Changing Employee Benefits: Radical Steps Needed

I’m taking a risk here. I’m likely to lose readers on this one either because the advice is so ridiculously obvious you’ll be bored or because it is so radical you’ll disown me. But humour me, please. It’s that important.

Unilateral changes
Not many of us are brave or foolish enough to go about unilaterally changing contracts with our banks or suppliers or customers. Yet, when it comes to employees, we often fail to see our contracts with them in the same light or treat them with the same respect.

Situations change, markets are volatile, income is affected and contracts have to be amended. But a contract is a contract. It is not the property of one party to amend at will (unless, of course, you are the aforementioned bank; they do as they please).

Talk to employees
Here is the radical idea: if you have to change a benefit your employees enjoy, talk to the affected employees first. Aim for consensus.

Whether the benefit is embedded in an employment contract, such as a guaranteed bonus, or an ad hoc benefit that has become part of the landscape, such as free lunch, it cannot be taken away without some form of discussion, some attempt to reach consensus. This for two reasons. First it is just plain silly to think one can stomp all over another’s rights without any comeback – especially when the CCMA is within easy reach. And second, it’s the quickest and simplest method of disengaging your workforce, encouraging them to resist your control and ensuring the best ones start looking for another job.

‘Of course! It’s obvious,’ you say. Sadly, not so much.

A case in point
In an all-too-common scenario, the Western Cape Nature Conservation Board in 2015 withdrew a travel allowance of R 30 per day that was written into contracts of employment.

The employees were on two-year contracts under the Extended Public Works Programme. The employer, struggling under a reduced budget for the project, unilaterally withdrew the allowance after the first year. When employees enquired, they were told they could reapply for an allowance of R 15.00.  When even that did not materialise, the employees referred a dispute to the CCMA. (Miranda Mayipheli and 4 Others and the Western Cape Nature Conservation Board t/a Cape Nature [2015] (CCMA))

At the CCMA, the employer’s Labour Relations manager agreed that the change had happened unilaterally. But she explained the funding model of the programme and simply stated that the funding had been reduced, leaving them with no choice. She said they had explored several scenarios, and it was decided that employees should be told to apply for a travelling allowance of R 15. But, when the budget was further reduced, it had to be cut out completely.

Not surprisingly, the CCMA Commissioner found the unilateral cancellation of the allowance to have been an unfair labour practice and ordered them to pay two months’ worth of the allowance to each employee. In my opinion they were lucky he didn’t reinstate the allowance, forcing them to do what they should have done in the first place – talk to their employees.

By agreement 
The change to contracts was not the problem; it was the fact that the discussion about budgets, the exploration of scenarios and the final decision all happened behind closed doors at head office within the management structures. Then an email was sent to the regions for implementation.

Nothing is fixed forever, but decisions around change cannot be debated at head office and simply passed down to employees as some sort of oracle. Thrashing out the need to change, the reasons for change and the way forward has to include the people who will be most affected and with whom the benefit resides.

Is that too radical? What do you think?

Ian Webster

From Methodist minister to Customer Relations manager in a computer bureau to HR Manager in a newspaper printing and publishing company. Now focussing on training and developing people and HR & people-management consulting.

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