Change of employment contract questions

[adrianh]

I have a number of employees that are currently employed on a permanent basis. This is proving to be very problematic because they work very erratic hours. My one employee is often late and takes Friday, Monday or many afternoons off Another employee has various mental issues and I allow him to work very much whatever hours suit him. Then I have one employee who works his butt off and picks up the slack that the other two create.

I would like to shift them all over to being hourly paid. I have no problem with their work as such but I have a serious problem with having to pay them for them not putting in the hours. Of course I will pay them fairly and for the hours that the actually do work.

My questions are:
1. Can I do this?
2. What if they do not agree?
3. What are the implications to PAYE?
4. If I go on the principle of no work no pay should I then increase their hourly rate so as to compensate them for the hours that I would have paid them for leave?

[Mike C]

I suppose it depends on whether you had them sign a contract when they started for you.

I would think that it is possible to change if it is done with negotiation and agreement - a new contract can be signed.

If they no not agree, then the original contract comes into play and they would have to stick to the working hours stipulated. If they can't, then you follow the verbal then written then final warning procedure and they get terminated.

If they are good workers then you might consider re-hiring them on a "flexi-time" basis where they get paid only for hours worked ... or the fact that they have to work a certain number of hours each day/week, but it is up to them as to when they put those hours in.

If they are paid hourly - paye should work the same, and leave gets worked out at 1 hours leave for every 17 hours worked.

This is my opinion - I suppose the "legal-eagles" will need to give you proper guidance here.

[Dave A]

I think you're spot on, Mike.

4. If I go on the principle of no work no pay should I then increase their hourly rate so as to compensate them for the hours that I would have paid them for leave?

The problem with this is twofold:

• It contravenes the Basic Conditions of Employment Act, and
• It's only a matter of time before the cause of the "higher" rate is forgotten/devalued.

Over the years I've come to realise that it doesn't hurt to leave some space in remuneration systems to give the employee an occasional sense of getting "something for free."

[adrianh]

Is it ok in principle in terms of the LRA to make the change from being paid a salary to being paid hourly?

[HR Solutions]

We have a number of "temps" on our books. They are exactly that and some of them have been temps for years. They work at different companies and are paid according to their timesheet ie hours worked which is signed off by their supervisor at the company. At the end of the day if the company does not need them any more, their employment is terminated. Most of them are hired for "contracts" the company gets. Some of them move from one contract to another contract. It works well, the temp is happy, the company is happy and we are obviously managing the temp. Their benefits are basically exactly the same as a permanent employee with some obvious differences.

[adrianh]

Well, I can tell you, if the one guy doesn't pull up his socks then he will no longer a temp by me but permanent in the unemployement line!