Himhbs mag proof file

HEAVEN

IS MY HOME BURIAL SOCIETY MAGAZINE

mmogo re ka fitlhana

Table of Contents Message from HIMHBS

6

Origin of Heaven is my Home, Burial Society, Matilda Matenge

8

Life Cover, Thekiso Mothibi

10

Planned Fruits of My Retirement, Mbakisi Gopolang

12

Value Your Assets, Neo Thipe

16

The Importance of Having Financial Advisors, Thabo Moipolai

20

Money Mistakes People Make, Refilwe Khupe & Busiswa McBrianMpungose

26

Women and Financial Planning, Kesaobaka Matlhare

31

Start Saving, Diphuka Maganu

34

A Closer Look at Critical Illness, Kgomotso Disele

40

Wills & Last Testaments, Kelly Kewagamang

46

Attract and Retain Employees, Modiri Nlanda

55

Agents vs Brokers, Keamogetse Motse

58

Summary of Court of Appeal Judgement on Damages for Unfair Dismissal, Kelebogile Kewagamang & Joseph Akoonyatse

64

Message from HIMHBS Matilda Matenge Chairperson: Heaven is my Home

Many are times we go about our days hoping, believing and wishing “if only we could decide our own fate”. Unfortunately we all have a little box of uncertainties that never warn us of their immediate and sudden presence.

Editor in Chief: Victoria Nish, Millenia Media & Publishing Sub-Editor: Shaka Senwamadi, Millenia Media & Publishing Contributors: Matilda Matenge Diphuka Maganu Joseph Akoonyatse Keamogetse Motse Kelebogile Kewagamang Kesaobaka Matlhare Kgomotso Disele Mbakisi Gopolang Modiri Nlanda Neo Thipe Refilwe Khupe Thabo Moipolai Thekiso Mothibi Thomas Moipolai Contact: (+267) 261 4741 / 297 0331

However, the business of insurance is meant to mitigate risk, in order to keep our hopes and dreams alive. You cannot hope that the car behind you will not accidentally bump into you, nor exude blind faith that death will not befall you or any of your loved ones; it is a promise to all! Knowing that your child will be able to complete their education after your passing, that your lost property can be replaced if you are hit by uncertainties; is exactly how insurance keeps these hopes and dreams alive.

As a society driven by passion for our members, we saw it fit to impart general knowledge about insurance in order to help Heaven Is My Home members develop a sense of judgment when purchasing any insurance product that they may feel they need.

This magazine serves as a reminder to our members of the importance of insurance. Reading through these articles will have you appreciate amongst others the beauty that is insurance and the power of financial planning; from a simple funeral plan, a life cover, retirement planning, property insurance, and other aspects of insurance.

We have put together simplified information that we deem vital to our everyday life in order to help you make informed decisions regarding your insurance needs. As Suze Orman crisply put it “a big part of financial freedom is having your heart and mind free from worry about the what-ifs of life”.

It is our hope that you enjoy the read.

Facebook: www.facebook.com/HIMHBurialSociety/

Publishers: Millenia Media & Publishing www.milleniapublishing.co.za 6

Matilda

Never take anything for granted when it comes to the future.

Talk to us to find out how we fit into your future financial goals.

T: + 267 261 4741 / 267 297 0331

Origin of …

Heaven is my Home Burial Society

Matilda Matenge Chairperson

Introducing HIMHBS Heaven Is My Home Burial Society (HIMHBS) is a burial society registered under the Society’s Act 19 of 1972 in Botswana. Heaven Is My Home Burial Society (HIMHBS) was formed in October 2002 by employees of miner companies being; Debswana Orapa, Letlhakane & Damtshaa Mine Branch and Bamangwato Concessions Limited (BCL) Selebi Phikwe Branch. Since then, the society’s membership has increased significantly. This membership is made up of employees of Debswana, BCL, Mupane Gold Mine, Quarries and sub contracted employees on those mining areas. The society has since opened up to other groups of people to join.

Everyone deserves a dignified and affordable farewell Death is something that comes suddenly, and the loss of a loved one can be emotionally overwhelming. When you lose a loved one, there are many decisions and arrangements to be made, and these have to be made at a time of personal distress, and within a short timeframe. In addition to the stress of your loss, there is also the financial stress to be dealt with, because funerals usually catch us unprepared. That’s why at HIMHBS, we have seen it fitting to come up with this funeral scheme to assist up our members to afford dignified funeral for their loved ones.

Premiums P120.00 shall be paid by the main member to cover s/he immediate family, parents/parents in law and 3 extended family members Benefit Amount per cover CLAIMANT BENEFIT (P) Main Member Spouse Children 14-21 (Student up to 25) Children 06-13 Children 01-05 Children 0-1 Parents/Parents in Law Extended Family Members Additional Benefits (Grocery) Main Member Spouse Children 1 - 21 (and up to 25 for students)

20,000.00 20,000.00 20,000.00 10,000.00 5,000.00 2,500.00 7,500.00 5,000.00 P6000 P6000 P3000

Who can be covered under the Heaven Is My Home Burial Society Scheme? The scheme covers the main burial society member in good standing and their family. A family consists of a maximum of one main member below 65 years at commencement, one spouse below 65 years commencement and a maximum of 6 children as per above table. There is no age limits for physical and mentally disabled children.

Does the policy also cover my parents?

Two biological and Parents-in-law can be covered. They should be less than 85 years of age during commencement date of the policy.

What about other family members like brothers and sisters?

A maximum of 3 family members below the age of 65 years at commencement can be covered. Extended family members should be financially dependent on the main member.

Is there a waiting period before I can claim the benefits?

Natural death: 3 months after commencement date (3 months waiting period starts when your first premium payment is received) Accidental death: No waiting period Suicide: After 24 months following the commencement date Note: If you make an amendment, either adding a new member, the 3 months waiting period shall apply.

How do I pay the premium?

Employed members may have their premiums deducted from their salaries. Debit orders are also allowed.

How do I make a claim?

You are eligible to claim any time after death, for as long as it’s within 12 months of such occurrence Making a funeral claim is easy, and we process all claims within 48 hours. You will need the following documents: Proof of identity of the deceased such as: A claim form shall be correctly filled Identity document of claimant and beneficiary (If not the same person), original and a certified copy Original death certificate and a certified copy For accidental deaths, a police report is required Certified or original copy of marriage certificate (for those who are married) For still-births, 26 weeks from birth, a clinical card and medical report shall be required Note: Please note that these are standard requirements and that additional documentation might be requested by our claim assessors Burial Society Rules Age limits for children under the main member and family or extended family will follow that of new members above.

No replacement of spouse unless you get legally married again, No replacement of parents/parents-in-law and extended family members Children/spouse may continue with the policy after the retirement or death of the main member, provided premiums are continued to be paid.

New born children can be added to the societies’ scheme provided a birth certificate is presented to the society bearing the names of its parent.

Member may continue even after retirement or change of jobs provided that they are still a member of the society and continue to pay premiums.

Details of all members must be specified upfront. This includes parent/parents-in-law and extended members If a member is to stay in a foreign country for a prolonged period of time s/he should notify the society of such move.

Cancelation and Reinstatement A one moth notice shall be given to the society if a member decides to quit Heaven Is My Home. Should a member decide to rejoin the society a 3 months waiting period shall apply.

It’s important to always have car insurance.

Life Cover

By Thekiso Mothibi Regional Broker Manager, Botswana Life

What is it? Well, life insurance is as old

income for the family and is the one

as you can imagine. This is a contract

taking out home loans. The absence of a

between the insured, policyholder and the

life cover will force the surviving spouse

insurer. The insurer promises to pay a

to liquidate the assets and also adjust the

lump sum to the designated beneficiary

life style they have been used to, that is

as important as your medical doctor. As

in the event of death of the life assured

in the event of death of the bread winner.

a potential client, you will need to

or policyholder. The policyholder pays a

The children may end up changing

disclose all the information to the advisor

regular premium for this benefit.

schools to the ones where school fees are

as this will aid in drawing up a proper

lower.

financial plan. We always advise that a

Life cover is categorized in two ways.

financial plan without a life cover is

There is whole of life and term life. In

The other major change would be for the

incomplete. A life policy used to secure

this article, we will not delve much into

surviving

for

a mortgage loan will pay out the balance

whole of life. Term life means the cover

employment. The big question being,

owed to the bank and any remaining

will elapse after an agreed period of time.

does she or he possess the qualifications?

amount distributed to the nominated

Whole of life simply means that you will

The surviving spouse might have to study

beneficiaries. The advice is that the

be covered for the rest of your life.

and this attracts an additional expense.

amount of cover taken must be sufficient

There might be need for a helper at the

to cover the outstanding debts and have

Life cover has unique properties. It can

house to take care of the children. The

surplus to be utilized by the surviving

be used to provide for beneficiary

solution to this problem is to take out a

dependents.

liquidity needs. The policyholder takes a

life cover policy with an insurance

life cover with a sum assured enough to

company. The process will require

cover for mortgages and other loans. This

interaction with a financial advisor who

is with the intent to provide immediate

will enlighten you more and focus on

cash in the event of death of the bread

your specific needs.

spouse

to

search

winner. The surviving dependents will

10

not be forced to sell the assets in order to

The level of cover needed varies from

get cash. Take a scenario of a family

one person to the next. As stated above,

where the one spouse is a stay at home

it depends on your unique financial

spouse. The working spouse provides

circumstances. The financial advisor is

“Life, Disability and Critical Illness cover is not only meant for those with dependants.�

means no income, while the bank wants

are pivotal to the continuity of the

the loan to be repaid. At this stage the

business. The partnership agreements

policyholder will lodge a disability claim

will vary from one to the next

with the insurance company. The claim

Contribution of capital at the start of the

will be assessed, and if successful, paid

business normally determines percentage

The other dimension of life cover is a

to the policyholder. The proceeds can be

shareholding. The partners are key to the

joint cover. In the above paragraphs we

used to repay the bank and avoid

survival of the business and this is where

focused on the life of one party who is

liquidation of the assets.

we derive the term key man.

is also very vital to the daily chores of the

Critical illness plays a more similar role

In this arrangement the company will

family. In a joint life cover scenario, both

save for the fact that it is specific to

take life policies for the business partners.

spouses’ lives are covered. The contri-

illnesses outlined by the insurer you

The purpose of this is to avoid a situation

bution made by the stay home partner is

would have chosen. Make sure you read

whereby the beneficiaries of the deceased

the list of illnesses covered to avoid

party assume shareholding in the

disappointment at claims stage. The

business. This can be complicated as they

insurer will pay as per the agreed

may not possess the same skills and

schedule, a percentage of the sum assured

experience that can assist the company to

in the event you are diagnosed with one

continue generating income. The life

of the illnesses narrated on the policy

cover policy taken on the lives of the

contract.

partners is to avail proceeds that will be

the bread winner. The stay home spouse

immense and cannot be under estimated. I advise that cover be availed for both parties so that his or her death does not lead to liquidation of assets to avail cash needed for the continuity of life in the family. A joint life policy will pay the benefit in the event of the death of any of the two, husband or wife.

It is also important to highlight that you can attach other benefits to a life cover policy. The most common ones being Disability and Critical illness benefit.

Disability benefit is very important especially where a life cover policy is taken to use as security for a loan. The financier or bank requires regular

used to buyout the deceased partner. The Be reminded that life cover, disability and

business will not be financially burdened

critical illness benefits are not only meant

by the cash outlay as the insurance

for people with dependents. Disability

company will take care of that through

can affect you in your sole proprietary

the life cover benefit.

status. In that case you are unable to provide for yourself like you used to. You

This article has touched on a number of

need life cover and disability benefit.

uses of life cover policy. I believe it has

Similarly to the example of a family that

enlightened you to be in a position to

needs immediate cash, you will not be

consider the amount of cover you need.

forced to liquidate your assets.

You do not have to start cracking your

repayments of the loan and this can only

head too much as there are professionals

be achieved if the borrower is gainfully

who can do it for you, of course with your

employed or active enough to carry out

participation. As I indicated, this should

his or her business. Disability can halt this. I believe in attaching disability benefit to all life cover policies as it makes sense to do so. Where the borrower becomes disabled, they may not be able to get back to work to draw a salary or fail to operate the business. This

The next chapter of the article focuses on

be part of your financial plan. It is not a

life cover being used to provide for

secret that majority of the working

business liquidity needs. In insurance

population do not have life insurance let

language we call it key man insurance. In

alone life cover. The financial plan will

business partnership, there is a blend of

guide you on how to use your money and

skills and capital contribution that led to

also introduce some financial discipline

the formation of the entity. All partners

in your life.

11

Planned Fruits of my Labour: RETIREMENT

By Mbakisi Gopolang, Investment Officer, Bona Life After we have battled and conquered

enjoy the fields and cattle post. The

this uphill rewarding fight, we should

retirement package that you are about

graciously step into retirement to enjoy

to receive is meant to help you achieve

the fruits of our labour. After all, you

just that, and much more if you make

deserve to rest; you deserve to enjoy

some smart financial decisions during

your golden years doing what you love;

your working life through Pension

you deserve to be surrounded by the

savings.

happiness of your loved ones; you deserve to be stress – free; and you

With age comes wisdom, and your life

certainly deserve the best that life can

experiences have taught you that there

offer you.

is a very close relationship between the sound prudent financial management of

12

At retirement, one of the biggest

your money and your happiness. The

financial achievements should be a

wiser the management of your finances,

From the very day we are born, we

satisfactory retirement package. Many

the happier you are bound to be for

undertake a journey, a journey that will

people may wonder why this financial

longer! So, however small or a lot of

see us progress through the various

asset should be your most prized life

money one has, there is a great need to

stages of life. Many of us will start with

possession, out of everything you have

wisely invest the money with a trusted

an academic journey, one that will last

done for 20-30 working life years. The

partner.

us 20 to 25 years. We will then move

simple reason is that one’s retirement

on to a professional career, a career that

package should be an instrument that

The easiest and simplest way to enjoy

will be the building blocks for our

rewards them for all their hard work,

all the wonders retirement has to offer

future and of our loved ones. Our

from their academic career through to

is by planning. Careful and thorough

professional career will be filled with

their professional career. It should be a

retirement

sweat, tears and numerous changes.

nest egg that allows one to live

difference between enjoying your

Most importantly, it will be filled with

comfortably, delighting in all they have

retirement years and stressing through

achievements that will reward us for the

earned and do things that one has

your retirement years. No matter how

rest of our lives.

always wanted to do. You can go to the

young or how old, we can always start

place you have always dreamed of, start

and diligently plan for our retirement

the hobby you never had time for and/or

before it’s too late.

planning

can

be

the

Talk to us to find out how we fit into your future financial goals.

T: + 267 261 4741 / 267 297 0331 www.facebook.com/HIMHBurialSociety/

HOW MUCH HAVE YOU SAVED?

Throughout our lifetime we work hard and plan for a lot of things. It is very important that our retirement years are also in our life’s financial budget.

For most of us, we start saving for our golden years without even knowing. Most individuals enjoy an employee benefit in a form of savings towards one’s retirement fund where tax exempted contributions are made. For individuals where this employee benefit is not rendered, they should find means that will offer the same benefit. Life Insurance companies offer Pension Plan to allow both of these individuals to contribute a defined amount to their pension to help bolster their retirement fund.

Some of the many advantages of saving in a fund over a long time are that one balances out the market volatility and

When retirement comes knocking at the

the annuity provider. That is, the annuity

door, one has to find means to continue

provider will continue to pay the agreed

earning an income. This income comes

amount for as long as one lives even when

in the form of Annuity or Pension, as

the accumulated investment has run out.

most know it. An Annuity is a monthly

Investment risk is also transferred to the

pension payment for life. It is an

insurance company because even when

insurance contract intended to provide a

the markets do not perform well, the

guaranteed income, after retirement, that

annuity provider will continue to make

one cannot outlive. For those retiring,

the payments as agreed or contracted. To

they are required by law to purchase an

mitigate inflation risk, one may opt to

annuity

have their annuity payments increase at a

provided

the

accumulated

investment is sufficient. Individuals will receive one third of their accumulated funds as a lump sum payment while the

Throughout our lifetime, we work hard

remaining two thirds will be used to

and plan for a lot of things. It is very

purchase an annuity at a registered

important that our retirement years are

insurer of choice.

Life companies

also in our life’s financial budget.

provide different Annuity Plans that have

Retirement should be a stress free and

different

is

enjoyable time, filled with joy and

important for you as a client, to source

wonderful memories. In order for this to

the best product for yourself.

happen, it is imperative that every single

attractive

benefits.

It

enjoys the advantage of the power of numbers. Large amounts of money are pooled together to be invested, and along with the compounded interest factor, this will truly benefit the individual through contributions and year after year returns.

specified percentage every year.

individual take their retirement planning There are many advantages that are

very seriously as some people find

associated with having an annuity, one

themselves struggling through retirement;

of them being the risk of outliving the

sometimes having to go back to work,

accumulated investment is transferred to

relying on the government or their loved ones.

Talk to us to find out how we fit into you future financial goals.

T: + 267 261 4741 / 267 297 0331 www.facebook.com/HIMHBurialSociety/

MANAGE YOUR LIVESTOCK RISKS And see a return on your investment

Value Your Assets?

As I drive down the streets of the city of

It is nісе tо еnјоу thе mаnу соmfоrts оf

or buildings. As one grows into their

Gaborone, I am reminded of how far we

lіfе but also important to realise that those

own it becomes a natural inclination that

have come as a nation (since 1966) as I

соmfоrts

and

we provide and care for our families and

observe the beautiful blue, black and

accordingly thіs іs whеrе іnsurаnсе соmеs

in doing so we purchase property and

white flags adorning the streets. One

іn. In order tо get the most оut оf уоur

cars amongst other things. To ensure we

could actually feel the euphoria, the

саr, hоmе and ultіmаtеlу hеаlth, уоu will

guard against any mishaps, one may ask,

gratitude and the patriotism in the air as

most lіkеlу nееd tо іnvеst in their

what policies to I take up?

every single Motswana, young and old,

рrоtесtіоn. This protection of assets

geared up for and celebrated the country’s

рrоvіdеs you with реасе оf mind and

50 years of Independence.

рrоtесts уоu аnd уоur lоvеd оnеs frоm

соmе

with

risks,

unfоrеsееn еvеnts or ассіdеnts. The Over the years, as Botswana made economic and developmental strides (limited in other aspects), Batswana have on a daily basis got up to work hard in order to improve their lives and those of their loved ones. It is essential to note that at the core of all of us as humans, we have

million dollar question is; are all these beautiful things that you place value in protected? What if we wake up one morning and everything is wiped away?

What if disaster strikes without notice and you wake up without any of your most valuable items?

Motor Insurance: This is a short term insurance policy issued by an insurance company to cover against any loss, damage or liability which the owner might incur during the period of insurance. Νоt оnlу іs it bеnеfісіаl fоr thе іndіvіduаl tо hаvе саr іnsurаnсе, but іt іs аlsо bеnеfісіаl tо оthеr раrtіеs should an ассіdеnt оссur; the іnsurеd раrtу mау have to bear соsts or dеlауs іn саr rераіrs оr mеdісаl bіll рауmеnts

individual dreams and aspirations. As parents, the burden becomes even more

The truth of the matter is anything can

аnd thе unіnsurеd раrtу mау іnсur fіnеs

when we have children to take care of.

happen therefore your safest bet is

аnd оut оf росkеt соsts. Motor insurance

Every parent dreams of creating legacies

Insurance. Insurance as defined by the

аlsо hеlрs іn саsеs where ассіdеnts are

that inspire the next generation; “The

Oxford dictionary is, “an arrangement by

саusеd bу уоur surrоundіngs. Fоr

choices we make about the lives we live

which a company or the state undertakes

ехаmрlе, іf уоur саr wіndshіеld іs

determine the kinds of legacies we

to provide a guarantee of compensation

shаttеrеd bу а rосk, but your car іs

leave,” Tavis Smiley.

for a specified loss, damage, illness or

insured, the insurance соmраnу will

death in return for payment of a specified

suррlеmеnt thе рrісе оf thе new

premium”. In order to protect against any

wіndshіеld.

In our quest to accumulate wealth and build on to what we have, we often forget to protect what we have already achieved.

loss for such eventualities one should arrange cover for properties such as motor

17

dealerships and/or garages and is to be

cover the cost of rebuilding your

reviewed at every renewal. It is common

property in the event of loss/damage. If

that people do not review the value of their

your property is under financing, you

vehicles at every renewal which results in

should make sure that your financier has

instances where a car that was insured 5

taken adequate coverage. Usually, the

years ago still reflects the same value.

coverage arranged by the financier will

Unlike property (buildings), vehicles

be for the amount of loan taken. You

depreciate in value over time, therefore it

may, therefore, want to take up a separate

is not financially savvy to pay the same

insurance cover to extend the coverage

C) Third Party Only - No fire or third

premiums

taken by your financier.

party damage is covered

depreciated in value. The onus is on the

There are 3 types of motor insurance; A) Comprehensive - Basically this covers the insured vehicle against any loss (such as own damage, fire, theft and third party liability).

B) Third Party Fire & Theft – Does not cover own damage.

for

a

vehicle

that

has

owner of the vehicle to ensure that their It is very important in respect of A & B

One can extend their insurance coverage to also include householders insurance;

vehicle is insured appropriately.

this is a policy to cover your household

above to ensure that the value of the vehicle is accurate at the time of insurance

Homeowners

is

contents and includes coverage for fatal

to avoid under insurance or overstating the

basically a form of property insurance

injury to you as the insured. You should

value.

of

designed to protect an individual's home

decide on the basis of compensation of

assessing/determining the current worth

against damages to the house itself. It

your householder policy, whether it is on

of an asset. In the case of motor vehicle

includes loss or damage due to flood, fire,

reinstatement or replacement value.

insurance, this is done by reputable motor

burst pipes, etc. The sum insured should

This

is

a

process

Insurance:

This

We offer you the best family benefits For the best premiums, the best benefits, the best service and restoring dignity and peace of mind T: + 267 261 4741 / 267 297 0331 www.facebook.com/HIMHBurialSociety/

“The choices we make about the lives we live determine the kinds of legacies we leave,” Tavis Smiley.

You will be compensated with the value

we have seen losses through natural

insurance as а waste оf mоnеу, those

of a brand new item under reinstatement

disasters, accidents, theft and a whole host

who have fасеd dіsаstеrs without

basis but on the depreciated value of item

of unforeseen circumstances. This should

insurance соvеrаgе can attest to its

lost under replacement basis. You must

provide us with a window to understand

significance. In selecting insurance, do

specifically declare each item to be

the value of insurance. Homeowners and

eхрlоrе all уоur орtіоns and carefully

insured under the policy to ensure that you

Householders Insurance are some of the

evaluate уоur insurance рrоvіdеr. Your

get the full compensation in the event of

cheapest insurance covers in the market

tор рrіоrіtу should be getting the

loss/damage. It is advisable to also keep

that every home owner must have.

insurance уоu nееd.

Whеthеr уоung оr оld, іnsurаnсе іs а

As we forge forward in building a better

Most people encounter a challenge in

nесеssіtу оf lіfе. By incurring these

tomorrow, every individual must protect

comprehending and taking appropriate

mоnthlу expenses оvеr thе соursе оf thе

their assets. As the old adage goes, it is

decisions in regards to their valuable

уеаr, уоur fаmіlу is protected frоm

better to be safe than sorry.

items. Through the journey of our lives,

unthіnkаblе іnсіdеnts. While some sее

receipts of items insured.

The Importance of a Financial Advisor!

By Thabo Moipolai

Most of us desire a financial future that is safe and secure and thus we spend a good amount of time to plan our finances. To deal with problems like paying the daily bills, mortgages, paying kids’ education fees, investments; to name a few can be overwhelming, thereby resulting in a lot of stress. If you are very serious about your future plans and wish to work towards attaining your objectives, then without any doubt it is worth investing your effort and time in hiring a professional and experienced financial advisor. After all, a good Advisor will assist you in being well prepared and setting an all-inclusive financial plan. Strong financial planning means absolute peace of mind. An expert financial advisor will assist you in arranging your personal finances in a manner that works best for you.

20

visualizing you on your possible impacts on your investments

Selecting the right Advisor matters Today there is no dearth in the accessibility of financial advisors all across the world, but unfortunately not all are up to the mark. Either they will not complete the task on time or make fake promises. So selection of an ideal person who is certified and licensed to look after your personal finances is a crucial decision to make. The fact is you will entrust the task to an advisor to manage your hard earned cash with the hope of making use of their financial expertise. Thus, the Advisor must be capable of helping you get solutions and reaching your financial objectives via preparing an effective plan and discover the most appropriate investment plan. The fact is you are driven in seeking the guidance of a financial advisor in getting serviced with integrity and professional caliber.

•

Will support you in paperwork and documentation related to your investments

A glimpse on when to approach a professional financial advisor Although you may possess the capacity of investing. It is notable that you may not have much of an idea as to which financial plan will be more suitable/profitable.

During such state of affairs, you have to be clear regarding a couple of things prior to beginning your search. These include; •

Dependent on whether you possess adequate investment capacity

•

Should you desire to secure an investment that is backed with an ideal investment planning

•

In case you have little or no understanding when it comes to the financial market as well as its products, and at the same time are clueless where and how to invest

•

Despite having the capacity to make your respective investment decisions, it is indeed crucial for you in choosing someone who is adept on drawing up an ideal financial plan which is in perfect sync with both your goals and financial capacity

A brief on the desirable duties and responsibilities of a financial advisor A professional financial advisor will offer the following set of duties and responsibilities; •

Will help you in making the most appropriate investment choices resting on a thorough review of your financial circumstances

•

Will guide you to remain committed and steadfast to your financial strategies

•

A good and reliable financial advisor will not be carried away by pessimism or excessive euphoria with regards to any official offer

•

Will monitor your portfolio and also review the same on a frequent basis and also manage to keep it seamless

•

When you need a financial expert to carry out paperwork and financial documentation more professionally and accurately.

•

A professional financial advisor will inform you about the most recent amends and developments taking place within the financial world, thereby

•

Last but not the least, you will require consulting a financial advisor during the launch of a novel financial plan or you require someone to help save you against paying hefty taxes 21

Discover the different types of financial advisors

•

They will cut down your financial stress, thereby making the load lighter, which in turn will help in simplifying your financial choices and sharpening the focus exclusively on your long term and short term goals

•

They will make you smart, along with assisting you on concentrating on the facts instead of the sales pitch

•

A good financial advisor will offer you the needed knowledge and expertise which you may not possess. They will take some time out, sit with you one-on-one and explain you in details as to how they can impact when it comes to your investment portfolios. Such discussions will indeed be a savior as it will guide you to prevent adopting unnecessary perils and focusing on your future goals.

•

Besides, they will work both with your CPA and estate planning attorney to avoid indulging in unnecessary risks, reduce taxes and safeguard things which you have worked really hard in accumulating.

•

Right from budgeting, saving, investing, retirement planning, insurance needs and much more; the financial planning via a professional financial advisor will help in bringing every piece of the financial life together.

•

Owing to their years of training, experience and the right tools; they can assess your needs quickly and provide advice which reflects the finest practices with regards to the current financial industry along with being ideal for your specific needs.

The good news is you have a couple of choices with regards to financial advisors. Some of these include; •

In-person advisors- such advisors will be the right fit if you desire delegating the responsibility of investment planning, have huge savings which you are not comfortable to handle alone, require more attention on strategies and goals or need a personal bonding with the team which will help in overseeing your investments

•

Robo advisors- hiring their services will be the right choice if you need help in low cost investing, investing long term, as well as require guidance with other forms of financial decisions.

•

Digital advisors- you should hire their services if you wish to invest and need professional help yet are not ready for high minimums which the majority of the traditional advisors charge.

Primarily they are online and will generally work with you via video chat, text, email or phone.

Besides, they are also the right pick if you wish to create a universal view of your finances and indeed are confident that you will be at ease with your communication being primarily mobile and online

The significance of hiring a financial advisor

22

•

A professional financial advisor certainly will be proactive as well as reach out with bad or good news, ideas and strategies.

•

They are the difference often amid your financial success as well as failure.

•

•

They can explain how inflation, savings rate, taxes and investment returns is likely to affect your financial planning. In fact, over your lifetime the right financial planning will appear as a course correction series.

They will help in distilling the diverse information via the filter of their experience for presenting you with an advice which is relevant, actionable, saves you time along with making you profit or good returns in the future.

Like the majority, you too have dreams and hopes as well as life goals equally for yourself and the family. And this may include purchasing a business or a home, saving for your children’s education, reducing taxes, going on a dream vacation and above all retiring comfortably. The right financial planning under the hands of a professional will work wonders in managing your finances wisely that will ultimately help you in attaining your goals and dreams and simultaneously help you in negotiating the financial barriers which inevitably crop up in every phase of life. It is after all, your responsibility to manage your personal finances. But relax, you no longer require doing

it alone. Joining hands with a certified and qualified financial advisor can assist you in making an informed decision that indeed makes a major part of the financial resources.

Always remember a genuine advisor can assist you in addressing assorted financial needs and not merely taxes, insurance or investments. To work with them will be a personal affair, and along with competency a renowned advisor will also have trust, commitment and integrity to high professional standards and ethical behaviour. Always hire an expert who will certainly put your interests and needs first. The truth is in a critical endeavor such as to manage investments the help of competent professional advisors for handling the situation will be a prudent choice. In this way, nothing can act as a barrier to help you accomplish your financial goals. The best part is a good financial advisor will happily welcome all your queries and try to resolve the same. The bottom line is, although at present you may fail to realize the significance of taking the help of a financial advisor; but years ahead do not regret on your negligence.

Talk to us to find out how we fit into your future financial goals.

T: + 267 261 4741 / 267 297 0331 www.facebook.com/HIMHBurialSociety/

Money Mistakes!

By Refilwe Khupe & Busiswa McBrian-Mpungose, Account Executives Exclusive Insurance Solutions Unless you’ve been living under a rock lately (or you avoid network news like the plague), you’re probably pretty familiar with these terms—and the implication that true wealth is too exclusive for most of us to ever attain.

What you do have to have? The right money mindset, as well as the financially savvy habits that go with it.

“The primary difference between the wealthy and the rest of us is that they’re in control of their money—they don’t let money control them,” says

ocean without a motor.”

Jaime Tardy, a business coach and

Money Mistake #1: You Refuse to Face Facts

author of The Eventual Millionaire,

And that type of aimless attitude is

who has interviewed more than 150

what can lead you to make serious If you’re not a numbers person, it can mistakes—unless you learn to adopt be tempting to mentally cut yourself

millionaires on how they accumulated their wealth.

“They have taken the time to learn how to work successfully with money, and as a result, they are the captain of their ship,” she says. “On the other hand, if you approach your finances from a place of fear or ignorance, you’ll be like a boat floating around the 26

some key good money habits of the off from your finances, whether it’s wealthy. neglecting to stay on top of your investments or blatantly ignoring So with that goal in mind, we rounded your bank statements. But that’s a up the biggest financial blunders many huge no-no—and those with skypeople make—but prosperous folks high bank accounts certainly don’t avoid at all costs—so you can start to amass big bucks by being blind to put their strategies into action to boost their balance sheets. your own net worth.

“If you don’t have the facts about your

podcasts, signing up for a seminar, or

financial situation, money will stream

hiring a financial adviser.

through your hands like water,” Tardy

bit more bearable.

“Make budgeting a game by giving

says. The consequence? You could

“Just make sure it’s a trusted source,”

yourself

land

Tardy says. “Learn from people who

challenge every week,” she says.

are already where you want to be.”

“See how little you can spend on

in

debt,

make

poor

investments—or end up flat-broke when you retire.

groceries,

an

or

interesting

even

skip

new

food

shopping one week and invent Money Mistake #2: You Overspend The Get-Rich Fix

meals using what you already have in the cupboards.”

When you think about the type of “Some people assume that you have

lifestyles the rich can afford, you

The key is to identify the system (or

to be an investment banker to

probably picture luxuries like a ski

mind trick) that you’re most likely to

understand money, but the wealthy

chateau in Chamonix or a closet full

stick with—and then do it.

weren’t born with some secret know-

of Manolos. But wealthy people are

how—it’s a gradual learning process,”

more down-to-earth than you might

Money Mistake #3: You Neglect to

Tardy says. “If you’re procrastinating

imagine.

Adjust Your Finances Following a

about facing money because you’re

Big Life Event

scared of what you’ll find, you have to

“Millionaires aren’t out there buying

dive in. Even if it’s not what you

Lamborghinis,” Tardy says. “They

When you get married or a parent

wanted to see, the truth will allow you

make purchasing decisions based on

passes away, your bank account is

to make decisions and move forward.”

their current financial status and their

probably one of the last things on

goals. They’re rich because they’re

your mind. But if you postpone

If you’re starting from scratch, the first

good

adding your spouse to your will,

step

spending it.”

is

to

gather

some

basic

at

keeping

money—not

canceling your joint account after a

information from your bank account,

divorce, your bottom line will take a

like how much you earn and what you

hit.

spend, so you can figure out what you’re

netting

each

The Get-Rich Fix

month—and

gauge whether your fiscal position is

Have your eyes started to glaze over

improving or getting worse. Once you

from having the importance of proper

have all the facts, you can start

budgeting

making thoughtful decisions about

repeatedly? We get it. Despite their

what you need to do in order to start

best

growing your money.

people still find it difficult to keep tabs

hammered

budgeting

into

attempts,

you

some

on their spending.

On the other hand, if investing is your

Unfortunately, we can’t give you a

money blind spot, facing the facts

free pass to throw this crucial money

might

your

to-do out the window—but Tardy

knowledge base by listening to

does have a solution for making it a

mean

building

up

27

“Successful people understand that

the most urgent, but at least if you

payment, insurance, credit cards,”

every transition you go through has a

recognize up-front that it’s in the mix,

Bach says. “Late fees can add up to

financial implication—and they make

you can make a plan to deal with it.”

a fortune.”

points,” says Pete Bush, a CFP with

Money Mistake #4: You Waste

Of course, that also doesn’t give you

Horizon

Cash on Fees

license to simply coast. “Rich people

sure to build a plan for those turning

Wealth

Management

in

Baton Rouge, LA.

read their statements, checking It’s one thing to burn through BWP

regularly for mistakes,” Bach adds.

600 on a fantastic meal at your

“They know that if they catch errors

favorite restaurant. Hey, at least you

on their bills, they can call their

Whenever your life takes a turn in a

enjoyed yourself! But it’s entirely

provider and get them fixed ASAP.”

new direction, find time to sit down,

another to trash 100 big ones on

look at your finances, and adjust them

overdraft fees or missed payments.

The Get-Rich Fix

accordingly.

Money Mistake #5: You Focus on Saving More—but Not Earning

“The difference between wealthy

More

“Think about it like football,” Bush

people and everyone else is that the

says. “The coaches have a game

rich watch where their money is

If you’ve decided that you need to

plan heading in. But let’s say the

going, and they protect their wealth

scale back on your spending, and

quarterback,

and

by making sure none of it slips

your first inclination is to sacrifice

linebacker get hurt in the first quarter

through their fingers,” says David

your daily Starbucks fix or unplug

and are out of commission. Their

Bach, vice chairman of Edelman

every electronic item in your house

original intention is now irrelevant,

Financial Services and author of

when you’re not using them—stop

and they have to come up with a new

Smart Women Finish Rich.

right there.

“Rich people will rarely be caught

Millionaires aren’t in the business of

Money-savvy folks understand that

paying their bills late, bouncing

wasting

even when you’re in the midst of a big

checks, or carrying a high-interest

recognize the greater importance of

event—like sleep-training your 6-

credit card because they hate to

earning additional income as a way

month-old—it’s

waste money.”

to attain financial goals faster.

running

back,

blueprint.”

still

important

to

consider your balance sheet … and open that 529 college savings plan

money,

but

they

also

Wealthy people understand that The Get-Rich Fix

while there is a limit on how much

that will help you save up thousands

you can save, there is no limit to how

of dollars for the big financial burden

Automate,

automate,

automate.

coming in 18 years.

We’re only human, after all, and we’re

much you can make,” Tardy says.

bound to miss a payment or overlook “Life transitions have many different

a

components

safeguards in place that will lower the

to

them:

logistical,

emotional, spiritual, familial, and, yes,

bill

at

some

point.

So

put

risk of those inevitable blunders.

financial,” Bush says. “Count the financial piece among the others and

“Set up auto-pay features to take care

give it equal weighting. It may not be 28

of your key bills—mortgage, car

‘Successful people understand that every transaction you go through has a financial implication’

In other words, even though slashing

Sometimes our frugal intentions end

So let’s say a bank offers a low rate

your expenses by BWP 500 or even

up sabotaging us: You buy cheapie

or 5% interest if you finance a

BWP 1000 a month will boost your

BWP 500 shoes instead of a good-

vehicle over three years versus a

bottom line a little bit—raking in

quality BWP 2000 pair that will last

higher rate for five years. If you plan

thousands more from a salary bump

longer. Or you make repeated repairs

on keeping the car for seven to 10

will have a much greater effect.

to your gas-guzzling, 1992 range

years, what is the total price of

rover rather than spring for a new

owning it over that time frame? The

model.

longer you finance something, the

The Get-Rich Fix

lower the monthly payments—but If you’re feeling a pinch, invest your

But rich people know better.

the more it costs over time. So it’s

time more wisely by seeking out ways

not as much short-term pain, but it

to earn more. An obvious place to

“Wealthy people understand that the

gives you less to build savings with

start is by examining your current

cheapest route isn’t always the most

over the long term.

salary. If you haven’t asked for a raise

valuable,” Bush says. “They are able

recently, and know you’re delivering

to take the long view and consider

Also, remember that enlightening

value to your company, schedule a

how what they pay today compares

experiences are inherently more

meeting with your boss to make your

with the worth over time.”

valuable than material goods. “Once

case for earning more.

you have an abundance of stuff, you quickly realize that you don’t need

Another strategy? Use the hour you

The Get-Rich Fix

more of it,” Tardy says. “Millionaires

would have spent researching the

understand

that

valuing

the

cheapest online purveyor of dish

Part of the solution is changing your

experiences that change you as a

detergent to brainstorm ways to bring

mind-set from “find the rock-bottom

person—be

in a side income.

price” to “find the best value.” Then do

riding—will do more for you than just

“The key is figuring out what skills you

the math.

getting the iPhone 6, when the

have that can be of value to others

it

travel

or

horse

iPhone 5 worked just as well.” (By

and then determining how to charge

“Take

for that value, whether it is a side

options of whatever you’re looking

millionaires

venture, helping a friend with a

at—a mortgage, car loan, etc.—and

iPhone 4!)

project, or some other way of

run the cost out over a reasonable

plugging into an opportunity of trading

time for that transaction,” suggests

So start paying attention to what you

your value for money,” Bush says.

Bush. “Compare them both ways,

are doing when you feel happiest

taking into consideration your cash

and

Money Mistake #6: You Obsess

flow, and see which works best for

financial efforts into creating more of

Over Price—and Sacrifice Value

your situation.”

those moments.

the

‘bargain’

and

‘value’

the way, Tardy knows several

most

who

still

alive—and

have

put

the

your

29

Your children’s legacy is a reflection of your life’s work.

Talk to us to find out how we fit into your future financial goals.

T: + 267 261 4741 / 267 297 0331 www.facebook.com/HIMHBurialSociety/

Women & Financial Planning

By Kesaobaka Matlhare A Nest for your Financial Needs Women are especially prone to the nesting instinct: that primal urge driving us to re-arrange, re-decorate, and re-organize. We call in the carpet cleaners, unclutter our closets, and flip over the mattresses — or at least we think about it! It is said that these instinct first show themselves days or weeks before a woman gives birth, but I certainly know women who have never experienced pregnancy — and are

not

particularly

driven

by

domestic impulses — who have felt overwhelmingly compelled to get their house in order.

But what about nesting for your financial house?

drive returns in the market. Whereas

day to day challenges and multiple

I believe I am empowered above

commitments I have.

average

with

such

valuable

I regard myself as an above average

information,

a

Recently, I realized that financial

in

the

challenge for me to stay focused in

discipline is the key to staying on top

and

maintaining

of my game when it comes to

terms

intricacies

of

understanding of

savings

investments, and the dynamics that

it

still

a

remains

monthly

savings/investment plan, due to the

savings/investing.

31

It’s not an option, but a must do, if I

less than men. They are more likely

am to enjoy a solid financial future

to be responsible for the household

and also leave behind me, a solid

budget. They often are the ones their

Pick the right planner •

understands your needs and

adult children turn to first for financial

financial legacy for my kids.

with whom you feel comfortable

help. And the demands of caring for In these complex economic times, keeping one’s financial house in order is more important than ever.

This is especially important for women. Why? Initially, it might be

Finding a financial planner who

is a key step.

aging parents or spouses tend to fall on their shoulders.

Below are the rules for creating a financial plan that addresses those

Fight market phobia •

challenges

Financial security is usually a high

priority

for

women

investors, and as such they

difficult to believe that our financial

tend

to

take

a

more

requirements are all that different

Prioritize your goals

from men’s. It is true that the general

Time management has the biggest

men

principles of financial planning are

impact

financial

conservative, not to mention

universal, but women face unique

planning. “There’s a great cartoon

shying away from the stock

out there that says if you want to

market altogether, can actually

understand a woman's mind, imagine

leave

280,000 apps open at the same time,

vulnerable. If you're invested in

all the time," "We've got all these

the money market (which is a

competing priorities."

cash product), because you're

challenges that add up to different financial needs.

The odds are that at some point in your

life,

responsible

you for

will your

be

solely

on

women's

conservative do.

you

afraid

finances,

whether you are single, married,

The reality is that men tend to be

divorced, or widowed. Women live,

most interested in tips on how to

on average, five years longer than

capitalize on market trends and what

men, and the average age of

kind of stocks to buy. Women ask

widowhood, according to some

questions about how to balance the

census, is 59. Add to this that a

goals of sending kids to college,

marriage has only a 50-50 chance of

retiring comfortably and caring for

being successful. Because of these

elderly parents. “Men are often either

factors, you owe it to yourself to learn

less inclined to think that way or less

as much about saving and investing

likely to be thrust into that decision-

your money as you can.

making role,”

of

approach But

being

more

market

than too

financially

volatility;

inflation will erode the buying power of your money. If you're planning for retirement in about 30 years, the stock market is a wonderful place to grow your money,"

Protect your retirement •

Just as flight attendants instruct passengers to first don their own air masks in case of emergency before placing one

But while the basics of good financial planning are the same for both sexes, women often face particular lifestyle and economic issues that require special consideration. On average, they live longer and earn 32

The first step in a successful

on their child, financial planning

financial plan is to decide what's

requires the same protocol.

most important on your financial

Your financial survival depends

to-do list.

on "paying yourself first" by saving for retirement.

Make sure that your house is in order, •

If you're married, you need to

by making sure that your finances are

have a clear idea of what your The wife might say OK, not realizing spouse has in mind for his or her that she's only going to get 40 percent

secure -- and then you can look around and see what your capacity is to help other people around you, “Because women live longer than men, they have a greater fear of outliving their retirement savings. I haven't met a woman yet who's not worried about

retirement. We often encounter of that pension instead of 100 percent, couples in which the man makes It really pays to be in the loop with that financial

decisions,

including decision. A woman who will be retirement plans, that aren't depending on her husband's benefits necessarily in the woman's best can end up in a financial bind if he

running out of money," anonymous.

interest. For example, he might decides to retire early. decide to take his pension

Know your spouse's retirement

withdrawals early in exchange for a lower survivors benefit.

“Women often face particular lifestyle and economic issues that require special consideration. On average, they live longer and earn less than men. “

We are there for you.

T: + 267 261 4741 / 267 297 0331 www.facebook.com/HIMHBurialSociety/

Start Saving!

Personal Financial Management “Why don’t I have enough money left at the end of my month?”

For my part, as a qualified, market-salary

products. I have always had access to

planning from the day to day decision

earner who has been employed for over a

various sources of information that has

making processes of our lives. The

decade now, I still find that “saving” can

empowered and enabled me to make, (and

consequences can be terrible, through

be impractical at times. Between the day

not make), well-informed decisions

different experiences (loss of houses,

to day expenses of being a mother-of-two,

regarding my financial health.

loss of cars, failure to pay school fees etc.).

homeowner, car-owner and generally navigating adult professional life in a city

It is the plight of the middle-class to

such as Gaborone, it seems near

compete; the lower social strata simply

impossible to have that ideal 3 months’

don’t have the means and higher up than

salary in an account somewhere against a

middle-class, there is little need to. It is

rainy day at any given time.

within the so-called middle-class and lower where this savings struggle occurs.

Having said that, however, all the odds

I’m inclined to believe more so across the

have been stacked in my favour; I have

middle-class as access to all forms of debt

good influences in the form of my parents

keeps us aspiring towards the lavish

who are dedicated investors. I have

lifestyles we are bombarded with across

numerous friends in various areas of

social and conventional media.

It is important that as people, we realize that we cannot put aside financial

34

judgement calls and in the end convince ourselves we are victims. The only real way to tackle financial freedom is to be disciplined; know what you can and cannot afford based on money coming in. While reading has its benefits, as does attending seminars, workshops etc., the pivotal issue ultimately is what changes you are willing to make in order to see changes in your financial

financial services from whom I can tap information on available investment

It’s not uncommon for us to make bad

situation.

conscious of lights, appliances, geysers

etc.

that

are

on

unnecessarily.

Come up with a monthly budget – A budget is the foundation of a wellmanaged financial system; this is why large organisations work off sales budgets and expense budgets, there is no better way to measure yourself and your progress. A monthly budget sounds limiting and unnecessarily tedious. It is however, crucial to have definite information about your sources of income and Spending, in order to have an organized financial life. You need to have; Debt has an enormous part to play in

and that immediately affects one’s

this vicious cycle, as do self-control

ego. When your finances are in a

and misinformation.

Fortunately,

mess, pause and reflect. It is normal

anyone can change those three things.

to find that you may have veered off

I must admit to still being on this

your chosen path at some point.

journey; forced on me by some life

When you find yourself in that space,

decisions as well as an incessant

you can’t will it away – identify how

economic down-turn! Thus, this article

you got there and make the necessary

is a classic case of “do as I say, and

changes. You’ll find oftentimes it’s a

not as I do” (disclaimer!). Let me share

result of bad judgement.

some of what I employ in my personal

Review your monthly expenditure –

turn-around strategy. Ultimately, tips are simply that, changes will only manifest if changes are consistently and diligently applied.

•

Record of sources of income

•

List of all monthly expenses

•

Breakdown of expenses between adjustable and fixed

•

Total monthly income and monthly expenses

How one budget will always vary

Over a two or three month period, track your expenses to see where you are able to, or have to, cut-down. It’s important to distinguish needs vs.

depending on individuals’ basic needs, habits and interests. It is, however, control

important over

one’s

to

exercise expenses

constantly and consistently. After reviewing your patterns, you can then

A crucial starting point is simply to

wants. Once you have been able

be honest with oneself - Different life

distinguish that, it becomes practical

events occur that force us to adjust

to cut down on your budget. Places to

our quality of life downwards. I find

start are groceries, utility bills and

aid you in living a more comfortable

that admitting this to oneself is

multiple insurance policies. The green

lifestyle.

actually

means

movement is not just about load

admitting that we have to do with

shedding; we can make significant

much less than what we are used to,

savings

quite

difficult!

It

for

ourselves

by

being

unlearn what is not helping in order to learn new spending habits that will

Record income and breakdown expenses.

35

We need to fight for our health and be strong

Talk to us to find out how we fit into your future financial goals.

T: + 267 261 4741 / 267 297 0331 www.facebook.com/HIMHBurialSociety/

Monthly Savings – Once you have

Start paying off debt – You’ve heard

to encourage individuals to take

begun the process of budgeting, the

that there is necessary debt, such as

loans for pure consumption.

next step is how to use excess funds

a mortgage? The converse is also

that are left from your monthly

true.

While store cards and credit

The following evaluation process is

spending. One must be mindful that

cards appear to offer some respite

recommended when applying for a

having something to put aside for a

during a cash flow crisis, they actually

loan;

rainy day is not a choice, but an

do more harm than good in the long

•

the need for a loan

integral part of building a secure

run due to the high interest rates as

•

capacity to service the

financial future, especially when you

well as the impact on your personal

have a family and are responsible for

credit score. They effectively keep you

other peoples ‘livelihood. There are

in what I call the middle-class-cycle as

many ways of saving excess funds.

a significant amount of your monthly

The money we earn must be used to

expenditure goes towards servicing

in

run our lives and to build our cash

that

(compared to waiting)

reserves for future purposes. Savings

increasingly difficult, both to do without

is normally short-term vs. investments,

them and to have any excess money.

debt.

It

then

becomes

which is long term. One important

loan •

the cost of the loan (interest rate)

•

the benefit of the loan the

long

term

It is also important to avoid getting stuck in the cycle of loan sharks by

factor in determining the type of

There is absolutely nothing wrong in

making sure that all your short term

savings is the purpose for saving.

getting loans. What is important is the

cash needs are covered.

Funds that are being saved can be

purpose for which the loan is being

Reward yourself - A balanced life is

used for infrequent monthly spending

taken and whether there is capacity to

important; after a three month run of

that one may include;

service the loan.

It’s a pity that

your new financial “diet”, reward

institutions have made it commonplace

yourself with a small splurge, one that

•

car breakdowns

•

emergency trips

On the other hand, Investing is the creation of more income and wealth through the use of capital. Investment vehicles include (and are not limited to) products like bonds, equities, property and combinations through unit trust and / or mutual funds vehicles. A number of asset managers, local banks and societies have good products that don’t require high monthly contributions.

Arrange to

have the amount deducted straight from your salary, or for a debit to go through on your pay-day so that you ‘feel’ it less.

won’t set you back.

In the end, Life is long, and has many uncertainties. Through different ages, we have witnessed, read and heard about

natural

significant

catastrophes

magnitudes.

We

of have

learnt about the collapse of financial markets and near collapse of the same. At personal levels, we have lost and we have gained, and the wheel of life keeps moving forward. Against everything we are exposed to in life, directly or indirectly, there is no greater

satisfaction

prepared

for

than

eventualities,

being and

ensuring the provision of your loved ones. The best part is that it’s never too late to put one’s house in order.

A consistent effort towards cutting down on expenses and reducing your debt bill can lead to overall less stressful

living.

As

mentioned

previously; very few of us have the exact formula, but, to borrow a phrase from the AA program, I believe it’s better to be “on the wagon” more times than to be off it.

We mostly know what needs to be done, we fall short when we have to commit and be disciplined. The difference between getting the rewards and living on the cusp is commitment.

Once

you

consistency

start,

maintain

throughout

your

the life,

applying the principles regardless of the circumstances at the time. The goal is one you can never regret; financial freedom.

Stay saving!

38

Plan for the best in life, but also be prepared for life’s mishaps.

COVER YOUR RISK Talk to us to find out how we fit into your future financial goals.

T: + 267 261 4741 / 267 297 0331 www.facebook.com/HIMHBurialSociety/

A Closer Look at Critical Illness Kgomotso Disele Liberty Life Botswana Head: Business Development

A closer look at Critical Illness; Diseases under critical Illness, Statistics, and Preventive measures Healthy living is rapidly becoming a trend

younger ages than they were 20 years

because diabetes can go for many years

that is being adopted by many people

ago, due to medical advances and greater

without

around the world. Consumers, especially

awareness. There are very few people

symptoms may be misdiagnosed as other

young consumers are starting to become

who don’t need to work to pay the bills.

conditions, meanwhile high blood

more mindful of what they eat, what they

Bond

cards,

glucose is causing damage to major

wear and how to be more present in each

electricity and water, taxes, school fees

organs in the body. In the year 2012

moment, they often value experiences over

and grocery bills won’t stop arriving just

alone,

material goods preferring to spend their

because you’re sick or injured to the

worldwide died from diabetes. It is

money on concerts, dining and exotic

point that you are unable to work and

estimated that diabetes will affect 552

vacations. Owning too many items is seen

function normally. Bearing this in mind,

million

as wasteful and stressful, they are starting

protection against the consequences of

intervention is made.

to value their lives more.

contracting a chronic illness or suffering

This comes as no surprise as in the past

repayments,

credit

showing

about

people

4.8

by

symptoms,

million

2030

or

people

if

no

a serious accident should be a top

In Botswana, there were 96000 people

priority.

living with diabetes in the year 2012, giving us a national prevalence of

years critical illnesses such as Cancer, Heart Attack, Stroke, HIV/AIDS, Diabetes,

According to the International Diabetes

8.25%. Compared to the rest of Africa

Alzheimer’s disease, Kidney failure were

Federation, there were an estimated 371

where the average prevalence stand at

on the rise. According to the World Health

million people living with diabetes

4.3%, our national prevalence is nearly

Organisation, one in every 11 women

worldwide in the year 2012. Of these,

twice that of the African continent. This

between 20 and 59 years of age will be

80% of them live in the middle and low

places Botswana in the top five highly

diagnosed with breast cancer in their

income countries and half of them don’t

affected countries in Africa.

lifetime. The breast cancer statistics in

know they have diabetes. This is so

Botswana are quite unnerving. Cervical cancer continues to be a public health problem worldwide as it claims the lives of more than 270,000 women every year. It is the most common cancer affecting women and is the leading cause of cancer deaths of women in Botswana. What is even worse is that cervical cancer tends to affect women aged 35-49, a period when they are critical to the social and economic stability of their families.

When one looks at statistics for cancer claims, people are being diagnosed at far 41

Diabetes is a disease of development.

Urbanization and the accompanying changes in lifestyle are the main drivers of the epidemic in addition to changes in population structure where more people are living longer. As a high middle income developing country, we have witnessed a rapid increase in the urbanization and the change in the life style of our people in the last 4 decades.

As we continue to develop as a country and our people start to live longer, this epidemic will only increase unless effective prevention and treatment measures are put in place.

Though at times hereditary, critical illnesses such as cancer, diabetes and

sugar to rise. If you have diabetes,

• Sleep restores us and has a huge

this can damage your heart,

effect on how we feel. Have

kidneys, eyes and nerves over

trouble sleeping? Your diet may

time. Managing blood sugar is one

be a culprit. Food relates directly

of seven metrics for heart health,

to serotonin, a key hormone that

according to the American Heart

— along with Vitamin B6, B12,

Association. These same metrics

and folic acid — promotes healthy

make it less likely to be diagnosed

sleep. For more restful sleep,

with cancer.

focus your diet on the “big three”:

others are the result of unhealthy

complex

lean

• Exercise doesn’t have to be in a

unhealthy eating, alcohol, lack of

gym or structured environment.

exercise, obesity are often times the

Experts

causes and triggering factors of critical

often), intensity (how hard) and

illnesses.

time (how long) are what matter.

screenings can save your life.

Preventive measures of critical illnesses

Find just 30 minutes, which don’t

They are designed to catch cancers

are as follows:

have to be consecutive minutes.

and serious problems early for

You could take short and brisk

more successful treatment. There

• For good health, avoid saturated

walks two to three times a day. Or

are screening recommendations

fats, cholesterol, refined carbs and

do three 10-minute spurts (or two

for adults and women specifically,

sugars and fats. These foods can

15-minute spurts) of activity that

and varied screenings depending

cause chronic inflammation and

make your heart happy.

on your family history.

Smoking,

bad

diet

say

frequency

proteins and unsaturated fats.

Exercise like yoga, can also help.

(how

can contribute to heart disease,

• It’s

no

exaggeration:

health

• If you smoke, there is probably no

While sometimes we can’t necessarily

other single choice you can make

prevent a critical illness, there are steps

to help your health more than

we can take to lessen the financial

quitting. While a recent study

burden one may cause. Critical illness

• Help your heart by keeping your

found that smokers lose at least 10

insurance is one option that can help in

weight and salt intake down and

years of life expectancy compared

the case of a serious illness. If you suffer

your activity level up.

with people who never smoked, it

a covered condition, the lump-sum

also found that people who quit by

payment you’ll receive can be used for

age 40 reduce their risk of

many purposes.

diabetes and even cancer. Also, choose good cooking oils and read food labels carefully.

• For good preventive health, cut

42

carbohydrates,

or

lifestyles.

back on soda, candy and sugary

smoking-related

desserts, which can cause blood

percent.

death

by

90

We pay our greatest respect and honour to our loved ones by sending them off with dignity.

Talk to us to find out how we fit into your future financial goals.

T: + 267 261 4741 / 267 297 0331 www.facebook.com/HIMHBurialSociety/

Wills & Last Testaments

By Kelly Kewagamang, Partner at Rantao Kewagamang Attorneys A will is a legal document in which a person expresses his/her wishes on how their property/assets ought to be distributed after their death. It basically gives the departed a voice.

A will specifically provide how one’s assets/property, be it tangible, corporeal / incorporeal or immovable, ought to be distributed among the chosen beneficiaries. It names guardians of minor children and outlines the sources to be used to pay off the debts due by the estate should there be any. It also provides for an executor- who is a person who carries out the instructions of the deceased. The executor cannot be a beneficiary under the will.

Formalities of a will are found in the Wills Act Cap 31:04. An admitted Notary Public of the Republic of Botswana would be in a position to draw up a will in accordance with the law and have same lodged with the Master of the High Court of Botswana as required.

It should be drawn up strictly in accordance with the law to limit the possibility of legal and other challenges.

A will is perhaps the most important piece of document an individual can execute in their lifetime as it protects one’s assets. Ideally everyone who owns property should have a will as it gives you an opportunity to have a say in what happens to your estate. In the event one dies without a will, the “Rules of Intestacy” kick in and the estate will be wound up in terms of the provisions of the Administration of Estates Act.

“Ensure that your last Will and Testament is in order. For the sake of your loved ones.”

46

IMPORTANCE OF HAVING A WILL

4.

Joint Will- a Will executed by two people. When one dies, the will provides for the estate to pass

•

•

A will primarily prevents intestate succession, where

to the other. It will also provide instructions on

ones estate is distributed amongst family members,

how the estate will be wound up on the death of

some of whom may not have been ideal beneficiaries

the last Testator to prevent the last person from

in terms of your wishes.

changing the will. This is a form of a couples Will.

Some common ones are;

Therefore, by executing a will, you ensure that your

a.

assets will be distributed according to your wishes.

Mirror Will- two people make identical wills which include mutually agreed

•

Your beneficiaries will be well cared for, from the

beneficiaries should they both die at the

proceeds of your estate- this is primarily because

same time. Unlike with the Joint Will,

dealing with an intestate estate is a prolonged tedious

the surviving person may change the will.

process that may potentially see the entire estate b.

frozen until the process has been finalised.

Mutual Will- it is in simple terms a hybrid of the Joint Will and the Mirror

A will, in as much is forces one to reckon with their mortality,

Will. Two people make wills with

may perhaps be the key to solving most family feuds that occur

identical provisions, with a promise that

in the event of one’s death.

the survivor will not make changes later.

It is also important that on updates their will on every milestone

5.

reached i.e, acquisition of more property, marriage, divorce, more

meaning of a will. A Living will provides

children etc. In the event one dies and the latest property acquired

instructions on how to deal with the Testator in

has not been catered for the in will, that portion of the estate will

the event they are not able to make the decisions

be dealt with in terms of the laws of intestacy.

themselves. It provides for instances such as when the Testator is in a coma, or for burial of the

TYPES OF WILLS 1.

the standard set out in the Wills Act Cap 31:04.

2.

Testator.

Statutory Will- signed by the owner (Testator) before a Notary Public. It confirms in terms of formalities to

Living Will- it does not fall within the ordinary

6.

Testamentary Trust Will- it is simply a Trust established by way of a will.

Holographic Will- a handwritten will. Does not need to

There are other type of wills that may or may not apply to

be witnessed nor confirm to the formalities as

most jurisdictions depending on the state laws. A Notary

outlined in the Wills Act.

public should be able to advice on the validity of any will you desire to execute.

3.

Conditional Will- it shall be valid only if the conditions stipulated therein are met. In the event the conditions are not met, the estate shall be dealt with in terms of the laws of Intestacy.

47

Why dream of the future when you can make it a reality!

Talk to us to find out how we fit into your future financial goals.

T: + 267 261 4741 / 267 297 0331 www.facebook.com/HIMHBurialSociety/

51

Prepare for their education

Business Insurance

Attract and Retain Employees

By Modiri Nlanda Liquorama, HR Manager As an employer, if you had an open

turnover. Attracting and retaining a

company's business strategy. The

position in your company, what

talented, committed workforce is

current job market has also shown

would your job advert look like?

crucial for employers. Employers

that there is a lot of poaching and

It will obviously mention the salary

that are able to target their benefit

head hunting done by recruiters.

or give an idea of how much the salary

package to attract and keep the

As an employer, it is pertinent for

would be. Over and above the basic

employees they need to succeed gain

you to offer competitive packages

salary range, the offer letter will

a valuable competitive advantage.

inclusive of employee benefits.

mention other employee benefits. If

The

employee

The acquisition of skilled and

not, as an employer you might want

benefits is something that can't be

dedicated workers will help create

to rethink that the level of retention

overstated. Most employees value

a strong foundation for any

you want to have you in your

their benefits as much as they do

business.

business. Offering a high wage in a job

their salary. There are also a number

individuals on board, helps to

advert instead of benefits might

of reasons that employers should

create

attract applicants at first, but what is

consider offering multiple benefits to

differentiate an employer from the

going to retain them after they are

employees. Here are a few reasons

mere masses. Rather than offering

hired?

why an employer must consider

the bare minimum, employers

salary

offering benefits to their employees:

must consider giving out benefits

combined with benefits and perks

a. Attraction – Today's job market

Offering

can

a

prove

competitive

to

be

a

win-win

importance

is

fiercely

of

competitive,

and

combination in promoting improved

getting the best new employees

work habits and reducing employee

is an important part of any

Bringing

tangible

these

benefits

that

that many new employees look for today, especially as the costs of living continues to skyrocket.

55

c.

Healthier employees – Assuming

a. Retention – Attracting great

interests in mind and value their

employees is only half of the

job performance. This can help

you offer some type of medical

battle. You need to keep them on

employers build a tight-knit team

aid or some sort of health plans,

your team once you hire them,

of professionals that will stay for

the employees should be in

and employee benefits will do

years.

relatively

just that. Employees are likely to

b. Morale and peace of mind – It is

be eyeing other organisations

important to note that morale is

that can give them the benefits

closely tied to the happiness of

they need. It is very difficult for a

employees.

business

know that you value them and

to

make

serious

Employees

their

constantly coming in and going.

organisation stay happy and loyal

When this happens, it’s hard to

and work harder for the company

establish a veteran team of

than they would without the

experts, and the overall talent

benefits. Most common benefits

level

provided

will

lack.

Fortunately,

contributions

also

to

include

If

or medical aid in place, there is a better likelihood that they will have regular checkups and take preventative

medical

steps,

which should help in ensuring

the

the

health.

employees have solid health plan

who

progress when employees are

good

they don’t take many sick days off hence improving efficiency and performance. d.

Productivity

–

By

offering

benefits, employees are given a

offering benefits packages is

employees’ family members (e.g.

reason

often enough to make employees

medical aid) that in turn gives the

employer and remain loyal. As a

stick around for the long run.

employee surety and peace of

result, they should be willing to

When employers invest in their

mind that their family will be

work harder, which can lead to

employees, it shows that they

partly taken care of should

greater productivity and higher

have

anything happen to them.

quality.

their

employees’

best

to

care

about

the

Obviously not all employee benefits

easily available to employees

are created equally, and certain

who do not have access to the

ones are more valued than

scheme.

a.

others. This, however, does not

d. Group Funeral Schemes – These

reduce the importance of the

is one of the most underrated

least valued. Listed below are

benefit as in most cases they are

some of the common benefits

not included in major benefits

that will help keep your current

such as retirement plans and

employees happy and attract

medical aid schemes. These

new employees:

benefits must be considered on

Retirement Plans – One of the

the basis that it’s interest of

major desired employee benefits

companies

is a retirement plan. The reason

employees and immediate family

is obvious – people want to

members have decent funeral

know that their future is secure.

farewells.

An employer who provides a retirement plan is likely to retain most of the employees as it gives them peace of mind. b.

Life Insurance – One of the most desired employee benefits is life insurance.

There's

certainly

something to be said for knowing that your loved ones will be taken care of after you're gone, and life insurance is provides peace

of

mind

that

many

employees desire.

to

see

their

Medical Aid Schemes – With

f. Wellness programmes - These have been reported to help in reductions of visits to the

health costs continuing to rise; medical aid is one aspect of employee benefits that will never go out of style. Medical aid remains one of the most sought after benefit from prospective employees as it provides easy access to medical doctors and specialists that might not be

absenteeism.

That’s

because

employees who participate in wellness programmes are often able to slow or reverse health conditions that might otherwise have

turned

Through the benefits they offer, employers send a message about what they believe is important. Most benefits communicate a concern for the financial and physical well-being of

e. Educational partnership – Many employees are looking for opportunities to balance academic pursuits with employment opportunities. It is therefore more appealing to an employee to be offered full or part scholarship to assist in pursuing further education. The need for training cannot be overemphasized.

doctors as well as curb employee c.

High performing workforce translates into highly profitable businesses that can afford better benefits for their workers. Enhanced employee benefits are hence a gateway to securing and creating a high performance culture in any business.

into

chronic

conditions. Wellness days can also be used to help build the spirit of team work.

employees.

These

benefits

communicate a desire to invest in employees’ total well-being, helping them achieve a better work/life balance. Fortunately, it’s a message that benefits both employers and employees, which is why many employers already view benefits as an investment rather than a cost.

Employees too understand benefits as an investment in their personal financial security. Winning companies are those that have struck this balance very well by ensuring that employees never have to be concerned about their welfare and hence are 100 per cent focussed on their jobs. High performing workforce translates into highly profitable businesses that can afford better benefits for their workers. Enhanced employee benefits are hence a gateway to securing and creating a high performance culture in any business.

57

Agents vs Brokers Keamogetse Motse Head: Business Development Exclusive Insurance Solutions Often, consumers are confused between

intermediary between you and the

to ensure that it possesses the adequate

the difference of an insurance broker and

insurance

coverage level.

an insurance agent. And this confusion is

essentially is administrative. An agent is

quite common. In fact, there are some who

responsible to sell, process forms on time

Unlike agents, brokers will work with

do not even realize that there exists any

and accurately, and the servicing of their

different insurance companies and can

difference at all. In Botswana, agents and

client policies. Agent sell policies for just

offer policies and plans from different

brokers are accredited and regulated by

a sole insurance provider. Comparisons

insurance companies, thereby helping

the Non-bank Financial Institutions

that are done by agents, can only be within

customers

Regulatory

the insurer that they are tied up to.

insurance policies, rates and plans.

Insurance broker

Through

Authority

(NBFIRA).

Generally, agent and brokers receive

company.

Their

liability

comparing

comparisons

of

various

multiple

underwriters/insurers, brokers can find

commission for their services. Below are some points that will outline the manner

An insurance broker will be capable of

the best available solutions/policies for

in which an agent and a broker differs and

offering different insurance products

their clients.

thereby help you in deciding who will

specifically for your consideration. There

work adequately for your needs.

need to possess a broker’s license that generally indicates that they are more

58

in

An agent

experienced, and qualified than an

An insurance agent in simple terms is an

insurance agent. A broker also has a higher

insurance expert who functions as an

liability. Brokers will analyze a business

Who to choose?

Brokers and Agents- The main

client will be given a broader product

avail a policy which offers you what

differences

suite to choose from, and the opportunity

you require.

The difference between brokers and

to select the best priced product.

•

agents are many such as, •

•

An insurance agent represents just

Discover the benefits of using a broker

brokers will offer you with the

one insurance company while an

A broker will sell insurance policies not

needed, unbiased advice. Brokers

insurance broker represents many

from

are

insurance companies.

companies. To work with them can be

regarding the industry along with

really beneficial, and below are some of

the various companies which are

the reasons why;

present

An agent will generally work for an insurance company and a broker for their clients.

•

An agent requires in learning about the products of just a single company that help to simplify their learning curve and brokers should know the services and products provided by different companies.

In regards to brokers, remaining current

and

offering

reliable

product knowledge to the clients can prove challenging.

•

Unbiased advice - to work with

one,

but

several

insurance

• More choices/ ability to shop

in

knowledgeable

the

marketplace.

Besides, they have successfully

around - as opposed to working

worked

with a single insurance company

possess a good idea as to; which

that

insurance

company holds the finest track

options; working with brokers is a

record with regards to promise

smart choice as they can show all

delivery. Furthermore, they can

the options to you from different

also help in narrowing down your

insurance companies. This ensures

options and guide you in selecting

that you get a policy in line with

the appropriate cover placed by the

your current insurance needs.

finest insurance company present

Besides, they will also help you in

in the market.

offers

limited

with

customers

and

pointing out the different forms of policy

covers

which

you/your

The experience, qualification for

business may require for staying

an insurance broker is much higher

secure from all forms of risk factors.

than that of an insurance agent.

extremely

•

Assist with claims - if an insurance claim arises, a broker will assist with the whole process. The fact that the insurance industry is one

• Save money - another big benefit of

which is extremely complicated

Whom to choose?

using a broker is that you can save

with immense technical jargon

There are several opinions in this regard,

money. By checking the different

being used, brokers assist in

but one thing that is for sure; regardless

options, you can pick one which is

breaking it down for their clients.

of being certain as to which insurer is

more affordable than the rest.

Having a trained expert to work for

needed, the best choice will be joining

Rather than concentrating on a

you rather than an insurance

hands with a competent professional who

specific company or brand, they will

company will certainly lead to a fair

help you in getting the best deal. It

settlement which will help a great

is this factor that will enable you in

deal in putting you back where you

saving money on the premiums and

had been before the loss.

understands the business of insurance.

Access to multiple underwriters gives brokers an edge over agents hence the

59

â—?

Assist you to get the perfect

that is most ideal for you and at an

they will deliver ethical conduct,

policy- an insurance broker will

affordable price.

impartial advice as well as disclose complete information which may be

help in analyzing the dangers and risk

factors

organization

which mostly

you/your faces

regarding your requirements and demands for choosing the right policy. Also, they will guide you and make you aware should your present policy require an upgrade.

Further, they know each and every detail related to the different insurance agencies in the market, thereby helping you get a policy

While investing in a business, vehicle, life or personal insurance you are indeed spoilt for choice. You can purchase it from an insurance company directly, get it from an agent or a broker. The majority of brokers can help you in saving a lot of time, money and effort by finding for you the best insurance deal. It is always wise to hire an experienced broker that can assist in simplifying the paperwork for offering you maximum ease. Consulting a broker for purchasing your insurance is always a smart decision. This is because

needed for making an informed decision.

The best part is they will help you right from the beginning till the end, thereby offering

you

unmatched

service.

Insuring

your

customer business

undoubtedly is essential. No matter the size or type of business, having the right policy coverage is a must. The bottom line is, if you own a big business, then it is wise to hire an insurance broker, while an agent is adequate for small businesses.

Ease the financial burden during times of distress

Summary of Court of Appeal Judgement on Damages for Unfair Dismissal Compiled by Kelebogile Kewagamang & Joseph Akoonyatse, September 2016, Gaborone

CASE NAME:

Chakalisa Ronald Phuthego & 4 Others vs Barclays Bank Botswana Limited

COURT:

Court of Appeal

DATE OF JUDGMENT:

28 July 2016

CORAM:

[Full Bench], i.e. 5 Judges of Appeal sitting.

1.0

INTRODUCTION 1.1

For the longest time, the High Court of Botswana has been grappling with the question of how much, in terms of monetary damages, an employee who has been unlawfully dismissed from work should be paid by their former employer. Different judges have been deciding the question differently, using different approaches and awarding different amounts even in cases which were otherwise materially similar to each other. As a result, there has been no consistency in this area and employers and employees alike have not been certain as to what to expect from the courts in any specific case.

1.2

The Court of Appeal, as the highest court in the land, whose decisions are binding on the High Court, has also not been exactly clear in guiding on how to approach the question of damages for unlawful termination of employment. The Court of Appeal has over the years created essentially 2 tests/approaches to the matter.

1.2.1

The first approach can be referred to as the ABM approach (from the Court of Appeal judgment in the case of ABM University College vs Reinford Khumalo - 2012). This approach states that the measure of damages for unlawful dismissal is: “… the actual loss suffered by him [i.e. the dismissed employee], represented by the sum due to

him for the unexpired period of the contract less any sum he earned or could reasonably have earned during such latter period in similar employment.”

1.1.1

The second approach can be referred to as the ZIMBANK approach (from the Court of Appeal judgment in the case of Zimbank Botswana Limited vs Makura - 2002). This approach states that the measure of damages for unlawful dismissal is:

“… the amount the employee would have earned under the contract for the period until the employer could lawfully have terminated it, less the amount he would reasonably be expected to earn in other employment…”

64

1.2

The 2 approaches are evidently different, and it has not been particularly clear as to when to apply one approach and when to apply the other. It was for this reason that when it was faced with the same question in the case of Chakalisa Ronald Phuthego & 4 Others vs Barclays Bank Botswana Limited, the High Court elected not to complicate matters further but rather to refer the matter to the Court of Appeal for consideration and guidance. This was done in terms of a procedure allowed under the law – section 15 Court of Appeal Act. The Court of Appeal was asked to answer the question:

“What is the measure of damages in matters of unlawful termination of an employee’s employment?”

1.3

2.0

3.0

Having considered the matter in detail and the applicable law, the Court of Appeal answered the question in the manner indicated at paras [3.1] – [3.8] hereinbelow.

THE BRIEF FACTS IN THE CHAKALISA RONALD PHUTHEGO & 4 OTHERS CASE

2.1

The 5 plaintiffs in the Chakalisa Ronald Phuthego & 4 Others vs Barclays Bank Botswana Limited case were former employees of Barclays Bank. The plaintiffs had been terminated from their employment and they sued Barclays Bank at the High Court of Gaborone for what they regarded as unlawful termination.

2.2

The judge at the High Court then referred the matter to the Court of Appeal for the Court of Appeal for consideration and guidance as already indicated at para [1.3] above.

HOW THE COURT OF APPEAL DETERMINED THE QUESTION POSED BY THE HIGH COURT

3.1

The Court of Appeal looked at the 2 approaches mentioned at paras [1.2.1] and [1.2.2] above and noted the following key feature about the approaches: a.

that the ABM approach provides that an employee who has been unlawfully dismissed must be paid damages representing the sum/amount due to her for the unexpired period of her contract, i.e. the balance of the contract.

a.

that the ZIMBANK approach provides that an employee who has been unlawfully terminated must be paid damages representing the sum/amount due to her for the period entailed in effecting a lawful termination.

1.1

The test in the ABM approach is therefore about “the actual loss suffered by the employee”[i.e. actual lost wages].

1.2

The test in the ZIMBANK approach on the other hand is about “the time taken to undertake a lawful termination”.

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1.1

The Court of Appeal thereafter considered the relevant sections from the Employment Act of Botswana and reached the following conclusions: 1.1.1

1.1.2

The Employment Act recognizes in effect 2 broad types of the employment contracts, these being: i.

a contract for a specified period of time (also known as a fixed-term contract) and

ii.

a contract for an unspecified period of time (also known as a permanent contract)

The Court then divided these 2 broad types into 4 categories, being: i.

a fixed-term contract that does not have a clause which allows for earlier termination on notice – the Court referred to this as Category A;

ii.

a fixed-term contract that contains a clause which allows for earlier termination on notice – the Court referred to this as Category B;

iii. a permanent contract that does not have a clause which allows for earlier termination on notice – the Court referred to this as Category C; iv. a permanent contract that contains a clause which allows for earlier termination on notice – the Court referred to this as Category D. 1.1.3

The Court then found that the Employment Act (at sections 17, 18 and 19) allows for termination of a permanent contract on notice, notwithstanding anything to the contrary which may be captured within the employment contract.

1.1.4

The Court of Appeal determined that there is no provision in the Employment Act which obliges an employer to provide a valid reason before he can dismiss a permanent employee on notice. A valid reason (in the nature of serious misconduct) is required only if the employer intends to dismiss the employee without notice.

1.1.5

The Court of Appeal therefore went on to determine that past judgment of the courts in Botswana which had indicated that the employer is obliged to have a valid and fair reason for termination on notice were not correctly decided and should no longer be followed.

The Court of Appeal in particular referred to the Industrial Court decision in the case of Motsumi vs FNBB (1995) where the Judge in that case had said that:

“…when an employer wants to terminate a contract of employment which is for an unspecified period of time, he must have just cause for doing so and also has to give his reasons thereof”.

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1.1.1

The Court of Appeal held that the decision in the Motsumi case is incorrect and must not be followed – see at para [21] of the Court of Appeal judgment.

1.1.2

The Court of Appeal noted however that sections 17, 18 and 19 of the Employment Act do not address the termination of a fixed-term contract on notice before the agreed time lapses. In this way the Court found that one must then be guided by the common law.

The Court said that the common law principle is that in a breach of contract scenario, the innocent party must be compensated in the manner as if the contract had been performed properly or as initially agreed. In this way, if an employee on a fixed-term contract is unlawfully dismissed before the expiry of the agreed contract term, then the amount of damages due to that employee is the sum equal to the remaining period of the contract, i.e. the balance of the contract. However, where a fixed-term contract contains a clause that says the contract may be terminated on notice (i.e. before the agreed period lapses) then the amount of damages if an employee in that contract is dismissed unlawfully will be the sum equal to the notice period.

1.1.1

In the end the Court of Appeal therefore decided that the correct measure of damages to award to an employee who has been unlawfully dismissed is as follows: i.

for Category A contracts – apply the ABM approach;

ii.

for Category B contracts – apply the ZIMBANK approach;

iii. for Category C contracts – apply the ZIMBANK approach; iv. for Category D contracts – apply the ZIMBANK approach; 1.2

Kindly note, however that the Court of Appeal also found that whatever approach is adopted, the employee who has been dismissed has a duty to mitigate her loss and therefore that any amount earned by such employee in mitigation of loss should be deducted from whatever damages awarded to her.

1.3

It should also be noted that in a different judgment by the Court of Appeal (also delivered on 28 July 2016 – being the case of Botswana-Baylor Children’s Clinical Centre of Excellence vs Marape Marape) the Court of Appeal ruled that an employee who was employed on a fixed-term contract that allows for termination on notice but on condition that there is a valid reason for such termination, may not be lawfully terminated just on notice. Such an employee, if dismissed on notice when there is no valid reason, will be entitled to damages equivalent to the balance of her contract, i.e. the ABM approach will apply.

1.4

Lastly, it is to be noted also that the Court of Appeal said in the Chakalisa Ronald Phuthego & 4 Others case that the previous view that the amount of damages for unlawful dismissal could be influenced by the circumstances surrounding the termination of employment is wrong. The Court of Appeal referred with specific reference to the earlier statement made by the Late Legwaila JA in the case of Unchartered Africa Safaris vs Niehaus (2013) where Legwaila JA had stated that:

“The quantum of damages may, of course, also be influenced by any mitigating or aggravating circumstances of the termination.”

1.5

1.0

The Court of Appeal in the Chakalisa Ronald Phuthego & 4 Others case said the above statement

by Legwaila JA was not supported by any known authority and that the statement is not binding authority.

THE MEANING OF THE JUDGMENT OF THE COURT OF APPEAL 1.1

The meaning of the Court of Appeal decision in the Chakalisa Ronald Phuthego & 4 Others case and in the Marape case, as captured at paras [3.4.8] and [3.6] above respectively, can be presented with the following illustrations: 1.1.1

Category A contract illustration: Paul is employed by XYZ (Pty) Ltd on a fixed-term of 36 months (3 years). The contract of employment does not have a clause which allows for earlier termination on notice. At month 15 Paul is dismissed when there is no valid reason for the dismissal. Paul is entitled to damages equivalent to the remainder of his contract, i.e.

21 months (36 - 15).

1.1.1

Category B contract illustration: Paul is employed by XYZ (Pty) Ltd on a fixed-term for 36 months (3 years). The contract of employment contains a clause which allows for earlier termination on a 3 months’ notice. At month 15 Paul is dismissed when there is no valid reason for the dismissal. Paul is entitled to damages equivalent to 3 months’ salary (i.e. the time period of the notice). Note that the employer could simply put Paul on a 3 months’ notice at the end of which Paul will leave and there will be no damages payable. Or the employer could choose to pay Paul a 3 month’s salary in lieu of notice in which event Paul will leave immediately and there will be no damages payable.

1.1.2

The Marape case illustration (see at para [3.6] hereinabove): Paul is employed by XYZ (Pty) Ltd on a fixed-term of 36 months (3 years). The contract of employment contains a clause which allows for earlier termination on a 3 months’ notice provided that there is a valid reason for issuing the notice of termination. At month 15 Paul is dismissed on notice when there is no valid reason for the dismissal. Paul is entitled to damages equivalent to the remainder of his contract, i.e. 21 months (36 - 15). Unlike in Category B contract, the employer here may not simply put Paul on a 3 months’ notice or make payment in lieu of the notice.

1.1.3

Category C contract illustration: Paul is employed by XYZ (Pty) Ltd on a permanent contract. The contract of employment contains a clause which does not allow for earlier termination on notice. Paul is dismissed when there is no valid reason for the dismissal. Paul is entitled to damages equivalent to 1 months’ salary (i.e. the time period allowed for notice of termination under the Employment Act.) Note that the notice period is 6 weeks (1.5 months) if the employee has been in service for more than 10 years.

1.1.4

Category D contract illustration: Paul is employed by XYZ (Pty) Ltd on a permanent contract. The contract of employment contains a clause which allows for earlier termination on a 3 months’ notice. Paul is dismissed when there is no valid reason for the dismissal. Paul is entitled to damages equivalent to 3 months’ salary (i.e. the time period of the notice).

1.1

It is not yet clear however whether the Court of Appeal judgment applies to cases which are resolved at the Industrial Court. This is so since: 1.1.1

The Trade Disputes Act (which creates and establishes the Industrial Court) states that the Industrial Court may award compensation to an employee who has been wrongfully dismissed or wrongfully disciplined. In assessing the amount of compensation to be paid, the Industrial Court is permitted by the Trade Disputes Act to take into account any of the following factors:

a. the actual and future loss likely to be suffered by the employee as a result of the wrongful dismissal;

b. the age of the employee; c. the prospects of the employee in finding other equivalent employment; d. the circumstances of the dismissal; 68

1.2

a.

the acceptance or rejection by either the employer or the employee of any recommendations made by the Court for the reinstatement of the employee;

b.

any contravention of the terms of any collective agreement or of any law relating to employment by the employer or the employee;

c.

the employer's ability to pay.

1.1.1

However, as indicated above, compensation is only to be paid, even under the Trade Disputes Act, where the Industrial Court determines that an employee has been wrongfully dismissed or disciplined.

1.1.2

The practice of the Industrial Court has been to approach dismissal from 2 basic angles – substantive fairness (which requires that there be a valid reason for dismissal) and procedural fairness (which requires that there be a fair process in dismissal of employees, usually a prior hearing/consultation of some sort.)

1.1.3

It remains doubtful whether (in view of the employer’s right to terminate simply on notice as the Court of Appeal says in the Chakalisa Ronald Phuthego & 4 Others case), the Industrial Court could still insist of substantive fairness in dismissals of employees. It is doubtful whether in such instances the Industrial Court will then legitimately find a dismissal to have been wrongful when an employer acts within the parameters of the Chakalisa Ronald Phuthego & 4 Others case. As is well known, decisions of the Court of Appeal are by law binding on the Industrial Court.

1.1.4

The fact that the Court of Appeal also held that the decision in Motsumi (which said that an employer requires a valid reason for dismissal) is incorrect and must not be followed also creates a reasonable impression that the Chakalisa Ronald Phuthego & 4 Others case may be applied to cases that come before the Industrial Court.

1.1.5

Be that as it may, please note that the present case summary is not providing any opinion or views on that aspect.

It is also not yet clear however whether the Court of Appeal judgment applies to cases between public servants and their employer (government). This is so since: 1.2.1

Public servants are governed not by the Employment Act but rather by the Public Service Act.

1.2.2

Section 26(1) of the Public Service Act details the circumstances by which the employment of a public servant may be terminated, but section 26(3) goes on to state that: “The provisions of sections, 18, 19, 26 and 27 of the Employment Act shall apply with the necessary modifications, to terminations under this Act.”

1.0

1.2.3

Sections 18 and 19 Employment Act are the sections which the Court of Appeal says in the Chakalisa Ronald Phuthego & 4 Others case that they permit lawful termination on just notice or payment in lieu of notice alone.

1.2.4

Be that as it may, please note that the present case summary is not providing any opinion or views on that aspect.

LEGAL DISCLAIMER 1.1

In conclusion, please note that the discussion made above is meant for information only and does not purport to offer any legal advice on any similar or related matter which you may currently have.

The golden thread in law is that each case is determined on its own merits, so please do seek and obtain proper legal advice before you act on any matter that involves any of the issues discussed hereinabove.

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