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”.
65
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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