of the Employer Magazine Jan - Jun.2012
The Employers’ Consultative Association of Trinidad and Tobago The Premier Employers’ Representative
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Voice of the Employer Jan - June 2012
of the Employer Magazine Jan - Jun.2012
The Employers’ Consultative Association of Trinidad and Tobago The Premier Employers’ Representative
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Our Vision To be the Premier Employers’ Representative Our Mission To Advance Employers Interests for the creation of optimum sustainable value for all stakeholders. Our Mandate To provide employers with quality representation at the organisational, national and international levels in order to ensure the strength and success of the employer community for the socio-economic wellbeing of the nation.
Chairman and Executive Director’s Profile 4 Focus on Youth Unemployment 5 ECA’s Local Agenda 7 Regional News 10 International News 11 Industrial Relations Guidelines 15 Contracts 16 Probation 17 Policy Manual 18 Job Abandonment 19 Absenteeism 20 Grievance Handling 21 Maternity Act 22 Retrenchment 23 Occupational Safety & Health 24 Industrial Action 25 Retirement due to Ill health 27 Small Business Focus 29 Technology & SME’s 30 5 Rules for Good Business’ 31 Upcoming ECA Events 32 New Members 32 Heart of Your Business 34 Critical Facebook Questions 37
Board Members - Keston Nancoo (Chairman), Suzetta Ali (Vice Chairman) Linda M. Besson (Executive Director/Corporate Secretary), Ruben Mc Sween, Martin de Gannes, Neil Derrick, Victor Coombs, Dexter Charles, W.A. Hilton Clarke, Lennon Ballah-Lashley, Charlene Pedro, Gwendoline McLaren, Imran Khan, Narendra Kirpalani, Farzan Ali, Russell George and Henley Harewood Publisher: Linda Besson Editor: Marsha Gomes Layout & Cover Design: Marsha Gomes Editing: Annette Joseph, Avery Purcell Advertising Sales: ECA Team - Marketing Department Employers’ Consultative Association of Trinidad and Tobago 17 Samaroo Road, Aranguez Roundabout North, Aranguez Tel: 675-5873, Fax: 675-4866 Email: ecatt@tstt.net.tt, Website: http://www.ecatt.org Advertisers : - Ministry of Energy and Energy Affairs, TSTT - Smart Business Solutions, Regency Recruitment Services, The National Insurance Board of Trinidad and Tobago, The Environment Management Authority, Neal and Massy Automotive (Hyundai) The views expressed by the ECA Voice Magazine are not necessarily those of the ECA. The ECA accepts no responsibility for the views expressed by contributors nor for errors in contributed articles or advertisements. Reproduction in whole or in part without written permission is strictly prohibited. © Employers’ Consultative Association of Trinidad and Tobago – All Rights Reserved.
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The Business Toolkit
CHAIRMAN’S Mr. Nancoo is the Group Vice President, Human Resources and Corporate Services at Guardian Holdings Limited and has over thirty years of experience within the manufacturing sector, both locally and regionally, in Human Resources especially in the area of Employee Relations, Industrial Relations, Marketing and Communications. He served for some ten years as the Branch Secretary of NUGFW, and has been a member of the Employer’s Consultative Association’s Board for over four years. Keston has a B.Sc (cum laude) in Business Administration and a MBA in Marketing from Andrews University in Michigan, USA. His training did not cease at his MBA but his aspirations and commitment to his career also led him to pursue additional training at The Chicago Business School and Harvard Business School.
EXECUTIVE DIRECTOR’S PROFILE Linda M. Besson, is the Executive Director and Corporate Secretary to the Board of Directors of the Employers’ Consultative Association of Trinidad and Tobago and Executive Secretary to the Caribbean Employers’ Confederation (CEC) - the Regional Body of Employers Organisations/Associations. Mrs. Besson has over 30 years’ management experience. She has spent more than 15 years in her current position at the ECA and 14 years at the CEC. Prior to joining the ECA she worked as a consultant manager to Trinidad Cement Limited Group of Companies. Previously she worked at Eastern Credit Union Co-operative as General Manager. Mrs. Besson is adept and experienced at building and developing organisations. She is very much at home working with people and at empowering those around her to see the vision she sees and shares. This has been very well demonstrated in the 15 years she served as Chief Executive Officer of the Eastern Credit Union. In 1993 Linda Besson was the only female CEO in the top 50 companies in Trinidad and Tobago. She has an International MBA and is a member of the Association of Business Executives (ABE). Linda Besson has acquired expertise in the development and implementation of Management systems and has project-managed programmes. She also has wide experience in Administration, Financial and Credit Management, Business Development, Public Relations and Managing Change. Her success is demonstrated in the fact that she is responsible for the growth of the ECA from 75 members in 1996 to over 684 members as at June 2012. She also manages a team of 29 persons, including professionals and support staff and is responsible for the forward looking approach the organisation currently holds. The ECA ranks as one of the top Business Organisations in Trinidad and Tobago, being the largest in terms of membership, its service delivery and for its role in Industrial Relations. As the Executive Secretary/Treasurer of the CEC Linda Besson is responsible for the day-to-day administration of the Secretariat, for ensuring that the Confederation is represented at all meetings, workshops and seminars to which it is invited. She coordinates projects and programmes that the regional body may be called upon to carry out, including those coordinated through CARICOM (PANCAP-HIV/AIDS).
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The Employers’ Consultative Association of Trinidad and Tobago
Voice of the Employer Jan - June 2012
CHAIRMAN’S ADDRESS
FOCUS ON YOUTH UNEMPLOYMENT that gathered 100 young leaders in Geneva from the 23 – 25 May, expressed the collective view that they are not being listened to and - “there can be no solution for them without them”. More importantly, there is the need to complement representative democracy with participatory democracy. In short, they want to be part of the decision-making process.
The ECA has always seen the celebration of Labour Day as not merely a celebration for the outstanding achievements of Labour throughout the years, but more importantly, as a day of reflection. Of even greater significance, is the belief that management/Labour relationship has reached a point of inflection, given the current state of the Industrial relations climate in our nation. As the nation celebrates its 50th year of independence and the Labour Movement celebrates its 75th Anniversary, our Labour Day message focuses on our youth who are our future leaders, professionals, entrepreneurs and employees. At the 101st Session of the International Labour Conference the focus was on the burning issue of ‘youth employment’. The Global Economic and Financial Crisis intensified the challenges around youth employment making it a real crisis where there is still so much uncertainty around its depth and duration. The global statistics are very compelling and pose a tremendous global challenge for policy makers, both at the national and global levels. According to the International Labour Organization (ILO), close to 75 million young people worldwide are unemployed, four million more than in 2007, while more than 6 million have given up looking for a job. Generally, youth jobless rates are nearly 3 times that of adults. More than 200 million young people are working but earning under US$2.00 a day. The incidence of part time and temporary work has increased significantly. Informal employment amongst young people remains pervasive. The feedback from the 2012 Youth Employment Forum
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Some of the guiding principles to assist and combat youth unemployment locally and worldwide are: • To ensure that our policy responses are multi-pronged, coherent and context- specific; • To assign highest priority to youth employment in national development frameworks and to accelerate the implementation of our National Youth Policy; • To involve all social partners in policy decision-making through meaningful social dialogue; • To provide innovative and multi-stakeholder partnerships engaging the Government, social partners, educational institutions, communities and our young people; • To make sure that the impact of programmes are monitored, evaluated and regularly reported on, to inform further policy action; • To make youth part of the solution. Their voices should be heard, their creativity engaged, and their rights respected in dealing with the youth employment challenges. The ECA believes that critical action items to achieve these principles fall under the question of youth employability as it relates to the areas of education, training and skills, and the school-to-work transition. The following areas must therefore be looked at as we move towards developed country status: • Education, training and lifelong learning foster a virtuous cycle of improved employability, higher productivity, income growth and development. Continued efforts should be focused on achieving greater levels of alignment between quality of education and skills as well as their relevance to labour market requirements. Skills mismatches remain a major constraint for the employability of our young people; Continued on next page.
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“Youth unemployment has been shown to be tightly linked to social exclusion, as the inability to find employment creates a sense of uselessness and idleness among young people.” • There is also a growing segment of young people some of them drop-outs without basic reading, writing and numeracy skills for which ongoing attention need to be paid. For school drop-outs and young people that are neither in employment nor in education, second-chance initiatives such as alternative training modalities with their delivery and non-traditional curriculum being offered in informal or non-formal settings; • Recourse to internships, apprenticeships and other work experience schemes. • Students should be encouraged to pursue graduate level programs notwithstanding the fact that graduate unemployment is also emerging as a key challenge with the risk of eroding the attractiveness of higher education. Education and training are essential for young people to enter the labour market successfully as they increase their potential productivity and employability. There is a strong link between educational attainment and employment outcomes. The ECA is committed to working with all stakeholders on the way forward and recommend that as a nation we look at: • Continuously improving the links between education, training and the world of work through meaningful social dialogue on enhanced technical/vocational education and training, including apprenticeships, other experience schemes, (such as internships) and work-based learning; • Developing skills strategies in support of sectoral policies that harness technologies and know-how and result in higher skills and better paying jobs; • Improving the system of informal apprenticeships, for example (hairdressing, mechanic, nail technicians) through complimentary learning at the workplace with more structured institutional learning; upgrading the skills of master craft persons; including literacy training and livelihood skills; strengthening community involvement, especially to open more occupations for young
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women; • Regulating and monitoring apprenticeship and other work experiences, including through certification, to ensure they allow for a real learning experience. Continuing to expand the reach of formal education and training through distance-learning strategies that integrate printbased material, remote study and access centres, and face-to-face components; • Improving mechanisms for early identification of potential drop-outs and support them to stay in school; • Supporting second-chance initiatives to facilitate the acquisition of basic knowledge and competencies both for those who dropped out too early or never attended school and for the unemployed who want to resume their studies with particular attention to young women and girls; • Developing systems of recognition of prior learning and skills acquired on the job; • Including job-search techniques in school curricula in order to strengthen career guidance and youth’s access to information on career opportunities; • Scaling-up social protection measures to help poor households manage risks without compromising on education, including through cash or food vouchers integrated in broader social protection strategy, while paying attention to the institutional and financial capacities for implementation; • Investing in youth entrepreneurship initiatives, which guides the economic development process as each generation takes its place in contributing to the nation’s gross domestic product. The price of the social debt to our young nation could be high if we choose not to act and act now. Young people are the drivers of economic development in a country, foregoing this potential is an economic waste. Youth unemployment has been shown to be tightly linked to social exclusion, as the inability to find employment creates a sense of uselessness and idleness among young people. We have seen in Asia and other parts of the world an increase in demonstrations and protests by young people. The call for action is for us to take a proactive approach to this growing phenomenon, keeping in mind that overall success requires a collective approach which has at its very foundation social dialogue and partnerships between the tripartite partners and other key stakeholders - educational institutions and most importantly strong representation from the youth of our beloved nation. Keston Nancoo Chairman
The Employers’ Consultative Association of Trinidad and Tobago
Voice of the Employer Jan - June 2012
ECA’s LOCAL AGENDA
Social Dialogue a MUST
Opening of Workshop on Social Dialogue Process for Trinidad and Tobago hosted by the Ministry of Labour, Small and Micro Enterprise Development (June 2012) The Employers’ Consultative Association of Trinidad and Tobago is deeply honoured to be a part of this workshop which has come at a time when the Global Economic and Financial Crisis have exacerbated the challenges for governments regionally and internationally. The International Labour Organization in its working definition defines Social Dialogue to ‘include all types of negotiation, consultation or exchange of information between representatives of governments, employers and workers, on issues of common interest relating to economic and social policy.’ It can exist as a tripartite process, with governments as an official party to the dialogue, or as bipartite relations between representatives of labour and on one or more employers. The Theme for this workshop is, “Towards People-Centred Development - Social Dialogue as the key driver” and has as its primary objectives: a. To establish a multi-partite operational framework in which to engage social partners; and b. To build commitment and trust among social partners. Among us today, are representatives from organisations which have had rewarding experiences with the implementation and execution of a framework where tripartite partners have used the medium of social dialogue to achieve socio-economic development and national prosperity, including effective crisis recovery responses.
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According to Jonko Ishikawa in the ILO publication - Key Features of National Social Dialogue, Social Dialogue at the national level has become an important component of good governance in many countries. Tripartite social dialogue in economic and social-policy making has a fundamental role to play in furthering democracy, social justice and a productive and competitive economy. The association of all three parties concerned in the design and implementation of economic and social policies facilitates consensus building with a balance between demands of economic development and social cohesion. It also provides the best possible scenario for the effective and sustainable implementation of the policies concerned, minimizing the risk of industrial and social conflict. Moreover, Social Dialogue provides social partners and other key stakeholders with the opportunity to participate in deciding their future. Continued on next page
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In order to place my opening remarks in its proper perspective, I took some time to look at the pathways that would have led to those rewarding experiences in countries like Singapore and Barbados among the many others, so as to get a better understanding of what we would need to do as a nation in order to experience similar levels of success. What I discovered is that there is a common thread which speaks to the key drivers that motivated and influenced the decision by those countries to take ownership for their future, by securing the participation, involvement and commitment of tripartite partners to engage in a process that would have led to the achievement of socioeconomic development and prosperity. • That common thread was the need to “SURVIVE” driven by the desire for wealth creation, economic and social progress, social security, stability and equity - a better life for their citizens. • A period of industrial unrest in the early sixties and an industrial relations climate, characterized by the adoption of adversarial and confrontational positions • High unemployment, which may be attributed to poor economic and social conditions • In the case of Barbados - the introduction of the International Monetary Fund structural adjustment program Here in our beloved Nation, though we have much more to be thankful for when we compare our economic performance with our regional counterparts, we need to keep in mind that the medium term economic prospects for the region continue to be uncertain. While we have many more options than our regional neighbours, given the uncertainty surrounding our natural resource endowments and the increasingly more difficult global economic environment, we would need to undergo considerable social and structural transformation, if we are to maintain or even increase the relatively high standards for which we have become accustommed. In short, time may not be on our side and the time for action is now!. What is encouraging is that we do not have to reinvent the wheel. There are quite a few proven and tested successful models from which key learnings can be had. Quite a lot have been said about the Singapore Model and bringing it much closer home - the Barbados model. Briefly, what are some of the key success factors from the Singapore model? • Strong leadership with a Global mind set. The country’s first Prime Minister, Lee Kuan Yew, who served for 30 years, was a strong, decisive, visionary leader, who
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enabled a corporate governance model which had at its foundation, sound ethical principles, which everyone had to practice. • The Agreement by tripartite partners to a shared vision through a process of consensus building • High levels of collaboration, cooperation, understanding, mutual respect and trust between social partners. • The willingness to put country first What is even more interesting was the very structured approach with clear definitions of roles and responsibilities for every member of the tripartite social partnership. Underpinning the shift toward sound and harmonious industrial relations that started with the establishment in 1972 of the tripartite National Wage Council, which brought tripartite partners together to formulate wage-related guidelines through social dialogue to achieve orderly and realistic wage adjustments. Social Dialogue and Reform were also used by Barbados in the early 1990s. Based on a series of social partnership agreements, the IMF prescription of devaluation was avoided, and the parties focused on improving competitiveness and productivity and accepted wage freezes until the corresponding productivity gains were achieved. Social dialogue facilitated implementation of difficult economic decisions in Barbados and achieved stabilization and economic growth. What therefore should inform the process that we should adopt? • Continued demonstration of strong leadership with a Global mind set • Agreement of a shared vision through the process of consensus building, collaboration, cooperation, mutual respect and trust • The willingness of social tripartite partners to fully commit themselves to that shared vision • A commitment to the discipline of cooperation and collaboration • The acceptance that trust and social capital formation is a key driver to increase competitiveness and productivity in a global economy, and that trust is the CRUCIBLE for the creation of social capital and, it is a cultural attribute with economic value. At the ECA our mandate is to provide employers with quality representation at the organizational, national and international levels in order to ensure the strength and success of the employer community for the socio-economic well-being of the nation. Continued on next page
The Employers’ Consultative Association of Trinidad and Tobago
Voice of the Employer Jan - June 2012
This mandate can only be achieved through a process of meaningful Social Dialogue. We have worked with stakeholders on Convention 144 which speaks to Tripartite National Consultation and believe that the time has come for the tripartite social partners to fully commit themselves to “operationalizing” the tripartite approach. Our hope today is to see tripartite social partners tangibly demonstrate their commitment to move the social dialogue process from concept to reality. There will be challenges, it is not going to be easy sailing, but the ECA is encouraged by the fact that the hosting of this workshop is a sign of the determination and an unwavering commitment by the Government to act and act now. We all know that Social Dialogue structures and processes have the potential to resolve important economic and social issues, encourage good governance, advance social and industrial peace and stability and boost economic progress and I am sure from looking at the agenda that the Ministry has a line of distinguished speakers over the next two days who will speak to us on the importance and relevance of moving our social dialogue process forward. As the employers’ representative, the ECA looks towards the interest of employers on a national level and we wish to reiterate our commitment to the process of Social Dialogue as the key enabler to provide a framework for the engagement of social partners. We remain dedicated and committed to building a partnership on the National level as we see our role as critical to the process of nation building. Moreover, economic prosperity, stability and social progress cannot be achieved by governments, employers or workers acting alone. This quote from Abraham Lincoln reminds us that Labor is prior to, and independent of, capital. Capital is only the fruit of labor, and could never have existed if labor had not first existed. Labor is the superior of capital, and deserves much the higher consideration. Having said that, we must be mindful that, in order for businesses to be able to provide jobs, they must become competitive and with the ability to compete globally. In closing, when one looks at the different countries who have successfully implemented and executed the Social Dialogue process and compare them to Trinidad and Tobago, It is very noticeable that they do not have the abundance of natural resources with which we have been blessed. They had to rely on the development and investment in their human capital. The theme today is “Towards People-Centered Development - Social Dialogue as the Key Driver”. “Our people are our greatest asset; the quality and talents of our people are our key competitive differentators. Taiwan is a great example in this regard. Taiwan is described as a barren rock in a typhoon-laden sea
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with no natural resources to live off. It even has to import sand and gravel from China for construction, yet it has the fourth- largest financial reserves in the world. Because rather than digging in the ground and mining, whatever comes up, Taiwan has mined its 23 million people. So too has Singapore and Barbados who have had success with these models – there is a strong education and development thrust that focuses on people; their talent, their energy and their intelligence. Moreover, Taiwan has been able to develop the habits and culture of honing the skills of their people which turned out to be the most valuable and only truly renewable resource at their disposal. As we focus on people we must pay special attention to our youth. The Global Economic and Financial Crisis have intensified the challenges around youth employment making it a real crisis. The global statistics are very compelling and pose a tremendous global challenge for policy makers, both at the national and global levels. We should keep in mind that our future leaders, professionals, entrepreneurs and employees will come from this pool of young people, who comprise the very future of tripartism for which we are now laying a foundation. If you remember one thing I say today, it should be that time is not on our side. We need to act and act now. Meaningful Social Dialogue is no longer an option if we are to fully operationalize the theme of this workshop - “Towards PeopleCentred Development;- Social Dialogue as the key driver. This is all about change, and, as L.W LINETH said, “the most effective way to cope with change is to help create it”. This is what we are being called upon to do today. It is about our future, let’s act responsibly as we seek to create and take ownership for our future. Finally, these words from our Honorable Prime Minister in her address to the nation on the Cabinet reshuffle should seek to reinforce the behaviors that are required. “There is no room for personal egos, no time for personal agendas, and no opportunity for self glorification. This is not about us, it is about the people.” The ECA commends the Minister of Labour and Small and Micro Enterprise Development, Mr. Errol Mcleod, and his team for this initiative and I give my full support, as we move forward in the development of the Social Dialogue process. ***
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The Business Toolkit
Regional NEWS
CARIBBEAN EMPLOYERS’ CONFEDERATION
The Caribbean Employers’ Confederation (CEC) held its 52nd Annual General Meeting on Thursday, May 03, 2012 at the Sunset Jamaica Grande Resort in Ocho Rios, Jamaica.
Mr. Wayne Chen President
The work of the confederation during the year ended December 31, 2011 was reviewed by the President, Mr. Wayne Chen, who assumed the leadership in 2011. Continued emphasis was placed on the strengthening of the working relationships with the International Labour Organization (ILO) at the International and Subregional levels, the International Organisation of Employers (IOE), and other regional and International organisations. The CEC continued its working relationship with the Caribbean Congress of Labour (CCL) as we sought the wider involvement of the two groups in the workings of CARICOM, especially in the areas of the ongoing trade negotiations with Canada and the implementation of the provisions of the European Partnership Agreement (EPA). The promotion of Social Dialogue in the wider membership continues to be a strong focus of the work of the CEC and these efforts will continue as we seek to reap the benefits of this collaborative approach to taking the development of the Caribbean region forward. The meeting also addressed the challenges faced by the member organizations to strengthen their structures to ensure they remain responsive and relevant in the rapidly changing business environment and to heighten their role in advocacy on key business issues for the benefit of the wider community.
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In addressing the issues arising from the continuing sluggish economic activity in the region and examining ways to make the member countries’ governments more responsive to the needs of their particular economies, the CEC calls for the governments’ concerted attention to and action on the following areas: - Clear and focused national strategies for addressing the vexing issue of Youth Employment; - Focused programmes for the sustainable development of the Micro, Small and Medium Size business sectors; and - The intensification of the process of meaningful Tripartite Social Dialogue. Addressing the foregoing will be critical to the maintenance of the orderly and stable socio-economic environment of our communities and societies. The Board of Directors for the term 2011-2013 is headed by Mr. Wayne Chen, President of the Jamaica Employers’ Federation (JEF) and he is supported by: - Mr. Ferdinand Welzijn, 1st Vice President (President of the Suriname Trade & Industries Association) (VSB) - Mr. Vern Gill, 2nd Vice President (President of the St. Lucia Employers’ Federation) - Mr. Clement Carty, Director (President of the Dominica Employers’ Federation) - Mr. Raymond Eytle, Director (Jamaica Employers’ Federation) - Mr. Acres Stowe, Director (President of the Antigua/Barbuda Employers’ Federation) - Ms. Gwendoline McLaren, Director (Board Member of the Employers’ Consultative Association, Trinidad & Tobago). - Ms. Linda Besson (Executive Secretary/Treasurer, Employers’ Consultative Association of Trinidad and Tobago) Mr. Ferdinand Welzijn will continue to represent the CEC on the ILO Governing Body. It was agreed that the venues for the Annual General Meetings for 2013 and 2014 shall be: - 2013 - Suriname - 2014 - St. Lucia ***
The Employers’ Consultative Association of Trinidad and Tobago
Voice of the Employer Jan - June 2012
INTERNATIONAL NEWS
International Organisation of Employers
We are pleased to announce that, at this morning’s session of the IOE General Council, IOE President Dato’ Azman Shah Haron reported on the decision of the IOE Management Board on Saturday, 26 May 2012, to appoint Mr Brent Wilton, current Acting Secretary-General, as the new Secretary-General of the International Organisation of Employers (IOE). Brent succeeds Mr Antonio Peñalosa, who stepped down from his post last November after 13 years of dedicated leadership of the Secretariat. The General Council heard tributes from member federations and colleagues around the world for the accomplishments of Mr Peñalosa on behalf of the global business community. Brent joined the Secretariat in 1999 as a Senior Adviser, bringing with him experience of representing employers’ interests at the Employers’ and Manufacturers’ Association (EMA) Northern, New Zealand. He had previously practiced law in the private sector. Brent was appointed Deputy Secretary-General of the IOE in 2003.
Speaking on his new role, Brent said, “I will be looking forward to consolidating the IOE’s position as the global voice of business on social and labour policy, both in the International Labour Organization and in the increasing number of forums that are influMr. Brent Wilton encing the operating environment for enterprises, large and small, wherever they may operate.” For further information, please contact Linda Hotham, IOE Communications Manager, hotham@ioe-emp.org,or call +41 22 929 00 24. ***
International Labour Organization
ILO Director-General’s opening address to the 101st International Labour Conference.
We know that it’s time for a policy rethink. The financial crash of 2008 signalled the beginning of the end of the current growth and globalization model as I Mr. Juan Samovia described last year in my report on “A new era of social justice”. Four years on we are mired in a period of uncertainty, unclear on what the future rules of the game will be. We are at a turning point where crisis brings the opportunity to change course. I see a critical role for the ILO in capturing the opportunities that lie ahead. I will return to this theme when I inaugurate the high-level segment of the Conference next week. But I feel obliged to say a few words on the Eurozone. The policies being pursued in the Eurozone are
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extremely worrying for the ILO. Early on after our creation in 1919, European countries progressively embraced our values and made them an integral part of their social, economic and political systems and later of the European Union. The austerity-only course to fiscal consolidation is leading to economic stagnation, job loss, reduced protection, and huge human costs, undermining those social values which Europe pioneered. While trying to reduce the public debt, unsuccessfully by the way a social debt is building up that will also have to be paid. The most affected countries of Europe subject to direct or indirect conditionalities are backsliding on the ILO’s core values on which the region was a leader. Continued on next page
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INTERNATIONAL NEWS continued The culture of social dialogue, the foundation for the post war reconstruction of Europe, is being discarded or weakened. Yet it is precisely with social dialogue that we can get out of the crisis, through productive investments in sustainable enterprises that can increase jobs, aggregate demand and fiscal revenues at the same time. It is possible. This real economy response must be accompanied by a socially responsible fiscal consolidation. I think the Global Jobs Pact is today a useful tool for Europe. Giving confidence exclusively to financial operators while losing the trust of people not only deepens the vicious downward economic spiral but also opens the way to extreme solutions which I am sure European democracies do not want to revisit. Extreme policies produce extreme reactions. We must welcome then the emerging debate in Europe on the need for growth jobs and social protection and certainly the ILO will play its part. Youth employment We have been failing our young women and men for some time now. Generally, youth jobless rates are nearly 3 times that of adults. This is without the many millions worldwide who have become discouraged and stopped looking for work. Furthermore, those who do get a job are likely to be working part time, on temporary contracts, in the informal economy, or precarious work. There is little inter generational solidarity when the adult generation who formulates policy, lets the young generation carry a heavy share of the burden of the crises. There is a powerful reassertion of activism from young people who refuse to accept a future of unemployment, marginal work and expensive, poor quality education. They go from social entrepreneurs to trade union leaders. I applaud this. At the same time, in many countries, the disturbing truth is that the young, are becoming disconnected from the political process, fed up with systems that have no effective answers for the jobs crisis. In many different ways, young people are telling us “you don’t listen to us”. So we decided to listen, interact and think together with them to get their ideas into the ILO Conference discussion. We held 46 national consultations with around 5000 representatives of young people’s organizations across regions. It culminated last week in a creative and stimulating World Youth Forum here in Geneva with some one hundred young people from employers’, workers’ and other youth organizations. A delegation will present a synthesis of their views and ideas to your conference committee. This is innovation at work. The several thousands who assembled in these forums and on-line are the beginnings of on ILO
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youth network to connect us with the ideas and needs of young women and men. True to our heritage of dialogue we reached out. Young people reciprocated, and I have made their sensible demand my own: “no solution for us without us.” Social Protection Floor The ILO’s capacity to innovate also characterizes this year’s discussion on social protection floors. In just four years we are on the verge of a new Recommendation responding to the call of our 2008 Social Justice Declaration to consider “developing and enhancing measures of social protection ...which are sustainable and adapted to national circumstances,...” in promoting a fair globalization. The 2009 Global Jobs Pact called for countries to do so drawing on “a basic social protection floor.” Establishing social protection floors, respecting the diversity of country situations, is about promoting human dignity. It is a basic contribution to reduce poverty, to empower people and to expand aggregate economic demand. It is a commitment to a decent society, a platform that enables hundreds of millions of women, men and children to progress on a strong footing. Country experience and our work with the IMF show it is affordable even in poor societies. Our Recommendation will give impetus to a major international initiative. The ILO, the UN system, the IMF and the World Bank will set up a Social Protection Interagency Board within the G20 framework, to promote social protection in global, regional and national development agendas. Fundamental Principles and Rights at Work The 1998 Declaration on Fundamental Principles and Rights at Work underlined the role of fundamental principles and rights at work in maintaining the link between social progress and economic growth. Specifically, these principles and rights enable workers “to claim freely and on the basis of equality of opportunity, their fair share of the wealth which they have helped to generate, and to achieve fully their human potential.” The realization of Fundamental Principles and Rights at Work is an end in itself and a means of furthering all ILO’s objectives. This will be your compass and responsibility as you shape Conclusions, identifying priorities that will drive an innovative Action Plan for 2012-2016 to promote fundamental principles and rights at work in practice as well as in the letter of the law. Today, with a weak and fragile global recovery, when respect for fundamental principles and rights has come under great pressure, your discussion takes on event greater significance.
The Employers’ Consultative Association of Trinidad and Tobago
Voice of the Employer Jan - June 2012
Your tripartite conclusions will be critical in securing more effective action for their realization. Greater respect for what are today universally accepted basic “rules of the game” for the world of work is urgently needed. You will also have a tremendous responsibility in considering the circumstances of those in the informal economy – up to 90 per cent of working people in many developing economies – and other categories who face specific difficulties in exercising their rights. The reports of the Committee of Experts to our Conference Committee on Applications also provide essential tools in helping authorities to move from postures of denial to engagement and constructive dialogue on solutions and support to put principles into practice. Myanmar We will have an historic discussion on Myanmar. For many difficult years, in the face of denial of abuses well documented by an ILO Commission of Inquiry, the Governing Body maintained its unity and its pressure. All remained engaged. Our persistence and method of working eventually enabled us to open an Office and receive complaints directly from victims of forced labour. It will be a very special moment when Aung San Suu Kyi addresses this Conference. Last year she sent a video. This year she honours us with her presence. It reflects some political changes underway which we should welcome and must seize and expand the opportunities they represent. We didn’t give up and so it should be for the future. Democracy will come to Myanmar. And when it does, we will be able to say: “ the ILO was there.” Palestine We cannot have the same optimism for the people of Palestine. A combination of political intransigence, the incapacity of outside actors to assist the parties or effectively exercise influence on them, volatility in the region, the elusiveness of Palestinian reconciliation, and a weak response by international cooperation partners, create a situation of serious concern. Yet, the indomitable spirit of the Palestine people shines through. The ILO will continue to work with our Palestinian constituents through concrete policies and programmes, as they build a fully viable Palestinian State. When the day of liberation comes – as it will – the Palestinian people, with their heads high Upon the resignation of Juan Somavia, the International Labour Organization (ILO) has elected Guy Ryder as its tenth Director-General. M. Ryder, who is currently the ILO’s Ex-
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and their dignity intact, will prove to the world that the struggle for fundamental rights can ultimately prevail. This, even against seemingly insurmountable obstacles posed by occupation and the never ending expansion of settlements. Implementation Report My report on the implementation of the 2010-11 Programme allows you to assess our work over the last biennium. Of the 50 targets set for the biennium, 46 have been broadly met. We now have 61 countries with an active Decent Work Country Programmes. All 13 UN Development Assistance Frameworks signed in 2010 mainstream some or all the pillars of decent work, with emphasis on employment and social protection. With the ILO’s 20 major development cooperation partners, we have maintained a volume of some US$225 million per year in extra-budgetary resources, equivalent to a third of our total resources. We have progressively established a solid internal governance and oversight system. And once again, our auditors have presented an unqualified report. Conclusion In the next weeks, I will take this Conference’s outcomes directly to the G20, the Rio +20 Summit and the UN’s Economic and Social Council while you will take them back to your governments, unions and employer organizations and develop policy and promote action at home. What happens here goes far beyond the ILO. As we move into the substantive work of our Committees, remember how much your discussions make a difference to the world. I know it is a responsibility you assume with conviction and a sense of purpose, even a sense of pride. I am sure you will have the vision and the ambition to match the urgency of the moment: I call on you to visualize the expectations of youth struggling for quality jobs, of people living in poverty for social protection, of workers demand for fundamental rights. I call on you to see the hope in their faces, to feel their will to work hard if given a chance. To put yourself in their place and to think of the dignity you can bestow or negate through your negotiations. So go and build realistic agreements, but do so with the values of this marvellous organization in your mind and the will to help make this a better world in your heart. *** ecutive Director for International Labour Standards and Fundamental Principles and Rights at Work, will begin his five-year term in October 2012.
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The Employers’ Consultative Association of Trinidad and Tobago
Voice of the Employer Jan - June 2012
INDUSTRIAL RELATIONS GUIDELINES
A look at key principles and topics
MAINTAINING GOOD INDUSTRIAL RELATIONS ‘The Key to Successful HR’ “When it’s time to let someone go, do it right. No surprises. No humiliation.” – Jack Welch, Winning
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The Business Toolkit
EMPLOYMENT CONTRACTS
A Contract of employment in its simplest sense is an agreement between an employee and his employer on the terms and conditions of employment. They may be written or oral or partly written and partly oral. Contracts of employment, like all other contracts, consist of express or implied terms. The expressed terms are those that the parties have actually agreed on. The implied terms are those terms which are not stated in the contract but are inserted by the courts to fill the gaps left by the expressed terms to which the parties actually agreed on. Terms may be implied on the basis, for example, that they are necessary and the parties would have agreed to them had they thought of them at the time of contracting, (for example, the implied duty of fidelity or trust and confidence). Contracts of employment may be either permanent or for a fixed term. A fixed term contract has a stated start and end date of employment. This is usually used for short term project type work. Permanent contracts have a stated commencement date, but no end date. It is presumed that the employee will work until the age of retirement or until the contract is otherwise terminated. Contracts “of” and “for” services Contracts of employment should not be confused with “contracts for services”/“independent contractor” agreements. A “contract of employment” or a “contract of service” means that the individual hired by the employer is an employee of that employer. Whereas, under a “contract for services”, the hired person is an “independent contractor”. The distinction between an employee and an independent contractor is important because they attract different rights and legal consequences. For example, an employee (worker) through his trade union may report the existence of a trade dispute to the Minister under the Industrial Relations Act 1972 if he was dismissed contrary to the principles and practices of good industrial relations. However, the rights of an independent contractor, if dismissed, are limited to sue for breach of contract in the High Court (Civil Division). The following are some common differences between an employee and an independent contractor. EMPLOYEE Statutory deductions are made by the employer; Paid leave entitlement - sick, vacation etc.; Employer may be vicariously liable for the torts of their employees; the Employer has the right to discipline; generally, there is supervision - there may be exceptions, for example, specialist jobs; Employer may contribute to pension and health
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plans. INDEPENDENT CONTRACTOR No deductions - responsible for his own taxes; No Paid leave entitlement; Liable for his own torts; Employers have no right to discipline; Requires little or no supervision. Test to determine employment relationship The fact that a person is called an employee does not mean that he is employed under a contract of employment. Alternatively, the fact that the person is labeled as an independent contractor or the fact that the contracting parties labeled the relationship in a particular way does not mean that the label will obtain. It is not conclusive. It is merely evidence from which the Court may infer the intention of the parties and the existence of one of the two employment relationships. Ferguson v John Dawson (Contractors) Limited (1976) 3 ALL ER 817. Hence, “… it must be the Court’s duty to see whether the label correctly represents the true legal relationship between the parties”. Young & Wood Limited v West (1980) IRLR 201. In determining whether a person is an employee or an independent contractor, the Courts employ the Multiple or Multi factor Test. Ready Mixed Concrete (South East) Limited v Minister of Pensions and National Insurance (1968) 2QB 497 per Mac Kenna J, a contract of service exist when: 1. The servant (employee) agrees that, in consideration of a wage or other remuneration, he will provide his own work and skill in the performance of some service for his master. 2. He agrees, expressly or implied, that in the performance of that service he will be subject to the other’s control in a sufficient degree to make that other master (employer). 3. The other provisions of the contract are consistent with it being a contract of service. Continued on next page
The Employers’ Consultative Association of Trinidad and Tobago
Voice of the Employer Jan - June 2012
Economic Reality Test Market Investigations Limited v Minister of Social Security (1969) 2 QB 173. The question should be asked, whether the person was in business on his own account. If so, then there is a contract for services. The following may be asked: • Whether the individual provides his own equipment • Whether he hires his own helpers • The degree of financial risk he takes • The degree of responsibility for investment and management • Whether he has an opportunity of profiting from sound management in the performance of his task. Other factors that may be taken into consideration: • Statutory deductions
• Employer contributions towards health plans • Paid vacation and sick leave • Bound by company rules and procedures • Employer responsible for workers tortuous acts under the doctrine of vicarious liability. • Degree of supervision • Pension, gratuity benefits • Employer’s right to discipline • Power to delegate (Express & Echo Publications Limited v Tanton (1999) IRLR 367). However, in Macfarlane v Glasgow City Council (2001) IRLR 7, it was stated that a limited or occasional power of delegation is not inconsistent with a contract of employment. ***
THE PROBATIONARY PERIOD
The primary purpose of probation is to allow an employer to assess an employee’s suitability for permanent employment. Additionally, it gives the employee an opportunity to determine whether the job is suited to him or her. An employee who is on probation is, in effect, a permanent employee who is yet to be confirmed in his/her position. The Company’s expectation during the probationary period should be communicated clearly and understood by the employee. Thus, it is advisable that the employee be informed, in writing, of the length of the probationary period as well as the performance standards required during this period. Assessment of the probationer’s performance should be a continuous exercise. Probationers should be informed of shortcomings in relation to their performance. They should be given guidance and coaching on how to improve the specified problem areas and given reasonable opportunity to improve. Probationary periods should be reasonable. What is considered reasonable will depend on the nature of the job
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as this will determine how long it will take to establish whether the employee is performing satisfactorily or not. The more complex the job - the longer the probationary period may be. Generally, probationary periods are three to six months. At the end of the probationary period the employee should be notified, in writing, of his or her confirmation in the position. Probationary periods may be extended within reason where the employer is not convinced that the employee’s performance is up to the required standard of the organization. Any extension of the probationary period should be in writing. The employee must be given adequate notice of any extension of the probationary period. In cases of non confirmation, an employer ought not to wait until the end of the probationary period to inform a probationer that he or she cannot be confirmed in the position. It is recommended that the employer give the probationer adequate notice of non confirmation in the position. Contrary to popular belief, a probationer cannot be dismissed without cause. Where dismissal of a probationer is contemplated, the general rules of procedural fairness must apply. For example, if the issue is poor performance, the probationer “must be told beforehand of his performance shortcomings and given an opportunity to improve”. Summary dismissal is rarely justified if this is not done. Where the probationer is dismissed for other reasons than performance, for example, misconduct, the normal procedure in relation to discipline must be applied. ****
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The Business Toolkit
THE POLICY MANUAL Businesses should establish policies and procedures and commit them to print before hiring the first employee. Businesses often overlook the creation of policies and procedures but this simple task has the ability to save time and money in a variety of ways. These Policies defined simply as rules as to how the company and its representatives should handle specific scenarios, and procedures, meaning instructions as to how to accomplish certain tasks, are crucial to every business, regardless of size. A manual is like your communication tool for your employees. They need not come to you every time they have questions in mind because they have the manual to read. It also saves business owners from any excuses of employees, since everything is stated in the manual. Thus there should be no point for argument. The main benefit is that the company is able to operate with greater consistency, both in its internal and external workings. Company morale generally increases because guidelines are available on how to accomplish a task. Set policies and procedures can also circumvent certain legal issues. The policies and procedures manuals of a business should be in accordance with applicable laws. The books need to appear professional as an investor may request a copy of the policies and procedures of a company under review. Procedures Manual This manual should clearly describe processes, such as how to enter an invoice into the system, processes with which the new employee will not yet be familiar. This may seem quite simplistic to the writer who is familiar with the tasks at hand, but to the novice, a precise explanation of the procedure may be invaluable. Policy Manual This manual should contain the company’s policies on employment, disclosure, competition, customer service, purchasing and so forth. When writing a policy manual you should always keep in mind, if the owner could not be reached, what would an employee need to know to accomplish his assigned tasks?
outlines what will happen when those standards are not upheld. The handbook should contain the company’s employee policies and procedures for asking for leave and similar requests. Management may find this to be an empowerment tool should it be needed to discipline an employee.
Importance of a Policy Manual Template A policy and procedure manual is an important document in any office or business. Though many types of policy manuals are currently made, it is still best to follow a policy manual template when you are making the manual. So what is the significance of a policy manual template? Listed below are some of the reasons why you should develop one: 1. It allows you to organize the contents of the actual manual, such that they follow a specific order. 2. It makes business owners modify their policies and procedures easily since they have a guide format. 3. It makes easier construction of drafts for the manual. 4. It ensures that the manual contains all the essential details that are necessary for the benefit of the employees and the business operation ****
The Employee Handbook This will be the first formal communication the company has with a new employee. As an abbreviated policies and procedures manual, it defines standards of behavior and
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The Employers’ Consultative Association of Trinidad and Tobago
Voice of the Employer Jan - June 2012
JOB ABANDONMENT Job Abandonment is one way in which the employment contract can come to an end. It occurs where the employee overstays an approved leave of absence, or absents himself from work without proper justification for a period of time. The Industrial Court, in several of its judgments, has stated “Abandonment is a matter of intention and this intention can only be gathered or inferred from the conduct of the person intending to abandon the job. The presence or absence of intent to remain away permanently can be inferred from circumstances surrounding the absence of the employee.� The court has also highlighted certain factors that should be considered before determining that the worker intended to abandon the job. Such factors include:1. Length of the absence; 2. Whether the worker kept in contact with the employer during the absence; 3. Whether the worker refused or failed to return on being directed to do so by the employer, and 4. Whether the employer warned the worker that failure to return by a fixed date would result in dismissal. Generally, most Companies have a policy relating to the issue of Job Abandonment. Such a policy typically states that if the worker is absent for three or more days, he will be considered to have abandoned his job. It should be noted that the mere absence of the worker from the workplace will not necessarily prove abandonment of the job. Where the Company has not heard from or seen the worker for a period of time, there is a procedure that must be followed before the Company can truly state that the worker has abandoned his job. The procedure is as follows:1. When an employee is absent from work, the employer should make reasonable efforts to contact the employee to ascertain the reasons for his or her absence. This can be done by contacting the employee at the telephone numbers listed on his personnel file or at any other known telephone numbers that the Company is aware that the employee possesses. 2. If there is no legitimate excuse for the absence or contact cannot be made with the employee, the employer must then write to the employee. This letter should notify the employee of his absence, direct him to report for
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work on a specific date, and also put him on notice that his failure to attend work on or before the date stated in the letter, would result in the Company determining that he has abandoned the job. The letter should then be sent via registered mail at the last known address of the employee. 3. Should the employee fail to report for duties by the date stipulated in the letter, the employer must send a final letter informing the employee of his failure to report for duties on the requested date and stating that the Company has determined that the employee has abandoned the job. This letter should also be sent via registered mail. It should be noted that in instances of perceived Job Abandonment, that the onus is on the employer to communicate with the absent employee. ***
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The Business Toolkit
ABSENTEEISM In Industrial Relations the premise upon which discipline is based is: “For group action to be performed efficiently there must be coordination and control on the part of the employer.” Because of this the employer has been given the right to lay down rules and regulations so that he can control and coordinate the five M’s : • Money • Men • Machine • Material • Motivation Thus workers whenever they enter the workplace or been employed they are subject to rules and regulations laid down by way of policies, collective bargaining agreements and laws of the lands. They are supposed to carry out said rules and regulations because the said rules and regulations are part and parcel of their contract of employment. Anytime one of these rules or regulations has been violated they would have breached their contract of employment and therefore they are subject to disciplinary action. The employer has the right to punish the worker for what he has done. Nevertheless in executing such punishment the employer must take into consideration Section 10 (3b) of the Industrial Relations Act which says: “One must not be harsh nor oppressive but must be in keeping with the principles and practices of good Industrial Relations.” Now, according to Justice Reece in Civil Appeal No. 30 of 1972 between Caribbean Printers Ltd. and the Union of Commercial and Industrial Workers the principles and practices of good Industrial Relations is: “All those informal uncodified understandings which are ancient habits and dealings adopted by trade unions and acquiesced in or agreed to by employers.” Thus when a worker absents himself from work or comes late to work whether it is one minute, two minutes three minutes or more he would have breached his contract of employment and is subject to be disciplined by the employer. Bearing in mind that the employer in punishing the worker must not be harsh nor oppressive then the employer should use the progressive steps of discipline which means for the first offence the worker is warned orally, second offence the worker is warned in writing (Employer is getting serious with his indiscipline), third offence the employer must charge the worker, give him the opportunity to be heard and if found guilty suspend him for a
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period of time without pay, the fourth offence, the employer will charge the worker again, maybe for misconduct or persisting absenteeism, give him a hearing i.e. an opportunity to defend himself and if found guilty then the worker could be terminated. Such termination would not be deemed harsh or oppressive because the worker has been persistently breaking the rules and regulations without showing any signs of change towards improvement. Now, in order to justify their right of the employer to punish the worker there are many judgments coming out from the Court that supports the employer in doing so. In trade dispute (T.D) No. 159 of 1974 between Cannings Limited and NUGFW the Court stated that if a worker takes ten percent more of the total working days by absenting himself with or without a medical certificate he or she runs the risk of committing persistent absenteeism and that is dismissable. The judgment further states that if a worker absents himself 2 days per month for nine months consecutively he can also be terminated. However the employer is obligated before he does anything to put the worker on notice about what he is doing. Given the use of IT or Information Technology, employers can easily do this by the use of his computer provided there are records. In T.D 142 of 1977 between Excellent Stores and Communication Workers Union (CWU) the court also stated that a worker has an obligation to inform his employer when he is sick or due to illness immediately thereafter, or as soon as possible or as early as possible according to the employer’s practice in the workplace. Continued on next page
The Employers’ Consultative Association of Trinidad and Tobago
Voice of the Employer Jan - June 2012
Further in Essential Services Division (E.S.D) No. 16 of 1982 between T&TEC and OWTU an employer can reject a medical certificate from a worker which does not satisfy him because the principles are: “A medical certificate refers to a document from a medical practitioner certifying that a person is suffering from physical, mental, nervous or other illness, and recommending or purporting to recommend that some period of time should be spent away from work on account of such illness” or “A medical certificate should be carefully written to satisfy employers who require justification to pay workers who are absent as a result of illness” or “A medical certificate should contain the date of issue and a statement verifying that medical attention was received from a certified medical practitioner on said day” or “A medical certificate should include the facts of the examination and the diagnosis, if it is such that these findings can be confirmed by another examination or otherwise.
continue with this type of medical certificate without challenging the medical practitioner to explain to them what is a medical problem.
If not verifiable, the certificate should reflect that reference was made to the applicant’s medical history and that the diagnosis was in keeping with such.”
When he comes late for the fourth time he should be charged with persistent absenteeism, found guilty and terminated but if the infraction is stealing on the job for the first offence he should be terminated. No employer would want an employee who is caught stealing to allow him to steal again. ***
The problem comes about however that employers will accept a medical certificate which states: “The worker is suffering from a medical problem.” Most employers will
From the above facts the employer has several answers from which he can develop a procedure for dealing with workers who absent themselves from work. Once the employee has breached his contract of employment by absenting himself the surest way to discipline him is to use the progressive steps of discipline to strengthen the hands of employers in disciplining the worker, the employer should develop a policy where there is a schedule of laid down offences and the various punishment for each such offence, for example when a worker is late for the first time he is warned orally, for the second late coming he is warned in writing, for the third late coming he is charged with persistent absenteeism, found guilty and suspended for x number of days without pay.
GRIEVANCE PROCEDURE A grievance is a complaint which has been formally communicated (either orally or in writing) to Management regarding the real or perceived violation of the contract of employment, collective agreement and/ or any established principle or practice of good Industrial Relations between the worker and the Company. A grievance procedure is the systematic method for handling grievances designed by the employer, and in a unionized environment, by both management and the recognized majority union. According to section 43(1) of the Industrial Relations Act 1972 (IRA), in unionized organizations “a collective agreement shall contain effective provisions concerning appropriate proceedings for avoiding and settling disputes…” Further, at section 43(2), “… every collective agreement shall contain a provision for the settlement of all differences between the parties thereto arising out of the interpretation, application, ad-
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ministration or alleged violation thereof.” The Minister may object to the registration of a collective agreement if there is “non-compliance with section 43(1) and (2)” Section 45 (4) of the IRA. Further, if the parties fail to follow the grievance procedure as stated in the collective agreement, “… the Minister may ... refer the dispute back to the parties for such procedures to be followed.” Section 53(1)(b). While there is no requirement under the IRA for a nonunionized organization to have a grievance procedure, it is a good practice for companies to institute such a procedure as it will be beneficial in resolving grievances internally. Additionally, the grievance procedure should allow the aggrieved party the option of appeal, which is a fundamental element of natural justice and by extension proper industrial relations practice. The grievance procedure should not be avoided, but rather embraced as it epitomizes fair process and allows for grievances to be properly exhausted. ****
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The Business Toolkit
THE MATERNITY PROTECTION ACT The Maternity Protection Act, 1998 Act 4 of 1998 Purpose An Act to provide a minimum level of Maternity Leave benefits and protection When assented: March 11, 1998 Entitlement of pregnant female employees Subject to the Act, an employee is entitled to: 1. Leave of absence (13 weeks) for the purpose of Maternity Leave 2. Employee must inform her employer, in writing no later than eight (8) weeks before the expected date of her confinement 3. She must submit to her employer a medical certificate from a qualified person stating the probable date of confinement; and 4. She must inform her employer in writing of her intention to return to work at the expiring of the Maternity Leave Date of Maternity Leave Six (6) weeks prior to the probable date of confinement, a pregnant employee can proceed on leave of thirteen (13) weeks duration When no Maternity Leave is payable When an employer has failed to pay contributions to the National Insurance Board, and no Maternity Benefits are payable by the National Insurance Board, the employer shall pay to the employee the total sum she would have been entitled to under subsection (2). Claim by Employer 1. Notwithstanding the Income Tax Act (Chapter 75.01) an employer is entitled to claims as a tax deduction for the full amount paid by the employer to an employee for Maternity Leave; or
Limited Payment An employer’s right to pay for Maternity Leave under section 7 (1) (b) is limited to one payment during each period of 24 months commencing at the beginning of such leave. ***
2. Where an employee is paid full pay for Maternity Leave even though benefits are not payable under the National Insurance Act, the employer will be entitled to claim that amount as a tax deduction.
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The Employers’ Consultative Association of Trinidad and Tobago
Voice of the Employer Jan - June 2012
RETRENCHMENT Retrenchment is one possible reason for the termination of employment and is governed by the Retrenchment and Severance Benefits Act of 1985, which will be hereafter referred to as ‘the Act’. Retrenchment may result from the restructuring or reduction in the operations of a company, leading to surplus labour or a labour force in excess of the organization’s requirements. Firstly, Employers should take note that Retrenchment can only apply where workers are genuinely redundant, that is, when there is surplus labour in an organization. Retrenchment would not apply if the business has ceased to exist. In the case of retrenchment, separation of the worker from the company is compulsory and at the initiative of the employer. This is in contrast to Voluntary Separation or VSEP where the separation is voluntary, that is, by the choice of the worker. Formal notice of retrenchment in writing is mandatory. The Notice should comply with Section (4) of the Act and include information on: the names and classifications of the involved workers; the length of service and current wage rates; the reasons for redundancy; the proposed date of termination and the criteria used in the selection of workers to be retrenched. During the Notice period Employers may still terminate a worker for valid reasons, for example, gross misconduct. Severance benefits should be paid in accordance with Section (18) of the Act being the minimum standard. Before making the decision to retrench workers, employers should explore all possible options of offering suitable alternative employment for the affected workers. An employer may also seek to absorb a retrenched worker in other employment. Please note that a worker who unreasonably refuses an offer of comparable and suitable employment is not entitled to severance benefits. Employers must also understand that they cannot arbitrarily select workers for retrenchment. When selecting workers for retrenchment, the Last In, First Out principle applies. This is subject to the qualification of “all other things being equal” as was recognized in the case of Amalgamated Workers’ Union v Pan American Standard Brands Inc, Trade Dispute No.106 of 1991. Employers should be cautioned that if the retrenchment turns out to be a sham or not to be genuine, they may be liable for dismissing the worker in circumstances that are harsh and oppressive and not in accordance with the principles of good industrial relations. Employers should therefore handle retrenchment issues responsibly. We urge employers not to embark on a retrenchment programme without justification as retrenchment is an extremely sensitive issue that can have severe economic, psychological, and emotional effects on workers and their families. The employer should study his organization carefully before deciding that it is necessary to engage in a retrenchment exercise. ***
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The Business Toolkit
OCCUPATIONAL SAFETY AND HEALTH in the WORKPLACE Employers need not be afraid or panic with the new law, it is simply to give the opportunity to Employers to do what they should have already been doing but to do it in a formal context as opposed to doing it in an adhoc fashion. The law provides rights and duties for Employers and employees. The law also provides for the administration and monitoring of occupational safety and health in the workplace through the factory inspectorate of the Ministry of Labour. One area that many Employers are quite concerned about is the right of employees to refuse work when safety or health is in danger. This right is enshrined in the law, however there is a basic process and procedure for this to be undertaken, it is not to be done in an informal fashion. Once the employee is familiar with this process, there is no need for fear since it is a partnership between the Employer, the employee and the Union representative to ensure what is supposed to be done is done, and that a worker who rightfully refuses to work is not penalised by his Employer for so doing. Another consideration that the Employer have expressed concern about is penalties. The Law provides for penalties in the context of monetary fines and jail sentences. However this law is not intended to put anyone in jail or to be punitive. However, these provisions are in existence for punishment when/where the law is broken. The approach is one of cooperation and collaboration rather than one of being punitive, so that all stakeholders need to come together to ensure that the law can be obeyed within a reasonable time frame. Another area that the Act deals with is the area in which doctors are expected to report occupational health conditions to the factory inspectorate. If they fail to do so, then, they too can be subjected to a fine of up to $5,000.00 or up to three (3) months imprisonment. Again the intention is not to send doctors to jail but to ensure that they obey the law by reporting to the appropriate authorities on cases of occupational diseases that are prescribed in the act. It is useful to recognise that monies spent on occupational safety and health in the workplace should be considered as an investment in your company and in your workers. The provision of personal protective equipment and clothing, the provision of safety boots, safety hats, also training and accident prevention are all considered to be investments in your most valuable capital, your human capital. Employers have expressed concerns about the number of groups and organisations that are running courses in occupational safety health and this has caused some confusion both in the minds of Employers and in the general public. The Employers Consultative Association can provide in-house expertise to train employees in the area of compliance with the OSH Act. ***
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The Employers’ Consultative Association of Trinidad and Tobago
Voice of the Employer Jan - June 2012
DEALING with INDUSTRIAL ACTION
“go slow”.
Industrial Action may most commonly take the form of strike by employees, lockout by the employer, or any form of action that disrupts production and is taken in furtherance of an industrial dispute. It includes action commonly known as “sitdown strike”, “sick-out” and
Industrial action is regulated by Part V of the Industrial Relations Act 1972. This legislation limits how and by whom industrial action may be taken and makes it an offence for industrial action to be taken that is not in conformity with the Act. It also imposes strict time limits and requirements for giving notice in relation to taking Industrial Action. Employers need to pay careful attention to these limits so that they may be aware of what constitutes action that is legal or illegal. Strike or lockout action can only be taken where the dispute is an ‘interest dispute’ as opposed to a ‘rights dispute’ and we must first appreciate the difference between these two (2) types of disputes. An ‘interest dispute’ is a dispute between a trade union and an employer arising out of the negotiation of terms and conditions of employment that are to be included in a proposed collective agreement. On the contrary, a ‘rights dispute’ concerns the application of existing terms and conditions of employment. It can include disputes relating to dismissal, suspension or refusal to employ. If a ‘rights dispute’ remains unresolved, after being reported to the Ministry of Labour, it may then be referred to the Industrial Court for determination. Strike or lockout action cannot be taken in relation to a ‘rights dispute’. An ‘interest dispute’ may also be referred to the Industrial Court but there is the option for either or both parties to the dispute to take strike or lockout action. Take careful note that only a recognized majority union can take action by way of strike (Section 59 (4)) of the Act, therefore such action in a non-unionized environment is not permitted. Also note that strike and lockout action is
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not permitted in the Essential Services. Section 63 of the IRA deals with what may occur if action is taken that is not in conformity with the Act. If the employer is guilty of such action, he commits an Industrial Relations Offence and is liable to a fine of twenty thousand dollars ($20,000.00). In the case of a trade union, a fine of ten thousand dollars ($10,000.00) can be imposed as well as the cancellation of its certificate of recognition. Workers in non-unionized workplaces are not permitted under the Industrial Relations Act to take strike action. Where a worker takes part in industrial action that is not in conformity with the Act, the employer may treat it as a fundamental breach of the contract. Such a breach may entitle the employer to terminate the employment of such workers. In addition, the principle of “no work, no pay” applies where workers absent themselves deliberately from the job and an employer is not obligated to pay workers for such time away. According to the Act: Section 42:5 Does not compel any employer in the absence of Agreement, to the contrary, to pay or compensate any worker for any time not spent in performance of the duties of his employment. Section 62:2 Does not impose on an employer any obligation to pay for any services of a worker that are withheld as a result of strike action taken. We at the Employers’ Consultative Association of Trinidad and Tobago (ECA) would like to urge employers to seek full and proper advice on handling such issues before taking action. As was stated before, Industrial Action can lead to huge disruptions and losses in production and if issues can be ironed out amicably without resorting to such actions, then all efforts should be made to pursue that avenue. ***
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The following are your obligations as an employer under the National Insurance Act of Trinidad and Tobago: To register as an employer within fourteen (14) days of hiring your first employee. To register your employee and unpaid apprentice within 14 days of hiring him or her if they are unable to provide you with a National Insurance (NI) Number To inform employees and apprentices within twenty-one (21) days of hiring them whether you have registered them or not To prepare and maintain accurate pay records in the appropriate format To make the appropriate NI deductions at the time that payment of such earnings is made To remit the combined contribution (payable by both employer and employee) which is due on the last day of the month, at any National Insurance Service Centre no later than the 15th day of the following month To complete the employer section on all forms relating to insured persons in your employ To provide insured persons, with a Termination Certificate within thirty (30) days of termination of employment. A copy of the certificate must be forwarded to the NIBTT on the same day it is issued to the insured person To inform the NIBTT of any of the following changes: business address, name or nature of the business,owners or directors To inform the NIBTT of the closure of your business and return the NI Certificate of Registration To allow any NIBTT Authorised Officer access to records for inspection NB: Some of these carry penalties and fines for non-compliance. 26
The Employers’ Consultative Association of Trinidad and Tobago www.nibtt.net Hotline: 663-4NIS (4647) info@nibtt.net
Voice of the Employer Jan - June 2012
Retirement on the Grounds of ill-Health Where the company has a pension plan and you receive a medical report from a qualified medical practitioner that a worker’s injury or illness prevents him/her from carrying out the duties assigned to him and has found him/ her unfit to continue to perform his/her job, you should first review your Pension Plan Trust Deed and see what conditions must be met for an employee to retire on such grounds and ensure that you adhere to all those conditions. For example, the pension plan may say that the employee must be examined by a suitably qualified/registered medical doctor or panel of doctors appointed by the company. If so, you should adhere to this condition, and not just accept the employee’s personal doctor’s (usually a General Practitioner) recommendation. Often, given the nature of the ill-health complaint, you may have to arrange for a medical Specialist to examine the employee and pronounce on his medical fitness for continued employment in the current job position. There are also occurrences where a medical certificate is issued by the employee’s doctor, and states only that the employee should be retired on grounds of ill-health without speaking to the issue of the employee’s fitness for continued employment, that is, in some other capacity. One would think that, having due regard for employee confidentiality of his medical issues, that the doctor would comment on his findings with regard to the employee’s permanent incapacity to continue working before concluding that the employee should be retired on grounds of ill-health. There are certain factors to consider when dealing with the employee’s disability which include the extent of the injury and the duration of the impairment. Issues to consider will include the following: Does the employee’s ailment(s) permanently disable him from performing his normal job duties or from undertaking any work in any capacity for the rest of his working life? It may be that the ailment temporarily disables him, in which case it is not necessary to retire him on grounds of ill-health (i.e. he is not permanently disabled), or he may be permanently disabled to perform in his current job but is capable of performing another job in the company, sometimes in a limited capacity and at a lower level. The important consideration here is whether alternative job positions at the company are readily available or can be made available to the employee. Consider what can be done to facilitate the employee’s return to work. For example, is a new work station, chair or desk required?
Additionally, the ailment may be medically treatable perhaps through surgery or some other course of treatment but the employee chooses not to undergo such treatment. In which case, should the company retire him on the grounds of ill-health when the ailment is treatable/ correctable? And, where the employer does decide to retire an employee on grounds of ill-health in accordance with the pension plan, should the employer require such an employee to submit annually a doctor’s certificate of continuing unfitness for employment? There are examples of situations where an employee is allowed to retire on grounds of ill-health under the pension plan, only for information to come to light a year or two later, that they are gainfully employed elsewhere. And, do you as an employer have in your policy what you will do, should such information come to light. Then, in later years, when a pension plan is introduced in such companies, the opportunity is not taken at that time to remove the provision/ article in the Collective Agreement regarding severance pay. The end result of such an omission is that the employee who is retired on grounds of ill-health may be eligible to receive both a severance pay lump sum as well as the full pension benefit. In such companies, this may then be an ‘incentive’ for employees to submit requests for retirement on grounds of ill-health once they have length of service (on which severance is paid), as they can then get double payment. This usually happens when the employee is approaching retirement age and has twenty-plus years of service. Such companies should carefully review these arrangements and streamline the eligibility requirements and process. Remember, the severance arrangement existed because there was no pension plan. Now that a pension plan is introduced, the severance policy for ill-health retirement must be reviewed. And, if it requires negotiating with the union before effectively introducing the pension plan, then so do. Remember, as the employer, the onus is on you before you retire any employee on the grounds of ill-health to use every possible opportunity to obtain the fullest possible information on the worker’s true medical condition. This would ensure that your decision is not only in keeping with the principles and practices of good industrial relations but also ensures you give yourself every possible opportunity to obtain up-to-date and relevant information on the worker’s medical condition and that you make your decision to separate and pay appropriately only after careful deliberation.
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The Employers’ Consultative Association of Trinidad and Tobago
Voice of the Employer Jan - June 2012
SMALL BUSINESS FOCUS ‘Entrepreneurial Toolkit’
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The Business Toolkit
Technology can make SME’s the new super achievers There are over 18,000 small and medium enterprises (SMEs) in T&T. They are a wellspring of economic activity, a critical source of employment and innovation and also account for 85 per cent of registered businesses. As if that were not enough, when you are an owner of a SME you can find yourself being the captain, the Jeunesse Walters cook and the bottle wash– TSTT Product manager. er. Balancing the scales of running a business and keeping up productivity and efficiency on a tight budget with lots of competition is absolutely essential. No two SME’s are alike. The industries they operate in are diverse and include finance; manufacturing, transport, consultancy, technology, retail and the list goes on. The staff comprises different types of employees, some who work from home, some at the office, in the field and so there is no one-size-fits all solution to meet the needs of each company. Fortunately technology can move an SME from underdog to “king of the hill” and they don’t have to bust the bank to do it. Say Private Branch Exchange, or PBX as it is commonly known and people’s eyes roll back into their heads. That is, people who don’t realise how tremendously advanced today’s Internet Protocol – based systems (IP PBX) really are. How advanced are they? Think of video calling, telecommuting, mobile and internet integration and more people connected. Now picture all of this costing less than traditional ways of putting these services together. The real game changer is that the systems are so much easier for an SME to operate but there is also back up support from vendors like TSTT.
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Even the image of a PBX system being a series of physical phones in an office has changed. Now, SME’s need not rely on physical phones (although the new ones are very high tech). Soft-Phone software turns your laptop or desktop into your phone extension where you have all your contacts and can dial or answer video calls from right on your computer screen. What about working from home? With more employees empowered to work from home and on the field, space acquired by renting or building for the SME can be greatly reduced. IP PBX connectivity can put secure, reliable access points right in the homes of employees. For field staff wireless, protected links give them office access from on the road. In both cases contacting these personnel is as simple as dialling their four or five digit extension and paying nothing for the calls! The same holds true if the SME wants physical offices in different locations in the country. The IP PBX and underlying network at TSTT connects them as though they were offices in the same building for voice or video calls that are also free. There are lots of cool features that you couldn’t dream of doing on the old-school PBX but IP PBX’s make it possible. Believe it or not, you could be on a call on your IP PBX extension and the call can be seamlessly transferred to your mobile if you need to continue the call while going out. The same works in reverse if you got the call on your mobile on your way to work that you want to continue when you get to the office. There is a contact centre application that allows the SME to track how many employees are on calls and stealthily join the call to add to the discussion or to just listen in but use Instant Messaging to share information privately with the staff member on the call. Missed calls are also a thing of the past with the One Number Access on this system. One Number Access puts all of the numbers you would like to be contacted on, into a prioritized calling chain. Continued on next page.
The Employers’ Consultative Association of Trinidad and Tobago
Voice of the Employer Jan - June 2012
When a customer calls one number, if the call is not unanswered, the system automatically directs it to the office extension, then to a mobile phone and to a direct line (or any order the SME chooses) until someone answers the call. If the call is still unanswered then it is sent to voicemail. The great thing is the system then creates an e-mail message that is sent to the phone’s owner with an audio file of the voicemail attached. How cool is that! Another really great thing about IP PBX systems is that they can be integrated with the smartphones and tablets of today which make it even easier to integrate employees on the system. Recently, TSTT launched Session Initiated Protocol (SIP) trunking to allow customers the flexibility of adding and subtracting the digital equivalent of phone lines at a moment’s notice. SIP trunking customers no longer have the undesirable wait for the installation of extra lines as it can facilitate up to 100 lines on an IP PBX sys-
tem. Even better still costs were shown to be reduced by thirty to forty percent. These cost benefits arise from the advantages of a secure private Ethernet network fully managed by TSTT and calls between geographic locations are free. Also, a special group can be created connecting the mobile phones of employees so that mobile calls among the SME owners and their staff are free. So while changes in the economic climate means SME’s have to be more vigilant, technology can help them adapt to the times with extremely versatile connections for less, ensuring that in the end they do not have to compromise on the quality of service to their customers. ***
Richard Branson’s 5 Rules for Good Business In the 46 years since I launched Student magazine, the world has certainly changed. The uncertain economic outlook and the relentless pace of technological advances make replicating Virgin’s success much more challenging for today’s young entrepreneur. Back then, American and European markets were generally stable; today, the economic power of Western nations is being challenged by the fast-growing economies of Brazil, Russia, India and China, and growth opportunities and new markets can be found around the world. There is also marketers’ new ability to bypass traditional channels - TV, radio and newspapers - and build a strong following online for their companies via Twitter, Google+, Facebook and new applications such as Path and Klout. This means that most startups are able to launch with smaller marketing budgets, and that entrepreneurs can break into
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new markets fast. The world may be changing quickly, the steps to building a good business have not. The five simple guidelines we followed when we started the magazine and then Virgin Music remain as valid and useful as they were in the late 1960s and early 1970s. 1. If you don’t enjoy it, don’t do it. You must love what you do. 2. Be innovative: Create something different that will stand out. 3. Your employees are your best asset. Happy employees make for happy customers. 4. Lead by listening: Get feedback from your staff and customers on a regular basis. 5. Be visible: Market the company and its offers by putting yourself or a senior person in front of the cameras. If you have the right idea and execute properly, your startup’s launch date does not matter. While the business environment has changed, the basic rules remain the same. Rather than getting nostalgic about how things used to be, embrace the new opportunities and challenges available to you now. ***
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NEW MEMBERS FOR 2012 The Employers’ Consultative Association of Trinidad and Tobago acknowledges the following Companies that were admitted into the membership for the period January through June 2012. The ECA welcomes you and look forward to serving you with Excellence! Cinnaworld Ltd CG Construction Services Ltd Camquip ICS Limited Estate Management & Business Development Company Limited Eve Financial Services Ltd Fortune Traders Limited Haniff Mohammed & Sons Ltd Home Restaurant Ltd Inglefield/Ogilvy & Matter Caribbean Ltd (T/A Abovegroup Ogilvy) Magdalena Grand Beach Resort Oliver Signs Ltd Perez Y Cia (Trinidad) Ltd Roof Systems Limited
TEK Engineering Limited TISI Trinidad Limited The Cotton Three Foundation of Trinidad and Tobago The Sport Company of Trinidad & Tobago Ltd Travel Network Inc. Ltd Trinidad & Tobago Agri Business Association Trinidad and Tobago Housing Development Corporation Vanus Investments Ltd Welkleen Services Limited Western Pharmacy “Walkers” Limited Woodville Industries Limited
The Employers’ Consultative Association of Trinidad and Tobago and its Subsidiary The Employers Solution Centre Limited are working to meet and exceed all of your training expectations. You can visit us at www.employerssolutiontt.com and www.ecatt.org for updates on all events
SEPTEMBER 2012 ESC- OSH Symposium - A Call to ACtion - Workplace Health and Safety Matters Friday September 28, 2012 from 8:30 - 4:00 pm at the Hyatt Regency Hotel OCTOBER 2012 “Expectation, Education, Enterprise: Putting the Next Generation of Leadership into Context” Leadership Lecture Series, Friday October 05, 2012 from 7:00 p.m at the Hyatt Regency Hotel NOVEMBER 2012 ECA’s Charity Brunch: Sunday November 25, 2012 at the Hyatt Regency Hotel 32
The Employers’ Consultative Association of Trinidad and Tobago
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Voice of the Employer Jan - June 2012
So there you are, minding your own Business, and a staff problem comes up – What do you do? Have you considered reviewing your: PEOPLE MANAGEMENT SYSTEMS - Human Resources and Recruitment - Industrial Relations - Training and Development TECHNOLOGY MANAGEMENT SYSTEMS - Sales Engines - Management Services - Platform Services MONEY MANAGEMENT SYSTEMS - Payroll Servies - Business Planning - Cash Flow Planning So maybe you need help ..... Call the one company that can help you with all of this! The Employers Solution Centre Can Help Make Your Business More Profitable and Successful
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The Heart of Your Business Keep Your Cash Flow Pumping BY Brad Sugars
Brad Sugars is the founder and chairman of ActionCOACH. As an entrepreneur, author and business coach, he has owned and operated more than two dozen companies including his main company, ActionCOACH, which has more than 1,000 offices in 34 countries.
For new business owners, getting cash flowing into the business should be priority No. 1. Here are ideas for getting started. For start-up business owners, one of the biggest -- and most common -- mistakes you can make is to place other business goals ahead of your company’s cash flow. While it’s important to spend time on building your brand and generating sales leads, it’s downright vital to quickly cultivate a steady stream of what accountants call “free cash flow” - that is, the amount of cash coming into your company over and above all of your expenses. After all, if you don’t have money, you won’t be around long enough to worry about those other things. If possible, keep 10 percent to 20 percent of monthly revenues on hand because at that point, in most companies, you’ll be able to reinvest into the growth of your business - from purchasing additional product or service lines to roping in more suppliers or even building up your team when you need to. Here are a few ways to keep cash flowing consistently into your business: Know your expenses Although discounting can help you attract new customers, selling anything at a loss won’t help you generate a positive cash flow. My view? Never discount. But if you do, know the costs and impact of what you’re offering and be prepared for the fallout. Among other things, you’ll need to know your overall cost basis -- that is, what you paid for something. You should also know your how much you should ideally charge, the cost of your offer and the profit margins on your product or service. How else will you know if your discount has you breaking even or operating at a loss? To do the math, see our break even calculator. Bundle products and services Even though discounting isn’t always recommended, adding value is. By creating bundles of products or services, for instance, businesses can inject tremendous amounts of perceived -- and tangible -- value into their offerings for very little cost. A good example is the maintenance agreements some car manufacturers are now providing
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with the purchase of a new car. Not Yesterday is a canceled only does that type of offer help allay check; tomorrow is a a major concern or promissory note; today is frustration customers have -- paying the only cash you have - so spend it wisely” for a breakdown or time lost at the - Kay Lyons dealership -- it also offers real value in terms of limiting out-of-pocket maintenance costs. Put more simply, you can increase your price point initially since you’ve helped lower a perceived risk by offering something as basic as a guarantee. Create a back-end product or service If you know your initial offer to reel in new customers won’t be profitable, find ways to create higher price points on back-end products or services. Perhaps the first hour of catering is free, but subsequent hours shoot up in price. Or maybe an attorney will agree to draft your will for less if she thinks you’re a likely candidate for estateplanning consultations in the future. Encourage repeat business If you’re in a volume-driven business like retail, landing repeat shoppers is your holy grail for cash flow, profit and growth. In most cases, you won’t start to profit on a customer until the third, fourth or even fifth transaction. For this reason, you need to devote your efforts toward getting customers coming back - and more often. Consider loyalty programs, VIP offers and other frequent-shopper programs, which can be ideal vehicles for systematizing repeat business. Also keep in mind that the word “free” is a popular incentive among shoppers, and the costs of funding a freebie may easily be covered as long as you’re dealing with excess inventory or low-cost, but valuable add-ons. Pre-sell products or services For owners who want to encourage sales sooner, pre-sell your products or services. You might couch the pre-sale as a way for consumers to plan for their future or get a jump on shopping. You can also offer to take old, outdated products back at a pre-arranged price. ***
The Employers’ Consultative Association of Trinidad and Tobago
Voice of the Employer Jan - June 2012
Cash Flow Rules to Observe BY Tim Berry author of 3 Weeks to Startup and The Plan-As-You-Go
they’ll never buy from you again. So you wait. When you sell something to a distributor that sells it to a retailer, you typically get the money four or five months later if you’re lucky. 5. Inventory sucks up cash. You have to buy your product or build it before you can sell it. Even if you put the product on your shelves and wait to sell it, your suppliers expect to get paid. Here’s a simple rule of thumb: Every dollar you have in inventory is a dollar you don’t have in cash.
Business Plan, published by Entrepreneur Press.
1. Profits aren’t cash; they’re accounting. And accounting is a lot more creative than you think. You can’t pay bills with profits. Actually profits can lull you to sleep. If you pay your bills and your customers don’t, it’s suddenly business hell. You can make profits without making any money. 2. Cash flow isn’t intuitive. Don’t try to do it in your head. Making the sales doesn’t necessarily mean you have the money. Incurring the expense doesn’t necessarily mean you paid for it already. Inventory is usually bought and paid for and then stored until it becomes cost of sales. 3. Growth sucks up cash. It’s paradoxical. The best of times can be hiding the worst of times. One of the toughest years my company had was when we doubled sales and almost went broke. We were building things two months in advance and getting the money from sales six months late. Add growth to that and it can be like a Trojan horse, hiding a problem inside a solution. Yes, of course you want to grow; we all want to grow our businesses. But be careful because growth costs cash. It’s a matter of working capital. The faster you grow, the more financing you need. 4. Business-to-business sales suck up your cash. The simple view is that sales mean money, but when you’re a business selling to another business, it’s rarely that simple. You deliver the goods or services along with an invoice, and they pay the invoice later. Usually that’s months later. And businesses are good customers, so you can’t just throw them into collections because then
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6. Working capital is your best survival skill. Technically, working capital is an accounting term for what’s left over when you subtract current liabilities from current assets. Practically, it’s money in the bank that you use to pay your running costs and expenses and buy inventory while waiting to get paid by your business customers. 7. ”Receivables” is a four-letter word. (See rule 4.) The money your customers owe you is called “accounts receivable.” Here’s a shortcut to cash planning: Every dollar in accounts receivable is a dollar less cash. 8. Bankers hate surprises. Plan ahead. You get no extra points for spontaneity when dealing with banks. If you see a growth spurt coming, a new product opportunity or a problem with customers paying, the sooner you get to the bank armed with charts and a realistic plan, the better off you’ll be. 9. Watch these three vital metrics: “Collection days” is a measure of how long you wait to get paid. “Inventory turnover” is a measure of how long your inventory sits on your working capital and clogs your cash flow. “Payment days” is how long you wait to pay your vendors. Always monitor these three vital signs of cash flow. Project them 12 months ahead and compare your plan to what actually happens. 10. If you’re the exception rather than the rule, hooray for you. If all your customers pay you immediately when they buy from you, and you don’t buy things before you sell them, then relax. But if you sell to businesses, keep in mind that they usually don’t pay immediately. ***
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The Employers’ Consultative Association of Trinidad and Tobago
Voice of the Employer Jan - June 2012
Critical Questions to Ask Yourself before Posting to Facebook “I like to say that Twitter is like a bar, Facebook is your living room and LinkedIn is the local chamber of commerce.”
- BSStoltz
“The goal of social media is to turn customers into a volunteer marketing army.” - Anonymous Don’t say anything online that you wouldn’t want plastered on a billboard with your face on it.” – Erin Bury
BY Brian Patrick Eha - Entrepreneur.com The Holy Grail of social media outreach on Facebook is “engagement” -- going beyond broadcasting to interact with your fans. While some businesses might use Facebook to drive traffic to their own websites, the more that people are “Liking” and commenting on your posts and sharing your content with their own networks, the more brand loyalty you can build. Facebook uses its “Edgerank” algorithm to measure fan engagement and to determine which of your updates appear in the News Feeds of your fans. Your Edgerank score goes up when fans “Like” and comment more on your updates which, in turn, means your posts will be seen by more people. While there’s no tried-and-true formula for everyone to maximize engagement all the time, outreach on Facebook doesn’t have to be like blindly throwing darts at a board. Here are three questions to ask yourself to make sure your Facebook posts are prompting maximum engagement: 1. Will this add value to the people I’m trying to connect with? Social media is a “soft-sell medium,” says Mark Evans, a social media consultant. That means you should be trying to provide your fans with some kind of value instead of hitting them over the head with a sales pitch. Nevertheless, one of the goals of social media outreach, as with other types of marketing, is to spark conversion. The way to achieve this on Facebook is to come up with “educational and entertaining wall posts and promotions. For example, raffling off an iPad 2 to fans gained one company 1,200 fans on there Facebook page.
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2. Will this update seem fresh to my fans? If all your updates sound the same, your outreach can grow stale and your audience might stop engaging. You can post links to interesting articles, photographs and videos; you can create contests and polls. To help keep your updates fresh, and fans coming back to your page, i recommend this weekly posting schedule, or something similar: Mentor Monday: Share videos and posts that educate your audience. Trivia Tuesday: Encourage fans to engage and share their opinions. Watch Us Wednesday: Publicize in-office events and community involvement. Thankful Thursday: Offer an incentive and play up your strengths. Fan Friday: Feature and reward your star fans. The goal, is to create “a content potpourri that keeps people coming back, because they don’t know what to expect.” 3. Is this post in line with my metrics? To understand what types of updates resonate with your audience, use the administrator panel on your Facebook page to monitor your metrics. Page Insights can be especially crucial, providing a weekly breakdown - by age, gender and geographic location - of who likes your content and who’s talking about it. For instance, if you’ve been posting U.S.-related content but discover that nearly half of your fans live in India, you might consider rethinking your approach. You could post special updates and promotions on major Indian holidays such as Diwali in addition to Labor Day and other U.S. holidays. ***
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The Employers’ Consultative Association of Trinidad and Tobago
Voice of the Employer Jan - June 2012
Our Mission
To Advance Employers’ Interest for the Creation of Optimum Sustainable Value for all Stakeholders
Our Mandate To Provide Employers with Quality Representation at the Organizational, National and International Levels in Order to Ensure the Strength and Success of the Employer Community for the Socio-Economic Well-Being of the Nation
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