South Africa regrettably is known for a relatively active labour environment. There are over 200 000 cases reported to the CCMA and Bargaining Council’s each year with the vast majority of these cases being for unfair dismissal.
Why place this cover?
- Even in a business where there is a functioning industrial relations or human resources department, the risk of a labour dispute cannot be eliminated.
- Every time there is a dismissal, it is highly likely there will be a dispute lodged with the CCMA or Bargaining Council. Even if the case is successfully defended by the employer, there are legal and consulting fees involved. If a case is referred to the Labour Court, the legal fees start stacking up very quickly.
- If the employee is successful in their application, the CCMA could make an award of 12 months salary. This could hurt any size business.
What is EPL cover?
- Covers the employer’s legal defence costs at any of the dispute resolution forums in South Africa
- Covers the award if the case is unsuccessfully defended
- Covers back-pay if the employee is reinstated
- Typically, the policy responds to allegations of:
- Unfair dismissal
- Sexual harassment
- The SHA policy also responds to allegations where it is alleged that 20% of the workforce (max 50 staff) have been unfairly retrenched.
- Wilful or malicious acts by the employer
- Deliberate failure to follow own HR or IR procedures
- Bodily injury and COID related claims
- Minimum wage violations
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