Author: Candice Zulu
After years of working with business owners across industries, we have noticed something interesting.
The same questions keep popping up. Not because employers don’t care, but because HR and payroll risks often sit quietly in the background, until they become expensive.
Below are the 10 questions we are asked most often, and why each one matters more than most businesses realise.
- Can we just dismiss this employee? They are not performing.
This is usually asked in frustration, but under the Labour Relations Act, dismissal for poor performance requires a fair and documented process. No counselling? No written warnings? No opportunity to improve? That frustration can turn into a CCMA case. The cost:
- Legal time
- Management hours
- Possible compensation of up to 12 months’ remuneration
- Reputational risk
Poor performance must be managed, not reacted to.
- How much notice pay do we legally have to give?
Notice periods are governed by the Basic Conditions of Employment Act, but contracts often override the minimum. We frequently see:
- Incorrect notice calculations
- Payment in lieu errors
- Misalignment between contracts and legislation
Small payroll mistakes here can create large financial disputes. Compliance saves time, and accuracy saves money.
- Do we need to follow the correct retrenchment process?
Retrenchment is one of the highest-risk HR processes. Dismissals for operational requirements require meaningful consultation, not simply the issuing of letters. When businesses shortcut the process, they face:
- Procedural unfairness findings
- Reinstatement orders
- Compensation awards
Retrenchment is not just a financial decision. It is a legal process that needs to be followed to the T.
- Can we change an employee’s salary or working hours?
In challenging economic conditions, businesses often need to restructure. But changing terms and conditions without proper consultation may be viewed as a unilateral change, opening the door to disputes or even constructive dismissal claims.
The risk is not in the change. Rather, it is in how the change is implemented.
- How is severance pay taxed?
This is where HR and payroll intersect. Severance pay requires correct tax treatment and directives from the South African Revenue Service (SARS). We often see confusion between:
- Severance pay
- Leave pay
- Notice pay
- Ex gratia payments
Each has different tax implications. A payroll error here does not just affect the employee, it affects the employer’s compliance standing as well.
- What are our obligations when an employee goes on maternity leave?
Beyond compliance under the BCEA, employers must manage:
- UIF processes
- Temporary replacements
- Operational planning
- Policy alignment
Handled poorly, it disrupts workflow. Handled properly, it protects both employee rights and business continuity.
- Is this a grievance or harassment?
This question often arises when workplace tension escalates. The difference matters. Failing to investigate harassment properly can expose an employer to liability, while over-formalising a simple grievance can damage morale.
Clear policies and structured processes protect both the employee and the organisation.
- Can we deduct money from an employee’s salary?
Deductions without proper written consent are unlawful, except in very specific circumstances. Common risks include:
- Over-recovering damages
- Incorrect garnishee handling
- Payroll system misconfigurations
A seemingly small deduction can result in a formal dispute.
- Is this person really an independent contractor?
This is one of the most financially risky questions we encounter. Misclassification can result in:
- Retrospective PAYE liability
- UIF and SDL exposure
- Penalties and interest
What looks like cost-saving on paper can become expensive non-compliance.
- Do we really need formal HR policies and proper employment contracts?
This question usually comes from growing businesses. And the honest answer is this: you only realise you needed them once something goes wrong. There is no doubt about it: policies and contracts create consistency, reduce disputes, protect leadership decisions, save management time, and strengthen compliance. They are not administrative paperwork. They are business risk management tools.
Most businesses only review their HR and payroll structures after something goes wrong: a CCMA referral, a SARS query, an internal dispute, a compliance audit. By then, the cost is already incurred. If your internal team is stretched, or you simply want peace of mind, partnering with an outsourced HR and payroll specialist may be the most cost-effective decision you make this year. Email us on [email protected] for more.