Divorce and the forgotten will

Divorce inevitably affects one’s estate. If you were married in community of property, your joint estate is divided up. If you were married with accrual, some money or property would have changed hands, or one of you would have waived a claim. Even if you were married out of community, some division exercise would have taken place in the common home to sort out what is yours and what was your spouse’s.

Yet the last thing on your mind when going through a divorce may be your will. It may have been signed years earlier – in happier times – and the chances are that your spouse would have been your primary heir.

The Wills Act acknowledges that it can take some time to get one’s affairs in order after a divorce. Section 2B provides that, if (1) you made a will before your divorce (or annulment) and (2) you die within three months of your divorce (or annulment), then your will will be implemented as if your former spouse died before you. An exception is made where it is clear from the will that the bequest is made regardless of divorce.

Three months after a divorce, however, any outdated will that benefits your former spouse becomes of full force once again. If you die three months and one day after your divorce, and your old will made your former spouse your heir, then they will still inherit.

It is thus important to think about the need to update one’s will whenever there is a major change in status such as a divorce. Births, deaths, marriages and divorces, and major changes in one’s estate, should all trigger a review of your will to ensure that it still reflects your wishes.

Contact us to draw or revise your last will and testament and/or living will: camilla@roseattorneys.co.za / 074 697 2048.

 

Exiting the exit agreement: a departing employee’s claims of coercion and duress

It happens with some regularity that an employee refers a dismissal dispute to the CCMA, and the employer arrives at the hearing bearing a termination agreement with the employee’s signature. In it, the employee agrees to resign from employment, often in return for some benefit such as an extra month or two’s pay, or the privilege of leaving honourably rather than being dismissed and incurring a disciplinary record for serious misconduct. The employee will usually concede that they signed the agreement, but argue that they were bullied into it. The CCMA commissioner will advise them that the agreement is binding until set aside by the Labour Court on solid grounds, such as duress, and close their file.

In the recent matter of Gbenga-Oluwatoye versus Reckitt Benckiser SA, an employee went as far as approaching the Labour Court and, thereafter, the Labour Appeal Court, in his quest to get out of a termination agreement he admitted signing with the employer.

The employee was approached by a headhunter while employed in a lucrative position with a large multinational. He later left his lucrative position, but actively concealed this from the headhunter, negotiating a generous sign-on bonus on the false basis that he was losing a handsome shareholding by leaving the large multinational to join the employer. In short, he deceived and defrauded the new employer.

Some months into his employment with the new employer, the employee’s misconduct came to light. He was suspended pending a disciplinary hearing,  and then summarily dismissed. On receipt of his termination letter, the employee approached the employer requesting a “softer exit”. He offered to repay the money over time, in exchange for the employer delaying action to revoke his work permit and housing allowance. The employer agreed, and the employer expressed his gratitude for the humanity shown him.

A termination agreement was then drawn up in draft form. The employee was unwilling to sign the first draft, but agreed to sign a second draft. The agreement recorded that it was in full and final settlement of any claims between the parties, and that it was entered into voluntarily without any coercion or pressure. The employee agreed, in the agreement, that he waived any right to approach the CCMA and Labour Court arising in any way from his employment and the termination agreement.

A week later, however, the employee brought an urgent application to the Labour Court, for an order setting aside the termination agreement and reinstating him into his employment. He argued that the agreement was against public policy and that he had been coerced into signing it through fear of losing his work permit and housing and other allowances.

The Labour Court was unsympathetic. It had regard to the fact that the employer had a legal entitlement to dismiss the employee summarily on account of his serious misconduct, and also the fact that the agreement had been further negotiated after the employee had been dissatisfied with the first draft. There were no facts to indicate that he signed the agreement only as a result of duress by the employer.

The employee was unrelenting, and took the matter further to the Labour Appeal Court, on appeal.

The Labour Appeal Court pointed out that, in order to get out of an agreement on the basis of duress, intimidation or improper pressure had to be proven of such magnitude that the purported consent of the signatory was no true consent. There had to be actual violence or a fear caused by the threat of a considerable evil. The threat had to be unlawful or against the morals of the community.

Although the Court did not point this out, it goes without saying that the loss of a work permit and of allowances due to termination of employment by resignation or by summary dismissal for gross misconduct, are lawful and reasonable consequences. They cannot be construed to be unlawful or against the morals of the community.

The Court did point out that, while everyone has the constitutional right to seek redress through the courts, this right could be limited in reasonable circumstances. Parties were free to limit this right in their free contractual dealings. The Court found that the employee was an experienced, senior managerial employee, who would understand the import of what he was agreeing to. Clauses limiting the right of redress were standard in termination agreements, and of practical value.

Finally, the Court point out that it had no power to set aside agreements simply because they appeared to be unfair.

The Court accordingly upheld the termination agreement, and dismissed the employee’s application with costs.

Caveat subscriptor – “signer, beware!” – is a well-worn legal maxim for good reason. All parties should be slow to sign any agreement unless they are completely satisfied with the terms, and should be aware that by signing an agreement they trigger important legal consequences which cannot be easily evaded. In the absence of compelling evidence of significant unlawful pressure, a party who foolishly signs an unfair or prejudicial agreement, will be held to its terms.

 

 

 

A paper shield? The email and social media disclaimer

“On this date, in response to the new guidelines of Facebook, pursuant to articles L.111, 112 and 113 of the code of intellectual property, I declare that my rights are attached to all my personal data drawings, paintings, photos, video, texts etc. published on my profile and my page. For commercial use of the foregoing my written consent is required at all times. The content of my profile contains private information. The violation of my privacy is punishable by law (UCC 1-308 1-308 1-103 and the Rome Statute)…”

What a feeling of empowerment, that small post on social media that instantly and indefinitely protects your rights from the predatory acts of big corporations! Except that it doesn’t. As pointed out by legendary internet myth-buster snopes.com, “Before you can use Facebook, you must indicate your acceptance of that social network’s legal terms, which includes its privacy policy and its terms and policies. You can neither alter your acceptance of that agreement nor restrict the rights of entities who are not parties to that agreement simply by posting a notice to your Facebook account.”

It is not only social media users who issue unilateral disclaimers, however. Receive an email from a large company or law firm, and in many cases the final words will be along the lines of “The information contained in this transmission is confidential and is intended solely for the nominated addressee. The information is private in nature and is subject to legal privilege. If you are not the intended recipient, you may not peruse, use or disseminate this transmission or any file attached thereto. Such actions are prohibited and may be unlawful. If you have received this transmission in error, please notify us immediately and delete same and all copies from your system.” Heavy stuff, but how enforceable is it, really?

In her recent feature in the attorneys’ journal, De Rebus (available in full at http://www.derebus.org.za/reading-the-small-print-are-e-mail-disclaimers-really-important), local attorney Jesicca Rajpal cited a US domestic violence case in which a man emailed his estranged wife, amongst other things, that “pay-back is really a b****… you and your others still have a gigantic debt to pay to me, which will be paid no matter what. I spend every second of every day contemplating an appropriate method of payment… Your most determined, unstoppable, and visceral enemy”. The email ended with a disclaimer: “Not one word herein should be construed by anyone as meaning violent or threatening intentions, and instead the entire contents is to be taken by the strict literary meaning. There have not been, and will be any elucidated threats of violence or intent, either expressed or implied, within the entirety of this document.”

The above disclaimer seems ludicrous and did not eventually protect the sender from the censure of the courts. But is it any more or less meaningful than any of the fancier disclaimers added to commercial and legal emails every day, with the intention of protecting parties’ critical legal and financial information?

Rajpal points out the weaknesses of the disclaimers so many of us use without a thought:

  1. We use them indiscriminately – not only when their use is appropriate but also when clearly non-confidential and trivial communications are sent.
  2. The disclaimer can be completely contradicted by the content of the email itself.
  3. There is no guarantee that the recipient will see or read the disclaimer.
  4. The disclaimer is usually only read after the confidential information, if at all.
  5. The sender cannot control the recipient’s response to the disclaimer.
  6. Most importantly, the disclaimer is issued unilaterally, without the recipient’s agreement to its terms. You cannot unilaterally impose obligations on another person. A disclaimer is not a contract and does not have the effect of binding another person without their consent.

Rajpal concludes her article with advice gleaned from the Minnesota Law Review. Do not place confidentiality disclaimers at the foot of your email – by the time a recipient sees it (if at all) they will have read the confidential information. Place them at the top of your email, if you must. If a communication is privileged, this can be marked in the subject line to bring it to the attention of a recipient even before they click on a message and see its content. For further protection, confidential information can be placed in an attachment and the email body can consist only of a disclaimer.

Even if the above advice is heeded, however, the sender cannot prevent an unintended recipient from ignoring the warnings in the subject line and email body, and accessing information the sender had hoped to keep confidential, without there being some sort of encryption in place. Mere disclaimers rely upon the attentiveness, goodwill and co-operation of an unintended recipient. Where confidentiality is critical, password protection is a better option, although also not fail-safe.

 

Avoiding the top 7 legal blunders that jeopardise your business

Setting up a new business is an exciting time. However, few business owners have legal training, and it is remarkably easy to walk straight into a legal pitfall in the early days of your business, completely unaware of the risk that you are creating. In this article, we consider how you can avoid the 7 worst legal missteps when setting up a business.

1. If you are starting a business together with anyone else, it is essential to have a clear and detailed agreement as to what this entails. Each party must have a clear understanding of what is required of them, what they do and do not have the power to do, and what is to happen if the relationship must end. Without these matters being considered and spelled out up-front, conflict is highly likely to ensue. No business will meet its potential unless the co-founders are on the same page.

2. In the absence of registering a company (or other legal entity), your business is YOU. That means that your business’s risks are your personal risks. Your assets – your home and savings or income – are directly available to your business’s creditors. If you are married in community of property, your spouse is just as much at risk. In some cases, it is appropriate to run your business as a sole proprietorship, where there is no division between you as a person and your business. However, where there are risks (as in most businesses), it is wiser to register a company and separate your business’s assets and risks from your own. Once you have concluded deals with suppliers and clients, those deals bind you personally even if you later create a company, unless the other parties agree to transfer the rights and duties to your company (which will seldom be in their best interests). Where it makes sense to register a company, do this right at the outset to avoid complications and protect yourself and your family from day one. 

3. In any business, there will be certain terms and conditions that you want to apply to your deals with clients. These need to be spelled out, in each and every transaction. It is worth drawing up a top-notch standard terms and conditions document, to use as the basis for every deal you conclude. You can vary your standard terms and conditions as needed from deal to deal, but will always have a proper basis for every deal which will avoid conflict and miscommunication, and protect you in the event of a dispute. Beware of borrowing documentation from other businesses or found online, as this may not be the best fit for your specific business. Do not copy and paste terms from various other sources as this tends to result in ambiguity and contradictions which might not be apparent until a dispute arises. 

4. A great deal of legal difficulties arise from poor communication. In employment relationships, as elsewhere in business, good clear communication of rights and responsibilities is essential. When hiring for your business, ensure that you have a good employment contract in place at the outset. Again, this will help avoid conflict and protect you should a dispute arise. When your business is just starting out, you may not be concerned with matters such as protecting confidential information (client lists and so on), but once your business is established and you experience staff turnover, you will regret omitting the necessary protections from your employees’ contracts.

5.  Good, clear agreements with your suppliers are also important. Often you will be on the receiving end of your suppliers’ standard terms and conditions. Ensure that you read and understand these. Before signing, make any amendments or additions that are needed, and have the supplier counter-sign these. There is no magic in a pre-printed form – do not blindly agree to terms that strike you as unreasonable or more risky than you can stomach. If there are issues that the pre-printed form fails to record and which matter to you, write them in.

6.  A clear, comprehensive document in black and white is generally preferable to relying upon a fallible human memory. This applies when contracting with clients, suppliers and staff, but it also applies to most transactions your business will engage in. Should disputes arise, a written record can serve as invaluable evidence. It is always a good practice to have a good filing system and to keep good written notes of important transactions with clients, suppliers and employees for later reference. Confirming important discussions and agreements in writing shortly after the event is an excellent practice. If you need to have a performance discussion with an under-performing employee, for example, take a good written minute of the discussion, provide the employee with a copy, and keep a copy on file.

7. Sometimes, a situation looks as if it is heading south long before it actually does. If legal advice is called for, seek it early. It is usually much simpler (and cheaper) to resolve a legal problem in the early days than to untangle the sort of mess that develops after a protracted period of denial and avoidance. Tackle problems early. Don’t wait until you are fairly certain that you have made a hash of things to seek advice. It is much better to follow good advice from the outset than to receive confirmation that you did exactly the wrong thing after the event (and that it is going to cost you dearly to rectify the situation).

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Tips on avoiding a bad lawyer, from US attorney Tanya Starnes:

“1. Don’t go for a general practitioner when you need a specialist.Using the same business lawyer you’ve trusted from the beginning may lead to a bad experience if you really need a specialist. Should the case end up in court, you don’t want a lawyer who has never performed litigation cutting his teeth at your expense. The word “specialist” may cause you to cringe and think of high cost. However, Starnes argues that a specialist may turn out to be less expensive, depending on your needs. Where a general small-business attorney may take days to research and draw up the right documents, a real estate or tax specialist may solve your problem in a matter of hours.

2. Do some legwork to find a good attorney.Simply put, don’t let your fingers do the walking when it comes to tracking down competent legal advice. “Don’t be lazy,” Starnes says. “You can’t go to the mall and get a lawyer.” If you need a specialist, ask your current lawyer for a referral. Don’t stop there, though; ask people you know with some connection to your legal community. Get references and do background checks. The more time you put into your search, the better your chances of getting a competent lawyer who’s also suited to your business.

3. Do some due diligence on lawyers’ costs and fees, too.Before you contact a lawyer, consider how much time and money you are willing to spend on one. Make sure to account for time away from your business. Do some research on the Web and make some phone calls to get basic understanding of lawyers’ costs and whether your problem is worth what it might cost. If you decide that the issue is big enough, then it’s time to meet with a lawyer to discuss the problem and the fees required to solve it. But proceed cautiously: In the hands of the wrong lawyer, your $3,000 problem can quickly escalate into $30,000 and take months to resolve. If you lose, you now have to deal with both the original problem and a hefty legal fee.

4. Don’t sign up unless you’re completely comfortable with the fee arrangement and relationship.Make sure an attorney is worth what you’re spending—agree only to a fee structure that suits you. Small-business owners are often asked to sign blank checks or retainer fees. Avoid doing this if at all possible, Starnes says. It means that you are dependent on the honor system and likely will have no idea how much time your lawyer actually spends on your case. Instead, ask your lawyer for an estimate at the beginning. This will allow you to set up a budget and to avoid any unexpected surprises when the bills arrive. Take it as a serious red flag if the lawyer balks. As an attorney, “I can give you an estimate on just about anything that I know how to do,” Starnes says. “At the very least, I can give you a range and tell you the factors that will make it higher or lower. “Also, insist on a written fee agreement where all anticipated costs and fees are specified. In other words, get it in writing.

5. Understand what an attorney is doing for you.The last thing you want is for a legal problem to bite you later because your lawyer neglected to file the documents with the right government department-or, just as bad, did not let you know what the documents meant. That said, another warning sign is your lawyer failing to explain any sort of legal document he or she is drafting. To keep your relationship running smoothly, keep a written account of all interactions that you have with your attorney. As Starnes says in her book, “One of the most helpful things you can do, especially early in your relationship with your lawyer, is to provide a written summary and chronology of what happened. “This is particularly important in discussions concerning money. By documenting your understanding of fee changes or potential settlement discussions along the way, you will ensure a fair and quick resolution of any future disputes. As you move through each stage, question the things that you don’t understand. A good lawyer will take the time to explain and answer these questions.

6. Insist on a good system of communication.Insist in advance on how and how often you should communicate. If you have to wait days or weeks to hear back from your lawyer, either you didn’t relate your expectations well enough, or you have a lawyer too busy to take on your business. Give some thought to finding a new one as soon as you can. Starnes points out that you could have the best lawyer in the country, but if she is too wrapped up in a high-profile case, she isn’t devoting much time to you. That means your problem is unnecessarily going to take more time, and more money, to resolve.

7. Be wary of the “slam dunk” claim.”Any lawyer who tells you you’ve got a slam dunk case is probably not a very good lawyer,” Starnes says. “I have seen very few slam dunks in my time. The law is rarely black and white. Oftentimes, there is a disagreement, and who will win and lose is difficult to predict. “Depending on the case, an attorney likely will have to do some research and talk to several people before making any kind of assessment. While his confidence may be reassuring, his actions on your behalf are more important. Also, trust your gut. If you feel doubts about a lawyer’s comments or competence, you may be best to cut your losses, terminate the relationship, and move on.”

Source: Microsoft Business Centre resources – originally published at http://www.microsoft.com/business/en-us/resources/finance/legal-expenses/avoid-a-bad-lawyer-7-tips.aspx?fbid=BHP0CSGncpb 

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Impossibility of Performance in the Workplace

Imagine that you own an optometry practice located in a busy shopping mall. A fellow tenant of the mall accuses your employee of theft, and the management of the mall bans your employee from ever setting foot in the mall again. She can no longer enter your office at the mall without being ejected by mall security.

Obviously, in these circumstances, you are relieved from the duty to employ the employee concerned, and you simply terminate her contract – right? Wrong.

Our case law indicates that cases such as these – known as “supervening impossibility of performance” cases – must be treated as cases of incapacity. Cases of incapacity include instances where an employee becomes sick or injured, and therefore unable to perform their work, in whole or in part, and on a temporary or permanent basis.

The law sets out duties with which the employer must comply in such cases. In essence, the law expects the employer to accommodate and assist an employee who is incapacitated. The extent to which this must be done depends on the facts of each case. Where the incapacity arose in the course of the employee’s employment – for example a shop assistant falls off a ladder while packing goods on shop shelves, and injures herself – more is expected from the employer. More is also expected from a large employer who has “deep pockets” and can better afford to be generous.

In some cases, the period for which the employee cannot work is short, and the employer can do without the employee or get by through hiring a temporary replacement.

If, in the circumstances, the employee will be prevented from working for a period which is unreasonably long, the employer cannot simply dismiss and replace the employee, but must first consider all options short of dismissal. This might include, in the case of the optometrist’s employee, transferring her to another branch located outside of the mall from which she was banned. It might include adapting the employee’s work circumstances – for example,  providing seating to an employee who would normally be required to work standing – or adapting the employee’s duties to accommodate her incapacity. It might also involve providing the employee with alternative work if this is available – and as a last resort before dismissal a demotion might be justified.

It may well be that, having investigated all of these options together with the employee, there is no alternative to dismissal. Then the employer can rest assured that he or she has treated the employee fairly and that the resultant dismissal will be both substantively and procedurally fair. In the absence of taking the trouble to investigate these options, however, any dismissal is likely to be both substantively and procedurally unfair, and ultimately prejudicial to both parties.

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