Saturday February 17 2018

Can I renegotiate my employees pay structure?

Moses Ssesanga

Moses Ssesanga  

By Moses Ssesanga

I own a tour company and I pay nine of my 10 workers a salary. However, the wage bill has become a burden because of falling revenues and low business prospects. I had thought of renegotiating their contracts to commissioned workers. How do I go about this and is it legal anyways. Please advise. Charity

Many businesses have suffered declining revenues, and this has been attributed largely to the country’s economy that has not performed as had been generally anticipated.
This economic slump has forced many struggling businesses to restructure their operations to reduce operating expenses, and the measures adopted have in some instances included letting go of some of their less critical employees, or outsourcing some functions hitherto managed internally.
As a businessman, you have several options to manage your wage bill and improve your enterprise’s bottomline or profitability. You may have to reduce operating expenditures in the less critical arrears of your business, however, the option of renegotiating the employment terms of your workers from salaried employees to commission agents, without officially terminating the existing contracts may result into litigation against your business.
You should, therefore, pay off the current contracts according to the agreed termination clauses in your human resource policies and then, issue the new commission contracts to those who will have expressed willingness to accept and work under the new terms. This may be the least costly option, if your employees do cooperate.
The other option may be to declare redundancy and let go of some your employees with paid up redundancy or terminal benefits as provided for by law.

Moses Ssesanga
Head Human Resource
Monitor Publications Limited