How to prevent labour relations issues in your Start-up business


Retaning the services of an HR Consultant should be one of the first SLA’s you enter into when starting up your business, and here’s why.

Common start-up business scenarios that play out:

You and a few partners have marketed your profitable product or service and your business has grown substantially after a year or two. The orders are increasing and the pressure is picking up, placing more demands on existing staff and in areas unfamiliar to you which may be quite daunting. Your sales, production and operations teams are in place, so now you are good to go and in business!

Would we be correct in assuming that the HR function has not been given any priority and has been pushed to the back burner and you probably thinking we will cross that bridge when we get to it.

You think that “Employment contracts and Job descriptions are not necessary because you are of the opinion that you have a good rapport with your staff so you don’t issue contracts. Policies are also not formulated and procedures are not defined.

The current staff are suddenly not coping as they can’t keep up with the additional working hours required of them to complete the orders on time. The employees start to question the legal regulations surrounding working hours, and responsibilities so they request employment contracts and job descriptions. You are now hastily Googling to download some free employment contract templates so you can put something together to issue to them trusting that the templates you find meet the legal requirements.

Your star performer is not happy with the written conditions of employment and Job Description as he/ she disputes the working hours, start and finish times, meal intervals, leave entitlements and responsibilities etc. The employee argues that the terms stipulated differ to what has been practiced consistently since start up.

The honeymoon phase is now over and the harmonious working environment you had cultivated is damaged.

The employee’s attitude starts to shift from co-operative, positive and motivated to arrogant, resistant, uncooperative, and negative and his/her behaviour starts to affect the entire workforce culture negatively and his/her overall work performance is becoming poor.  You can understand that the employee is frustrated and feels that the trust relationship is damaged.

This could have been avoided if you started off on the right foot and issued the employee with written conditions of employment from the onset and defined your expectations in terms of responsibilities up front before agreeing to enter into an employment relationship.

The star performer has turned into a poor performer. Finding yourself having to manage the employees poor performance and bad attitude.

You now accept that it is time to reach out to an HR Consultant for advice on how to proceed. You most probably will end up parting ways with this employee and this outcome could have been avoided.

Sound familiar?

Only when there is a conflict situation regarding a condition of employment i.e. disputes around working hours, overtime payments, sick leave, annual leave entitlements, incentives, salary increases, managing performance, training etc do you wake up to the fact that these documents needed to be drafted and issued.

There is no magic staff headcount threshold number which determines the stage at which you need to lean on an HR Consultant to handle your people matters.

You probably don’t need a full time HR Consultant so why not consider outsourcing the function to an HR Consultant on a retainer basis to lay your strong HR foundation for you, ideally from START UP phase. Get the contracts in place, the employee handbook drafted, your payroll set up and HRIS to keep accurate records. Once this is implemented your expert can support you telephonically and on-line or attend to HR Matters a couple of days a month to ensure your HR matters are handled and maintained, and if applicable to your business ensure monthly compliance obligations are adhered to an annual reporting to Department of Labour and relevant SETA’s.

Don’t make the mistake of adopting “the ignorance is bliss” attitude, you will be sorry as it has the potential to become a costly exercise and puts your business at huge risk for non-compliance and may even lead to you having to close your doors.

We can help you.

Chat to us about our retainer package options, customised to suit your unique business.

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Natalie Leach, CHRP, is the Founder and Director of Talent at Hands on Human Resources. She has gained a comprehensive understanding of people management from 25 years of experience in various sectors both in-house and HR Consulting. She is passionate about self-improvement and empowering people and organizations to thrive. Hands-on Human Resources offers Virtual HR and Talent sourcing services to South African SMEs. Send an e-mail to to book a call.

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