Keeping employment records in good order is essential for both a business and an employee. Maintaining these records gives both of these parties security when it comes to employment. Without even considering the law’s ruling on how long certain records must be kept, it should be considered sensible practice to keep these records anyway.

Neither the business owner nor the employee wants to think about how a relationship can sour but, of course, we all know that occasionally they do. In these unfortunate circumstances, the position either side takes in an argument or dispute is only as strong as the evidence that can back it up.

Whether you’ve arrived at an argument over employee performance, a dispute over sick or overtime pay, or you’re having the potentially more simple argument over what exactly an employee’s responsibilities are, you’ll want clear and up-to-date documentation to prove your point.

What does the law say?

The Employment Act of 2007 stipulates what types of records an employer must keep with regards to an employee. The business must keep records of these following things:

  1. The Employee’s contract and working particulars. The employer is expected to keep a record of what the business expects of the employee. This is, of course, the working contract. This contract should include stipulations on annual leave entitlement as well as how termination/sick pay, leave, injury/pensions are to be handled. It should include a description on how notice is to be dealt with, how long the contract is, how the contract can be extended. It should also include explanation of where the employee is expected to complete his or her work assignments, how failure to complete tasks will be processed and what is expected of the business and the employee when it comes to the employee’s travel for work reasons. Each contract is different and dependent on the exact role an employer is advertising for. Resultantly, there may well be more or less to the contract of employment but what doesn’t change, from contract to contract, is the need for these parameters to be clearly laid out. This is, as a result, one of the most important documents an employer must keep.
  2. Statement(s) of changes to employment contract. If anything changes, is added to or subtracted from in the above contract of employment, that must be filed and stored also.
  3. Statement of payment and statutory deductions. Employers are expected to keep a record of payments made to employees. This is usually called a payslip and it’s a very important document. It should be created and stored as an employee’s wages are paid and it should include a record of every deduction – tax, insurance or otherwise – that has been taken off of it.
  4. An employee’s weekly rest days, holidays taken, maternity leave days and sick leave. Recording these days taken away from an employee’s time and days of work is key.
  5. Records describing, defining and measuring employer provided housing. In the case that an employer provides lodging for the employee, a contract defining this arrangement and a record of how this provision is being used is essential. This record should include a history of events as they have shaped and changed the housing arrangement. Include any damage or improvements done to the lodging, by either the employer or the employee.
  6. Food ration, if applicable. If the employer provides a food ration, records of the purchase of this ration is required by law.
  7. A record of employee disciplinary proceedings. If warnings are given out by the employer to the employee, a record of this must be taken and recorded.

Why must an employer keep these records?

The first and most important reason for why an employer must keep the above listed personnel files is because it is the law. With due course, a government officer can ask to see these files and, according to the Employment Act of 2007, they can ask to see records dating back 36 months. This is obviously a huge reason why your business should keep personnel records. If a government officer asks your business for a file that you don’t have, it throws suspicion on the business and can incur a fine.

There are, however, other, similarly motivating reasons why you should keep these records. Certain employers may well think that keeping no records gives them plausible deniability when it comes to dispute mediation with an employee. However, as the law puts the onus on the employer to keep all the above records, if they aren’t kept and are considered necessary for the mediation of a dispute, it will be considered that the employer is at fault for not having them. This will result, in a court of law, in the employer being penalised even if the fault of the dispute really lies with the employee.

Generating, maintaining and storing personnel records is one of the best ways that a business can protect itself from a hostile former or current employee. Termination proceedings are a great example of this. If there is no clear and consistent paper trail of the warning letters given to an employee in the build-up to termination, then an employee, however poor they are as a performer, can sue for wrongful termination.

Similarly, even if an employer has been very generous in its provision of sick leave or holidays, if there is no record of these being given, an employee can sue for remuneration on these factors.

Another important reason for why employers should keep their personnel files for a long time is when it comes to making pension payments. The size and duration of a pension plan is often dependent on the length of term served by an employee at a certain organisation. As a result, keeping clear records of these things helps an employer correctly calculate how much they owe each month in pension payments.

Parastatal organisations offer a great example for why employment records are often kept for many years. Parastatal organisations often offer decades long pension schemes. They are constantly reliant on personnel files when it comes to calculating their payments.

 

Keeping clear, concise records: the key to keeping your business compliant and safe

Keep these records, keep more of them than you think is absolutely necessary and keep them for longer than you might have thought was truly needed. You never know when you will rely on a personnel file in a dispute or as you are forced to muddle your way through a relationship that has turned sour.