adminunderstanding of the legal transactions, which are common in business.
When dealing with contracts, a manager must be able to appreciate the various contracts relating to business and business transactions.
As a leader of an organisation, a manager must at least have a basic legal astuteness that will prevent them from making legally unsound decisions.
Managers in public listed companies have a duty to protect the interests of the company they are working for.
One of the struggles faced by top managers is their lack of basic knowledge of law. Most people including managers do not normally give a second thought when it comes to legal matters or the law and it is only when they get into trouble that they start looking for a good lawyer.
In Zimbabwe, getting quality legal service does not come cheap. Again, if a person lacks the basic knowledge of the law or legal matters, they have to sacrifice their interests and may end up sustaining huge losses.
As such, today’s professionals must be educated in basic legal knowledge. An entrepreneur should know the basic legal things like what is law, what is the court, what is company law, what are the features of a company? What is tax, how is tax computed, the legal procedure, the practice otherwise it would extremely be difficult to run an organisation without such knowledge.
If you are still a young entrepreneur, you may not have to consult a lawyer for each and every simple thing but may only consult on sticky matters.
If you then lack the understanding of basic legal things, you may resort to filing a civil suit for recovery of a small debt without considering the options for amicable settlement.
One of the important statutes that managers need to be conversant with is the Companies Act.
Pertinent issues such as formation of the company, duties of directors, protection of minority interests, roles of the board of directors are explicitly covered.
We also have the Consumer Contract Act that protects the consumer or the unsophisticated public from unscrupulous business people that have the tendency of passing down harsh and extreme penalties to defaulters.
During business arrangements, agency relationships may arise — the agent in the process is given authority to conclude a contract with a third party, the principal is therefore bound by the contract entered into by his agent.
Did you know that in terms of the Criminal Law (Codification and Reform) Act (Chapter 9:23) any person who takes property capable of being stolen knowing that another person is entitled to own, possess or control the property or realising that there is a real risk or possibility that another person may be so entitled; and intending to deprive the other person permanently of his or her ownership, possession or control, or realising that there is a real risk or possibility that he or she may so deprive the other person of his or her ownership, possession or control; shall be guilty of theft.
Managers also need to keep abreast with the country’s labour laws. Generally, the labour law seeks to protect the interests of the employee.
There are provisions dealing with issues such as leave — a person may be away for up to nine months in a year and still remain in employment.
Issues such as dismissal, collective bargaining — employers are normally outnumbered and outpowered by strong unions. Such unions become powerful and are difficult to negotiate with as opposed to a single employee.
An employee is greatly empowered by the labour laws, which provide them with fundamental rights that include unionism, democracy at the workplace, and protection from forced labour.
Minimum wage stipulations are legally endorsed and must be conscientiously followed. Do not operate your business without the knowledge of the law!
Shelter Chieza is an advisor in management issues. She can be contacted at [email protected]
Online Reporter