Without a team that has a common goal and works to achieve it, even having strong assets (a large land bank) is not the key to a successful business. Financial efficiency and business security depend on properly organized staff work. Otherwise, its owner may feel the effects of a number of legal risks.
Are your managers responsible?
Attracting tenants by competitors is one of the reasons for the loss of land. Competitors work with the villagers, offer better conditions, including higher rents. After that, on behalf of the landowners initiate the procedure of termination of lease agreements. As a result - the farmer loses the earth for cultivation. In it, as practice shows, farmers are very often guilty. In particular, the basis for declaring the contract invalid or for its termination may be the signing of the document by another person. Responsible managers often disregard the provisions of the law, assuming that instead of old landowners, contracts were signed by their younger relatives. This, in turn, may be grounds for invalidating the lease agreement.
Another reason for termination of the contract: late payment of rent. And this is mostly due to not very punctual managers who do not adhere to a certain schedule of payments and do not properly record them, if the rent is paid in cash or in kind.
Another problem is the violation of the law on the renewal of the lease agreement and the preemptive right to enter into a land lease agreement for a new term. Managers responsible for conducting contractual work simply forget to send notifications about the renewal of the lease agreement, or do not keep evidence of sending such notifications, which, in turn, is also the reason for the loss of land.
How can this problem be solved? To begin with, conduct an audit of the land bank and check the land plots that are leased. It is also worth adjusting the provisions of lease agreements, which must primarily meet the interests of the tenant. It is necessary to ensure high-quality contractual work at the enterprise: the work must be automated and all the facts of rent payment, the expiration dates of contracts must be recorded, as well as documents confirming this. The procedure for working with land owners, concluding, executing and renewing contracts must be clearly spelled out in the internal instructions. Training of workers responsible for contract work and communication with farmers should also be provided periodically.
Are you ready for unexpected visits?
Even acting within the legal framework, it is very easy to get a fine from the State Labor Office. Often hired under civil law contracts for seasonal work during inspections by labor inspectors can say that they are paid workers. This, in turn, may be grounds for imposing a fine of more than 120 thousand hryvnias for one such employee. After that, the farmer will have to prove in court the existence of civil law contracts.
During searches, investigators and operatives often try to talk to employees to learn more about the work of the company, other employees or management, or where the money or documents are stored. As a result, the company's management faces criminal liability, and property and documents seized during the search must be returned to the courts for a long time.
How can all this be prevented? First, employees must always be prepared for unexpected visits. The company needs to develop instructions for working with law enforcement / control bodies. Be sure to read these instructions to employees.
Among the employees it is necessary to identify the responsible persons who will be responsible for communication with them, as well as for communication with the management and lawyers during the visit of the inspectors and law enforcement officers. Responsible staff must understand the basic principles of inspections and investigative actions, and know what documents inspectors must have in order to respond properly to an unwanted visit before the arrival of a lawyer or supervisor. It is also worth conducting trainings for employees, or training searches and inspections, which will provide an opportunity to analyze the weaknesses in the work of the enterprise.
Is the company protected from "traitors"?
Raiders who illegally seize other people's assets mostly use help from within, such as former employees. Copies of lease agreements, statutory documents of a legal entity or title documents for real estate can be obtained from them for a small fee. There were times when these people helped the raiders negotiate with the guards to quickly capture the harvest in the field or warehouses.
How to avoid such situations? Usually, the behavior of employees is influenced by motivation to work in a particular company and the fear of losing a good job. Therefore, the owner first of all needs to take care of a good salary, bonus system and other working conditions. However, it is better to sign non-disclosure agreements with the most responsible categories of employees, in which to determine confidential information and prescribe penalties for disclosure, as well as to notify employees of criminal liability for cooperation with unfair competitors.
Be that as it may, the financial efficiency of work and the safety of agribusiness depend on the loyalty of staff. People need to be motivated, and their work should be systematized in accordance with all internal processes of the enterprise.
To protect the land bank, it is necessary to establish a system of cooperation with landlords. To minimize inspections, it will not hurt to prepare employees in advance for such visits and to establish a communication system. In order to reduce the risks of information leakage and transmission to unscrupulous contractors, it is necessary to carry out explanatory work with employees and sign non-disclosure agreements. If you follow such simple rules and set up the job correctly, then employees will become a real asset for business development.
Andriy Gevko, attorney, partner of the law firm Bargen
the newspaper "AgroMarket”, August 2019