Service Level Agreements South Africa

Section 198 (1) of the LSA contains the definition of a TES as “any person who, for a fee to a client, procures or provides services to others, who provides services to the client or works for him or her, and who is paid by the temporary work agency.” There are very few legislative acts in Parliament that apply. However, if the person receiving the goods or services as a consumer, the Consumer Protection Act (CPA) applies. The CPA requires that ALS be in clear and understandable language and must not contain prohibited clauses. SLAs must indicate what service a customer can expect, when, how, how many times downtime can be expected, and what corrective action can be taken if the provider does not deliver on one of its promises. In reality, they are often confusing and complicated documents that really do not help either the service providers or the client in managing the relationship, especially when things go wrong. John Giles, executive counsel at Michalsons: “In South Africa, there is a lot of confusion about service level agreements. People seem to have different understandings of who they are and why they should exist. There are many types of service level agreements that baffle the problem. Once service levels have been determined, it is necessary to consider the effects of non-compliance with these levels of performance and determine the amount of compensation. Negotiations often focus on the compensation the claimant must pay for lost benefits (whether in the form of penalties, service credits or damages). A level of service agreement describes the services (not goods) that one company makes available to another company. When goods are delivered, an ALS is not the right contract. It is a kind of contract and, in the IT context, an IT contract.

We will write more about the difference between an agreement and a contract another time. To create a working ALS, you need to define that service levels are at the heart of the relationship, as they define the (agreed) criteria that allow you to demonstrate the objectivity of the desired quality of service.

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