by K-Ci Henry | Jul 19, 2021 | Legal
Employers too often get rid of employees for reasons unacceptable in law. Some of these reasons include:
The employer dislikes the employee for reasons unrelated to the workplace.
The owner wants a more attractive secretary
The employee is unwilling to grant her superior sexual favours
The employee has clashed with a key executive who has threatened to resign
The employee has reported the employer to SARS, the Department of Labour
or Department of Health for violating the law
The manager is under pressure to perform and uses the dismissed employee
as the scapegoat for performance problems
The employer feels that it is time that it shows the workers who is boss and
picks on the first employee who makes a mistake
The shop steward stands up for the employee’s rights and is labelled as a
trouble maker.
Employers then conspire to get rid of such undesirables through the use of a
number of tricks including:
Firing the employee orally and then pretending that the employee absconded
Framing the employee for poor performance or misconduct
Provoking the employee into committing misconduct
Setting up a disciplinary hearing where the presiding officer has been primed
in advance to fire the employee.
This latter trick clearly renders the presiding officer biased. This constitutes a
serious breach of the employee’s right to fair procedure. Where the employer is
caught out using such a biased presiding officer the CCMA has no mercy. The
employee is likely to be reinstated with full back pay or to be granted heavy
compensation to be paid by the employer.
Such bias on the part of a disciplinary hearing chairperson can be discovered in
a number of ways including:
The chairperson grants the complainant (person bringing the case for the
employer) the opportunity to obtain more evidence, take adjournments or
interrupt the employee; but does not grant the employee similar rights.
The presiding officer ignores evidence brought by the employee
The chairperson is chosen to hear the matter despite having been the one
who caught the employee breaking the rule.
The chairperson says things early in the hearing that indicate that he/she has
decided in advance that the employee is guilty.
For example, in the case of Fourie & Partners Attorneys obo Mahlubandile vs
Robben Marine cc (2006, 6 BALR 569) the employee was dismissed for
attempting to remove several frozen chickens that he had hidden in a bucket.
The arbitrator accepted that the employee was guilty of the offence but still found
the dismissal to be unfair. This was primarily because the chairperson of the
disciplinary hearing had revealed his bias by asking the employee at the
beginning of the hearing “do you have an excuse for stealing the chickens?”
In South African Policing Union obo Moorcroft vs South African Police Service
[2018] 11 BALR 1192 (SSSBC) the employee, who had been dismissed for
calling a colleague a “dom apie”, was reinstated. This was partially due to the fact
that the arbitrator found that there was a reasonable apprehension of bias of the
presiding officer because of his historical relationship with the accused.
The fact that arbitrators do not hesitate to punish biased or inept presiding
officers means that employers should:
resist the temptation to ‘fix’ the outcome of disciplinary hearings in advance
avoid misusing disciplinary processes to pursue private agendas
ensure that only impartial and properly trained persons chair disciplinary
hearings.
To access our debate on thorny labour law topics please go to
www.labourlawadvice.co.za and click on the Labour Law Debate icon in the top
by K-Ci Henry | Jul 12, 2021 | Legal
It is extremely dangerous for any employer to dismiss an employee unfairly. This is because South African labour law strongly protects employees. The forums provided by the Labour Relations Act (LRA) to carry out labour dispute resolution include:
- The Centres for Dispute Resolution attached to the numerous bargaining councils established in South Africa
- The Commission for Conciliation, Mediation and Arbitration (CCMA)
Many employers, via bitter experience, will already be aware that going to any of these forums can be extremely costly. Such employers will be aware that, should things go wrong with a dismissal, they may have to pay the following:
- A settlement amount in order to avoid having to go to court or arbitration
- Legal fees to be represented at arbitration or court
- The legal fees of the employee
- Retrospective back pay to employees who the courts or arbitrators have reinstated
- Compensation to employees who they have been found to have dismissed unfairly.
Most employers will however be unaware that, in addition to the hugely expensive costs listed above, they may also have to pay arbitration fees to the CDR or CCMA).
I will deal with each of these in more detail:
OUT OF COURT SETTLEMENTS
The first stage of labour dispute resolution is conciliation. Here a CDR or CCMA commissioner attempts to mediate an out of court settlement between the employee and employer. Especially where the employer comes to realise that it messed up the dismissal it lands up agreeing to pay a substantial settlement amount to make the problem go away. Due to the fact that such settlements are made by agreement there is no legally prescribed maximum limit to the amount thereof.
LEGAL FEES AND THE EMPLOYEE’S LEGAL COSTS
Should the employer’s case be found to be frivolous and/or vexatious it may have to pay, in addition to its own legal fees, a significant portion of the employee’s legal fees. This may occur when the court/arbitrator finds that the employer was clearly in the wrong and/or defended the case unreasonably.
RETROSPECTIVE BACK PAY
Where the arbitrator or court finds that the dismissal was unfair it may require the employer to take the employee back and to pay the employee remuneration lost between the date of dismissal and the date of the reinstatement order. (Such back pay is limited to a maximum of 12 months for ordinary unfair dismissals and 24 months for automatically unfair dismissal)
COMPENSATION
Even where reinstatement is not ordered the employer may be required to pay the employee compensation in recompense for unfairly depriving him/her of his/her job. (Such compensation is limited to a maximum of 12 months for ordinary unfair dismissals and 24 months for automatically unfair dismissal)
ARBITRATION FEES
In terms of the little known section 140(2) of the LRA the arbitrator may charge the employer an arbitration fee where it is found that a dismissal for misconduct or incapacity was procedurally unfair. For example, in the case of Martini and others vs Galata Eksport Chain cc (2006, 8 BALR 836) the employees were dismissed after 20 oriental carpets worth R 800 000 went missing. The arbitrator found that the employer had good reason to dismiss the employees but that, because the employer had failed to give the employees a fair hearing, the dismissal had been procedurally unfair. He/she therefore ordered the employer to pay the CCMA an arbitration fee in terms of section 140(2) of the LRA. It is uncertain what the intension of this fee is. Perhaps it is for wasting the CCMA’s time by failing to follow procedures that every employer ought to be aware of.
In the light of the above employers are advised to:
- Make sure that they know and fully understand all aspects of labour law
- Use that knowledge to comply with the law when dealing with employees.
To register for our 16 July webinar on Investigating in the Covid Environment please contact Ronni on [email protected] or 0845217492.
by K-Ci Henry | Jul 5, 2021 | Legal
Many employers try to evade the law by closing down one business and opening another. However, this ploy has become less and less likely to succeed. Especially where the employer opens the same business under a different name and/or in a different place, the new business could be found liable for the compensation payment award made against the old business.
The new business might be registered as a separate company or close corporation to the old one which would normally, in terms of the Companies Act, protect it from liability for any legal obligations of any other entity. However, arbitrators at the CCMA and bargaining councils as well as judges in the Labour Court may be willing to ignore this corporate protection where they deem it appropriate. This practice of ignoring the Companies Act protection is known as ‘piercing the corporate veil’ because it breaks through the protective shield behind which the employer is hiding. This the courts and arbitrators might do where:
- They believe that the employer is purposely switching businesses in order to evade labour law compliance
- There is a clear and close connection between the old and new business
- The employee could lose out if the corporate veil is not pierced.
For example, in the case of Marllier vs G7 Technologies cc & Another (2004, 4 BALR 480) the employer retrenched its production manager while the owners of the employer were still running other similar profitable businesses. The CCMA found that:
- The first cc had not been closed down for genuine operational reasons but rather for the convenience of the owners
- The employer had failed to consult with the employee before retrenching him
- The business of the second cc was so intertwined with that of the first one that they could be regarded as a partnership
- The owner’s reliance on the juristic personality of the second cc as a means of avoiding liability for the employee’s retrenchment justified the piercing of the corporate veil
- The employer had to pay the employee six months’ remuneration as compensation for the unfairness.
In the case of Domingo vs Ad-Bag Advertising CC (2008, 7 BALR 646) the arbitrator found that the dismissal was unfair and awarded the employee nine months’ remuneration in compensation. However, the arbitrator lifted pierced the corporate veil and found the two owners of the business personally liable for the payment of this compensation despite the fact that officially the employer was a close corporation. This was because the owners lied during the hearing and because there was a danger that the business might not pay the compensation amount due to its impending closure.
In the light of these decisions it is most important for employers to:
- Act cautiously before moving their business operations from one company or cc to another
- Ensure that any such move is carried out for legitimate reasons
- Ensure that the rights of employees will not be unduly prejudiced by the transfer of the business operations
- Avoid misusing the ownership of other companies in order to get rid of employees
Employers must also ensure that when considering retrenchments:
- There are truly no alternatives to the loss of jobs
- Potential retrenches are properly consulted
- The whole process is managed under the guidance of a labour law expert.
To attend our 14 May 2010 seminar in Cape Town on CHANGES AND DANGERS IN LABOUR LAW please contact Ronni at [email protected] or on 0845217492 or (011) 782-3066.
by K-Ci Henry | Jun 29, 2021 | General
The Labour Relations Act (LRA) provides two ways of going about setting aside an arbitration award; via a Labour Court review or via a rescission application.
In a Labour Court review the party who is unhappy with the award asks the labour Court to set the award aside on the grounds that the arbitrator, in making the award, ‘misconducted himself/herself’. That is, the review application is not an appeal against the award decision but rather a claim that the arbitrator:
- Committed misconduct in relation to his/her arbitration duties
- Committed a gross irregularity in the conduct of the arbitration proceedings
- Exceeded his/her powers or
- Made the award improperly
The above criteria refer to misconduct and irregularities including, but not limited to:
- Taking into account evidence that was not put before the arbitrator
- Refusing to allow valid and relevant evidence to be brought
- Ignoring statutory requirements or legal principles
- Unduly assisting one or other party with his/her case
- Delivering a biased award
- Taking a bribe
- Failure to apply his/her mind to the facts in evidence
A party may, within 14 days of becoming aware of the arbitration award, apply to the arbitrator to rescind (cancel) the award on the grounds that the award:
- Was erroneously sought or made in the absence of any party affected by it
- Contained an ambiguity (i.e could mean two different things) or an obvious error or omission
- Was granted as a result of a mistake common the parties.
The grounds for rescission are very narrow and such applications are most commonly brought when one party has not attended the arbitration hearing and the award has been made in that party’s absence. Where the party who has failed to attend the hearing has an excuse for his/her absence he/she may apply to the arbitrator to rescind the award so as to allow a new arbitration hearing to be set down. Typical reasons for rescission applications being granted include:
- The rescission application is made within the 14-day deadline and
- Valid proof is submitted of illness, or of failure of CCMA/bargaining council to serve the notice of set down on the party concerned.
However, employers are warned that the CCMA requires valid reasons and thorough explanations for the absence of parties. In the case of Shoprite Checkers vs CCMA & others (2005, 8 BLLR 816) the employer party failed to attend the arbitration hearing. The arbitrator held the hearing in absentia and granted an award in favour of the employee. The employer then applied for a rescission on the grounds that the assistant of the person in charge of the matter had mis-diarised the date of the arbitration. The CCMA turned down the rescission application.
The employer therefore took the matter on review to the Labour Court. The Court upheld the CCMA’s decision saying that a negligent error by the employer is not grounds for rescission. The Court ordered the employer to pay the employee’s legal costs expended on defending the Labour Court review application.
In Sebati vs Rens Security Services cc (2009, 11 BALR 1170) the CCMA turned down a rescission application where the employer failed to explain how the notice of hearing had failed to reach the relevant employer official.
Parties are therefore advised to:
- Exercise extreme care in keeping records of CCMA hearings
- Ensure that they attend all CCMA meetings and hearings
- Get advice from a reputable labour law expert before applying for rescissions and lodging applications at the Labour Court
To register for our 16 July webinar on Investigating in the Covid Environment please contact Ronni on [email protected] or 0845217492.
by K-Ci Henry | Jun 21, 2021 | Legal
Section 213 of the Labour Relations Act (LRA) provides that an employee is anyone, other than an independent contractor who works for another person
or who assists in conducting the business of an employer. This definition omits only service providers who are external and/or truly autonomous.
Section 200A of the LRA states that, unless the contrary is proven and regardless of the form of the contract a person is presumed to be an employee if any one of the following circumstances exist:
The manner in which the person works or his/her hours of work is/are subject to the direction or control of another person
The person forms part of the organisation
The person has worked for the other person for an average of at least 40
hours per month for the last 3 months
The person is economically dependent on the other person
The person is provided with tools of trade by the other person
The person only provides services to one person.
This law applies to government, business, welfare, NGO, religious and all other employers except perhaps the Secret Service, National Intelligence
Agency and Defence Force. It could be argued that anyone doing work as a means of receiving training in their trade or profession would be defined as a learner and not as an employee. For example, the Skills Development Act and the Manpower Training Act appear to provide for special circumstances where people are signed up for learnerships and apprenticeships purely for purposes of advancing their learning and qualifications. Work contracts that clearly fall under the jurisdiction of either of these two acts may well not qualify as employment contracts. In Mokone vs Highveld Steel and Vanadium (2005, 12 BALR 1245) the arbitrator found that the applicant had done some work for the respondent while he was completing studies financed by the respondent. Despite this the arbitrator found that the applicant had not been an employee in terms of the LRA and that the Council therefore did not have jurisdiction to hear the case.
However, in the case of Andreanis vs the Department of Health (2006, 5 BALR 461) Ms Andreanis was appointed as an intern at a state hospital. Four
years later she was told to vacate her post as her internship period had come to an end. She claimed unfair dismissal as she believed that she was an
employee and that the end of her internship was irrelevant to her employment status.
The employer claimed that:
Ms Andreanis was a trainee and not an employee
The CCMA had no jurisdiction to hear a case brought by a non-employee
In any case Ms Andreanis had not been dismissed as her appointment had expired automatically when her internship period expired.
The arbitrator found that:
Ms Andreanis was an employee in terms of the definition in Section 213 of the LRA
She also qualified as an employee in terms of all but one of the seven criteria in section 200A of the LRA
Section 200A gave arbitrators no discretion at all to find that a person was not an employee if any one of the seven criteria in section 200A applied. (This is a puzzling finding as section 200A clearly leaves room for discretion via its proviso “Unless the contrary is proved…”)
The Department of Health had been attempting to hide behind Ms Andreanis’s internship
The dismissal was unfair
The employer was to reinstate the employee with full back pay.
Employers are advised, in the light of the above to ensure that all trainees are treated fairly and to contact a reputable labour law expert should they be
unsure whether a worker falls under the protection of the labour law or not.
To register for our 16 July webinar on Investigating in the Covid Environment please contact Ronni on [email protected] or 0845217492.
