by K-Ci Henry | Jun 7, 2021 | Law & Criminology , Legal
Section 197 of the Labour Relations Act (LRA) requires the new employer, in a takeover as a going concern, to take over all the employees of the old employer.
A take over of an enterprise “as a going concern” essentially means that the new employer is carrying on the same business as the old employer after a takeover.
In such a case the new employer is required to take over the old employer’s staffwith all their years of service and all their old terms and conditions intact. Due to
t his heavy burden and for other reasons, the new employer often wishes to retrench excess employees or requires the old employer to carry out the
retrenchments before the takeover. However, section 187(1)(g) of the LRA prohibits any retrenchment (or any otherdismissal) related to a takeover as a going concern. Such terminations are deemed to be automatically unfair dismissals. This means that the dismissed employees could claim reinstatement or up to 24 months remuneration in compensation. It is important to stress that the provisions of sections 197 and
187 of the LRA apply not only to businesses but to all employers including government departments, welfare organisations, NGOs and all other enterprises
that employ staff.
The purpose of this legislation is to preserve jobs by preventing employers from rationalising their workforces in circumstances of a takeover. However, because
such legislation tends to discourage takeovers, rescue bids for enterprises that are going under will also be discouraged. Such enterprises will often have to
close down. Then, instead of a limited number of employees being retrenched during a rationalisation, all the employees will lose their jobs.
In the case of Cash Paymaster Services (Pty) Ltd vs Browne (2006, 2 BLLR 131) the Labour Appeal Court found that the employee who lost his job due to the
takeover of a business had been unfairly dismissed. The employer was ordered to pay most of the employee’s legal costs plus compensation in the amount of
R684 621.
In the case of Van Zyl vs Asanti Safari Trading cc t/a The Hill Kwik Spar and another (2009, 2 BALR 206) the parties consented that the case be heard by the
CCMA instead of by the Labour Court. In this case the employee was dismissed shortly before the business was taken over by a new owner. The respondent
claimed that the sale agreement between the old and new owners had excluded the requirements section 197 of the LRA. However, the arbitrator found that:
The sale agreement had not excluded section 197 and that, had it done so, this would have been illegal.
The old and new employers could have entered into an agreement to vary the requirements of section 197 but only if they had entered into such agreement with the full participation of the employees of the business whose jobs could be affected by the results of the takeover.
Van Zyl, the dismissed employee, had not been involved in any such agreement with the owners.
The purchase of the business had constituted a transfer of a going concern as contemplated in section 197 of the LRA
The reason that the employee was dismissed was the takeover of the business.
This contravened the provisions of section 187(1)(g) of the LRA effectively prohibiting such dismissal.
The dismissal was automatically unfair.
The new employer was required to pay the employee compensation equal to 12 months’ compensation and also to pay the employee’s legal costs.
These cases show that employers considering takeovers, buy outs, mergers or contracting/outsourcing arrangements must, before implementing any transfers,
must act with extreme caution. That is, they should utilise their labour law experts to:
Analyse and explain the meaning of sections 197 and 187 of the LRA as well
as of the developing case law in this area.
Examine the specific circumstances of the intended takeover in the light of the legislation.
Work out a strategy for completing the takeover without infringing the ever tightening labour legislation.
To register for our 7 May webinar on Lockdown Labour Law please contact
Ronni on [email protected] or 0845217492.
by K-Ci Henry | May 31, 2021 | Legal
South African employees are so heavily protected by the Constitution, by labour legislation, by the Labour Courts the CCMA and trade unions that they
are less often afraid to defy the employer’s instructions. For the employer the resulting insubordination is a nightmare.
This is especially so where the employer is ill-equipped to deal with insubordinate employees and fails to understand:
What insubordination really is
How it differs from disrespect
What a reasonable instruction is
When a charge of insubordination is not appropriate
How seriously the law views insubordination
How it should be dealt with
WHAT IS INSUBORDINATION?
The Collins Concise Dictionary defines “insubordinate” as “not submissive to
authority, disobedient or rebellious”. It is the refusal of an employee to bow to
the authority exercised reasonably by the employee’s superior. This could
include conduct such as:
Refusal or intentional failure to obey reasonable and lawful instructions
Comments such as “You have no authority over me”
Telling the manager to go and get what he/she wants from someone else
INSUBORDINATION VS DISRESPECT
Insubordination applies only upwards and can only be perpetrated by a junior towards a senior. Disrespect, on the other hand, can apply upwards and
downwards. For example, it would be disrespectful for a manager to shout at an employee and tell him/her to ‘get out of the office’. Disrespect is therefore
not necessarily linked to a person’s position of authority but can also be linked to one’s human dignity.
WHAT IS A REASONABLE INSTRUCTION?
In my view a reasonable instruction is one that:
The employee is capable of carrying out and
Involves a task that is not substantially beneath the employee and
Does not infringe the rules of the employer or the laws of the country and
Involves a task that truly needs to be done.
For example, if the boss tells the Human Resources Manager on a 4-day week contract to come in on the weekend to repair the faulty elevator the HR
Manager might be entitled to refuse because The HR Manager is being required to carry out a task:
That is completely outside the sphere of the HR Manager’s duties
Outside of the HRM’s capabilities
Assigned for a time that is not normally worked
That, if carried out by the HRM, could result in danger to users of the elevator.
However, instructing employees to adhere to heath and safety requirements would, in most cases, be both legal and reasonable.
In Mogano vs St Mary’s Children’s Home [2021] 2 BALR 181 (CCMA) the employee was dismissed for disobeying a rule to remain on the work premises
during the lockdown. The arbitrator noted that a key aim of the lockdown was to protect vulnerable people from contracting Covid. The children at the home
were vulnerable, and the care workers had been allocated a cottage in which they could stay while off duty. The arbitrator found that the applicant had
unreasonably defied management’s authority and imperilled the children at the home. The applicant’s dismissal was upheld as fair.
WHEN A CHARGE OF INSUBORDINATION IS NOT APPROPRIATE
Insubordination is not the same as poor work performance. That is, poor work performance relates to how badly the employee has performed work or
missed deadlines. While poor work performance can sometimes be wilful there is usually some work that is done albeit badly and the poor performance
occurs regardless of whether the employee has been given an instruction. On the other hand Insubordination means the employee’s refusal to obey a
specific instruction whether the instruction relates to work performance or not.
Also, an employee might fail to carry out an instruction because:
The equipment used is really faulty
The employee truly does not have the required skill
The employee is genuinely disabled
These examples do not amount to insubordination because the employee is not refusing to carry out the instruction.
To book for our 16 July 2021 webinar on CONDUCTING INVESTIGATIONS IN THE COVID ENVIRONMENT please go to
https://www.labourlawadvice.co.za/seminar/ or contact Ronni at [email protected] or on 0845217492.
by K-Ci Henry | May 24, 2021 | Legal
Since 1995 the Labour Relations Act (LRA) and Basic Conditions of Employment Act have been replaced with entirely new versions. In addition
new legislation in the form of the Skills Development Act and the Employment Equity Act have been born. The LRA has also been further amended more than once. Attached to these acts are numerous codes of practice that provide guidelines as to what is fair and acceptable.
However, as large as this body of legislation is it often falls short when it comes to detail. For example, the LRA requires employers to prove that a
dismissed employee’s conduct must have been so gross as to render a continued employment relationship intolerable. However, the LRA neither
defines what would make an employment relationship intolerable nor what degree of behaviour can be considered gross.
Therefore, employers and employees need to look to case law for more detailed guidance as to what the law means and what would be fair in specific
circumstances. In addition, the employer’s own rules and terms and conditions of employment can, within limits, play a significant role in determining what
discipline is and is not fair.
For example, in the case of Rubin Sportswear vs SACTWU and others (2004, 10 BLLR 986) the employer took over a business and then introduced a rule
changing the age at which employees were to take retirement. The Labour Appeal Court found that the word “normal” means “the way things are
normally done” and that the employer could not unilaterally change what was normal.
It is therefore imperative that employers have their rules reviewed in line with the latest interpretation of the law by the courts. Furthermore, had the new
employer, at the time of takeover, negotiated renewed employment contracts with its employees, it could have included the new retirement age in those
contracts. This would have legitimated the change in the retirement age. There are other equally important reasons that employers need to update their
rules and terms and conditions of employment. For example, employers are not allowed to suspend employees unfairly and one element of unfairness
could be the extreme length of the employee’s suspension period. That is, if the employer’s disciplinary code does not cater for protracted suspensions
then a drawn out period of suspension could be considered unfair even if the employee is being paid.
Protracted suspensions could be unfair not only on the employee but also on the employer and on the general public! This is because, where the employee
is being paid to sit at home without working, the employer bears the burden of the cost of the employee’s unearned remuneration. Thus, either the
company’s shareholders have their profits eroded or the taxpayer shoulders the burden where the employer is the state. For example, it was reported in
The Star that 11 officials of the Road Accident Fund were suspended on full salary for a period not less than 10 months at a cost of R5,3 million (The Star,
3 June 2004, page 17.
The standard clauses in employer’s disciplinary codes are no longer sufficient because provision needs to be made for exceptions as well. For example,
should the employer wish to discipline an employee twice for the same act of misconduct the employer’s disciplinary code should provide for this. In the
case of BMW (SA) (Pty Ltd vs Van der Walt (Contemporary Labour Law vol. 13 No.5 page 49) the Labour Appeal Court held that it is important, that, for a
second hearing for the same incident of misconduct to be fair, this should ideally be permitted by the employer’s disciplinary code. In addition, the
holding of a second hearing must be fair in all respects. Employers are warned that the holding of such second hearings will only be fair in
exceptional cases.
Should employers fail to keep up with such decisions of court judges and of arbitrators they will be unable to run their organisations according to law
because labour law is a constantly changing thing. Should employers fail to update their rules, disciplinary codes and terms and
conditions of employment in the light of new case law decisions they will be caught short when it comes to implementing discipline and dismissal. This is
because an employer’s rules and policies should encapsulate the latest labour laws so that, when management applies the policies, they are in line with the
law. It can be a laborious and complex task for an employer to draw up a comprehensive set of rules, but dealing with the consequences of having no
rules can be far more onerous for employers at the CCMA, bargaining councils and Labour Court. If employers are not in a position to take charge of
this vital task there are experts they can use who can take over the pain of carrying it out and making sure it is done properly.
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 | May 17, 2021 | Legal
South African employees are so heavily protected by the Constitution, by labour legislation, by the Labour Courts the CCMA and trade unions that they
are less often afraid to defy the employer’s instructions. For the employer the resulting insubordination is a nightmare.
This is especially so where the employer is ill-equipped to deal with insubordinate employees and fails to understand:
What insubordination really is
How it differs from disrespect
What a reasonable instruction is
When a charge of insubordination is not appropriate
How seriously the law views insubordination
How it should be dealt with
WHAT IS INSUBORDINATION?
The Collins Concise Dictionary defines “insubordinate” as “not submissive to authority, disobedient or rebellious”. It is the refusal of an employee to bow to
the authority exercised reasonably by the employee’s superior.
This could include conduct such as:
Refusal or intentional failure to obey reasonable and lawful instructions
Comments such as “You have no authority over me”
Telling the manager to go and get what he/she wants from someone else
INSUBORDINATION VS DISRESPECT
Insubordination applies only upwards and can only be perpetrated by a junior towards a senior. Disrespect, on the other hand, can apply upwards and
downwards. For example, it would be disrespectful for a manager to shout at an employee and tell him/her to ‘get out of the office’. Disrespect is therefore
not necessarily linked to a person’s position of authority but can also be linked to one’s human dignity.
WHAT IS A REASONABLE INSTRUCTION?
In my view a reasonable instruction is one that:
The employee is capable of carrying out and
Involves a task that is not substantially beneath the employee and
Does not infringe the rules of the employer or the laws of the country and
Involves a task that truly needs to be done.
For example, if the boss tells the Human Resources Manager on a 4-day week contract to come in on the weekend to repair the faulty elevator the HR
Manager might be entitled to refuse because The HR Manager is being required to carry out a task:
That is completely outside the sphere of the HR Manager’s duties
Outside of the HRM’s capabilities
Assigned for a time that is not normally worked
That, if carried out by the HRM, could result in danger to users of the elevator.
However, telling the HRM to conduct recruitment interviews because the HR Officer is in hospital would, in most cases, be both legal and reasonable.
WHEN A CHARGE OF INSUBORDINATION IS NOT APPROPRIATE
Insubordination is not the same as poor work performance. That is, poor work performance relates to how badly the employee has performed work or
missed deadlines. While poor work performance can sometimes be wilful there is usually some work that is done albeit badly and the poor performance
occurs regardless of whether the employee has been given an instruction. On the other hand Insubordination means the employee’s refusal to obey a
specific instruction whether the instruction relates to work performance or not. Employers confuse these two concepts at their peril. For example, in the case
of Fourie vs Capitec Bank (2005, 1 BALR 29) the employee was dismissed for insubordination. The dismissal decision was influenced by the fact that the
employee had previously received a final warning for poor work performance. The arbitrator found the dismissal to be unfair because these were not two like
offences.
Also, an employee might fail to carry out an instruction because:
The equipment used is really faulty
The employee truly does not have the required skill
The employee is genuinely disabled
These examples do not amount to insubordination because the employee is
not refusing to carry out the instruction.
To observe our experts debating hot labour law topics please go to
www.labourlawadvice.co.za and click on the Labour Law Debate item in the
main menu.
by K-Ci Henry | May 10, 2021 | General
Section 60 of the Employment Equity Act (EEA) EEA, in effect, provides that, if the employer fails to take the steps necessary to deal with unfair discrimination or sexual harassment the employer can be charged with unfair discrimination.
In the case of Christian vs Colliers Properties (2005, 5 BLLR 479), two days after Ms Christian started work, her boss invited her to sit on his lap and kissed her on the neck. When she later objected to the owner’s conduct he asked her whether she was “in or out”. When she said that she was “not in” she was dismissed with two days pay and referred a sexual harassment dispute.
In a default judgement the Court decided that:
The employee had been dismissed for refusing her superior’s advances
This constituted an automatically unfair dismissal based on sexual discrimination
Newly appointed employees are as deserving of protection from sexual harassment as are their longer serving colleagues. The employer had to pay the employee:
24 months’ remuneration in compensation
Additional damages
Interest on the amounts to be paid
The employee’s legal costs
The above finding might lead employers to believe that, in order to protect themselves, they need to dismiss any employee found guilty of sexual harassment. However, this is not always so. For example, in the case of SABC
Ltd VS Grogan (2006, 2 BLLR 207) a regional sales manager was dismissed for (amongst other things) sexual harassment after he had allegedly kissed a junior female colleague several times, given her love literature and had physical contact with her in his car. An arbitrator later found that, while he was guilty of sexual harassment the level of seriousness of his conduct did not merit dismissal. This was largely because the alleged victim had not seemed to mind his advances very much and had said she thought he should not be dismissed. The arbitrator therefore ordered the employer to reinstate the employee. The Employer took this decision on review to Labour Court but lost again as the Court pronounced the arbitrator’s finding to have been properly thought out and justified.
In Liberty Group Ltd v MM [2017] 10 BLLR 991 (LAC) the respondent employee resigned due to having been sexually harassed by her manager. The Labour Court awarded the respondent compensation of R250 000.
The Labour Appeal Court noted that there was no basis for the appellant’s contention on appeal that the respondent had fabricated the claim of sexual harassment in order to extort money from it.
No investigation had been conducted before the respondent resigned and no steps, as required by section 60(2) of the EEA, had been taken by the employer to ensure that the harassment did not continue. The appeal was dismissed with costs.
The above case findings show that:
1. Employers cannot ignore sexual harassment of their employees and must act
swiftly.
2. However, this does not mean that dismissal is appropriate in every case.
3. Employers need to use reputable labour law experts to assist with:
Deciding what the appropriate action should be in each individual case of
sexual harassment
Designing a comprehensive sexual harassment policy
Ensuring that every owner, manager and employee knows and understands
the severe consequences of committing such acts
Communicating to all concerned that such misconduct will result in severe
penalties including possible dismissal
Ensuring that all employees feel entirely free to report sexual harassment.
Training all employees in the above listed issues as well as in what
constitutes sexual harassment, how to deal with it, where to report it and the
company’s supportive policy towards sexual harassment victims
To observe our experts debating hot labour law topics please go to
www.labourlawadvice.co.za and click on the Labour Law Debate item in the main
menu.
