BY lvan lsraelstam, Chief Executive of Labour Law Management Consulting. He may be contacted on 011 888 7944 or 082 852 2973 or on e-mail address: [email protected].
Section 186(2) of the Labour Relations Act (LRA) defines “Unfair labour Practice” as “any unfair act or omission that arises between an employer and an employee involving-
- unfair conduct by the employer relating to the promotion, demotion, probation (excluding dismissals of probationers) or training of an employee or relating to the provision of benefits to an employee);
- the unfair suspension of an employee or any other unfair disciplinary action short of dismissal in respect of an employee;
- a failure or refusal by an employer to reinstate or re-employ a former employee in terms of any agreement; and
- an occupational detriment, other than dismissal, in contravention of the Protected Disclosures Act, 2000 on account of the employee having made a protected disclosure defined in that Act.”
The word “unfair” is mentioned several times in the above definition. For example, under part (b) of the definition the section mentions “…any other unfair disciplinary action…” However, without an explanation of what ‘unfair’ means the entire definition of an unfair labour practice is meaningless. For example, there are many fair actions relating to discipline and many unfair ones. How do we distinguish between these? In addition to the definition of ‘unfair’ that I proposed above it is useful to examine the way in which arbitrators attempting to resolve labour disputes decide whether an act of an employer is fair or unfair.
The question as to what does and does not constitute an unfair labour practice is so complex that arbitrators and judges are sometimes unable to agree with each other as to what actions do and do not fall under this definition. In the case of SAPU obo Louw vs SAPS (2005, 1 BALR 22) the arbitrator found that failure to pay the employee a merit award did fall within the definition of an unfair practice.
This is despite the decision of another arbitrator made at the same forum a little earlier that payments of merit awards do not fall into the definition of unfair labour practices. In Solidarity obo Kern vs Mudau & others (2007, 6 BLLR 566) the employee, a senior personnel officer was moved to the post of committee officer after the incorporation of one municipality into another.
The employee alleged that he had, via this move, been unfairly demoted. The arbitrator decided that the action of the employer did not constitute demotion. When the employee took the matter on review the Labour Court found that the employee had in fact been demoted because the position of committee officer was lower than that of a senior personnel officer. The Court said that the arbitrator did not understand the concept of demotion. Also, the job that the employee had been doing was equivalent to that of a HR Manager. The Court therefore ordered the employer to pay the employee the difference between the annual salary he had been paid and the annual salary of a HR Manager.
Another question is how the arbitrator rectifies an unfair dismissal. It appears that arbitrators are required to try to put the employee back in the same position he/she would have been in had the unfair labour practice not occurred. For example, in Kwepile vs Department of Foreign Afairs (2005, 12 BALR 1225) the employee was unfairly recalled from overseas duty before his term of duty had expired. The arbitrator ordered the employer to pay the employee for those benefits he would have received between the date of premature recall and the scheduled end date of his term at the overseas office.
At the root of many ‘unfair’ practices is the employer’s attempt to gain something. There is nothing wrong per se with an employer gaining something, as long as the employee does not lose out unfairly as a result. Thus, an employer is entitled to protect its interests or save money by disciplining an employee or changing the employee’s benefits provided that the discipline is merited or the loss to the employee is justified. The problems that employers face when deciding whether the actions thay wish to take will or will not be shot down by the CCMA, bargaining councils and courts include:
- What one person considers to be unfair another will consider to be fair
- The courts and arbitrators disagree on this amongst themselves
- The employer has no control over which arbitrator will preside over the case.
It is thus a serious and dangerous challenge for the employer is to judge when its actions are merited and justified and whether an arbitrator would find them to constitute an unfair labour practice. Due to the complexity of the law such judgement cannot be done via guesswork. Every employer must therefore obtain comprehensive and in-depth expertise in labour law via the use of a reputable labour law expert and via training of all levels of management in the application of labour law.
To attend our 8 May 2009 seminar on RETRENCHMENT AND HOW TO WIN AT THE CCMA please contact Ronni at [email protected] or on 084 521 7492 or 011 782 3066.
BY lvan lsraelstam, Chief Executive of Labour Law Management Consulting. He may be contacted on 011 888 7944 or 082 852 2973 or on e-mail address: [email protected]. Go to: www.labourlawadvice.co.za
The central reason that a presiding officer (PO) attends a disciplinary hearing is to hear and understand the evidence from both sides. The PO must hear this evidence properly in order to be able to consider it once the hearing is adjourned for purposes of a verdict. The PO then assesses the evidence collected at the hearing in order to decide whether the employee is guilty or not guilty of the charges.
Later in the process, if the verdict is guilty, the PO must decide on the corrective action most appropriate to the circumstances. However, this key task is more difficult to achieve if the PO’s collection of the evidence is hampered unduly. Such obstacles could, for example, include the absence of key participants, unjustified objections raised, unnecessary adjournments and disruptive behaviour by the parties at the disciplinary hearing.
ABSENCE OF KEY PARTICIPANTS
Participants in a disciplinary hearing would typically include the following:
The presiding officer, the accused, the accused’s representative, the complainant (person bringing the charges on behalf of the employer), an interpreter (where required), witnesses and a scribe. Sometimes a HR advisor also attends for procedural reasons. Where the accused fails to attend, continuation of the hearing in his/her absence should only be considered as a possibility if it is established that the employee has chosen not to attend without good reason.
The employer must, at the outset, ensure that the accused’s representative and witnesses are released from duty in order to be at the hearing. The employer must also offer to arrange for an appropriate interpreter if the hearing is not being conducted in the accused’s home language.
Where parties raise procedural objections the PO must give these serious consideration, assess their validity and deal with those problems that merit correction.
Such interruptions may be necessary where parties need time to consider responses to issues raised during the hearing. POs need to be expertly trained to know how to evaluate each such request and to decide whether it would be proper to grant them or not. Also, POs might themselves need adjournments, in order, for example, to consider objections or proposals raised by the parties.
Complainants seldom, if ever, behave intentionally disruptively during disciplinary hearings because an orderly hearing is in the best interests of their goal to prove the employee guilty. Therefore, while the complainants might use underhand tricks, disruption of the process is unlikely to be amongst them.
However, where the accused and his/her representative know that he/she is guilty and that they have no legitimate way of defending the charges, it may happen that they use disruptive tactics such as walk-outs, shouting, threats, hammering the table or toyi toyi-ing. Such parties trade on the fact that the accused has a basic right to be present at his/her hearing and for his/her representative to be present as well. They may behave badly in the hope of either having the hearing scrapped altogether or with the aim of getting evicted from the proceedings. Such eviction could then be used at the CCMA as grounds for procedurally unfair dismissal.
Only properly skilled POs will be able to deal with such disruptive tactics. On the other hand, untrained POs may mishandle such behaviour in the following ways:
- Try to ignore the disruptions regardless of the harm they cause. A danger of this approach is that the complainant could be distracted from presenting a full and fair case. Also, witnesses could feel intimidated and the PO could lose concentration.
- Lose his/her temper and become abusive, thereby adding to the disruption. This is unprofessional and plays into the hands of the perpetrators.
- Immediately evict the accused or representative. This would be too hasty a remedy and could result in the employee succeeding at the CCMA with an unfair dismissal case.
While lack of space does not allow elaboration, POs need to be given intensive training on hearing control strategy. Such strategy includes a graduated, cautious yet firm and effective approach towards ensuring an orderly and evidence-friendly disciplinary hearing.
Fines of up to R900 000 await defaulting employers
BY lvan lsraelstam, Chief Executive of Labour Law Management Consulting. He may be contacted on 011 888 7944 or 082 852 2973 or on e-mail address: [email protected]. Go to: www.labourlawadvice.co.za
Recently a major airline operating in South Africa was reported to have been fined R900 000 for failing to comply with Employment Equity Act (EEA). This penalty highlights the seriousness with which the Department of Labour (DOL) takes non-compliance and shows that they will not hesitate to bring the maximum penalty against defaulters. If you are a designated employer you have only a few weeks to submit your Employment Equity Report. Designated employers are those that either:
- Have more than 50 employees OR
- Have fewer than 50 employees but have an annual sales turnover that exceeds the threshold for their sector.
Employers are warned that, while submitting the EE Report in time is crucial this is not enough. Employers are also legally bound to ensure that the Report’s contents is true and correct and that they can show that they have made sufficient progress with affirmative action as required by the EEA. It is clear that prosecutions in the Labour Court and potentially bankrupting fines can result if employers fail to comply. This means that designated employers will have to:
- Shift from merely putting together ‘impressive looking’ reports for the DOL
- Do a detailed employment equity (EE) Analysis
- Set affirmative action targets that are achievable on the one hand but substantial enough on the other hand to satisfy the Director General of Labour
- Prepare and implement a detailed EE Plan. This is a comprehensive strategy for recruiting, ‘accommodating’ and developing members of designated groups. That is, each employer must devise an action plan aimed at ensuring that it has the right proportion of black, coloured, Indian, female and disabled people working in all departments and at all levels of the organisation including the very top. For example, if you have fifty members on your board of directors then you must aim to have approximately 35 black, 5 coloured, 4 Indian and 5 white directors. Of these, 25 should be female and 2 should be disabled.
- Ensure that these plans are implemented effectively and in tune with the EEA’s procedural requirements
- Consult with a full cross-section of their workforce and representative trade union on the devising and implementation of the above mentioned analysis, report, plan and target.
- Make available to employees all the documents referred to above.
- Make special arrangements to ensure that black, coloured, Indian, female and disabled employees are able to remain with the organisation, cope with their duties and work environment, fit into the organisation and to advance in the organisation.
- Eliminate barriers to employment of members of designated groups.
While none of these requirements are impossible they will be very much more difficult to achieve with the DOL inspectors breaking down your door. It is important to bear in mind that, once you have set up your EE system based on your own level of resources and circumstances, the task of EE compliance becomes very much easier.
While potential investors are being deterred by South Africa’s labour law requirements the Director General is charged with implementing the law as regards affirmative action. He therefore has no option but to police employers that do not comply and to prosecute those that do not heed his instructions to implement affirmative action meaningfully.
Unfortunately the EEA does not sufficiently take into account the fact that the number of jobs available in South Africa are not increasing. This makes it extremely difficult for you to increase your numbers of employees from designated groups even if you want to.
However, as long as you can prove that you are doing everything possible to normalise the demographics of your organisation and that you have been completing the compulsory analyses, reports and plans the DOL is unlikely to take action against you.
You therefore have everything to gain and nothing to lose by using the help of a labour law expert to devise your EE analysis, report, plan, target and consultation system. Otherwise, at Labour Court, you will not only be forced to implement EE and to pay crippling fines; you may also be faced with having to meet imposed EE targets.
Conflicting court decisions on going concerns mean that we don’t know if we are coming or going
Where an undertaking (or part thereof or a service) of any kind is transferred by one employer to another as a going concern section 197 of the Labour Relations Act (LRA) comes into effect. This forces the new entity to take over all the employees of the old undertaking.
Unfortunately the LRA does not define what a transfer ‘as a going concern’ is. This causes great confusion and sparks many disputes between employers, employees and trade unions. This confusion causes a serious problem for contractors considering making a bid for an outsourcing deal. They need to know for certain, before signing the deal, whether they will be forced to take over all the old employer’s employees.
While the sale of a business as an operating entity has normally been considered to qualify under the heading of a section 197 transfer it was, for some time, unclear whether the outsourcing of an enterprise to a contractor without selling the entity constitutes the transfer of a going concern.
This uncertainty emanates from the contradictions in court decisions on this issue. In the case of NEHAWU vs University of Cape Town & Others (2000, 1 BLLR 803) the Labour Court found that the outsourcing of the university’s cleaning, maintenance and gardening functions did not constitute the takeover of a going concern. And in SAMWU and others vs Rand Airport Management Company (Pty) Ltd & others (2002, 12 BLLR 1220) the Labour Court found that the transfer of part of an employer’s structure that did not comprise a recognisable entity did not constitute the transfer of a going concern.
However, the Labour Appeal Court in SAMWU and others vs Rand Airport Management Company (Pty) Ltd & others (2005 3 BLLR 241) overturned the earlier Rand Airport case decision; and the Constitutional Court, in NEHAWU vs University of Cape Town & Others (2003, 24 ILJ 95) overturned the earlier University of Cape Town decision.
In the case of COSAWU vs Zikhethele Trade (Pty) Ltd (2005, 14 LC 11.3.2 ) as reported in Contemporary Labour Law 14 No. 12) the Labour Court took the prior outsourcing decisions one step further in finding that the takeover of a contract by one contractor from another constituted the takeover of a going concern. That decision means that:
• if contractor A loses the contract which is then outsourced to B (the new contractor) then B is required to take over all the employees of A who were employed on the contract!
• If, in the process of the takeover, the employees of contractor A are dismissed to make way for B’s employees, this would be an automatically unfair dismissal in terms of section 187(1)(g) of the LRA! On the other hand, if B retrenches its own employees to make way for the employees being transferred by A this could also be an automatically unfair dismissal because these dismissals took place for reasons related to the takeover of a going concern.
• For a contracting business to win a contract may no longer be a victory because this double-edged sword could destroy the contracting business.
The Zikhethele decision and those handed down by the Labour Appeal Court and Constitutional Court, were hailed as resounding victories for trade unions trying to preserve the jobs of their members involved in outsourcing arrangements. At the same time these three decisions constitute a massive blow for contractors and for businesses wishing to outsource certain functions.
However, in Aviation Union of South Africa & others vs SAA (Pty) Ltd & others (2008, 1 BLLR 20) SAA had earlier outsourced its support services department to a contractor named LGM and transferred the 62 affected employees to LGM. Then SAA cancelled its contract with LGM and put out a tender for a new contractor to take over. The employees’ trade union applied to the Labour Court under section 197 of the LRA to force SAA to either take over LGM’s employees or to require any new contractor to take them over. The Court refused to do so, saying that section 197 did not apply to “second generation” takeovers because section 197(1)(b) uses the word “by” and not “from”. This decision appears to contradict the Zikhethele decision but the circumstances of the two cases were very different. It is therefore very possible that the SAA decision will itself be contradicted in the future.
Due to the uncertainty and complexities involved contractors and other employers should not enter into outsourcing agreements before consulting a reputable labour law expert to establish whether winning a new contract will mean a victory or a disaster.
BY lvan lsraelstam, Chief Executive of Labour Law Management Consulting. He may be contacted on (011) 888-7944 or 0828522973 or on e-mail address: [email protected]. Go to: www.labourlawadvice.co.za
BY lvan lsraelstam, Chief Executive of Labour Law Management Consulting. He may be contacted on (011) 888-7944 or 082 852 2973 or on e-mail address: [email protected]. Web Address: www.labourlawadvice.co.za.
Employers use alternative and temporary labour sources for numerous reasons including:
Permanent employees are away on annual leave, sick leave, maternity leave or other leave and the remaining staff cannot cope with all the work
Work volumes have increased temporarily and more staff are needed
The agency or labour broker employs staff with specialised skills that the employer needs
Avoidance of having to deal with trade unions, discipline, grievances and other labour problems
The mistaken belief that, where there are problems relating to pay, benefits and working hours the agency/broker employee will take the blame and the company or organisation requiring the agency/broker staff will not be legally liable.
Such employment agencies and labour brokers are referred to in the Labour Relation Act (LRA) as “temporary employment services” (TES) The TES takes on many labour law responsibilities in return for a fee from its client where the employees are placed.
Trade unions, who find this arrangement to be a thorn in their sides, call it ‘Atypical Employment’ and have launched a campaign to oppose it. This campaign is in its early stages but is being bolstered by CCMA and Labour Court decisions made against labour brokers.
For example, in the case of Sibiya & others vs HBL Services cc (2003 7 BALR 796) the employees were employed by a labour broker to provide work to a client. The employees refused to change to a new shift system introduced by the client. When the employees arrived for work the next day to render services under the old shift system the broker’s client locked them out and they referred an unfair dismissal dispute.
The arbitrator found that the employees had been dismissed for refusing to work under the new shift system. As the employees were entitled to refuse the change and as no proper dismissal procedures had been implemented the arbitrator ordered the broker to reinstate the employees with full back pay.
In the case of NUMSA obo Mahlangu & others vs Abansedisi Labour Services and Another (2006 1 BALR 29) the employees were employed by a labour broker to render services to a client. The employees were fired by the labour broker because the client no longer required their services due to their poor performance. The arbitrator found that:
- The broker was not entitled to merely take its client’s word that the employees were performing their work badly
- The dismissal was unfair and the broker was required to pay the employees compensation.
In the case of Springbok Trading (Pty) Ltd vs Zondani and Others (2004 9 BLLR 864) the company wanted to transfer a number of its own employees into the employment of a labour broker. Those employees who refused to take the transfer were retrenched. The Labour Court found the dismissal to be unfair so the employer took the decision on appeal to the Labour Appeal Court. The Court found that:
- The employer’s stated reason for wanting to implement the transfer was not good enough to justify the retrenchment of those employees who refused the transfer. That is, the employer’s alleged wish to avoid the burden of payroll administration did not justify the loss of employees’ jobs.
- It was unlikely that the trade union would have agreed to the retrenchment of its members.
- Consultations on the retrenchments were neither completed nor properly conducted.
- The retrenchments were unfair.
The employer’s appeal was therefore dismissed with costs.
Should the trade unions succeed in closing down labour brokers or curtailing the use of such services employers will lose their one means of relief from the heavy constraints of labour legislation. All employers and the smaller ones in particular, need to learn, with the help of reputable labour law experts, how to continue to run profitable businesses despite the ever increasingly restrictive labour legislation.