VARIATION AGREEMENTS OFTEN CRUCIAL IN BUSINESS TAKEOVERS

VARIATION AGREEMENTS OFTEN CRUCIAL IN BUSINESS TAKEOVERS

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.

EMPLOYEE DEFIANCE AGGRAVATED BY THE LOCKDOWN

EMPLOYEE DEFIANCE AGGRAVATED BY THE LOCKDOWN

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.

VARIATION AGREEMENTS OFTEN CRUCIAL IN BUSINESS TAKEOVERS

UPDATE YOUR WORKPLACE RULES AND EMPLOYMENT CONDITIONS

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.

VARIATION AGREEMENTS OFTEN CRUCIAL IN BUSINESS TAKEOVERS

EMPLOYEE DEFIANCE A GROWING PROBLEM

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.
VARIATION AGREEMENTS OFTEN CRUCIAL IN BUSINESS TAKEOVERS

SEXUAL HARASSMENT A WORKPLACE NIGHTMARE

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.

EMPLOYEE RIGHTS BEGIN BEFORE YOU THINK THEY DO.

EMPLOYEE RIGHTS BEGIN BEFORE YOU THINK THEY DO.

According to section 213 of the LRA an employee is:
“(a) any person, excluding an independent contractor, who works for another person or for the state and who receives, or is entitled to receive, any remuneration; and (b) any other person who in any manner assists in carrying out or conducting the business of an employer…”
This definition strongly implies that the employer’s legal obligations begin only on the day that the employee physically begins work. However, this is not necessarily so. The courts have found that the employee is protected by labour law from the moment the employment contract is concluded even if the employee has not yet started work; and even if the contract has only been orally agreed.
For example, in the case of Wyeth SA (Pty) Ltd vs Manqele (People Dynamics, September 2003 page 39). Manqele was offered a position by the employer as a sales rep. The parties concluded a written contract of employment in terms of which he was to commence work on 1 April. Prior to Manqele beginning work, he was advised that the employer was no longer prepared to employ him. In terms of the contract of employment, Manqele had been entitled to a company vehicle.
The employer believed that Manqele had made a misrepresentation as to the status of the car he had chosen, and on this basis took the view that there was no contract, as the parties had not reached agreement as to the condition of the motor vehicle stipulated in the letter of appointment.
Manqele took the matter to the CCMA where the arbitrator ruled that Manqele had become an employee the moment he accepted Wyeth’s offer of employment. Wyeth took the arbitrator on review at the Labour Court on the
grounds that the arbitrator had arrived at an “unjustifiable conclusion in ruling on the definition of an employee”.
That is, Wyeth argued in the Labour Court that Manqele did not become an employee merely because of the employment contract. This argument is supported by an earlier Labour Court finding in the case of Whitehead vs
Woolworths (Pty) Ltd (1999 20 ILJ 2133). In that case the Court found, according to the report, that a person who is party to a contract of employment but who has not yet commenced employment is not an employee for the purposes of the LRA.

However, despite the Woolworths case finding the Court, in the Manqele case found that, as a party to a valid and binding contract of employment, Manqele was an employee for the purposes of the LRA.
The employer recently took the matter further to the Labour Appeal Court (In Wyeth SA (Pty) Ltd vs Manqele & others 2005, 6 BLLR 523) but lost yet again. The Court upheld the earlier decisions by the CCMA and Labour Court that Manqele had achieved legal employee status the moment his employment
contract was signed. This decision poses a number of concerns for employers.
–  Firstly, the fact that two different benches of Labour Appeal Court judges (Woolworths on the one hand and Wyeth on the other) made two such diametrically opposed decisions on a matter as fundamental as this one
creates major uncertainty as regards the law.
–  Secondly, employers are now clueless as to whether they are or are not entitled to cancel employment contracts prior to commencement of work.
–  Thirdly, where the parties have agreed in principle that the employee will get the job it is now not clear whether a disagreement on the terms of the employment does or does not delay the legal validity of the contract of
employment.
In the light of these dangers employers should:
–  Avoid entering into employment agreements until all the terms and conditions
have been dealt with thoroughly
–  Ensure that, before offering anybody a job, there are no obstacles to allowing
the candidate to take up the position
– Make it clear that the discussion of the terms and conditions of a contract in
no way constitutes an offer of employment.
– Never employ, contract with or cancel the employment contract of any person
without involving a labour law expert experienced in dealing with these tricky issues.
To observe our experts debating controversial labour law topics please go to
www.labourlawadvice.co.za and click on the Labour Law Debate menu item.

LOCKDOWN IS NOT A LICENSE TO FIRE AT WILL!!

LOCKDOWN IS NOT A LICENSE TO FIRE AT WILL!!

Under the yoke of the Covid lockdown employers are becoming more and more desperate in their attempts to run orderly, productive and profitable businesses. In addition to the lockdown the special obstacles to the achievement of this goal are intense and growing international competition, South Africa’s culture of crime and disciplinary legislation that severely restricts the rights of employers.
In their attempt to deal with this restrictive labour legislation employers place new employees on probation so as to detect and get rid of ‘bad apples’ without having to travel the tortuous disciplinary procedure route mapped out by the law. However, employers have discovered to their alarm that, while probationary contracts are legal, they are not a license to fire at will.
In October vs Teleperformance SA (Pty) Ltd 2021] 4 BALR 426 (CCMA) a call centre agent was dismissed for absenting himself from work without permission for four days during May 2020. He had stayed home because he
felt afraid after a colleague had been infected by Covid.
The Commissioner noted that a regulation issued by the Minister of Employment and Labour in April 2020 provided that employees may refuse to work if they reasonably feel that doing so would pose an imminent threat of exposure to Covid-19 and that they may not be dismissed or disciplined for this. The applicant was awarded compensation of four months’ salary.
Another problem is that probation clauses are not useful as quick fixes for getting rid of undesirable employees. As a result employers use fixed-term contracts as a way of testing out whether the employee is going to fit into the
organization. However, in the case of Abrahams vs Rapitrade (Pty) Ltd (2007, 6 BALR 501) the employee was hired on a probationary contract. However, when the employee performed badly the employer claimed that the employee was on a fixed-term contract and terminated his employment at the alleged expiry date. The arbitrator found that the dismissal was unfair because the employee was not on a fixed-term contract and dismissals for poor performance must be preceded by counselling and/or training. Other employers hire workers as independent or external contractors to disguise the fact that the workers are employees. If the contractor works and
behaves well the employer might then make him/her an employee. However, the pawpaw hits the fan when the worker fails to meet the standards and is terminated on short notice. Labour law procedures are not used because the worker is seen as an independent contractor.

However, workers terminated in this way have a good chance of succeeding at the CCMA because section 200A of the Labour Relations Act (LRA) effectively distinguishes between genuine independent contractors and
employees. That is, this section provides that, unless the employer can prove otherwise, the worker is presumed to be an employee and not an independent contractor if any one of the following factors is present:
o The manner in which the person works is subject to the control or
direction of another person;
o The person’s hours of work are subject to the control or direction of
another person;
o The person forms part of the organisation or business;
o The person has worked for the organisation/business or other person
for an average of at least 40 hours per month over the last three
months;
o The person is economically dependent on the
organisation/business/person;
o The person is provided with work tools or equipment by the
organisation/business;
o The person only works for one organisation/business/person.

I must stress that these criteria apply regardless of the form of the contract. This means that, even if the employee has contractually agreed that he/she is an independent contractor the CCMA may well find that he is not one!
Therefore, at CCMA there is a heavy onus on the employer to prove that, despite the existence of any one of these seven factors, the worker is an independent contractor. However, due to the fact that the majority of such
workers are employees disguised as independent contractors the employer loses the case. And, because the employer fails to use disciplinary procedures they are forced to reinstate or compensate the employees.
The loopholes for avoiding the law of discipline are all but closed and the impending new legislation on labour brokering and contracting is likely to finish off the job. This means that employers will have to abandon the quest
for loopholes and become more adept at implementing the laws of discipline  and dismissal.
To register for our 7 May webinar on Lockdown Labour Law please contact
Ronni on [email protected] or 0845217492.

LABOUR LAWS CONSTRICT EMPLOYERS

LABOUR LAWS CONSTRICT EMPLOYERS

South Africa’s labour legislation provides very heavy protection for employees. That is, numerous and imposing obstacles in the law and in the legal system make it extremely difficult for employers to dismiss those employees who deserve to be dismissed. These obstacles include:

  • A plethora of procedures that must be followed before a dismissal can be considered to be fair
  • Stringent and numerous criteria for deciding whether the reason for a dismissal is fair
  • Broad discrepancy between judges and arbitrators as to the interpretation of the labour law
  • The provision that, where a dismissal is adjudged to be unfair, the arbiter may reinstate the employee or impose a heavy compensation order (up to 24 months’ pay in some cases) on the employer 
  • The employer is automatically considered guilty of unfair dismissal until it has proven otherwise; but despite this is still required to present its case first at the unfair dismissal hearing
  • Despite the fact that many employers do not have the expertise to defend cases at the CCMA the law makes it difficult for them to use legal experts as representatives.
  • The Labour Relations Act effectively bans the use of fixed-term contracts except in cases where the employer can prove that the job itself is temporary. 

 

Therefore, in an attempt to circumvent all this onerous legislation, employers attempt to avoid having to dismiss undesirable employees by hiring workers on fixed-term contracts. Then, if the employee is seen as unsuitable, the employer merely allows the contract to lapse at its expiry date. However, this is a dangerous tactic because labour law has virtually closed this loophole. That is, if the employer gives the employee a “reasonable expectation” that the contract will be renewed on expiry, the arbitrator could force the employer to renew the contract. 

In the case of King Sabata Dalindyebo Municipality vs CCMA and Others (2005, 7 BLLR 696) the employer made a habit of regularly renewing fixed term contracts. But then it allowed the last contracts to lapse even though there was still available work for the terminated employees. The Labour Court found that the employees had a reasonable expectation of having their contracts renewed again and forced the employer to renew the contracts.

In the case of Pretorius vs Sasol Polymers (2008, 1 BALR 10) Ms Pretorius was appointed on a fixed-term contract to act in place of the permanent incumbent. When Ms Pretorius’s contract expired the employer advertised the post to be filled on a permanent basis and refused to renew Ms Pretorius’s contract. She referred an unfair dismissal dispute to the bargaining council because she claimed to have had a reasonable expectation that her contract would be renewed. The arbitrator found that:

  • The employer had a policy that required a fixed-term employee occupying a permanent post to be made permanent if management approved. 
  • The fact that management had advertised the post constituted management approval 
  • This policy gave the employee a reasonable expectation of renewal of her contract
  • The employer’s failure to give the employee the permanent post constituted an unfair dismissal and the employee was retrospectively reinstated.

 

 Another method used by employers to bypass the tough labour legislation is the use of temp. agencies and labour brokers. These agencies are referred to in the Labour Relation Act (LRA) as “temporary employment services” (TES) 

Trade unions, who find this arrangement to be a thorn in their sides, call it ‘Atypical Employment’ and have succeeded in a campaign for severely curtailing it. 

Employers are now finding it very much more difficult to use fixed-term contracts and labour brokers to evade the heavy constraints of labour legislation. All employers now, more than ever before, need to use reputable labour law experts to sharpen their skills in running productive workplaces despite the ever increasingly restrictive labour legislation.

BY Ivan Israelstam, Chief Executive of Labour Law Management Consulting. He may be contacted on (011) 888-7944 or 0828522973 or via e-mail address: [email protected]labourlawadvice.co.za. Website address: www.labourlawadvice.co.za. 

DISMISSALS UNFAIR IF EMPLOYMENT RELATIONSHIP STILL TOLERABLE

DISMISSALS UNFAIR IF EMPLOYMENT RELATIONSHIP STILL TOLERABLE

Item 92 of the CCMA’s Guidelines: Misconduct Arbitrations makes it most important that, when the employer is contemplating the dismissal of an employee, it should be able to show that the employee’s offence was so serious that it made “a continued employment relationship intolerable”. Such serious offences could include, for example, gross insubordination, endangering the safety of others, willful damage to the employer’s property, gross dishonesty and assault. 

While these examples are not the only potential justifications for dismissal, even these gross offences will not automatically give the employer the right to dismiss. This is because, in addition to looking at the seriousness of the offence itself, the person imposing the sanction is obliged to consider:

  • Mitigating circumstances such as the employee’s length of service, previous disciplinary record, personal circumstances and others.
  • The nature of the job – For example, while sleeping on the job might be most serious for a security guard it may not merit dismissal for a back room clerk.
  • Other circumstances attached to the case. For example, if the security guard fell asleep because he had to work a double shift without a break, this could render dismissal too harsh a penalty.

In the case of Humphries & Jewel (Pty) Ltd vs FEDCRAW & others (CLL Vol. 15 No. 10, May 2006) the Labour Appeal Court found that “The relationship of trust, mutual confidence and respect which underlies the employment relationship” are at issue. “Unless there are facts that show that the employment relationship was not detrimentally affected by the employee’s misconduct, it would be unreasonable to compel either the employer or the employee to continue the relationship.”

However, the concept of ‘intolerability’ is not an objective one. What an employer might find to be intolerable might seem to be tolerable to a judge who is removed from the situation. This is possibly why a number of judges and arbitrators have refused to interfere with the dismissal sanction even when they have found it to be somewhat harsh. They have let the dismissal stand because, albeit harsh, it is still within the bounds of reasonableness. 

The parties will therefore, in order to sway the arbitrator, need to argue around the issue as to whether dismissal was necessary to protect the employer form having to continue a relationship with the employee. If the employee can show that the relationship could have continued quite satisfactorily the arbitrator might find that the dismissal was unnecessary. However, if the employer can show serious damage to the relationship caused by the misconduct then the dismissal would be likely to be seen as fair.

In the case of NUMSA obo Khumari vs Harvey Roofing Products (Pty) Ltd (CLL Vol. 15 No. 10 May 2006) the employee had requested permission to borrow a tap to repair his Geyser at home. Without receiving a response to the request the employee took the tap and was dismissed. The arbitrator found that the employee had only borrowed the tap and that this did not justify the allegation that continued employment had been rendered intolerable. The dismissal was therefore found to be unfair.

The employer would normally be entitled to argue that racist behavior has rendered continued employment intolerable In the case of CEPPWAWU obo Evans vs Poly Oak ( 2003, 12 BALR 1324) the employee was dismissed for making a racist comment during an altercation. He was charged with using offensive language and with using inappropriate language. He claimed that he had done so in jest and had not intended to hurt the other person. The employer claimed that the employee had breached its code of conduct which was designed to improve relations in the workplace.. Despite the fact that the employee had apologised to the complainant for his remark the arbitrator upheld the dismissal.  

In Baxter v Minister of Justice and Correctional Services and others

[2020] 10 BLLR 968 (LAC) the appellant, then an area Commissioner for Kokstad, was dismissed for his alleged improper involvement in the learnership process, in which his daughter was one of the candidates. The appellant claimed that he had really been dismissed for protected disclosures he had made about a colleague’s manipulation of the selection of the five job candidates. 

The Labour Appeal Court found that the applicant’s disclosures were for the most part true and that his dismissal was automatically unfair. 

Turning to relief, the Court found that, although the appellant’s conduct relating to the non-appointment of family members did not justify dismissal, it was enough to make the continuation of an employment relationship intolerable. Reinstatement was, accordingly, not an appropriate remedy. The appeal was upheld with costs and the appellant was awarded compensation equal to 18 months’ remuneration. Thus, while employees should avoid making protected disclosures out of spite employers should avoid dismissing employees who make genuine protected disclosures.

BY   Ivan Israelstam, 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

DEBATE HOTS UP RE LEGAL REPRESENTATION AT DISCIPLINARY HEARINGS

DEBATE HOTS UP RE LEGAL REPRESENTATION AT DISCIPLINARY HEARINGS

Item 4 of the Code of Good Practice: Dismissal (The Code) contained in Schedule 8 of the Labour Relations Act (LRA) states that, when an enquiry is held into an employee’s alleged misconduct “The employee should be allowed …… the assistance of a trade union representative or fellow employee.” 

It is on this basis that employers allow the accused to be represented by someone from inside the organisation. Employers have, on the other hand, traditionally disallowed external legal representatives to represent accused employees at disciplinary hearings. 

In the case of NUMSA obo Thomas vs Murray and Roberts Alucast (2008, 2  BALR 134) the arbitrator found that the fraud-based disciplinary matter was not legally complex and therefore rejected the trade union’s claim that the employee was entitled to be represented by an external trade union official instead of by a shop steward.

The CCMA Guidelines: Misconduct Arbitrations states that an employee is not automatically entitled to legal representation.

However, in the case of MEC: Department of Finance, Economic Affairs and Tourism: Northern Province vs Schoon Godwilly Mahumani (Case number 478/03 SCA. Report by Dr Elize Strydom distributed 30 January 2005) the employee was refused the right to an external legal representative. 

The employee went to the High Court to dispute this ruling. The court found that the ruling of the presiding officer of the disciplinary was wrong and ordered that the employee be allowed to have legal representation at the disciplinary hearing. 

The employer appealed against this judgement to the Supreme Court of appeal which decided that the accused employee at a disciplinary enquiry, could, under certain circumstances, be entitled to be represented by a legal representative at a disciplinary hearing. This court found that clause 2.8 of the employer’s disciplinary code labelled the code as a guideline that may be departed from under appropriate circumstances. This gave presiding officers the right to use their discretion in deciding whether to depart from the prohibition on legal representation. 

In the case of Molope vs Mbha (2005, 3 BLLR 267) an area manager was dismissed for unauthorised use of funds and was brought to a disciplinary hearing. The accused employee chose a colleague to represent her but, shortly before the disciplinary hearing this colleague decided not to represent Mbha. The employee therefore applied for a postponement in order to obtain another representative but the employer refused and the employee was dismissed. The Labour Court it found the dismissal to be procedurally unfair and said that “it is now established that one of the requirements of a procedurally fair hearing embraces the entitlement of an employee to be represented thereat by a co-employee or a trade union official or a lawyer.” 

In Public Servants Association of South Africa obo Leiee and others / Department of Police, Roads & Transport (FS)[2015] 3 BALR 276 (PSCBC) the arbitrator found that neither employers nor employees may appoint lawyers to represent them in disciplinary hearings. However, the courts have made it plain that, while there is no such general right, applications for legal representation must be considered on their merits even if collective agreements or disciplinary codes appear to exclude legal representation absolutely.

In view of the contradictions in the case law as evidenced in the above reports employers are advised, when receiving applications for external representation to consider whether:

  • Their policies allow external representation
  • The complexity level of the case is high
  • The consequences of an adverse finding could be serious
  • There would be no significant prejudice to the employer if legal representation would be allowed
  • The employee’s ability to deal with the case is low in comparison to that of the employer.

 

The above case findings have major consequences for employers engaging in disciplinary hearings. In particular:

  • An employee’s request for legal representation can no longer be dismissed out of hand. While such requests must not always be granted, they must be given very careful consideration.
  • This in turn means that employers will need to ensure that their presiding officers are highly skilled in chairing disciplinary hearings. This is so as to be able to make the right judgement as to whether to allow legal representation or not and also to be able to deal with the legal challenges posed by attorneys and advocates at disciplinary hearings.
  • Managers must be thoroughly trained in disciplinary process and the employer must use genuine labour law experts to chair and/or prosecute hearings.

 

BY   Ivan Israelstam, 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

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