by Lihle Menzeleleli | May 9, 2022 | Employers
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: ivan@labourlawadvice.co.za. Go to: www.labourlawadvice.co.za.
Due to state capture loadshedding, unexpected power outages, Covid and maladministration South Africa’s economy is in crisis. The biggest fallout of this economic weakness is the very high number of retrenchments in this country.
Many employers are tempted to use Covid as a reason to retrench even when the disease is not the true spur for the retrenchment decision. Such employers often sidestep the legal proedures for retrenchment believing that Covid gives them a licence to terminate jobs quickly. However, despite Covid, the law still requires that:
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- The employer follows a fair procedure aimed at an attempt to find alternatives to retrenchment. This involves good faith consultations with the employees concerned or with their representatives.
- Fair or agreed criteria are used to decide which employees should be targeted for retrenchment.
- There is an acceptable reason for the need for retrenchments.
Section 213 of the LRA indicates that the reasons for retrenchment may be based on the economic, technological, structural or similar needs of the employer. It is necessary to look at each of these reasons more closely.
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- Typically, economic reasons given for the need for retrenchment include the ability to make money or to retain sufficient funds to continue operations. The courts are divided on whether the desire to increase profits is a fair reason for retrenchment.
- Technological reasons advanced for the need to retrench often include electronic advances that might reduce the need for labour.
- Structural reasons advanced for the need to retrench include the need to flatten the management structure.
However, there are other operational circumstances that could justify the need to retrench. In the case of Tiger Foods Brands Limited vs L Levy (CLL May 2007 page 102) the employer wished to introduce a system whereby employees would work on public holidays. The employees embarked on a strike in protest against this move and assaulted replacement workers. Also, a manager was shot and several other received death threats. As the company was unable to identify the perpetrators it concluded that it was unable to continue managing the workplace. It therefore decided to consider retrenching several employees. The union disputed the CCMA’s jurisdiction to facilitate the retrenchment consultations on the grounds that the reasons for the proposed retrenchments did not fall under the definition of operational requirements in section 213 of the LRA. The CCMA agreed with the union.
Later the Labour Court the Court found that the CCMA was wrong. It found that the CCMA arbitrator had, amongst others, made the error of ignoring the last part of the LRA’s definition of operational requirements that says: “or similar needs of an employer”. The Court decided that the company’s need to protect its managers and to manage the business fell under the definition of ‘operational requirements’ as they affected the viability of the business. These were grounds “similar to economic, technological or structural needs.”
In my view this finding makes sense. It seems that the legislators’ decision to include in the definition “economic, technological or structural needs” was based on the intention to give examples of what operational requirements entail rather than to consider this list of three needs as exclusive. The inclusion of the phrase “or similar needs” makes it clear that the definition should be interpreted broadly rather than narrowly. It would make no sense to include some types of operational requirements and to exclude others arbitrarily.
Employers are warned not to interpret this finding as a licence to invent their own reasons for retrenchment. Should the reasons given for retrenchment be found by the courts to be bogus or not to constitute operational requirements the employer will lose the case. This would probably be extremely costly for employers because a likely remedy for the unfair retrenchments will be the reinstatement with full back pay of all the retrenchees.
For example, it would be folly for an employer to retrench employees on the basis of its operational requirement for ‘employees who perform their work well’. While the need for good work performance can be argued to be an operational requirement there is a separate legal procedure prescribed in Schedule 8 of the LRA for dealing with poor performance. In the case of NEHAWU vs Medicor (Pty) Ltd (2005, 1 BLLR 10) the Labour Court forced the employer to reinstate 67 unfairly retrenched employees with full back pay. This was because the employer had used the retrenchment process to get rid of alleged poor performers.
In the light of the above, before dabbling in the dangerous area of retrenchments, employers should obtain legal advice from a reputable expert in labour law.
To attend our 27 May webinar on MANAGING CONFLICT IN THE WORKPLACE please contact Ronni on ronni@labourlawadvcie.co.za or 0845217492.
by Lihle Menzeleleli | Apr 19, 2022 | Employers, Jobs
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: ivan@labourlawadvice.co.za. Go to: www.labourlawadvice.co.za.
It is contentious as to whether second generation outsourcing falls under section 197 of the Labour Relations Act, which is the law protecting employees when a business or a part thereof is taken over.
In the case of SAA vs Aviation Union of SA obo Barnes the airline transferred its Infrastructure and Support service (I & S service) to a company called LGM as a going concern and accordingly transferred the relevant employees to LGM under section 197 of the LRA.
Before LGM’s contract with SAA expired SAA fired LGM and sought tenders from other contractors to take over the service. However, SAA did not include in the tender documents the requirement that the tenderers had to undertake to take over all the LGM staff providing services to SAA. Therefore, before any tender could be considered the union applied to the Labour Court for orders that, in effect, would prevent any takeover of the services until the LGM employees were first taken over by the new service provider and that would declare any retrenchment of the LGM staff automatically unfair.
The Labour Court refused to grant such orders for reasons including that second generation outsourcing would become untenable and because section 197 of the LRA did not cover second generation outsourcing. This was because section 197 (1), in effect, defines a transfer in terms of this section as a transfer of a business or part thereof “by” one employer to another. In a situation where the I & S service of SAA would be transferred to a new contractor (i.e. whichever tenderer won the contract) the I & S service would not be transferred by one employer to another because SAA, who ‘owned’ this service, was not the employer (LGM was) would be the one to transfer the service to the new contractor.
The LAC overturned the LC’s decision and found that:
If the LC’s interpretation were applied it would directly conflict with the purpose of section 197 which was to protect employees from losing their employment due to a transfer of a business or part thereof. The LAC preferred the purposive interpretation of the meaning of the word “by” which is that, although it would technically be SAA initiating the transfer of the I & S service to the new contractor, the service would effectively be moved by LGM to the new contractor even if this was done via the auspices of SAA. That is, while it would be SAA making the transfer decision, the old employer, LGM would be the one to be effecting the transfer.
Another way of explaining this is that the word “by” in the definition of a transfer of a going concern should, in the view of the Court, be read to mean “from”. This would mean that, although it would be SAA who would legally transfer the I & S service to the new contractor, the service would be transferred from LGM to the new contractor thus rendering the takeover a section 197 transfer.
SAA then took the matter further to the Supreme Court of Appeal which reversed the LAC’s decision. It said that the literal interpretation of section 197 should be applied and that applying the LAC’s interpretation would require every new service provider to take over the staff of any previous service provider every time the client changed its mind as to who it was going to use
The union then took the matter to the Constitutional Court and won its case. However, the Court said that second generation outsourcing would not fall under section 197 in cases where the client had never carried out the function itself but had aoutsourced it from day 1. This is because, in such a case, there would never have been a transfer of the function, and section 197 applies only to transfers of businesses or part thereof.
In Jenkin vs Khumbula Media (2010, 12 BLLR 1295) the applicant was told that his contract had lapsed after the business had changed hands twice. The Court rejected the employer’s version that the employee had been a fixed-term contractor and found that the employee had, in effect, been retrenched. It also found that on both occasions of takeover these had been carried out as transfers as a going concern. The employer had conducted only one meeting with the employee and this one meeting was not held in good faith because the employer had not even made its intentions clear. The retrenchment was thus procedurally unfair and the employer was ordered to pay the employee eight months’ salary in compensation plus severance pay calculated on the basis of 29 years of service.
Even the judges in the Courts differ with each other as to whether a business or part thereof has been transferred in terms of section 197 or not. Therefore, employers need to get expert advice before effecting any transfer that could possibly be seen as a section 197 takeover. Also, everyone in management and other dealing with employee dismissals must be thoroughly trained in the complexities and requirements of the law.
To book for our 5 April Johannesburg seminar on CHANGES AND DANGERS IN LABOUR LAW please contact Ronni via 0845217492 or ronni@labourlawadvice.co.za
by Lihle Menzeleleli | Apr 12, 2022 | Employers
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: ivan@labourlawadvice.co.za. Go to: www.labourlawadvice.co.za
In my previous article I explained that the New Code of Practice: Managing Exposure To Covid In The Workplace, 2022 requires employers to conduct a special health risk assessment (HRA) and to implement a plan to protect its employees from contracting Covid.
This code requires employers, via their HRA’s and plans to:
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- Identify employees who might be at risk of contracting Covid and/or who might pose a risk to the spread of the disease;
- Ensure the reporting of Covid symptoms by employees and isolation of employees who are diagnosed with COVID-19 and are symptomatic;
- Enforce all the workplace protective measures required to be taken;
- Implement a procedure to resolve any issue that may arise from the HRA by an employee invoking the right to refuse to work.
The Covid risk plan may include social distancing measures including minimising the number of workers in the workplace through rotation, staggered working hours, shift and remote working arrangements, use of PPE, hygiene measures.
An employer must notify its workers of the contents of this Code and its plan and the manner in which it intends to implement it.
It must provide workers with information via means including, where reasonably practicable, leaflets and notices placed in conspicuous places in the workplace informing workers of:
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- the dangers of the virus, the manner of its transmission, the measures to prevent infection
- the symptoms associated with COVID-19
- the nature of vaccines used in the country, the benefits associated with these COVID-19 vaccines, the contra-indications for vaccination and the nature and risk of any serious side effects
In giving effect to this Code, an employer may require its employees to disclose their vaccination status and to produce a vaccination certificate.
Employers must also make sure, amongst other things, that:
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- employees who run out of paid sick leave must be assisted to make application for an illness benefit from the Unemployment Insurance Fund.
- Employees with Covid are not discriminated against
- if there is evidence that the worker contracted COVID in the course of employment, the employer lodges a claim with the Compensation Commissioner
- it keeps the workplace well ventilated by natural or mechanical means
- it notifies every employee identified as potentially contagious of the obligation to be vaccinated;
- gives employees paid time off to be vaccinated and provides transport for the employee to and from the nearest vaccination site.
If an employee refuses to be vaccinated, the employer must:
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- counsel the employee and, if requested, allow the employee to seek guidance from a health and safety representative, worker representative or trade union official;
- take steps to reasonably accommodate the employee in a position that does not require the employee to be vaccinated.
If an employee produces a medical certificate attesting that an employee has contra-indications for vaccination, the employer may refer the employee for a medical evaluation for confirmation at the employer’s expense.
If the employer accepts the medical certificate or the employee is referred to medical evaluation and that evaluation confirms that the employee has contra-indications for vaccination, it must accommodate the employee in a position that does not require the employee to be vaccinated.
This last requirement is likely to pose a major burden on an employer that truly has no available position in which to place the unvaccinated employee. On the one hand the employer is strictly required to protect its workforce from colleagues with the disease, and on the other hand is required to keep the unvaccinated employee in service in a position that poses a risk of spread of the disease. Employers in such an invidious position might consider resorting to an ill health incapacity process. However, due to the prescriptive wording of this code, such employers will need to consider their options with extreme caution before considering termination of the employment of such protected employees.
To attend our 27 May webinar on MANAGING CONFLICT IN THE WORKPLACE please contact Ronni on ronni@labourlawadvcie.co.za or 0845217492.
by Lihle Menzeleleli | Mar 14, 2022 | Employers
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: ivan@labourlawadvice.co.za. Web Address: www.labourlawadvice.co.za.
Appended to the Labour Relations Act is The Code of Good Practice: Dismissal. This Code requires an employer to consider a number of circumstances before dismissing a guilty employee. For example, the Code requires the employer to consider the gravity of the misconduct, the employee’s past record, length of service and personal circumstances. Case law has added to the factors that could or should be considered including factors such as the seniority of the employee, aggravating circumstances, provocation and other extenuating circumstances.
Collins Concise Dictionary defines ‘extenuating circumstances’ as circumstances that cause an offence or fault to appear less serious or to mitigate or weaken.
However, in the labour law context, I tend to think of mitigating and extenuating circumstances as being slightly different to each other. I see mitigating circumstances as any circumstances that might reduce the seriousness of the offence whether such circumstances emanate directly from the actual incident or not. Whereas I see extenuating circumstances more narrowly, as only those emanating directly from the relevant incident as opposed to general circumstances such as length of service that have no bearing on the merits of the misconduct.
An example of extenuating circumstances based on my definition is provocation. In both criminal and labour law, and especially where an assault or other abusive behaviour has taken place, provocation generally has an important role to play in considering the level of penalty of the offender.
As I mentioned in a previous last article, assault at the workplace is normally seen as serious misconduct because of:
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- the harm or potential harm to the victim of the assault;
- the potential disruption of workplace harmony;
- the potential for the employer to be sued for vicarious liability by the assault victim;
- the loss in working time due the need for an assaulted employee to to take sick leave
- the loss of business if the victim of the assault is a client.
Despite this, employers sometimes bungle disciplinary action against alleged culprits, and this is often because of the anger attached to incidents of assault or other unsavoury acts. This can be disastrous for the employer because section 188(1)(a) of the Labour Relations Act (LRA) makes it clear that the employer cannot fire an employee without good cause.
One area where employers struggle with misconduct penalties in general is where provocation is alleged. The employer got it right in the case of Francis vs The Clicks Organisation (2010, 3 BALR 325). In this case Francis, a manager told a subordinate to stop chewing gum. It is reported that, when he refused in an insubordinate manner she assaulted him and bit him to the extent that she had blood on her mouth. When she was fired for this act she told the CCMA that she had been provoked by his refusal to stop chewing gum and by his attitude. The arbitrator found that the subordinate’s behaviour did not amount to provocation at all. Instead, his behaviour amounted to insubordination which should have been dealt with via proper disciplinary measures. This together with the seriousness of the assault and the manager’s relative seniority to her subordinate rendered the dismissal substantively fair.
However, in CEPPWAWU obo Mudau vs Super Group Supply Chain Partners (2009, 2 BALR 123) a shop steward was dismissed for, amongst other things, swearing at supervisors. The arbitrator found that he had been provoked into this behaviour because his supervisor had used an obscene term while addressing the shop steward. The dismissal was therefore unfair.
The above decisions tell us that it is important for employers:
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- To deal with all alleged acts of misconduct coolly, calmly and without biting the offending employee
- To ensure that their managers are trained never to speak abusively to employees
- To give very careful and reasoned consideration to allegations of provocation by employees accused of misconduct. This is in order to establish whether the alleged act constituted provocation or not, whether the provocation was significant enough to be pertinent and whether the seriousness of the offence and/or aggravating circumstances outweigh the extenuating circumstances
- To keep themselves constantly updated with case law decisions that can effect the fairness of their disciplinary decisions.
To view our experts debating thorny labour law topics please go to www.labourlawadvice.co.za andclick on the Labour Law Debate icon.
by Lihle Menzeleleli | Mar 8, 2022 | Employers, HR & Recruitment, Jobs
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: ivan@labourlawadvice.co.za. Web Address: www.labourlawadvice.co.za.
Even serious assault might not merit dismissal if the employer is unable to show that the misconduct rendered the employment relationship intolerable. The Code of Good Practice: Dismissal (The Code) states that:
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- Advice and correction are the best ways of dealing with minor offences
- Repeated misconduct will merit warnings
- More serious infringements or repeated misconduct may call for final warnings or other action short of dismissal
- Dismissal should be reserved for cases of serious misconduct or repeated offences
- Dismissal for a first offence is not appropriate unless it is so serious that it makes a continued employment relationship intolerable
- Included amongst offences that might merit dismissal for a first offence are wilful endangering of the safety of others and physical assault.
Assault at the workplace is normally seen as serious misconduct because of:the harm or potential harm to the victim of the assault;
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- the potential disruption of workplace harmony;
- the potential for the employer to be sued for vicarious liability by the assault victim;
- the loss in working time due the need for an assaulted employee to to take sick leave
- the loss of business if the victim of the assault is a client.
Despite this, employers sometimes bungle disciplinary action against alleged assault culprits, and this is often because of the anger attached to incidents of assault. This can be disastrous for the employer because section 188(1)(a) of the Labour Relations Act (LRA) makes it clear that the employer cannot fire an employee without good cause.
Should the employee dispute a dismissal via the CCMA or a bargaining council the employer will have the legal duty to prove that the dismissed employee was guilty of the assault and that, under the specific circumstances, dismissal was the most appropriate corrective measure. If the employer fails to convince the arbitrator of this it could be the employer’s bank balance that is assaulted. That is, the arbitrator could award reinstatement with back pay or could order the employer to pay up to 12 months’ remuneration in compensation.
In the case of NUMSA obo Madobeng vs Macsteel Tube and Pipe (2006, 10 BALR 982) the employee was dismissed for assaulting a colleague who had accused her of sleeping with her grandfather. The employee and her trade union took the matter to the Metal and Engineering Industries Bargaining Council accusing the employer of unfair dismissal. The arbitrator found that the scuffle that had taken place between the two employees did not constitute an assault and that Madobeng had been provoked by her colleague. As the employer had exaggerated the seriousness of the offence and had ignored the mitigating effect of the provocation the arbitrator found the dismissal to be unfair. The employee was reinstated with full back pay.
In NUMSA obo Hlela & others vs Jasco Special Cables (2009, 10 BALR 1012) The employees went on strike and were later dismissed for assault and intimidation during the protest action. While the arbitrator accepted that the employees had been guilty of assault the dismissal was found to be unfair. This was because the employees had only been given notification of their disciplinary hearings three weeks after the assaults had occurred and had been allowed to work during the three-week period. The arbitrator therefore found that the employment relationship had not been rendered intolerable by the assault. The employer was ordered to re-employ all the dismissed employees.
The above cases show that, even in serious cases of assault, the CCMA will not always approve of dismissal as a sanction. Therefore, employers should understand that:
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- The individual circumstances of each case are crucial in deciding whether dismissal for assault is acceptable;
- The ability to anticipate the thinking of CCMA and other arbitrators is vital;
- Substantial labour law experience and expertise should be obtained before discipline is implemented.
To book for our 11 March webinar on MANAGING COVID AND COMPULSORY VACCINATIONS please contact Ronni on 0845217492, (011) 782-3066 or ronni@labourlawadvice.co.za.
by Lihle Menzeleleli | Feb 28, 2022 | Employers
You can be an employee before you start work!
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: ivan@labourlawadvice.co.za. Web Address: www.labourlawadvice.co.za.
Case law makes it very dangerous for an employer to sign employment contracts before it is certain that there is definitely a job for the applicant and before the employer is certain that it wishes to employ the job applicant.
The Labour Relations Act does not deal with the situation where a job applicant has been offered the job but, before starting work, is told that he/she has no longer got the job. This is a serious gap in the legislation for a job applicant may who have resigned from his/her old job on receiving the offer of the new job. On hearing that the new job is no more he/she will have lost both the old and new jobs and be without a livelihood.
Neither the Basic Conditions of Employment Act (BCEA) nor the EEA nor the Labour Relations Act (LRA) shed any light on the recourse of a person who finds him/herself in this unenviable situation. Historically, the view has been that one is not an employee until he/she starts working and can therefore not use the labour dispute resolution system to take the employer to task.
One therefore had to rely on the law of contract. That is, when an employer offers a position to an applicant and the applicant accepts then a contract has been concluded. Such a contract is legally binding whether it is in writing or not. Therefore, if the employer then refuses to let the employee start work, the employer is in breach of contract and can be sued in civil court.
There is little if any dispute as to the employee’s theoretical right to sue the employer and the employee has a very good chance of succeeding with his/her suit if he/she can prove breach of contract. However, in practice, many employees do not have the substantial resources necessary to fight such a case in civil court. Secondly, it could take years for the employee to get his/her pound of flesh should the case go ahead.
It is possibly for this reason that Labour Court Judges and CCMA arbitrators have more recently become willing to broaden their view of what constitutes an employee.
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 seems to make it clear that a person only gains the status of ‘employee’ when he she begins working for the employer. That is, the definition strongly implies that the employer’s legal obligations begin on the day that the employee physically begins work.
In the case of Wyeth SA (PTY) Ltd vs Manqele and others (2005, 6 BLLR 523) Wyeth and Manqele signed an employment contract. Before Manqele began working a dispute arose between the parties as to Manqele’s company car. As a result the employer terminated the employment contract on the grounds that the parties to it had been unable to agree to one of its terms (relating to the company car). Manqele took the employer to the CCMA for unfair dismissal. The employer contended that the CCMA had no jurisdiction to hear the matter as Manqele had not been an employee. It based this claim on the fact that Manqele had not yet begun work and that the legal definition of an employee includes the provision that an employee is someone who “works for another person”. However, neither the CCMA nor the Labour Court was prepared to accept this argument. Wyeth therefore took the matter on appeal to the Labour Appeal Court which rejected the literal interpretation that Wyeth had put on the definition of an employee. The Court found that Manqele had become an employee the moment the employment contract was signed by the parties. The Court therefore dismissed the employer’s appeal and required the employer to pay the employee’s legal costs.
In Solidarity obo Nortje vs Xtrata Lydenburg Works (2009, 7 BALR 673) the employer repudiated the contract before the job applicant began work. The employer had offered Nortje a contract post in Lydenburg which he accepted. After he relocated to Lydenburg but before he took up his post the company told Nortje that it would not take him into service because he had failed to pay the company money owed to them in respect of a previous period of employment. At arbitration the company denied that their action constituted dismissal. The arbitrator found that the employment relationship had begun once the contract was finalised and that the company’s refusal to allow Nortje to commence work constituted a dismissal. As a proper procedure had not been followed the dismissal was unfair.
The above case decisions make it clear that employers should not enter into employment agreements with job applicants before all the terms and conditions of employment have been fully agreed and until all possible reasons for not employing the applicant have been fully considered.
To book for our 11 March webinar on MANAGING COVID AND COMPULSORY VACCINATIONS please contact Ronni on 0845217492, (011) 782-3066 or ronni@labourlawadvice.co.za.
