by K-Ci Henry | Jul 19, 2021 | Legal
Employers too often get rid of employees for reasons unacceptable in law. Some of these reasons include:
The employer dislikes the employee for reasons unrelated to the workplace.
The owner wants a more attractive secretary
The employee is unwilling to grant her superior sexual favours
The employee has clashed with a key executive who has threatened to resign
The employee has reported the employer to SARS, the Department of Labour
or Department of Health for violating the law
The manager is under pressure to perform and uses the dismissed employee
as the scapegoat for performance problems
The employer feels that it is time that it shows the workers who is boss and
picks on the first employee who makes a mistake
The shop steward stands up for the employee’s rights and is labelled as a
trouble maker.
Employers then conspire to get rid of such undesirables through the use of a
number of tricks including:
Firing the employee orally and then pretending that the employee absconded
Framing the employee for poor performance or misconduct
Provoking the employee into committing misconduct
Setting up a disciplinary hearing where the presiding officer has been primed
in advance to fire the employee.
This latter trick clearly renders the presiding officer biased. This constitutes a
serious breach of the employee’s right to fair procedure. Where the employer is
caught out using such a biased presiding officer the CCMA has no mercy. The
employee is likely to be reinstated with full back pay or to be granted heavy
compensation to be paid by the employer.
Such bias on the part of a disciplinary hearing chairperson can be discovered in
a number of ways including:
The chairperson grants the complainant (person bringing the case for the
employer) the opportunity to obtain more evidence, take adjournments or
interrupt the employee; but does not grant the employee similar rights.
The presiding officer ignores evidence brought by the employee
The chairperson is chosen to hear the matter despite having been the one
who caught the employee breaking the rule.
The chairperson says things early in the hearing that indicate that he/she has
decided in advance that the employee is guilty.
For example, in the case of Fourie & Partners Attorneys obo Mahlubandile vs
Robben Marine cc (2006, 6 BALR 569) the employee was dismissed for
attempting to remove several frozen chickens that he had hidden in a bucket.
The arbitrator accepted that the employee was guilty of the offence but still found
the dismissal to be unfair. This was primarily because the chairperson of the
disciplinary hearing had revealed his bias by asking the employee at the
beginning of the hearing “do you have an excuse for stealing the chickens?”
In South African Policing Union obo Moorcroft vs South African Police Service
[2018] 11 BALR 1192 (SSSBC) the employee, who had been dismissed for
calling a colleague a “dom apie”, was reinstated. This was partially due to the fact
that the arbitrator found that there was a reasonable apprehension of bias of the
presiding officer because of his historical relationship with the accused.
The fact that arbitrators do not hesitate to punish biased or inept presiding
officers means that employers should:
resist the temptation to ‘fix’ the outcome of disciplinary hearings in advance
avoid misusing disciplinary processes to pursue private agendas
ensure that only impartial and properly trained persons chair disciplinary
hearings.
To access our debate on thorny labour law topics please go to
www.labourlawadvice.co.za and click on the Labour Law Debate icon in the top
by K-Ci Henry | Jul 12, 2021 | Legal
It is extremely dangerous for any employer to dismiss an employee unfairly. This is because South African labour law strongly protects employees. The forums provided by the Labour Relations Act (LRA) to carry out labour dispute resolution include:
- The Centres for Dispute Resolution attached to the numerous bargaining councils established in South Africa
- The Commission for Conciliation, Mediation and Arbitration (CCMA)
Many employers, via bitter experience, will already be aware that going to any of these forums can be extremely costly. Such employers will be aware that, should things go wrong with a dismissal, they may have to pay the following:
- A settlement amount in order to avoid having to go to court or arbitration
- Legal fees to be represented at arbitration or court
- The legal fees of the employee
- Retrospective back pay to employees who the courts or arbitrators have reinstated
- Compensation to employees who they have been found to have dismissed unfairly.
Most employers will however be unaware that, in addition to the hugely expensive costs listed above, they may also have to pay arbitration fees to the CDR or CCMA).
I will deal with each of these in more detail:
OUT OF COURT SETTLEMENTS
The first stage of labour dispute resolution is conciliation. Here a CDR or CCMA commissioner attempts to mediate an out of court settlement between the employee and employer. Especially where the employer comes to realise that it messed up the dismissal it lands up agreeing to pay a substantial settlement amount to make the problem go away. Due to the fact that such settlements are made by agreement there is no legally prescribed maximum limit to the amount thereof.
LEGAL FEES AND THE EMPLOYEE’S LEGAL COSTS
Should the employer’s case be found to be frivolous and/or vexatious it may have to pay, in addition to its own legal fees, a significant portion of the employee’s legal fees. This may occur when the court/arbitrator finds that the employer was clearly in the wrong and/or defended the case unreasonably.
RETROSPECTIVE BACK PAY
Where the arbitrator or court finds that the dismissal was unfair it may require the employer to take the employee back and to pay the employee remuneration lost between the date of dismissal and the date of the reinstatement order. (Such back pay is limited to a maximum of 12 months for ordinary unfair dismissals and 24 months for automatically unfair dismissal)
COMPENSATION
Even where reinstatement is not ordered the employer may be required to pay the employee compensation in recompense for unfairly depriving him/her of his/her job. (Such compensation is limited to a maximum of 12 months for ordinary unfair dismissals and 24 months for automatically unfair dismissal)
ARBITRATION FEES
In terms of the little known section 140(2) of the LRA the arbitrator may charge the employer an arbitration fee where it is found that a dismissal for misconduct or incapacity was procedurally unfair. For example, in the case of Martini and others vs Galata Eksport Chain cc (2006, 8 BALR 836) the employees were dismissed after 20 oriental carpets worth R 800 000 went missing. The arbitrator found that the employer had good reason to dismiss the employees but that, because the employer had failed to give the employees a fair hearing, the dismissal had been procedurally unfair. He/she therefore ordered the employer to pay the CCMA an arbitration fee in terms of section 140(2) of the LRA. It is uncertain what the intension of this fee is. Perhaps it is for wasting the CCMA’s time by failing to follow procedures that every employer ought to be aware of.
In the light of the above employers are advised to:
- Make sure that they know and fully understand all aspects of labour law
- Use that knowledge to comply with the law when dealing with employees.
To register for our 16 July webinar on Investigating in the Covid Environment please contact Ronni on ronni@labourlawadvice.co.za or 0845217492.
by K-Ci Henry | Jul 5, 2021 | Legal
Many employers try to evade the law by closing down one business and opening another. However, this ploy has become less and less likely to succeed. Especially where the employer opens the same business under a different name and/or in a different place, the new business could be found liable for the compensation payment award made against the old business.
The new business might be registered as a separate company or close corporation to the old one which would normally, in terms of the Companies Act, protect it from liability for any legal obligations of any other entity. However, arbitrators at the CCMA and bargaining councils as well as judges in the Labour Court may be willing to ignore this corporate protection where they deem it appropriate. This practice of ignoring the Companies Act protection is known as ‘piercing the corporate veil’ because it breaks through the protective shield behind which the employer is hiding. This the courts and arbitrators might do where:
- They believe that the employer is purposely switching businesses in order to evade labour law compliance
- There is a clear and close connection between the old and new business
- The employee could lose out if the corporate veil is not pierced.
For example, in the case of Marllier vs G7 Technologies cc & Another (2004, 4 BALR 480) the employer retrenched its production manager while the owners of the employer were still running other similar profitable businesses. The CCMA found that:
- The first cc had not been closed down for genuine operational reasons but rather for the convenience of the owners
- The employer had failed to consult with the employee before retrenching him
- The business of the second cc was so intertwined with that of the first one that they could be regarded as a partnership
- The owner’s reliance on the juristic personality of the second cc as a means of avoiding liability for the employee’s retrenchment justified the piercing of the corporate veil
- The employer had to pay the employee six months’ remuneration as compensation for the unfairness.
In the case of Domingo vs Ad-Bag Advertising CC (2008, 7 BALR 646) the arbitrator found that the dismissal was unfair and awarded the employee nine months’ remuneration in compensation. However, the arbitrator lifted pierced the corporate veil and found the two owners of the business personally liable for the payment of this compensation despite the fact that officially the employer was a close corporation. This was because the owners lied during the hearing and because there was a danger that the business might not pay the compensation amount due to its impending closure.
In the light of these decisions it is most important for employers to:
- Act cautiously before moving their business operations from one company or cc to another
- Ensure that any such move is carried out for legitimate reasons
- Ensure that the rights of employees will not be unduly prejudiced by the transfer of the business operations
- Avoid misusing the ownership of other companies in order to get rid of employees
Employers must also ensure that when considering retrenchments:
- There are truly no alternatives to the loss of jobs
- Potential retrenches are properly consulted
- The whole process is managed under the guidance of a labour law expert.
To attend our 14 May 2010 seminar in Cape Town on CHANGES AND DANGERS IN LABOUR LAW please contact Ronni at ronni@labourlawadvice.co.za or on 0845217492 or (011) 782-3066.
by K-Ci Henry | Jun 21, 2021 | Legal
Section 213 of the Labour Relations Act (LRA) provides that an employee is anyone, other than an independent contractor who works for another person
or who assists in conducting the business of an employer. This definition omits only service providers who are external and/or truly autonomous.
Section 200A of the LRA states that, unless the contrary is proven and regardless of the form of the contract a person is presumed to be an employee if any one of the following circumstances exist:
The manner in which the person works or his/her hours of work is/are subject to the direction or control of another person
The person forms part of the organisation
The person has worked for the other person for an average of at least 40
hours per month for the last 3 months
The person is economically dependent on the other person
The person is provided with tools of trade by the other person
The person only provides services to one person.
This law applies to government, business, welfare, NGO, religious and all other employers except perhaps the Secret Service, National Intelligence
Agency and Defence Force. It could be argued that anyone doing work as a means of receiving training in their trade or profession would be defined as a learner and not as an employee. For example, the Skills Development Act and the Manpower Training Act appear to provide for special circumstances where people are signed up for learnerships and apprenticeships purely for purposes of advancing their learning and qualifications. Work contracts that clearly fall under the jurisdiction of either of these two acts may well not qualify as employment contracts. In Mokone vs Highveld Steel and Vanadium (2005, 12 BALR 1245) the arbitrator found that the applicant had done some work for the respondent while he was completing studies financed by the respondent. Despite this the arbitrator found that the applicant had not been an employee in terms of the LRA and that the Council therefore did not have jurisdiction to hear the case.
However, in the case of Andreanis vs the Department of Health (2006, 5 BALR 461) Ms Andreanis was appointed as an intern at a state hospital. Four
years later she was told to vacate her post as her internship period had come to an end. She claimed unfair dismissal as she believed that she was an
employee and that the end of her internship was irrelevant to her employment status.
The employer claimed that:
Ms Andreanis was a trainee and not an employee
The CCMA had no jurisdiction to hear a case brought by a non-employee
In any case Ms Andreanis had not been dismissed as her appointment had expired automatically when her internship period expired.
The arbitrator found that:
Ms Andreanis was an employee in terms of the definition in Section 213 of the LRA
She also qualified as an employee in terms of all but one of the seven criteria in section 200A of the LRA
Section 200A gave arbitrators no discretion at all to find that a person was not an employee if any one of the seven criteria in section 200A applied. (This is a puzzling finding as section 200A clearly leaves room for discretion via its proviso “Unless the contrary is proved…”)
The Department of Health had been attempting to hide behind Ms Andreanis’s internship
The dismissal was unfair
The employer was to reinstate the employee with full back pay.
Employers are advised, in the light of the above to ensure that all trainees are treated fairly and to contact a reputable labour law expert should they be
unsure whether a worker falls under the protection of the labour law or not.
To register for our 16 July webinar on Investigating in the Covid Environment please contact Ronni on ronni@labourlawadvice.co.za or 0845217492.
by K-Ci Henry | Jun 7, 2021 | Law & Criminology , Legal
Section 197 of the Labour Relations Act (LRA) requires the new employer, in a takeover as a going concern, to take over all the employees of the old employer.
A take over of an enterprise “as a going concern” essentially means that the new employer is carrying on the same business as the old employer after a takeover.
In such a case the new employer is required to take over the old employer’s staffwith all their years of service and all their old terms and conditions intact. Due to
t his heavy burden and for other reasons, the new employer often wishes to retrench excess employees or requires the old employer to carry out the
retrenchments before the takeover. However, section 187(1)(g) of the LRA prohibits any retrenchment (or any otherdismissal) related to a takeover as a going concern. Such terminations are deemed to be automatically unfair dismissals. This means that the dismissed employees could claim reinstatement or up to 24 months remuneration in compensation. It is important to stress that the provisions of sections 197 and
187 of the LRA apply not only to businesses but to all employers including government departments, welfare organisations, NGOs and all other enterprises
that employ staff.
The purpose of this legislation is to preserve jobs by preventing employers from rationalising their workforces in circumstances of a takeover. However, because
such legislation tends to discourage takeovers, rescue bids for enterprises that are going under will also be discouraged. Such enterprises will often have to
close down. Then, instead of a limited number of employees being retrenched during a rationalisation, all the employees will lose their jobs.
In the case of Cash Paymaster Services (Pty) Ltd vs Browne (2006, 2 BLLR 131) the Labour Appeal Court found that the employee who lost his job due to the
takeover of a business had been unfairly dismissed. The employer was ordered to pay most of the employee’s legal costs plus compensation in the amount of
R684 621.
In the case of Van Zyl vs Asanti Safari Trading cc t/a The Hill Kwik Spar and another (2009, 2 BALR 206) the parties consented that the case be heard by the
CCMA instead of by the Labour Court. In this case the employee was dismissed shortly before the business was taken over by a new owner. The respondent
claimed that the sale agreement between the old and new owners had excluded the requirements section 197 of the LRA. However, the arbitrator found that:
The sale agreement had not excluded section 197 and that, had it done so, this would have been illegal.
The old and new employers could have entered into an agreement to vary the requirements of section 197 but only if they had entered into such agreement with the full participation of the employees of the business whose jobs could be affected by the results of the takeover.
Van Zyl, the dismissed employee, had not been involved in any such agreement with the owners.
The purchase of the business had constituted a transfer of a going concern as contemplated in section 197 of the LRA
The reason that the employee was dismissed was the takeover of the business.
This contravened the provisions of section 187(1)(g) of the LRA effectively prohibiting such dismissal.
The dismissal was automatically unfair.
The new employer was required to pay the employee compensation equal to 12 months’ compensation and also to pay the employee’s legal costs.
These cases show that employers considering takeovers, buy outs, mergers or contracting/outsourcing arrangements must, before implementing any transfers,
must act with extreme caution. That is, they should utilise their labour law experts to:
Analyse and explain the meaning of sections 197 and 187 of the LRA as well
as of the developing case law in this area.
Examine the specific circumstances of the intended takeover in the light of the legislation.
Work out a strategy for completing the takeover without infringing the ever tightening labour legislation.
To register for our 7 May webinar on Lockdown Labour Law please contact
Ronni on ronni@labourlawadvice.co.za or 0845217492.
by K-Ci Henry | May 31, 2021 | Legal
South African employees are so heavily protected by the Constitution, by labour legislation, by the Labour Courts the CCMA and trade unions that they
are less often afraid to defy the employer’s instructions. For the employer the resulting insubordination is a nightmare.
This is especially so where the employer is ill-equipped to deal with insubordinate employees and fails to understand:
What insubordination really is
How it differs from disrespect
What a reasonable instruction is
When a charge of insubordination is not appropriate
How seriously the law views insubordination
How it should be dealt with
WHAT IS INSUBORDINATION?
The Collins Concise Dictionary defines “insubordinate” as “not submissive to
authority, disobedient or rebellious”. It is the refusal of an employee to bow to
the authority exercised reasonably by the employee’s superior. This could
include conduct such as:
Refusal or intentional failure to obey reasonable and lawful instructions
Comments such as “You have no authority over me”
Telling the manager to go and get what he/she wants from someone else
INSUBORDINATION VS DISRESPECT
Insubordination applies only upwards and can only be perpetrated by a junior towards a senior. Disrespect, on the other hand, can apply upwards and
downwards. For example, it would be disrespectful for a manager to shout at an employee and tell him/her to ‘get out of the office’. Disrespect is therefore
not necessarily linked to a person’s position of authority but can also be linked to one’s human dignity.
WHAT IS A REASONABLE INSTRUCTION?
In my view a reasonable instruction is one that:
The employee is capable of carrying out and
Involves a task that is not substantially beneath the employee and
Does not infringe the rules of the employer or the laws of the country and
Involves a task that truly needs to be done.
For example, if the boss tells the Human Resources Manager on a 4-day week contract to come in on the weekend to repair the faulty elevator the HR
Manager might be entitled to refuse because The HR Manager is being required to carry out a task:
That is completely outside the sphere of the HR Manager’s duties
Outside of the HRM’s capabilities
Assigned for a time that is not normally worked
That, if carried out by the HRM, could result in danger to users of the elevator.
However, instructing employees to adhere to heath and safety requirements would, in most cases, be both legal and reasonable.
In Mogano vs St Mary’s Children’s Home [2021] 2 BALR 181 (CCMA) the employee was dismissed for disobeying a rule to remain on the work premises
during the lockdown. The arbitrator noted that a key aim of the lockdown was to protect vulnerable people from contracting Covid. The children at the home
were vulnerable, and the care workers had been allocated a cottage in which they could stay while off duty. The arbitrator found that the applicant had
unreasonably defied management’s authority and imperilled the children at the home. The applicant’s dismissal was upheld as fair.
WHEN A CHARGE OF INSUBORDINATION IS NOT APPROPRIATE
Insubordination is not the same as poor work performance. That is, poor work performance relates to how badly the employee has performed work or
missed deadlines. While poor work performance can sometimes be wilful there is usually some work that is done albeit badly and the poor performance
occurs regardless of whether the employee has been given an instruction. On the other hand Insubordination means the employee’s refusal to obey a
specific instruction whether the instruction relates to work performance or not.
Also, an employee might fail to carry out an instruction because:
The equipment used is really faulty
The employee truly does not have the required skill
The employee is genuinely disabled
These examples do not amount to insubordination because the employee is not refusing to carry out the instruction.
To book for our 16 July 2021 webinar on CONDUCTING INVESTIGATIONS IN THE COVID ENVIRONMENT please go to
https://www.labourlawadvice.co.za/seminar/ or contact Ronni at ronni@labourlawadvice.co.za or on 0845217492.
