EMPLOYER UNFAIRNESS ATTRACTS HEAVY PENALTIES

by angelique | Dec 14, 2020 | Employers

The Labour Relations Act (LRA) in conjunction with the Arbitration Act gives the CCMA, bargaining councils, Labour Court, Labour Appeal Court and private arbitrators the power to take very strong action against employers who commit unfair labour practices or unfair dismissals. 

The types of penalties/corrective actions that have typically been imposed include reinstatement, re-employment, interdicts, promotion of the employee, reversal of a demotion, reduction of a disciplinary penalty reinstatement of benefits, and financial compensation amongst others. We need to look at each of these remedies in detail because they can have a severe effect on the employer’s financial and/or operational circumstances.

Employers are warned that the LRA favours re-instatement as the first remedy for unfair dismissal. That is, section 193(2) provides that: “The Labour Court or the arbitrator must require the employer to reinstate or re-employ the employee unless:

1. the employee does nor wish to be reinstated or re-employed;
2. the circumstances surrounding the dismissal are such that a continued employment relationship would be intolerable;
3. it is not reasonably practicable for an employer to reinstate or re-employ the employee; or 
4. the dismissal is unfair only because the employer did not follow a fair procedure.”

‘Reinstatement’ normally means that the employer must take the employee back with retrospective effect to the date of dismissal. For example, if the employee was unfairly dismissed on 1 February 2002 and the reinstatement award was made on 31 May 2004 then the employer would have to give the employee back pay for 28 months!

In the case of POPCRU & others vs Minister of Correctional Services & others (2006, 4 BLLR 385) seventy-five correctional officers were fired for refusing to work overtime. Prior to the dismissals the employer had successfully obtained an interdict prohibiting this overtime ‘rebellion’. During the year end holiday periods the employees failed to turn up for work. When asked for their reasons they all claimed to be sick. They were all dismissed on 3 January of the new year without a disciplinary hearing. The Court found that the dismissals were unfair and ordered the employer to reinstate all 75 employees.

Under a ‘re-employment’ order the employer is normally required to take the employee back, not from the date of dismissal, but with effect from the date of the award (or an earlier date). While this is not as harsh as a full reinstatement it could cause serious problems for the employer if it is unable to accommodate the employee due to relationship problems or operational circumstances.

If, for example, an employee was unfairly dismissed for discriminatory reasons the court could, in addition to reinstatement, issue an interdict (order) prohibiting the employer from continuing with its discriminatory acts.

Should it be found that the employer was guilty of unfairly failing to promote an employee the arbitrator could order the employer to promote the employee.

Likewise, if the employer demoted or disciplined the employee unfairly, the arbitrator could order the reversal of the demotion/discipline.

Should the employer have unfairly removed, reduced or refused an employee’s benefit (e.g medical aid or pension) the arbitrator could order the employer to restore or provide the benefit to the employee. 

Where unfairly dismissed employees are not reinstated compensation may be awarded. Under certain circumstances compensation can be as much as 24 months’ remuneration.

In the case of CEPPWAWU obo Baloyi and Others vs Houers Co-operative (2009, 10 BALR 1028) nine employees were dismissed for misconduct during a strike. It was established that strikers had threatened the employer’s clients and had tried to set fire to a bus carrying replacement workers. However, at CCMA the employer was unable to prove that the dismissed employees had been the ones who had carried out these acts of misconduct. As a result the CCMA found the dismissals to be unfair, ordered the employer to reinstate all nine employees and required the employer to pay each employee 12 months’ remuneration in back pay plus interest.

It is clear that, regardless of the nature of the remedy, it could, in different ways, prove extremely costly to the employer. Employers therefore need to:

• Undergo intensive training as to the labour law in order to avoid breaking it
• Prepare as watertight case as possible before going to CCMA
• Learn how to manage employees effectively but without breaking the law.

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

Employers: MANAGING SHOP STEWARDS

by angelique | Nov 24, 2020 | Employers

Don’t underestimate the power of trade unions

The trade union movement in South Africa is extremely powerful. This is not only because of the high proportion of unionised employees and because of the extremely strong legislation supporting unionisation but also because of the political alliance between the biggest union confederation and the ruling party.

In view of the above trade unionism can mean problems for any employer. However, employers who understand the rights of trade unions, union officials, union office bearers and union members are most likely to be able to deal with trade unions successfully. This is especially so of employers who also know the limits of union rights because such employers will not be prone to allowing unions and unionised employees to do whatever they wish.

Due to their uncertainty as to where the rights of unions start and end many employers lose out because they unnecessarily give to unions rights that they are not legally required to give them. Just as often employers lose out because they fail to accord to unions rights that have been conferred by law.

The Labour Relations Act (LRA) gives employees the right, under certain circumstances, to elect union representatives (shop stewards) from amongst themselves. Section 14 of the (LRA) gives shop stewards a number of special rights such as the right to:

• Assist employees in disciplinary and grievance hearings.
• Monitor and report any of the employer’s contraventions of the law to the appropriate authorities.
• Take reasonable time off with pay during working hours in order to perform these duties.

Where a manager is aware of the risk of losing the contract due to union action he/she may become nervous and over react towards shop stewards. They may see shop stewards as invaders trying to ruin or take control of the business. Such managers then tend to see shop stewards as their enemies and plot to get even with or get rid of the shop stewards. Such an approach is clearly counter productive because it is very likely to cause industrial action.

Instead of becoming negative towards shop stewards, managers, supervisors and foremen need to:

• Be given a full understanding of what the shop stewards’ rights are and where those rights are limited. 
• Learn to keep their tempers and act rationally in the face of pressure.
• Know when and how to take legitimate action against shop stewards who exceed their powers.
• Be empowered to keep control of the workforce regardless of the presence of shop stewards.

Managers do have the right to discipline shop stewards but this must be done for fair reasons and in a fair manner. Ignoring the legal procedures is extremely dangerous when disciplining any employee, but to do so in the case of a shop steward can cause irreparable damage.

Item 4(2) of the LRA’s Code Of Good Practice: Dismissal Code states that discipline against a shop steward should not be instituted before the employer has first consulted with the trade union.

It is thus clear that the law sees shop stewards in a different light to other employees. The question is how differently must we treat shop stewards? In Dunn vs Telkom SA (2003, 11 BALR 261) a shop steward was dismissed for insubordination. The CCMA found that the shop steward had justifiably been found guilty of serious misconduct meriting dismissal. However, the arbitrator found the dismissal to be unfair because the employer had not consulted the applicant’s union before disciplining the shop steward.

However, in an unreported CCMA case, in which the author was involved, the chief shop steward was dismissed for misconduct related to his duties as a shop steward. Despite this the CCMA found that the dismissal was fair in all respects. This was because the employer was able to convince the CCMA arbitrator that the shop steward’s status as a union representative did not exempt him from adhering to the employer’s rules.    [NUMSA obo Mahlangu vs Hernic Ferrochrome (Pty) Ltd case number NW2126-01]

Because the dividing line between acceptable and unacceptable discipline of shop stewards is so thin no employer should implement such discipline without the full involvement of a reputable labour law expert. The power of unionisation in South Africa combined with our pro-union legislation means that employers need to be very careful how they treat shop stewards and other employees and should never underestimate the resolve and resources of trade unions.

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

Employers – POOR PERFORMERS ARE PROTECTED FROM UNFAIR DISMISSAL

by angelique | Nov 16, 2020 | Employers

The level of work performance of employees is a crucial factor in the advancement of South Africa’s economy and in the success of each enterprise. This is one reason that the law does allow employers to dismiss employees who fail to perform according to performance standards. However, the same legislation lays down very stringent tests to establish whether dismissal for poor performance is appropriate in each specific instance.

The Labour Relations Act (LRA) provides that “Any person determining whether a dismissal for poor work performance is unfair should consider –

1. whether or not the employee failed to meet a performance standard; and
2. if the employee did not meet a required performance standard whether or not –
3. the employee was aware, or could reasonably have been expected to be aware, of the required performance standard;
4. the employee was given a fair opportunity to meet the required performance standard; and
5. dismissal was an appropriate sanction for not meeting the required performance standard.”

Thus dismissal can only be considered if the employer can prove factually that it has, prior to the dismissal, complied with all the substantive and procedural requirements of the law. That is, the onus at the CCMA falls entirely on the employer to bring solid proof:

• that it followed the procedural guidelines quoted above; and also 
• that, regardless of the procedure followed, the dismissal decision itself was appropriate under the circumstances.

Employers often lose poor performance cases at the CCMA because they are unable to prove that the employee failed to perform or because the dismissal process was unfair. For example, in the case of Nationwide Airlines (Pty) Ltd vs Mudau & others (2003, 3 BLLR 279) the employer dismissed Mudau after he failed a flight simulator test. However, at the disciplinary hearing the employee was neither given the right to union representation nor was he given a copy of the results of the test that he failed. In its defence, the employer contended that the employee was in a senior position. Despite this the Court upheld the CCMA’s decision that the dismissal was unfair, stating that the employee’s seniority did not deprive him of the right to fair procedure.

However, one employer came off second best at CCMA merely because the charges put to the employee were badly formulated. In Fourie vs Capitec Bank (2005, 3 BALR 314) the CCMA found that it was unfair for the employer to have charged the employee with poor performance as well as for failing to obey the employer’s instruction as these two charges were laid for one and the same incident. It appears that the employee, as a result of failing to follow the employer’s instruction, did not perform the work properly. The CCMA also found that the employer had unfairly taken into account a previous final warning for poor performance. This CCMA finding most surprising as well as frightening because:

• The CCMA viewed the bringing of the two charges as an unfair duplication of charges. In my view, as the one charge flowed form the other, the employee was in fact guilty of both charges, and bringing both allegations resulted in a comprehensive complaint that was both factually correct and justified. 
• Poor performance was part of the complaint. Therefore, the taking into account of the previous warning for poor performance was fair and proper. 

This CCMA award leaves employers very unsure as to what they are and are not allowed to charge an employee with. It may be that the CCMA commissioner expected the employer to charge the employee only with poor performance and then to use the employee’s failure to follow the employer’s instruction as an aggravating circumstance rather than as part of the charge itself. However, the Labour Relations Act (LRA) does not require this. Common sense dictates that the labels given to the charges should be much less important than what the employee did or failed to do in the incident in question.

However, while decisions such as that in the Capitec case are still being made, employers need to err on the side of caution. That is, employers need to ensure that their managers undergo intensive and ongoing training by a legal expert not only in enforcement of performance standards and fair procedure but also in how to formulate charges relating to poor performance. Alternatively, if such training does not take place, then the employer should take no steps towards employee discipline or performance correction without first consulting a labour law expert.

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]. Web Address: www.labourlawadvice.co.za.

STRIKES CAN BE PREVENTED THROUGH PRIVATE ARBITRATION

by angelique | Nov 9, 2020 | Employers

The losses resulting from strike action raise the question of how such strikes can be prevented. The consequences of strikes can include:

• The employer’s loss of clients
• Financial losses for businesses
• Closure of businesses
• Industrial sabotage
• Loss of pay and financial hardship for employees
• Dismissals
• Court cases
• Reinstatement orders
• Strike interdicts
• Picketing
• blockades
• Violence and death
• Damage to the national economy if the strikes are widespread and/or last a long time
• Reduction in investor confidence
• A negative relationship between employer and employees/unions once the strike is over.

The above list of consequences provides more than enough reason for the introduction of mechanisms for prevention of strikes. However, this is no easy task as the Labour Relations Act (LRA) gives employees the right to strike. While this effectively prevents employers from imposing outright bans on strikes the LRA itself limits the right to strike. Section 65(1) of the LRA states that “No person may take part in a strike or a lock-out or in any conduct in contemplation  of a strike or lock-out if –

1. that person is bound by a collective agreement that prohibits a strike or a lock-out in respect of the issue in dispute;
2. that person is bound by an agreement that requires the issue in dispute to be referred to arbitration; ……..”

The above section makes it clear that the law allows employers and employees to enter into agreements that prohibit strikes and lock-outs by replacing these with arbitration as an alternative with less drastic consequences than strikes have. 

The disadvantage of using the arbitration alternative is that the arbitrator’s decision is final and the parties are bound to comply with it. For example, in the security industry strike the trade unions are demanding an 11% wage increase for their members but the employers are reluctant to go much higher than 8%. Should the dispute go to arbitration and should the arbitrator rule that the wage increase is to be 9,5% the parties will have to comply with this decision even if this results in financial or other difficulties for them. 

However, the advantages of an arbitrated settlement far outweigh the potential disadvantage. These advantages could include:

• A swift conclusion to wage negotiations
• Elimination or reduction of the ill will caused by industrial action
• Saving of the money that could be lost during the strike/lock-out due to the non-payment of employees’ wages or to industrial sabotage, violence, interdicts and lost business
• Avoidance of injury and loss of life
• Improved investor confidence and consequent job creation.

The problem is that the LRA does not give the CCMA or bargaining council jurisdiction to arbitrate wage disputes. Instead, section 64(1) allows the parties to engage in industrial action (and not arbitration) where conciliation has failed to resolve the dispute. Fortunately, the LRA does allow the parties to agree to private arbitration for purposes of resolving wage disputes. However, should the parties agree to private arbitration they must choose an arbitrator who is:

• reputable
• fully conversant with labour law and with the need for positive industrial relations
• able to gather the facts of the case effectively from both parties
• able to assess the facts properly and fairly 
• able to reach a decision that is both fair and realistically implementable.

On those occasions that I have adjudicated arbitration matters I have noticed that it is not necessarily the party who is right that wins but rather the party who presents its case most expertly that is able to persuade the arbitrator of what the right outcome should be.

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]. Web Address: www.labourlawadvice.co.za.