Case Law Library

Case Law Library

Case Law Library

Case Law Library

Case Law based on South African Labour Legislation.

The purpose of this library is to provide you with quick access to leading case law relating to everyday life at work.

Easily find the topic you are interested in in the Index. You will find in this library a brief description of the essence of the case law dealing with the matter as well as a cross reference to the actual judgement. You will find a copy of the judgement in the ‘Case Law Judgments’ folder.

You will note that the reviews are presented in a diary format, which is not a typical legal review format of case law. The aim is to present it in a manner which is more personal, direct and easy to understand. The review is not intended to give a detailed legal analysis of the case, but just a brief overview of the essence of the topic in discussion.

The short code typically reflects the forum where the case was heard, i.e. LC=Labour Court, followed by the date the initial review was made.

Tobie Nel

Contact details

Cell: 082 447 9512

E-mail: tobie@effectusharmony.co.za

Table of Contents



CC#080818: Aviation Union of South Africa vs South African Airways (Pty)Ltd (Nov2011) [CCT08/11]

(Transfer of Service ‘Section 197). In context of first- and second-generation outsourcing, we will today specifically focus on the transfer of ‘service’ in terms of Section 197 and give some more clarity as to the intended meaning by the legislature. In terms of a Section 197 transfer, a transfer is inclusive of a ‘service’. This poses challenges in real life situations, especially within the hospitality industry whereby you often have situations whereby large organizations will outsource the service of their staff canteens for instance, but do these transactions trigger Section 197? It could indeed, but not necessarily.

In Aviation Union of South Africa vs SA Airways (CC-2011), the Constitutional Court held that “it is the underlying business that must be capable of being transferred and not the service itself in order for the transaction to trigger Section 197”. It further held “Were it to be otherwise, a termination of another service provider would constitute a transfer within the contemplation of the section. That this is not what the section was designed to achieve is apparent from its scheme, historical context and purpose. The context referred to here is the alteration of the common law consequences on employment contracts, when the ownership of a business changes hands.’

In essence then, you have instances whereby a company will merely outsource the service to a service provider, however not necessarily business ownership, meaning no real transfer of assets and customers. In such circumstances, Section 197 is not triggered. Section 197 addresses the issue of business ownership transfers (even if just a part of the business).


LAC#130818: Woolworths vs SACCAWU obo Moeng & Others (19 September 2017) [JA 56/2016]

Today we look at the importance to approach the retrenchment consultation process with integrity and thoroughness, especially considering all alternatives put before the employer by consulting parties. In Woolworths vs SACCAWU obo Moeng & Others (LAC)-2017, the parties have engaged in consultations for a lengthy period of time. Woolworths was thorough in the procedure, however after considering many proposals made by the other consulting party, the employer failed to consider the last proposal made by the union as they failed to understand the proposal. The Labour Appeal Court found that the retrenchments were procedurally fair, but substantively unfair. Consider the follow argument by the Court:

“Woolworths did not understand that SACCAWU’s last alternative proposal differed from its previous proposal regarding an alternative to dismissal. When a proposal is misunderstood and therefore not explored it means that the employer has not shown that this alternative had been properly considered. There is no way of knowing what the ring-fenced alternative or inducement would have turned out had it been pursued but is sufficient for purposes of this appeal to find that it was a reasonable alternative that was not considered.”

There is thus a duty on the employer to approach retrenchments with openness, transparency and to consider all alternatives placed before it.


LC#200818: The Independent Municipal and Allied Trade Union vs Witzenburg Municipality (13 February 2012) [CA 08/08]

Today we will investigate the purpose of the enquiry when it is contemplated whether to dismiss an employee for reasons relating to his or her ill health of disability.

I have often seen that employers treat these kinds of enquiries very similar to that of a misconduct disciplinary hearing. Schedule 8 (10) of the Code of Good Practice provides the legislative framework in terms of the correct procedure to adopt in dealing with incapacity dismissals. Of note, is what the Labour Appeal Court ruled in Independent Municipal and Allied Trade Union obo Strydom vs Witzenburg Municipality and others-2012.

“an incapacity enquiry is mainly aimed at assessing whether the employee is capable of performing his or her duties, be it in the position he or she occupied before the enquiry or in any suitable alternative position. The conclusion as to the employee’s capability or otherwise can only be reached once a proper assessment of the employee’s condition has been made. Importantly, if the assessment reveals that the employee is permanently incapacitated, the enquiry does not end there, the employer must then establish whether it cannot adapt the employee’s work circumstances so as to accommodate the incapacity or adapt the employee’s work circumstances so as to accommodate the incapacity, or adapt the employee’s duties, or provide him with alternative work if same is available. However, an employer is not obliged to retain an employee who is permanently incapacitated if such employee’s working circumstances or duties cannot be adapted.”

What we learn from this case is that the purpose of the enquiry is to establish the extent of the incapacity as well as an honest process whereby the employer should establish whether the employee’s duties or work circumstances cannot be adapted to accommodate the employee. I want to emphasize the importance that this is not a misconduct hearing. In the same case (LAC) the judge went on to find that after the enquiry the employee submitted doctor’s records which stated that the employee was indeed fit to work. The employer did not regard this information as it was not put before the chairperson of the disciplinary hearing. The LAC found that the employer should have applied its mind to the information and that the CCM should have treated arbitration as De Novo.


MEIBC#270818: Sacwu obo Masilo / Bic SA (Pty) Ltd (2007) [MEGA 11871]

Today we will be looking at the very sensitive issue relating to body searches within the employment context. Section 14 of the Bill of Rights (SA Constitution) states that ‘everyone has the right to privacy, which includes, inter alia, a. not to have their person or home searched, b. their property searched, c. their possessions seized, or the privacy of the communications infringed. On the face of it, it would appear then that body searches by an employer is an infringement on the right to privacy. It could very likely be! However, Section 36 of the Bill of Rights sets out the limitations of rights; ‘the rights in the Bill of Rights may be limited only in terms of law of general application to the extent that the limitation is reasonable and justifiable.

In THE SOUTH AFRICAN HUMAN RIGHTS COMMISSION REPORT, it was held ‘The right to privacy is protected in terms of both the Common law and the Constitution of South Africa. The right, however, is not absolute as there are competing factors such as maintaining law and order that can bear a significant limitation on the right. A careful weighing up of the right to privacy and other factors is necessary. The question to ask is whether the invasive conduct infringed the right to privacy and if so, is such infringement justifiable in terms of the requirements laid down in the limitation clause (Section 36) of the Constitution?’

In SACWU OBO MASILO / BIC SA (PTY) LTD, the Commissioner commented on an employer’s right to conduct body searches: ‘Employers are entitled to take measures to protect their assets and this may include the employment of security agents. Security agents may, in the fulfilment of their duties, patrol the premises of the employer, screen all personnel entering and exiting the employer’s premises or even conduct body searches.

Where body searches are conducted privately and decently, there would be no reason why anybody should complain that the searches constitute an invasion of privacy and are, therefore, unlawful.’

In conclusion then. Body searches involve the conflict in the right to privacy, but also to property rights and the maintaining of law and order. Within the employment context, body searches, will typically be acceptable under the following conditions: a. that a clear policy in this regard exists, b. that searches are done in a decent manner that does not violate human dignity, c. that searches are done from people with the same gender, d. that searches are done privately, e. that a justifiable reason exist to do the searches.


LC#030918: Avril Elizabeth Home for the Mentally Handicapped vs CCMA and Others (14 March 2006) [JR 782 / 2005]

Dismissals ought to be done fairly, both as far as the substance (reason) and the procedure are concerned. Today we will focus on the procedural requirement for dismissals relating to misconduct in context of Schedule 8(4) of the Code of Good Practice found in the Labour Relations Act. The term ‘Disciplinary Enquiry or Hearing’ is probably more commonly used, however how stringent is this process? Should this process be as stringent than that of a criminal trial?

In Avril Elizabeth Home for the mentally handicapped vs CCMA and others-2006, which is a landmark case dealing with the procedural requirement for disciplinary enquiries, the court held a significant departure from the criminal justice model that was developed and applied under the 1956 LRA, which likened a workplace disciplinary enquiry to a criminal trial. One often finds the CCMA to adopt similar models, however these are for procedure only and bears little value to the parties.

With reference to the explanatory memorandum that accompanied the Draft Labour Relations Bill, the court held ‘there is no place for formal disciplinary procedures that incorporate all of the items of a criminal trial, including the leading of witnesses, technical and complex charge sheets, requests for particulars, the application of the rules of evidence, legal arguments and the like.’

Fair Procedure may be narrowed to the following extend:

    1. Provided that the employee was entitled to respond to the allegations made against him and that the employer took a decision and communicated it to the employee;
    2. It is permissible for witnesses not to be called and for the employee instead to be provided with the complaint in writing and invited to respond thereto, but the employee must be advised of this at the outset and afforded an opportunity of obtaining representation;
    3. Reliance on hearsay-evidence may be permissible;
      1. Where the misconduct of the employee is common cause, an invitation to the employee to make written representations will be sufficient;
      2. It is permissible for an employer not to follow a two-stage enquiry (guilt and sanction) and to deal with the merits and mitigation at once;

In BIFAWU & another vs Mutual and Federal Insurance Company Ltd-2006, the Labour Appeal Court held: ‘Deviations from the provisions of the Code of Good Practice will not give rise to a finding of procedural unfairness where this causes no prejudice and where, judged holistically, the employee was afforded a fair disciplinary enquiry.’

In conclusion then the key is fairness and an opportunity for an employee to make representations. An employer does not have to follow an over technical procedure dealing with dismissals.


LAC#100918: Piet Civils vs AMCU (10 March 2018) [JA 37/2017]

The operation of the SLA can by no means be considered a ‘specified event, project or task’ as a project, upon expiry, always hold the possibility of more work or a new project, however where a SLA or a service is in operation, it is of a more indefinite nature and does not expire in the true sense of the word. Upon termination of a SLA there is really no possibility of future work. The relevancy is then that where a SLA is cancelled or staff requirements are reduced, an employer can no longer depend on clauses that automatically terminates employment, typically found in Limited Duration Contracts of Employment. Under such circumstances, an employer will have to initiate Section 189 proceedings.


CC#170918: Duncanmec (PTY) Ltd vs MEIBC, NUMSA (13 September 2018) [CCT284/17].

Today we will delve into the resend Constitutional Court judgement relating to 9 employees of Duncanmec dismissed for participating in an unprotected strike, whilst singing and dancing on a struggle song translated to mean “Climb on top of the roof and tell them that my mother is rejoicing when we hit the Boer”. The employees are also members of NUMSA. There were two charges raised against the employees. One for participating in an unprotected strike and the second charge relating to racism and hate speech. The employees were only given a final written warning for participating in an unprotected strike by the hearing chairperson. It is enough to say that the strike commenced on a specific day after lunch time and the employees did return to work by the next shift. The issue in dispute is whether the Commissioner at the MEIBC arrived at a reasonable decision to find that the dismissal was substantively unfair or not.

The decision was upheld on review at the Labour Court. The Constitutional Court agrees with the Commissioner

that the word ‘Boer’, given the context, can mean either farmer or white person and that this term, in itself, is not a racist remark. The representatives of the appellant agreed with this. The Court further found that there are no racist remarks or words in the song that was sang. As such, the behavior of the employees was not racist, for which they had been charged for. In addition, both the MEBIC and Constitutional Court found that the lyrics of the song does offend and is inappropriate to sing in the workplace, however that a distinction should be drawn between songs that are offensive and songs that are racist.

The Commissioner ruled that the employees should receive a final written warning for singing offensive songs, inappropriate in the workplace. The Commissioner applied her mind to the context. The appellant’s Disciplinary Code does not warrant a dismissal for this behavior. In addition, the appellant did not lead any evidence that demonstrated why they feel that the trust relationship was tarnished. The context was that the employees participated in a peaceful demonstration with no violence.

The Constitutional Court continued by stating that even if racist remarks were used, there are no principle in our laws that a dismissal under such circumstances are automatic. You still have to argue the context and lead evidence as to why the trust is tarnished. The court’s responsibility is to deal with the matter in a manner that is firm, yet fair to the perpetrator.

What we can take away from this case is that it is important to charge an employee accurately, as the appearance of racism in context of a word use (as in this case) does not automatically make it so. In addition, it is important to lead evidence as to why an employer feel that the Trust Relationship is tarnished and not just assume that it is so. Finally, that dismissal for racially offensive conduct in the workplace is not automatic and that one still need to take the totality of circumstances into consideration.


CC#240918: Minister of Justice and Constitutional Development vs Garreth Prince (18 September 2018) [CCT 108/17]

Today we will take a look at the recent Constitutional Court judgement of the non-criminalization of the use of cannabis by an adult, in small quantities in a private dwelling for personal use. Our focus will be on the effect of the judgment, having a workplace application. This judgement is the cause of wide debate and opens up the issue as to how employers should deal with employees found guilty of illegal substance abuse, in this case, cannabis.

The primary focus of the High and Constitutional Court was whether the limitations put on people in the Drugs Act to, the extend that it prohibited the use of cannabis (which is a schedule 7 substance), whether such prohibition is not constitutionally invalid. The state, in essence, focused on the reasons for the limitation provision in that it seeks to protect people from the effects and harm of illegal substances, however, the state did not primarily deal with whether the prohibition clauses was a constitutional infringement on the right of privacy, which the essence of the case focused on. To this effect, both courts ruled that medical evidence (Prince II report, Professor Shaw as well as the findings by the WHO) suggests that the use of cannabis in small quantities does not pose any harm and that the health and social consequences of cannabis use is less severe than that of alcohol dependency. The courts ruled that the criminalization of cannabis use in a private dwelling for personal use in small quantities by an adult, is disproportionate and there are less restrictive means available in dealing with any consequences to the use thereof. The Courts ruled that the prohibition clauses are constitutionally invalid, and that parliament should determine what should be considered as ‘small quantities’.

How to deal with circumstances then whereby an employee appears to be under the influence of cannabis at work? The Constitutional Court in its judgement made use of an analogy in that if a policeman sees a driver driving negligently, he must observe as to whether the said driver is driving in a manner which is not standard to be expected of a reasonable driver. If not, then the policemen can arrest the person and the courts will decide the matter. In my view thus, considering that cannabis is still a Schedule 7 substance, that the same test of ‘being under the influence’ will apply.

Is the employee considered to be under the influence of a substance that can impair his ability to perform his or her duties? If the answer is positive, then the employer may commence with disciplinary action. The scope of this article does not intent to deal with the manner / test in which an employer should establish whether an employee is under the influence or not, but rather addressing the overarching principle that still remains. Remember that for misconduct in the work place there are no principle in law that justifies an automatic dismissal for being guilty of misconduct. A decision maker should still consider the totality of the circumstances before a decision is to be taken.


LC#011018: DM Sethole and 18 others vs DR Kenneth Kaunda District Municipality (September 2017) [JS 576/13]

Today we will look at unfair discrimination in the workplace on arbitrary grounds, but from the perspective of onus and proving unfair discrimination. Unfair discrimination on arbitrary grounds are indirect grounds not listed in Section 6 of the Employment Equity Act ( gender, religion, race etc.). In DM Sethole and 18 others vs DR Kenneth Kaunda District Municipality the applicants, employed as Environment Health Practitioners (EHP), contended that the employer unfairly discriminated against them in terms of unequal pay for unequal value of those employees employed as Pollution Control Officers (PCO). After listening to oral evidence, it was established that the EHP position is on a higher level than the PCO position, requires a higher level of education and is a specialist position. The PCO is consider a general position and is not specialized.

The Court ruled that the onus of proving that a differentiation in treatment exist rest on the complainants, which must also prove that the differentiation amounts to discrimination. There must be at least a Prima Facie case and reasonable inference before the court that the employer is potentially making themselves guilty of discrimination. In this regard the amended Section 11 (2) of the EEA states that for unfair discrimination on arbitrary grounds that the complainant must, based on the balance of probabilities, prove a.) that the conduct of the employer is not rational, b.) that the conduct complaint of amounts to discrimination, and c.) that the discrimination is unfair. In this case the employees failed to make out a Prima Facie case and as such the respondent’s application for the absolution of the instance, whereby the court can decide on the matter without the respondent having to submits arguments (due to a week case presented by the applicants) was granted. Thus, when employees complain about unfair discrimination on arbitrary grounds, they will have to do more than just mere alleging discrimination and must have at least a Prima Facie case to substantiate their claim.


LAC#081018: Footwear Trading cc vs Mdlalose (28 February 2005)) [LAC 5 BLLR 452]

Today we will look at typical situations whereby a person or director/s may own multiple businesses in circumstances whereby management, directors or company staff have inter -company influence over the businesses owned by the employer. Who will be responsible as the real employer within context of labour disputes? It is, after all, trite law in South Africa that a registered business is a separate legal entity to that of the owners. In Footwear Trading cc vs Mdlalose, the employee worked for Fila (Pty) Ltd) and upon termination of her employment she filed an unfair dismissal dispute to the CCMA. Fila participated in the arbitration process and received an Award against them. The employee later applied to have the Award made an order of Court, upon which, Fila argued to the court that they are dormant and that assets are hold in the company by another company Footwear (Pty) Ltd. and that Footwear should be responsible for the payment of the Award.

Footwear objected and later appealed to the Labour Appeal Court where it was held by the LAC that the LRA does not define ‘employer’ and that the identification of the employer should be done in context of the definition of ‘employee’ who is a person providing services to another person and who is entitled to remuneration. The LAC found that the company or persons who had control of the undertaking should be regarded as the employer as too often true perpetrators hide behind the corporate veil to avoid legal responsibility. The LAC further held that where a corporation is mere an alter ego or conduit of another person, legal personality may be disregarded.

The LAC found that in this case both companies shared the same directors, that Footwear had substantial influence over Fila, paid the staff and a number of the company documents noted both Fila and Footwear interchangeably. Both Fila and Footwear was held jointly and severally liable. As far as the fact that Footwear was not present at both Conciliation and Arbitration proceedings, the Court held that both companies where aware of the proceedings and as such they had no excuse of not knowing and attending to the matter. This case shows that employers should be careful to try and hide behind the corporate veil with the purpose of avoiding taking legal responsibility for their actions.


LC/LAC#141018: TFD Network Africa (Pty) Ltd vs Singh (6 May 2015) [C571/11]

Today we will be looking at when an employee may legitimately refuse an employer’s instruction to do night work, or, to work overtime of, which, a portion of the shift extend after 18:00. In TFD Africa vs Singh, the Labour Court had to decide whether to accept or reject a Review Application against an award by a Commissioner of the National Bargaining Council for the Road Freight and Logistics Industry. The employer instructed, in accordance with the contractual agreement between the parties, for the employee to work overtime between 17:00 and 19:00.

The employee only worked until 18:00 due to the fact that public transport that will take him to his place of residence was not available after 18:00. Even though public transport was available after 18:00 it would drop him off far from home, which will then require him to walk a far distance through a dangerous neighborhood. The employee already received a final written warning for the exact same offense of refusal to work overtime.

The employer argued that Section 17 of the BCEA regarding the provisions relating to Night Work is not triggered under circumstances where majority of an employee’s work falls within his day shift and only the overtime portion of the work after 18:00. The Bargaining Council, the Labour as well as the Labour Appeal Court rejected this view as the provision of the Bargaining Council Agreement (which mirrors the BCEA) states ‘Night Work means work performed after 18:00 and before 06:00 the next day.

The argument of shift proportion is thus irrelevant. In addition, the employer argued that an employee cannot claim payment for both overtime and a night shift allowance when these overlaps. The Labour Appeal Court ruled that there is nothing in law that prevents an employee from claiming both overtime and a night shift allowance, considering both has very different purposes. The one is remuneration for additional hours worked above allotted normal hours, whilst the other is an allowance.

The Labour Court (upheld by the Labour Appeal Court) ruled that under circumstances whereby it is not save for an employee to commute after 18:00, that an employee refusing to work overtime after 18:00 or night work is not considered unreasonable. Of note is that an employer is under no obligation to provide save transport, but that safety is a consideration considering that safety is part of the purpose of Section 17 (2)(b) of the Main Agreement (and BCEA). The Labour Appeal Court stated:

[20] “The Code of Good Practice on the Arrangement of Working Time, published, in terms of section 87(2) of the BCEA, concerning the Design and Evaluation of Shift Systems, in item 4.2.5, enjoins employers to obtain, inter alia, information on:

‘means, costs and availability of transport to and from the place of residence and the personal security of the employee while commuting. [21] The Code also provides in item 10.3.2 that employers who engage employees on night work should ensure, inter alia, that employees are able to obtain safe, affordable transportation between their places of residence and their workplace.”

This case then shows that employers must consider personal safety and the availability of transport should they request employees to work overtime that extend after 18:00 or when they require employees to do night work.


CC#221018: Amcu vs Chambers of Mines of South Africa (21 February 2017) [CCT87/16]

It is said that in South Africa the labour market, at large, is not considered heavily unionized as only about 40% of employees have unions operating in their workplaces. South Africa is, however, known for its large well- established trade unions, which, over time, have made a valuable contribution to employment benefits. However, South African statute also allow its people the freedom of association.

As such, there are many unions trying to seek organizational rights within workplaces and often employers, especially smaller employers, are left exposed due to their lack of knowledge in how to deal with unions seeking organizational rights. This is especially so, considering that once a union applies for organizational rights, the employer must meet with the union within 30 days to conclude an agreement.

Even though there are a number of statutes (section 11 – 22) in the LRA dealing with this issue, we will specifically focus one on key matter, which probably serves as the primary factor relating to a union seeking organizational rights, or, where a union has organizational rights, but seeks to expand its footprint to other operations of an employer, but they may not necessarily have a legal claim to do so.

Section 11 – 22 requires that any union seeking organizational rights, must be a registered union who is sufficiently represented in the ‘workplace’. In this article, we are not focusing on the acquisition of rights via the collective bargaining process, which may benefit minority and majority unions, but will instead focus on the definition of ‘the workplace’ and the interpretation of the Constitutional Court and its implication on unions seeking rights within this context. In essence, unions have no legal claim (unless agreed upon) to seek organizational rights outside the context of ‘the workplace’, as defined.

Section 213 of the LRA defines ‘the workplace’ other than in a public service, as follows:

  1. in all other instances means the place or places where the employees of an employer work. If an employer carries on or conducts two or more operations that are independent of one another by reason of their size, function or organization, the place or places where employees work in connection with each independent operation, constitutes the workplace for that operation.”

In Amcu vs Chamber of Mines of South Africa, Amcu was a majority union in some operations of the employer, however AMCU was not a majority union once considering the workplace as a collective unit inclusive of all operations. The LRA has no ordinary meaning for workplace, but attributes a special meaning to the concept of workplace. Two important factors are prominent of the statute, in that a.) the focus of workplace is on employees as a collective and b.) location in itself is immaterial.

A ‘workplace’ is not a single place where an employee work, like a workshop, desk or office. It is where employees of an employer collectively work. Orderly bargaining of the collective is one of the statute’s expressed primary objectives. ‘Location’ is not primary, functional organization is. Thus, regardless of the places, one or more, where employees work, they are all part of the same workplace. There is, however, an exception.

Regardless of how many places where employees work, different operations may be different workplaces only if they meet the criteria the definition specifies-independence, not location!

Significance is not the ‘places’ where the employee’s work, but rather whether the operations are independent from each other. If there are two or more operations and they are independent to each other by reason of their size, function or organization, the place or places where employees work in connection with each independent operation, constitute the ‘workplace.’

By way of example then. A large retailer with many branches; the entire organization will be considered as one workplace as the branches operates dependent of each other; same policies, procedures, same support office and structures. Franchises on the other hand, are independent of each other and privately own, hence, each franchise is considered its own independent workplace.

If then a union seek organizational rights and claim they are sufficiently represented, it will be useful to consider how many branches/operations your business has and the level of independence between the branches, as often unions claiming they are sufficiently represented in a single branch/operation, but looking at it collectively, the union may have a very low level of representation at the workplace, which does not afford unions a legal entitlement to organizational rights.


LC#2910018: Randwater vs SAMWU obo SL Mosala (28 August 2009) [JR1377/06]

Unauthorized absenteeism in the workplace, especially due to ill-health of the employee is a major concern for employers. A more disturbing trend is the rise of sick leave abuse, employees not able to provide medical certificates or providing medical certificates that were altered or fraudulently obtained. But how does an employer deal with this contentious issue, especially in regard to the correct procedure to follow? Must it be dealt with in terms of Schedule 8 (10) of the Labour Relations Act according to the procedure for Incapacity, or, as misconduct in accordance with the procedure for misconduct as per schedule 8 (4) of the LRA? In addition, who has the burden to proof the reason for absence?

In Randwater vs SAMWU obo SL Mosala the employee was absent without permission as from the 8th of June 2005 to the 14th of July 2005, without contacting the employer, nor did he provide a medical certificate upon his return. The employer eventually dismissed the employee for abuse of sick leave. The Commissioner at Arbitration, however, found that the onus is on the employer to prove that the employee was not sick, considering he was charged for abuse of sick leave. On review, the Labour Court ruled that the Commissioner erred and that his decision was not reasonable. The court drew a distinction between incapacity and misconduct in that the employer argued the employee’s failure to obtain the required permission and failure to provide a medical certificate. The matter before the employer and presented to the Commissioner was not a matter relating to the illness of the employee, thus , the employee misconducted himself. As such, when an employee alleges sickness as reason for being absent, the onus is on the employee to prove his absence by providing a medical certificate.

The Judge ruled that the Commissioner misconstrued the issue of onus. One interesting matter for consideration though is that to some extend the reasoning of the Commissioner is understandable in that the employer should probably not have charged the employee for abuse of sick leave, but rather just unauthorized absenteeism, as this was the crux of the employer’s argument. An argument could be made that if the employer charges an employee for abusing sick leave, then the employer should probably focus on the manner in which the employee was abusing sick leave, however, in properly applying one’s mind to this case, it is clear that it was the fact that the employee failed to obtain permission and to provide a medical certificate that was the real issue in dispute. The Commissioner failed to draw the distinction. Employers should, however, be more specific when formulating charge sheets.


LAC#051118: Builders Warehouse (Pty) Ltd vs CCMA and Johanna Petronella Benade (05 May 2015) [PA 1/14]

As a pre-dismissal sanction, following a disciplinary enquiry, employees are often faced with a decision to either agree to a demotion or face a dismissal. Typically, such an agreement is considered a contractual agreement (verbal), which may render the CCMA or Bargaining Council lacking jurisdiction to entertain an Unfair Labour Practice dispute in regard to the demotion. But is this really the legal standing of the courts? Could an employee successfully file an Unfair Labour Practice Demotion dispute even under circumstances whereby the employee agreed to the demotion?

In Builders Warehouse (Pty) Ltd vs CCMA and Johanna Petronella Benade, the employee asked the employer for a transfer from Pretoria to Port Elizabeth, which was granted. The employee was employed as an Admin Manager. The employee, however, was frequently absent from work due to her ill health. This resulted in the employer having numerous meetings with the employee and during one such meeting, the employee understood the seriousness of her absenteeism and agreed to focusing on her high level of absenteeism.

Unfortunately, the employee’s high level of absenteeism remained. The employer started formal Incapacity Proceedings and eventually, during an Incapacity Hearing, was given the opportunity to either be dismissed or agreed to a demotion. The employee agreed to a demotion and filed an Unfair Labour Practice Demotion dispute to the CCMA. At the CCMA the Commissioner agreed with the employer that considering the employee agreed to the demotion, that the CCMA lacked the required jurisdiction to deal with the dispute. That is, an agreement is considered a legal binding contract, hence the CCMA was not at liberty to deal with contractual matters. The employee then filed for a Review at the Labour Court. Eventually the matter came before the Labour Appeal Court, which was in agreement with the Labour Court.

The Court argued ‘The determination of whether a demotion took place, unlike the determination of a dismissal, does not require an arbitrator to determine if there were consent or not. Even though it is a relevant issue, it is not a jurisdictional prerequisite for entertaining the Unfair Labour Practice dispute. An Unfair Labour Practice dispute focusses on the fairness of the conduct of the employer.’

The Court further argued ‘The fact that the parties have agreed that the aggrieved employee accepts demotion is not a complete defense, because the ambit of this Unfair Labour Practice is wider than this. The implementation of an agreement to accept demotion, in itself, may constitute an unfair labour practice. The Commissioner was obliged to have regard to the statutory formulation of the concept of an unfair labour practice. The agreement between the parties was part of the material relevant to a finding on jurisdiction, but it was not decisive as regards the jurisdictional question. It may well be decisive when the merits of the complaint are adjudicated.’

It is thus clear from this judgment that the CCMA should still entertain an ULP Demotion dispute even in circumstances whereby the employee agreed to the demotion. The Commissioner should still apply his/her mind to the conduct of the employer and the circumstances under which the employee entered into an agreement to be demoted as the conduct of the employer under the circumstances may also be considered as unfair.

The appeal by Builders warehouse was dismissed.


LC#121118: George v Liberty Life Association of Africa Ltd (1996)

Often employees will file an Unfair Labour Practise dispute to the CCMA regarding their non-promotion in terms of Section 182 (2) of the LRA, adopting a sense of entitlement arising typically from factors such as their level of education, skills and prior work experience. Often employees who acted in a certain position feels that an employer is obliged to appoint them given this fact. However, what employees typically do not appreciate is that employers have wide discretion when it comes to who they appoint and typically the courts will not interfere in an employer’s decision of who to appoint. This is so as who to appoint and/or promote is regarded as a management prerogative.

This is confirmed in George v Liberty Life Association of Africa Ltd, where the court found: “Following from this the employer would decide on the nature and extent of the functions which are required to be performed and would decide on the specifications which an ideal or suitable candidate for the job should have. Thereafter the employer, in the case of a corporate employer, other employees or agents of the employer would set about recruiting a candidate which they believe meets the specifications and who is acceptable to the employer. Inherent in the exercise of the managerial prerogative regarding the process of a selection of a candidate or recruit for the vacant post is the exercise of a discretion. In the exercise of this wide discretion it may be necessary for the employer to discriminate, in a sense of making a choice or selection between, available candidates and indeed the employer may decide to defer appointment or not to make any appointment at all. Indeed, the employer would have been perfectly entitled to withdraw the search for an employee and terminate the recruitment process.”

It is thus clear that an employer has the managerial prerogative to appoint whoever they feel will be best suited for the position. How wide is this discretion though? In this case the employee, a candidate from a previously advantaged, non-designated group was a shortlisted candidate already employed by the employer. Hence the candidate was an internal applicant to the position, thus opting for a promotion. The company had a recruitment policy, which stated that preference will be given for internal applications. Vacancies will be advertised internally first for a period of three weeks. Thereafter the advert could be advertised for external applications. After advertising the positon internally for two weeks, the company decided to advertise the position externally as they were looking, inter alia, for an affirmative action candidate. The external candidate, who eventually was appointed, had more experience and also happened to be an affirmative action candidate.

The Court ruled that the employer did indeed commit an Unfair Labour Practice as they could not justify as to why they have cut the time period for internal applications short by one week. Should they have considered all internal application first in terms of their policy, the complainant would not have had to compete with any external candidates. Hence, the complainant had a greater probability of being appointed, considering he was one of the two final candidates short listed.

‘Wide Discretion’ as a managerial prerogative is limited by statute, common law, company practice and policies. In this case the company committed an Unfair Labour Practice as they breached their own company policy. It is thus worth noting the importance for employers to regard their own policies with integrity and to remember that they are to be accountable towards their own policies.


IC#121118: Solidarity obo K Oelofse vs Armscor (SOC) Ltd (2018)

Occasionally it happens in a workplace that an employee committed misconduct, however in order for the employer to properly deal with the issue, disciplinary action is taken against the employee, but also deductions to the remuneration of the employee or certain benefits withheld. Could this be regarded as double jeopardy? Is the employee being punished twice for the same offence?

In common law, double jeopardy is known as autrefois convict. In Solidarity obo K Oelofse vs Armscor (Soc) Ltd, the employee committed gross misconduct, was found guilty in a disciplinary hearing and was lucky to only receive a final written warning. The company also had a performance bonus scheme in place with the employee exceeding the minimum requirements of the performance bonus policy. The employer, however, did not pay the employee her bonus as the policy should be read in context of the fact that employees should also adhere to the objectives and values of the company. Being found guilty of gross misconduct, regardless of the fact that she performed well, it cannot be said that she was meeting the values of the company. The employee filed an Unfair Labour Practise dispute to the CCMA and also complained about double jeopardy, being punished twice for the same offence. The CCMA found in favour of the employer. Upon review, the Labour Court argued:

That in criminal proceedings, the Court in Lelaka vs S held that it is a general rule that a person cannot be punished twice for the same offence. This principle is grounded on the maxim that no person is to be brought into jeopardy more than once for the same offence. This principle finds expression in the rule of law that if someone has been either convicted or acquitted of an offence, he or she may not be charged twice for the same offence.

The Constitutional Court stated: “An accused person is only protected against prosecution in a second prosecution if he or she was in jeopardy of conviction in the first instance.” A person who is being tried is in jeopardy. Thus, for double jeopardy to exist it must be shown that the person was again charged for the same offence.

The Labour Court continued in stating that “In employment law this means that an employee cannot be charged in disciplinary proceedings for the same misconduct if already subjected to disciplinary proceedings for the same misconduct.“

The Labour Appeal Court, however, stated that the principles of double jeopardy must be applied with reservation (BMW SA vs van der Walt). Double Jeopardy principles are public policy rules. In criminal and civil proceedings there is a sense of finality, however in labour law fairness alone is the yardstick.

The Labour Court ruled that the matter relating to the performance bonus is not a disciplinary matter. A bonus issue is not an issue of conviction, but a dispute relating to a benefit. The Labour Court upheld the decision of the CCMA.


LC#261118: African Bank vs MMapula Nancy Magashima (2014)

Often it happens that dismissed employees will allege that their dismissal was unfair due to the employer not applying its rules consistently. Typically, employers will be accused of being biased due to inconsistent treatment between staff. In this case the employer, African Bank, employed the employee as a branch manager at one of its branches. The employee was a senior and a person in authority.

The employer has detailed policies, which is designed to protect the bank, its employees and its customers. One of these policies is that a person reviewing loan applications (the employee) cannot also be the person who captures the application on the system. There must be a separation of duties in order to prevent errors and fraud. The employer also has a policy that employees are not allowed to share passwords. The employee misconducted herself and breached the company’s policies in that she was responsible for reviewing loan applications, but often also captured same on the system, using the passwords of the consultants. She will then also dishonestly request the consultants to sign off on the processed applications to create the impression of a separation of duties.

The employee admitted to her misconduct, but argued that the employer did not lose anything and that she did so to help the consultants reach their targets. The employer charged her in a disciplinary hearing for this misconduct. The employee eventually filed for arbitration at the CCMA claiming unfair dismissal in that the employer was inconsistent in its application of its rules. The employer dismissed the employee and one of the consultants involved, but did not deal with a third consultant in the same way, considering he also admitted to sharing his password.

The CCMA ruled that the dismissal was substantively unfair and ordered reinstatement. Upon Review at the Labour Court the judge argued:

    • That in NUM v Amcoal Colliery the LAC found that ‘ The parity principle was designed to prevent unjustified selective punishment or dismissal and to ensure that like for like cases are treated alike. It was not intended to force an employer to mete out the same punishment to employees with different personal circumstances just because they are guilty of the same offence.
    • That in SACCAWU v Irvin & Johnson the LAC found that ‘fairness of course is a value judgment, to be determined in the circumstances of the case, and for that reason there is room for flexibility, but where employees have committed the same wrong and there is nothing that distinguish them, I can see no reason why they ought not be dealt with in the same way.’
    • That in SATAWU v Ikhwezi Bus Service the court found ‘ that an employer is indeed entitled to impose different penalties on different employees who had committed the same misconduct, provided there was a fair and objective basis for doing so.’

In order to determine whether the employer had acted fairly in dismissing the employee, the Commissioner should consider factors outline in Sidumo, which includes:

    • The circumstances surrounding the act of misconduct committed by the employees;
    • The personal circumstances of the employees, including their length of service and disciplinary record;
    • The positions they occupied at the time of committing the misconduct, the nature of duties and hierarchy within the organization;
    • The severity of the misconduct or its impact on the employer;
    • The consequences of the misconduct vis-à-vis the sustainability of the employment relationship between the employer end the employee and also between co-employees;
    • Whether the employee have shown genuine contrition, which implies that an employee owned up to the misconduct as soon as it took place and showed remorse from that moment.

In casu, the employee admitted to committing misconduct. The employer confirmed that breaching these policies are dismissible in terms of its policies. The court argued that the view of the employee is akin to crying ‘inconsistency’ and expecting to automatically be absolved from the consequences of her misconduct. When alleging inconsistency, the onus is on the employee to show the disparity and that it was unfair. The employer should then justify its conduct. Nowhere in the Award was it shown that the employer acted capriciously and arbitrarily in not dismissing the third consultant.

The Award was set aside and replaced with a judgment that the dismissal was substantively fair.

What we learn from this case is that it is very difficult for an employee to defend a dismissal case solely on the parity principle. The onus is on the employee to show disparity but also reasons as to why it is unfair. Employees often do not have access to records and the detail of disciplinary enquiries of colleagues to better understand the personal circumstances of employees.


LC#031218: Schmahmann v Concept Communications Natal (Pty) Ltd (1997)

Section 187 (1) of the LRA states that an employer is committing an automatically unfair dismissal if the reason for the dismissal is that the employer unfairly discriminated against an employee on any arbitrary ground. Employers often struggle with the concept of retiring employees at a certain age and whether terminating a contract of employment constitutes a dismissal or not.

Section 187 (2)(b), however, states that despite subsection (1)(f) a dismissal based on age is fair if the employer has reached the normal or agreed retirement age for persons employed in that capacity. What employers find challenging though, is that there is no ‘normal’ retirement age in labour legislation. So how does an employer deal with retirement?

In Schmahmann v Concept Communications Natal (Pty) Ltd the employee, a bookkeeper, was employed by the company for 15 years before her contract was terminated when she reached the age of 65. The parties, however, did not agree to a mandatory retirement age. The employee claimed she had been retrenched and was entitled to severance benefits. The Court pointed out that various forms of dismissals specified in the Act each contained an active verb governing the employer. In each case therefore it was the employer which caused the employee’s dismissal, and this did not happen where parties had agreed that the contract would terminate on a particular date. The Court further stated that an employer did not commit an automatic unfair dismissal if the employer retired the employee on an agreed or normal retirement age.

The employee, however, had an expert witness who testified that females typically, according to statistics obtained from SANLAM, retires at 63 years of age. The Court held that in her capacity as a bookkeeper there are then no reason why not to accept that at age 65, the employee reached the normal retirement age in her capacity.

What we learn from this case study, is that it is imperative for an employer to have a provision in the contract of employment for the normal retirement age within the company. In the absence of any such provisions or policy, one may have to establish what the normal retirement age could be for the capacity in which the employee serves. The onus, however, is on the employee to prove that she / he was unfairly discriminated against and that she/he did not reach the normal or agreed retirement age. If any employer then, has an agreed retirement age in terms of contract, policy or practice, then retiring an employee on this anticipated date is not considered a dismissal.


LC#070119: Amanda Nthite vs Reitzer Pharmaceuticals (Pty) Ltd (2014)

Often employers, when engaging employees in a Section 189 retrenchment process, will enter into voluntary retrenchment agreements in order to avoid the risk of unfair dismissal claims at the CCMA or even the Labour Court. Employers typically conclude these kinds of agreements with a provision that stipulates this as ‘full and final settlement’ and that the employee waver any LRA rights that may arise out of the termination of his or her employment. Are these kinds of agreements a sure way of avoiding LRA accountability for the employer?

Employers are often unaware of the pitfalls of these kind of agreements. Section 24 of our Constitution guarantees fair labour practices and, as such, it is no sure thing that the Courts will simply turn a blind eye to these kinds of agreements. These agreements can be declared null and voided if an employee was induced in signing these agreements under duress or based on a material misrepresentation. These factors are well-known. However, a critical factor when concluding a VSP is that the terms and conditions of the VSP, in terms of compensation, must include something that is additional to the minimum requirements of the BCEA. The minimum requirements of the BCEA is that a retrenched employee is entitled to a.) Annual Leave payments, b.) Notice pay and c.) Severance pay. VSP’s that does not include a ‘sweetener’ will not forfeit an employee’s right to challenge the fairness of the termination.

In Amanda Nthite vs Reitzer Pharmaceuticals (Pty) Ltd, the employee entered into a voluntary retrenchment agreement with the employer, however the employer did, in terms of the agreement, not pay the minimum requirements of the BCEA and as such the judge ruled that the employee is entitled to challenge the fairness of the termination. This indeed complicated the matter for the employer as the reason for entering into a VSP in the first place was not because the employer entered into a retrenchment process, but because the employee committed misconduct and was charged to appear in a disciplinary hearing. As a measure to avoid disciplinary action, the employer engaged the employee with a voluntary retrenchment agreement and as such was not mindful of the BCEA required payments relating to retrenchments.

The Court stated: “ The waiver of the right to challenge the dismissal in cases involving voluntary retrenchment is enforceable only if the employee is given something in addition to those benefits set out in the BCEA”. Considering that the employer raised a point In Limine, objecting to the jurisdiction of the Labour Court (having the view that there was no dismissal but a mutual separation agreement), the Court ruled against the employer and stated that the fairness of the termination can only be ruled upon once oral evidence was led.

This case teaches us that it is important for an employer to correctly identify the real nature of a dispute and have appreciation for the legal consequence should a specific course of action be embarked upon. In addition, if a voluntary retrenchment agreement is engaged upon, an employer must at least pay the benefits stipulated in the BCEA as well as a sweetener.


LC#130119: Aquatan (Pty) Ltd vs Heinrich Jansen van Rensburg (2017)

It is common practise by employers to enter into a Restraint of Trade agreement with its employees. The question one should ask, however, “are these agreements entered into to protect a genuine trade secret owned by the employer or is it merely done to prevent the employee from competing with the employer”?

In Aquatan vs Heinrich Jansen van Rensburg the parties entered into a Restraint of Trade Agreement for a period of three years after termination of employment in the countries known as South Africa, Botswana, Namibia, Swaziland and Zimbabwe as the employer does business in Southern African countries.

Mr. Jansen van Rensburg was a Civil Engineer and employed in the capacity of a Contracts and Sales Manager. The employee resigned after 13 years and join a direct competitor Engineer Linings. The Applicant then brought an urgent application to the Labour Court to prevent the employee from taking up such employment. The Applicant argued that the employee had the most comprehensive technical knowledge and experience in the company and often consulted to assist with more technically complex estimates to provide accurate costing.

According to the Court, the question regarding Restraint of Trades to be answered is “whether the information acquired by the employee is considered Trade Secrets and worthy of protection and whether he had such personal knowledge and influence over the customers of the Applicant as would enable him to take advantage of the Applicant’s trade connections.

The Applicant relied on the following facts:

    • That the employee agreed in its contract that it will acquire confidential information;
    • That the employee agreed to the reasonableness of the Restraint of Trade;

In response the Court stated that the employee agreeing to the reasonableness of the Restraint is misplaced as reasonableness is only determined at the time it is sought to be enforced. The Court dealt with the main issues individually.

Regarding the issue of whether the knowledge acquired by the employee is considered a trade secret, the Court stated that it is trite that confidential information is joined with protection. For information to be a trade secret it must be capable of application in the industry or trade. It must thus be useful and not public knowledge or property, known only to a number of people who is seeking to protect it.

The Court found that based on the papers before it, the Applicant failed to demonstrate that the employee was exposed to trade secrets and failed to demonstrate that the employee was exposed to techniques, technology and installation processes unique to the Applicant and to the exclusive knowledge of the Applicant. The employee, on the other hand, showed that the Applicant do not use unique techniques and processes and that it is reasonably standard and readily available in the public domain.

The Court found that the Applicant had one product that was unique to the company that that the knowledge of the employee in terms of the use and installation of this product did constitute a trade secret. The Applicant, however, did not contest the view of the employee that almost similar products was available on the market.

The Applicant did not contest the employee’s argument that the industry is small, with common suppliers and customers and that consultants, such as the employee, did not acquire knowledge of specific customer needs by the Applicant as these are well-known in the industry. Projects are published for tender and customer needs are available for all to see. The Court found that costings and mark up is a trade secret, however that the Applicant did not dispute the employee’s argument that it was no longer involved in the costing process since August 2016. The Court stated though that these should however be protected but should consider whether protecting these for a full three years are reasonable or not.

The Court accepted that the employee possesses knowledge of specific customer needs that could be conveyed to the new employer, especially as he probably knows how to influence a customer consultant with alternative specifications. However, this knowledge is not propriety to the extent that the employee’s technical competence and experience in the industry has given him a feel for how to structure to best address a customer’s need. This is more a skill he has developed and carries in his head, not knowledge he has obtained from the Applicant.

The Court referred to the Labour Appeal Court case between Labournet vs Jankielsohn ‘Even if an employer spent time and effort and money to train or “skill” an employee in a particular area of work the employer has no proprietary hold on the employee, or his, or her, knowledge, skills and experience, even if those were acquired at that employer’.

In regard to the issue of customer connections, the Court referred to Rawlins vs Caravantrucks whether there is an attachment between the employee and a customer of such a nature that the employee would be able to induce those customers to follow him to another employer is a question of fact to be determined in each case’. Considering then that the majority of projects goes out to tender shows that the Applicant’s customer base is not specific to it. In addition, the Applicant failed to show how the employee may induce them.

The Court stated that according to the decision in Magna Alloys and Research SA (Pty) Ltd v Ellis, (“Magna Alloys”) restraints of trade are enforceable unless they are proved to be unreasonable. Because the right of a citizen, to freely choose a trade, occupation, or profession and to practice such, is constitutionally protected. In Reddy, the Supreme Court of Appeal stated, ‘If the accepted facts show that the restraint is reasonable, then the applicant must succeed, but if they show that the restraint is unreasonable then the respondent in those proceedings must succeed’. Reasonableness is a value judgement and considers two policies:

    • A duty of parties to adhere to their contractual obligations;
    • The right to freely practice a trade;

To seek to enforce a restraint then merely to prevent an employee from competing with an employer is not reasonable. According to the Appellate Division in Basson v Chilwan and Others, the following questions require investigation; namely, whether the party who seeks to restrain has a protectable interest, and whether it is being prejudiced by the party sought to be restrained. Further, if there is such an interest – to determine how that interest weighs up, qualitatively and quantitatively, against the interest of the other party to be economically active and productive. Fourthly, to ascertain whether there are any other public policy considerations which require that the restraint be enforced. If the interest of the party to be restrained outweighs the interest of the restrainer – the restraint is unreasonable and unenforceable.

The Court further stated, “It is now clear from, inter alia, Basson and Reddy that the reasonableness and enforceability of a restraint depend on the nature of the activity sought to be restrained, the rationale (purpose) for the restraint, the duration of the restraint, the area of the restraint, as well as the parties’ respective bargaining positions. The reasonableness of the restraint is determined with reference to the circumstances at the time the restraint is sought to be enforced. With reference particularly to the facts of this matter, it is an established principle of law that the employee cannot be interdicted or restrained from taking away his or her experience, skills or knowledge, even if those were acquired as a result of the training which the employer provided to the employee.

Regarding the matter relating to the unique product of the applicant, the court was of the view that the Applicant would suffer very little prejudice consider almost similar products exist. Considering then the very limited prejudice to be suffered by the Applicant, a restraint of three years is unreasonable taking into consideration the interest of the employee. This is a judgement call. The employee will lose far more than the Applicant.

In terms of the employee having no knowledge of the costings of the Applicant for eight months, considering prices change annually, it is not reasonable to restrain for a period of three years.

The Applicant’s Urgent Application was dismissed.

What we learn from this case is that it is no sure thing that just because an employer and employee agreed to a Restraint of Trade that these are automatically enforceable. Often employers do so out of practice with the intention to prevent an employee from competing with it. The Courts will look at the detail, to whether the confidential information is truly a trade secret of the company, which is not in the public domain, whether the employee received trade secrets by the employer and not skills he obtained and whether the employee has any real influence over customers. Reasonableness is a judgement call after taking into consideration the conflicting interest of both parties and who will suffer the most.


LC#210119 Rustenburg Platinum Mines vs UASA obo Steve Petersen (2018)

Often employers find themselves in a situation of uncertainty in dealing with sexual harassment in the workplace. This may be so due to the amendments to the Code of Practice dealing with Sexual Harassment in 2005, which requires a much less onerous burden than that of the 1998 code. In this case summary we will look at some of the key principles relating to dealing with sexual harassment in the workplace.

In Rustenburg Platinum Mines vs UASA obo Steve Petersen, the employer dismissed Mr. Petersen for allegations relating to him sexually harassing a fellow employee between the period of 2007 to 2014. Mr. Petersen was employed in a senior capacity and was charged for suggesting to a fellow female employee that he will help her paying her living expenses and also that he wants to move in with her so that he can sleep with her. Mr. Petersen felt that his dismissal was unfair and sought reinstatement by the CCMA. The CCMA granted a reinstatement Award in favor of Mr. Petersen. It is this Award that the employer is seeking to have set aside upon review at the Labour Court.

The Labour Court determined the principles relating to sexual harassment. In terms of Section 203 (3) of the LRA, any person interpreting the Act must also take into account any relevant Code of Good Practice. Savage AJA in Campbell Scientific Africa vs Simmers & Others confirmed that despite the 2005 code on sexual harassment being termed ‘amended code’, it did not replace nor supersede the 1998 code and as such both codes are relevant Codes of Practice. In the 1998 code, sexual harassment is defined as (1)..unwanted conduct of a sexual nature. The unwanted nature of sexual harassment distinguishes it from behavior that is welcome and mutual.

The 2005 Code deems sexual harassment as a form of unfair discrimination within the ambit of Section 6 of the Employment Equity Act. In Campbell, it was further held that “At its core, sexual harassment is concerned with the exercise of power and in the main reflects the power relations that exist both in society generally and specifically within a particular workplace. While economic power may underlie many instances of harassment, a sexually hostile working environment is often“…less about the abuse of real economic power, and more about the perceived societal power of men over women. This type of power abuse often is exerted by a (typically male) co-worker and not necessarily a supervisor. By its nature such harassment creates an offensive and very often intimidating work environment that undermines the dignity, privacy and integrity of the victim and creates a barrier to substantive equality in the workplace. It is for this reason that this Court has characterized it as “the most heinous misconduct that plagues a workplace.”

The Labour Court went further and found that the CCMA Commissioner only looked at the 1998 code, with his approach lacking. He overly focused on the elements of the offense. The Commissioner argued that if a claim of sexual harassment is found lacking in terms of the elements, then no sexual harassment occurred, especially if the alleged harasser was not aware or reasonably aware that his conduct was deemed offensive. The Labour Court argued that the Commissioner have put too much emphasize on item 2(a) (b) and (c) of the 1998 Code, to the exclusion of the test set out in item 4 of the 2005 Code. None of the codes states that all of the elements must be established.

The test in the 2005 Code requires that “ sexual harassment requires unwelcome conduct of a sexual nature that violates the rights of an employee and constitutes a barrier to equity in the workplace, taking into account a variety of factors.” On the plain reading of Item 4 of the 2005 Code, there is no requirement that the accused employee must have been aware or should have reasonably been aware that his or her conduct was unwanted, or that the recipient must have made it clear that the behavior is considered offensive. These requirements in the 1998 Code had an element of subjectivity, which placed an onerous burden on the complainant to prove the harasser’s state of mind, and to also prove that he or she had at all material times in unequivocal terms, made the harasser aware that the conduct was not welcomed. The 2005 code is less onerous and more objective.

At the CCMA the Commissioner argued that no party corroborated their version with direct evidence. The Court argue that the Commissioner required too high a standard of proof. The Court confirmed that we should be guided by the principles stated in Stellenbosch Farmer’s ’Winery Group vs Martell & Kie in that a Court make findings on: 1.) The Credibility of various witnesses, which takes into consideration the impression, accuracy, candor and demeanor in a witness-box, bias and the probability of testimony; 2.) The Reliability of the evidence or witness and 3.) the Probabilities of the witness testimony. The Court argued that even though Mr. Petersen denied all the allegations against him, the fact that he admitted to suggesting he will help paying the living expenses of the female employee and that he admitted to giving her a memorandum regarding a vacant position she was interested in, which was irregular on his part, was sufficient to constitute more than a ‘hint’ or innuendo’.

The Court continued by stating that “there is a school of thought that holds the view that human beings can be slaves to their urges. That being so, it does not imply that employees are incapable of controlling those urges in the workplace. A workplace should be free from ‘amorous’ and testosterone filled employees looking for love and gratification at every available opportunity. There is everything wrong when employees express their affection in the workplace to each other, to the point where the conduct in question is frowned upon, as it crosses that fine line between innocent attraction and sexual harassment.

The Court stated “The Commissioner proceeded to take issue with the fact that the complainant did not clearly and unambiguously say no to Pietersen. Had the Commissioner bothered to have regard to the provisions of 5.4 (Impact of the conduct) of the 2005 Code, he would have appreciated that the conduct complained of constituted an impairment of the complainant’s dignity, taking into account her circumstances and her junior position vis-à-vis Pietersen, and that in the absence of reciprocation, there was no requirement for the complainant to say no in unambiguous terms as suggested. Had the Commissioner further looked at the provisions of Item 5.2.1 of the 2005 Code, he would have also acknowledged that there are different ways with which a complainant may indicate that sexual conduct is unwelcome, including non-verbal conduct such as walking away or not responding to the perpetrator. In this case, the Commissioner failed to appreciate that in the seven years that the sexual advances had persisted, not once had the complainant reciprocated Pietersen’s advances, and how that reaction or non-reaction could have been interpreted as being docile and inviting is beyond comprehension. Nothing can be clearer and unambiguous than the complainant’s responses to the advances in this case. She had said no to Pietersen on countless occasions the advances were made. “

The Commissioner argued “ that sexual harassment had not however been established and concluded that in order to maintain credibility, the purported victim ought to act within a reasonable time period , and that in this case the female employee had let the problem to persist without expressing her unhappiness at the alleged conduct and to accordingly keep alive his hope that she would eventually agree to his sexual advances.” The Court, however argued “the so-called ‘victims’ of sexual harassment react to their own ordeals and circumstances differently, and in most instances, long after the fact. Astute lawyers will always attack the credibility of complainants because of the time lapses between the incidents and when they get reported, and the inability to proffer specifics or corroborating evidence. There is of course always a danger in accepting at face value that an incident took place simply because it was reported immediately thereafter. The consequences could be dire for both the accuser and accused if the allegations are found to be without merit. The stigma of being a sex pest remains forever even if in the end, the allegations are found to be unsubstantiated. There is however an even greater danger when it is not accepted that the incident took place because the complainant took long to report it, or that he or she cannot recall details with clarity. Without vindication because of such technicalities, the trauma persists indefinitely for the complainant.

The Labour Court granted relief and ordered that the dismissal of Mr. Petersen was substantively fair.


LC#270119 Victorio Suraci vs MBA Holdings (Pty) Ltd (2013)

LAC#270119 Jordaan vs CCMA & Others (2010)

Previously I wrote on the general principles that applies to Restraint of Trade Agreements, however today we will delve deeper into what to do when an employee refuses to sign a Restraint of Trade Agreement. In doing so, we will apply our mind to two case studies, one before the Labour Court and the other before the Labour Appeal Court.

In Jordaan vs CCMA & Others, Mrs. Jordaan worked as an Estate Agent for Homenet Cornerstone in Beacon Bay. Even though this case, primarily deals with a Constructive Dismissal claim, two important factors emerged from this case as far as employees refusing to sign Restraint of Trade Agreements are concerned.

The relationship between the employer and the employee’s husband, Mr. Jordaan who also worked for the employer, deteriorated substantially. Mr. Jordaan was a minority shareholder in the company and due to the strained relationship was stripped from his managerial role. During a meeting in July 2004, the employer informed all the staff to sign a Restraint of Trade Agreement and gave them one month to consider. The Appellant, Mrs. Jordaan refused to do so and asked the employer what would happen should she not do so, upon which the employer responded that her employment will be terminated for operational reasons. The appellant eventually resigned and filed a Constructive Dismissal dispute arguing that it is clear that the employer’s intention with the Restraint of Trade is to dismiss her and that threatening her is evidence that the employer is compelling her to resign and thus made a continued employment relationship intolerable.

The Court, on the other hand, found that the real underlying reason for the employer’s conduct has not so much to do with the dismissal of the appellant but everything to do with protecting his real propriety interest. The evidence shows that Mr Gouws consulted with his attorney to determine how best to protect the business assets of the Company. As he said: “The assets of an estate agent are intellectual properties, and database of clients, and the relationship one builds up with them. It is common

practice that the estate agency spends an awful lot of money branding itself in order to get people to come to them. But once an agent has a client, the client follows the agent, notwithstanding the fact that in most events the agency was the one responsible for that action to happen”. This evidence, together with much of the balance of his evidence, indicates a legitimate apprehension that, were Gouws to have done nothing, he would have lost key staff. The appellant also admitted that even after she refused to sign the employer did not take any action against her so there was no objective basis to believe that the employer wanted to dismiss her.

Two important matters arise out of this case. Firstly, even though an employer did not necessarily have an employee entered into a Restraint of Trade Agreement at the time of his/her employment, an employer can still require an employee to enter into such an agreement at a later stage, however, the conditions of the Agreement must still be a legitimate effort to protect protectible propriety interests of the employer. The second matter of importance is that employer’s must be careful not to threaten staff with dismissal as a means to compel them to accept the Restraint of Trade. The employer may also potentially open itself open to an Automatic Unfair Dismissal dispute in terms of Section 187 of the LRA in context of a mutual interest dispute whereby the employer is threatening employees with dismissal if they do not concede to its terms and conditions of employment.

In Victorio Suraci vs MBA Holdings, the company was involved in a takeover of Marks Chartered Accountants in terms of Section 197 of the LRA. The new employer informed the Appellant, an accountant, that he must sign a Restraint of Trade Agreement and a Contract of Employment, which he refused to do as he felt that such an agreement will limit his employability should he resign. The employer put an ultimatum on the employee and advised the employee that, should he not sign the agreement, that it will be regarded as a refusal on his part, to accept the offer of employment. The employer terminated the employee’s employment, upon which, the employee filed an automatic unfair dismissal dispute in context of the employer using dismissal as a means to compel him to accept their demand. Additionally, the employee also argued that the dismissal was for reasons relating to the Section 197 transfer.

The Court drew a distinction between a dismissal contemplated in Section 187, which have to be conditional,

i.e. a dismissal contemplated in relation to a mutual interest dispute, will be conditional to the acceptance of a demand by the employer, and a dismissal contemplated in Section 186 which has a sense of finality to it. In casu, it is noted “Maritz stated that he wanted to put in place the essential and standard practice of a restraint…and that it was an operational requirement.” The Court found that the reasons to dismiss the employee was not to compel him to accept the additional terms and conditions of employment (Restraint of Trade), but to implement measures to protect the propriety interest of the employer. The Court did not agree that this dispute should be considered an automatic unfair dismissal as far as disputes relating to mutual interests were concerned. In addition, the appellant miserably failed to prove that the dismissal was relating to the Section 197 transfer of the business.

The Court found: “ In terms of section 213 of the LRA “operational requirements means requirements based on the economic, technological, structural or similar needs of an employer.” In my judgment the proprietary interests protected by restraint of trade agreements (which meet with constitutional imperatives) must fall within the scope of this definition.” The Court agreed that the dismissal related to the operational requirements of the employer, however considering they did not follow the correct procedure, the dismissal of the appellant was found to be procedurally unfair.

From this study we learn:

    • That employers can request employees to sign Restraint of Trade Agreement for protection of legitimate propriety interests of employers even after being recruited;
    • That employers must be careful not to threaten staff with dismissal, especially not to compel them to accept the Restraint of Trade;
    • That implementing a Restraint of Trade is considered an operational requirement;
    • My opinion: that new employers in terms of a Section 197 transfer, cannot give employees new offers of employment as their employment status does not change with a transfer. They can, however, consult on implementing new terms and conditions of employment and follow the correct procedures regarding any disputes that may arise;
    • That if an employee refuses to sign a legitimate Restraint of Trade, do not threaten him with dismissal, but engage the employee in terms of a section 189 consultation process, which has as one of its objectives, measures to avoid a dismissal.



Often confusion exists as to the point in which an employment relationship comes into existence between an applicant and the prospective employer. The definition of an employee in terms of Section 213 of the LRA gives the impression an applicant to employment must have started to work for the employer before the employment relationship is established. Section 213, per say, reads as follows:

‘employee’ means-

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….

In JI Du Preez vs SALGBC, Mr. Du Preez applied for a position at the Eden District Municipality, but the application form had a suspensive condition that should he be the succesfull candidate, which read: “ I hereby declare that the information given on this form is true and correct. I accept that, in the event of my application been successful, any information to the contrary will lead to immediate dismissal.”

Mr. Du Preez indeed was the successful candidate and signed an Offer of Employment with the starting date being the 13th of October 2014. However, on the 10th of October 2014, the employer asked Mr. Du Preez to provide proof of his references as well as to provide reasons for some previous employment terminations. It subsequently transpired that Mr. Du Preez was dishonest in stating that he previously held the position of Head of Supply Chain Management at the George Hospital where indeed he was the Administrative Officer and the reason for having his employment relationship terminated was due to him being dismissed.

The Municipal Manager then withdrew the offer of employment on the 28th of October 2018. Subsequently at the Bargaining Council the Commissioner ruled on a jurisdictional matter disputing whether Mr. Du Preez was an employee or not and ruled that indeed he was not an employee in terms of the definition of an employee. It was this jurisdictional ruling Mr. Du Preez took on review at the Labour Court.

The Court, however, highlighted the fact that even though the suspensive condition allowed the employer to terminate employment, it is argued that the employer did not terminate employment in context of the suspensive condition, but they actually withdrew the Offer of Employment.

“However, the municipality’s letter of 28 October did not purport to terminate his employment but to withdraw the offer of employment. The question then arises is whether the offer of employment itself was subject to a suspensive condition, which would permit the municipality to withdraw the offer of employment even after it had been accepted by the applicant.” It was further argued that the employer could only have invoked the suspensive condition had the employee been employed if one accepts the plain reading of the suspensive condition as it envisaged a situation whereby the applicant first had to accept the offer of employment.

It is apparent then that the reason for the employer to withdraw the offer of employment was because it did not consider Mr. Du Preez to be an employee of the Municipality at the time of accepting the offer of employment as he did not commence working yet.

The Court, however, then upheld the position of the Labour Appeal Court that the literal construction of Section 213 is extended to include someone who had concluded a contract of employment, which would commence at a future date.

In casu, the Labour Court ruled in favour of Mr. Du Preez and set the jurisdictional ruling aside. He referred the dispute back to the Bargaining Council as an Unfair Dismissal dispute to be decided upon the facts of the case.

This case was not about whether Mr. Du Preez was unfair dismissed or not, but to establish that an employment relationship is established at the time of signing a valid Offer of Employment or Contract of Employment with a future starting date in terms of the extended interpretation of Section 213 of the LRA. Terminating or withdrawing an offer of employment may then constitute a dismissal with the fairness thereof to be established by the facts of the case.


LC#100219 Rawu obo Ndou & 1 others vs On the Bright Side (Pty) Ltd (2014)

LC#100219 South African Transport and Allied Workers Union vs G4S Aviation Secure Solutions (2016)

In terms of Section 213 of the LRA, Operational Requirements are defined as requirements based on the economic, technological, structural or similar needs of an employer. Section 189 of the LRA explains the procedure to be followed when an employer contemplates dismissing staff for operational reasons and also explains the objectives of the consultation process. Even though the Labour Relations Act is clear in terms of the basic circumstances under which an employer can retrench its employees, I have often found throughout my career in Labour Relations that employers still very often use retrenchments, in accordance with a Section 189 procedure, to rid the business of employees who became undesirable either due to the conduct of the employee, his or her performance or due to a conflict between the culture of the business and that of the employee.

More often than not, employers do not have fair substantive reasons to dismiss an employee and will then resort to some fictitious ‘made up’ operational requirement (often a restructuring exercise) to terminate the employment of the employee. These initiatives on the face of it seems legit, however typically is designed in such a manner as to target the unwelcome employees. What employers often forget though is the onus that rests on an employer, who wishes to dismiss for operational reasons, to give substance to the reasons provided for the proposed dismissals and to consult in good faith. Merely stating ‘operational reasons’ will not be sufficient to vindicate the fairness of a retrenchment exercise before the CCMA or the Labour Courts.

In Rawu vs On the Bright Side (Pty) Ltd The employer dismissed two long serving employees for misconduct, who referred the fairness of the dismissals to the CCMA. At the CCMA the Commissioner found in favour of the employees and order reinstatement. Upon returning to work, the employer offered the employees three months’ salary should they resign. The employees, however, rejected the offer. The employer then served the employees with notification of their contemplated retrenchments and also advised them of the consultation dates. Eventually the employer informed the employees that their services had been terminated for operational reasons.

At the Labour Court the employer argued as reasons for the retrenchments that particular items manufactured by Rakau has become obsolete due to market trends. The employer had to write off substantial stock manufactured by Rakau and as such the workshop was no longer viable and closed down. Due to this, employees were moved between shops in an effort to save expenses to avoid further retrenchments. As concerning the selection criteria, the employer contended that the job categories of both employees had become redundant.

The Court found that the real reason for retrenching these two employees was due to them refusing to accept the mutual separation agreement as was proposed by the employer subsequent to the arbitration award, which ordered their reinstatement. In addition, both employees were long serving, with one employee employed for over eighteen years and the other over eight years. “It is trite in our laws that for a fair retrenchment the selection criteria should be consulted with between the parties and where no consensus is reached the employer must apply a fair criteria.” It is generally accepted that LIFO can be applied in the absence of any fair criteria. The employer failed to justify its selection criteria especially given that the two long serving employees retrenched were also confirmed to be multiskilled in various departments with the employer.

In South African Transport and Allied Workers Union vs G4S Aviation Secure Solutions the employer retrenched a total of 26 employees due to their remuneration being far above the industry norm, which negatively impacted the competitiveness of the business. In this case the employer was a profitable business who sought to restructure its operations to gear for further growth, but was prevented to compete due to the high remuneration levels of some of its workforce. Even though the union argued that the retrenchments was not effected due to a genuine internal operational requirement of the employer, but was more focused on what the competition was doing, the Court found “There was no evidence adduced nor arguments advanced to demonstrate that the respondent had acted in bad faith when effecting the retrenchments, or that it had sought to serve an ulterior motive.”

From the above case studies, it is clear that an employer has a duty to conduct themselves in good faith when dismissing employees for operational reasons. Employers should be careful not to use retrenchments as a scape goat to get rid of unwanted employees as employers will have to give substance to their proposed reasons for contemplating retrenchments and its selection criteria.


CC#240219 Allan Long vs Sa Breweries (Pty) Ltd (2019)

Section 186 (2) of the Labour Relations Act gives effect to our Constitution that no employee may be subjected to Unfair Labour Practices, which is defined as any ‘act’ or ‘omission’ by an employer, inter alia, in regard to disciplinary action short of dismissal and suspensions.

Due to the possibility that employees may be prejudiced when placed on a precautionary suspension (those kinds of suspensions which typically is followed by an investigation into alleged misconduct and is generally with pay), it is common for employers to give an employee an opportunity to make representations to provide reasons for the employer not to suspend.

What is important to note is that the LRA does not place any requirement on employers to allow employees an opportunity to make representations before being suspended. The LRA do, however, set this requirement in terms of dismissals (Schedule 8-LRA). It is this debate regarding the requirement to give an employee the opportunity to make representations before being suspended, which was addressed by the Constitutional Court.

In Allan Long vs SA Breweries (Pty) Ltd Mr. Long, a Senior Manager at the employer was responsible, per say, to ensure legal compliance of the employer, more particularly its vehicle fleet. In December 2013, the employer informed Mr. Long that there are fleet irregularities in its Border Vehicle Fleet, which also involved fraudulent activities. There appeared to have been irregularities in the fleet records and that some vehicles were unlicensed and not road worthy. In May 2013, one of the company trailers were involved in a fatal accident. The vehicle was found to be in disrepair and unlicensed. Mr. Long was subsequently informed that he was under investigation for dereliction of duty and gross negligence. Mr. Long was put on a precautionary suspension for a period of about three months. Mr. Long was subjected to a disciplinary hearing and subsequently being dismissed.

At the CCMA, the Commissioner found that the suspension was unfair due to the employee not being afforded an opportunity to make representations before being suspended and that the length of the suspension caused the suspension to be punitive. The Commissioner ruled in favour of Mr. Long and ordered two months compensation.

At the Labour Court, the Court ruled that the Commissioners reasoning was flawed as there are no requirement for an employer to give an employee an opportunity to make representations in a precautionary suspension as long as it is linked to an investigation. The Court also ruled that the Commissioner’s reasoning that the long suspension was punitive, was flawed as the prejudice suffered by the employee was mitigated by the fact that he was paid.

Leave to appeal to the Labour Appeal Court was not granted.

Mr. Long applied to the Constitutional Court who finally settled this dispute. The applicant argued that the Labour Court erred in that the Court only focused on the flawed reasoning of the Commissioner, but failed to apply its mind to the reasonableness of the Commissioner’s reasoning. The Labour Court did not evaluate the evidence before it. The Constitutional Court ruled that indeed there are no requirement on an employer to allow an employee an opportunity to make representations before being placed on a precautionary suspension. ‘The suspension is a precautionary measure and not a disciplinary one.’ Thus, the requirement of fair disciplinary action in terms of the LRA cannot find application, as it is not a punitive measure, thus there are no requirement to make representations.

It is important to note, that even though the Constitutional Court ruled that there is no requirement to give an employee an opportunity to make representations before placing them on a precautionary suspension, that many employers and collective agreements do have this requirement in its policies. This is especially applicable in government departments and state institutions. Under these circumstances it may very well be considered an unfair suspension should an employer violates its own policies.


CC#030319 Armscor Dockyard vs Raynold Thabo Ngcobo (2016)

Section 186 (1) (b) of the LRA defines a dismissal, per say, where an employee, who was employed on a fixed term contract of employment, had a reasonable expectation that the employer will renew the fixed term contract of employment either on the same or similar terms, or, to retain the employee on an indefinite basis on the same or similar terms of the fixed term contract, but the employer offered to retain the employee on less favorable terms or did not offer to retain the employee at all.

Employers often make use of fixed term contracts of employment, as it is believed that doing so is the prerogative of the employer. On the one hand there is an element of truth to that saying as indeed it is the prerogative of the employer to manage its own business and it is not typically the CCMA’s prerogative to interfere in the operational initiative of the employer, unless of course, the conduct of the employer is either unfair or illegal. On the other hand, what does an employee do in circumstances whereby an employer employs people on a fixed term contract where the underlying nature of the position is not really temporary, or, whereby the circumstances justifies the renewal of a contract, but for some arbitrary reason the employer failed to renew a contract? Similarly, employers often employ people to circumvent their LRA responsibilities and obligations towards employees. This problem is somewhat addressed with the 2015 amendment to the LRA with the provision of Section 198B of the LRA whereby it is now a provision of the Act that employers justifying the use of fixed term contracts to marginalized employees ( those earning below the earnings threshold), in circumstances where a contract or subsequent contracts are for a period longer than three months.

But what about those employees earning above the threshold who do not have recourse in terms of Section 198B? Employees will have to show that a reasonable expectation was created to either renew or to employ on an indefinite basis in accordance with Section 186 (1) (b). But what constitutes ‘reasonable expectation’? The Act itself does not define this and a such we are dependent on the courts to give us guidance in terms of the test applied.

In Armscor Dockyard vs Raynold Thabo Ngcobo, the employee, Mr. Ngcobo was employed by Armscor as a Senior Human Resources Manager. The position was a permanent position but given the age of the employee

(59) and the high costs involved to pay for medical aid and provident fund, the parties agreed to a fixed term of three years. Upon confirming the appointment, the employer followed by providing the employee with a letter stating that the contract is renewable based on the performance of the employee. At the conclusion of the term, the employee was found to have performed very well, but that at the time parliament questioned

Armscor’s use of fixed term contracts in the workplace. As such, the CEO renewed the contract for a further three months only and did not offer the renew it beyond the three months.

It is this non-renewal that the employee disputed at the CCMA as an unfair dismissal. The CCMA ruled in favor of the employee, which the employer took upon review at the Labour Court.

The Labour Court argued that the arbitrator correctly summarized the test to be applied:

“The view seems to be that the expectation must be reasonable in the objective sense. The question that one has to ask is whether the circumstances were such that any reasonable employee would, in the circumstances, have expected the contract to be renewed on the same or similar terms.”

The Court noted with approval of the arbitrator referring to McInnes v Technikon Natal whereby the Court adopted the approach that a court must conduct a two-stage enquiry. The first stage is to determine what the applicant’s subjective expectation was in relation to renewal. This is a question of fact. Only once the subjective expectation has been established as a fact does the court then go on to decide the second stage, whether the expectation was reasonable in the circumstances.

The arbitrator also considered Auf der Heyde v University of Cape Town, in which, the court referred to Dierks v University of South Africa that the circumstances must be evaluated, including-

“the significance or otherwise of the contractual stipulation, agreements, undertakings by the employer or practice or custom in regard to renewal or re-employment, the availability of the post, the purpose of or reason for concluding the fixed term contract, inconsistent conduct, failure to give reasonable notice and nature of the employer’s business.”

And further the Labour Appal Court ruled in SA Rugby Players’ Association v SA Rugby (Pty) Ltd:

“The enquiry is whether a reasonable employee, in the circumstances prevailing at the time, would have expected the employer to renew his or her fixed term contract on the same or similar terms.”

Turning to the case at hand the court found that the initial advertisement itself stipulated that the position is a permanent position. The employer followed the employee’s appointment with a letter stating that the only consideration for a renewal would be his performance. It was common cause that the employee indeed performed very well and that this, in itself, created a subjective expectation to renew. This also satisfied the SA Rugby test in that a reasonable employee would have had an expectation to renew.

The court then considered the employer’s reason for non-renewal of contract and whether it was valid. The only reason for the non-renewal was due to parliament questioning the employer’s use of fixed term contracts in the workplace, which resulted in the employer making a unilateral decision not to renew. This decision by the employer was deemed unfair given the circumstances.

The court then laid out a three-stage test: First Stage- Subjective Expectation

The starting point is the wording of the contract itself. In casu, it was clear that the contract was renewable, albeit not automatically so. The key factor, however, was the performance of the employee, which the employee met due to his exemplary performance being common cause. Thus, the employer created an impression that his contract would be renewed and thus had a subjective expectation that his contract would be renewed.

Second Stage- Is the expectation reasonable?

Whether the expectation was reasonable or not must be assessed in context and factors outlined in Dierks. One of the primary factors is the purpose for concluding the fixed term contract in the first place, that the employee would have been employed on a permanent basis had it not been for his age.

This Stage- Was the dismissal fair?

It was agreed that the reason for dismissal by the employer was not valid. The only criteria raised for renewal was that of his performance and the employee met that criteria. In the absence of other valid reasons been communicated to the employee beforehand, the finding that the dismissal was unfair, is a reasonable one.

The court upheld the decision of the arbitrator and the review application was dismissed.

Based on this case study then, the employee bears the burden of prove and will have to show that he/she had a subjective expectation that a contract would be renewed or that the employee would be retained on an indefinite basis. One would then have to considered, objectively, whether such expectation is reasonable, an expectation held by a reasonable person. This should be done in context of the circumstances and a number of factors as mentioned in Dierks. Lastly, one should also consider the employer’s reason for dismissal and whether it is a valid reason or not.


CC#100319 Amcu vs SA Chamber of Mines (2017)

The LRA definition of ‘Workplace’ in Section 213 find special application in the context of trade unions seeking to exercise organizational rights. Freedom of Association is a constitutional right supported by the LRA, hence our legislation supports a system of collective bargaining for better wages and terms and conditions of employment. South Africa is well known for its well-established trade unions that plays an integral role in the wealth creation of our country. Even so, the labour market in South Africa is only about 40% unionized.

In terms of the LRA, a trade union seeking to lay claim to legislative organizational rights, should be a registered union with its members being sufficiently represented in the workplace. The LRA makes provision for trade unions that are mere sufficiently representative and those trade unions who has as its members the majority in the workplace. Majority trade unions may lay automatic claim to all five organizational rights found in the LRA. This, however, does not prevent a minority union from obtaining organizational rights through a process of collective bargaining.

But within what context then, should employers consider whether a trade union, seeking organizational rights, are sufficiently representative of its employees in the workplace? Afterall, the LRA does not define a sufficiently representative trade union. Representativity is defined within the context of the collective in the workplace. Even though lower thresholds have been accepted, the question often arises as to what is considered the workplace? Often employers are challenged with smaller trade unions seeking organizational rights at one of its branches, whereby the unions claim that a majority of the employers’ staff are members of the union. But, is it really such a simple matter that a union can lay claim to be a sufficiently or majority trade union within a company in circumstances where the employer operates numerous branches within an industry? Can a trade union claim they are sufficiently represented if they merely have employees at a particular branch listed as members of the union. It indeed may be the case!

In Amcu vs SA Chambers of Mines, the Constitutional Court addressed this matter. The dispute before the court was, at large, based on the applicant being aggrieved against what they regarded as the unconstitutionality of section 23 (1)(d) of the LRA, which effectively limits a minority trade union from embarking on strike action in circumstances where the majority union/s concluded a collective agreement that regulate a certain matter in dispute. Section 23 (1)(d) effectively prevents strike action in such circumstances if the parties to the agreement have extended the terms of the agreement to non-parties. At the heart of this dispute was the application of the definition of ‘workplace’ in terms of Section 213 of the LRA as in order to ‘lock’ a minority union out from embarking on strike action, the union/s who are party to the agreement, must have as its members the majority in the workplace.

Section 213 defines workplace as –

  1. in all other instances means the place or places where the employees of an employer work. If an employer carries on or conducts two or more operations that are independent of one another by reason of their size, function or organisation, the place or

places where employees work in connection with each independent operation, constitutes the workplace for that operation”.

Amcu, one of the competing unions within the chamber of mines, has as its members the majority in five of the mines, however in totality it was a minority union. Amcu’s claim at the courts was that the interpretation of the definition of workplace should be broadly interpreted to mean that individual operations should be considered as workplace, hence they will not be locked in to the collective agreement as they themselves will then be the majority union in each of these five mines.

Does the definition of ‘workplace’ mean all the mines of the Chamber member companies overall where Amcu was in the minority, or the individual goldmines, where it had the majority? Of note is that the definition focus on employees as a collective and that location, in itself, is immaterial. ‘Workplace’, thus, has a special meaning. Workplace is not the place where any single employee works, like the individual’s workshop, desk or office. It is where the employee of an employer, collectively work. This then supports the objectives of the statute of orderly collective bargaining.

Location is not primary, functional organization is. This then means that the ‘place’ or ‘places’ where workers work may constitute as single workplace. A default rule is thus that regardless of the places (one or more), where employees work, they are all part of the same workplace, but, that different ‘operations’ may be different workplaces only if they meet the criteria as defined. That is whether an operation is independent, not where it is located. Thus, each independent operation may constitute a separate ‘workplace’.

“Hence the proviso determines not so much whether separate physical places of work are separate workplaces, but rather whether independent “operations”, however geographically dispersed, are separate workplaces. The pivotal concept is independence. If there are two or more operations and they are “independent of one another by reason of their size, function or organisation” then “the place or places where employees work in connection with each independent operation, constitutes the workplace for that operation”. This is a test of functional organisation, and not geography or location. It requires one to determine whether the employer companies conduct two or more operations “that are independent of one another by reason of their size, function or organisation”.

In casu, each mining company (not single mine) constituted a single industry-wide workplace.

The clarification then given by the Constitutional Court is that it is not the location of the operation that is key, but whether each operation conducts its function independent of each other or as a collective. At many chain stores, as example, one will find that the group’s organization and functionality operates as a unit. As such, the entire group is considered as a single workplace. If a company, however, has branches that are independent from its other in terms of its operation or function, then each independent unit may be regarded as a workplace, independent from each other.


LC#180319 Shoprite Checkers (Pty) Ltd v Ramdaw NO & others (2000)

Often employers are unhappy about the outcome of an arbitration award as it appears not to be justified in light of the arguments and evidence presented by the parties. But does this mean that upon review, that such an award will be set aside if such award is not justifiable?

In addition, can a decision maker accept lapsed warnings and take these into consideration in applying his or her mind to a suitable sanction?

In Shoprite vs Ramdaw, the employee was dismissed for theft – related misconduct in that she ‘under – rung’ an item valued at R20, for R2. The employee was subjected to a disciplinary hearing and subsequently dismissed. The case eventually appeared for arbitration before a Commissioner of the CCMA.

The Commissioner found that the employer had failed to prove that the employee acted fraudulently and that the sanction of dismissal was thus unfair. Upon review, the Labour Court argued that the Commissioner too readily accepted that there was no collusion between the employee and the customer, even though the Commissioner’s conclusion that there was no collusion was not necessarily wrong. The Court further argued that the Commissioner’s finding that there could not have been theft as only one item was involved , was absurd. The Court’s view was that the Commissioner accepted, without proper thought, that the employee merely made a mistake.

The Court, however, stated that their powers as a court of review is limited and that the process is not that of an appeal. As such, the award can only be set aside on review if the court was satisfied that the only conclusion was that the employee was guilty of deliberate wrong doing or if the conclusion was overwhelmingly probable.

According to the Commissioner the employee was guilty of no more than mere gross negligence, which in this case did not justify a dismissal. The Court argued that the Commissioner’s assessment of the sanction of dismissal erroneously flowed from the reasoning that the employee merely made a mistake. In finding that the dismissal was unfair, the Commissioner overlooked the long line of cases, which ruled that in the absence of irregularity, that the employer is entitled to set its own standards of discipline.

In addition, the Commissioner found that the employee had a clean disciplinary record , whereas in fact, the employee had received five warnings over a period of two years for failure to follow prescribed procedures. The Commissioner’s finding that these warnings were irrelevant because they had lapsed was factually incorrect and wrong in law. The lapsing of a warning does not extinguish prior misconduct.

The employer contended that the Commissioner committed a “gross irregularity in the proceedings” by adopting

an incorrect approach and thus failed to apply his mind to the issues before him.

“The line between non-reviewable errors of fact or law and those which amount to gross irregularities was difficult to draw. In Toyota South African Motors vs Radebe, the Labour Appeal Court ruled that a finding that was ‘indefensible on any legitimate ground’ and ‘left a yawning chasm’ between the sanction the court would have imposed and that which the Commissioner imposed, amount to a gross irregularity.”

In casu, there was no error of similar proportions. The Commissioner’s award flowed from one error in that the employee merely committed a mistake, an act of carelessness. The Commissioner arrived at this conclusion after all the evidence had been weighed. The Court ruled that although the Commissioner’s conclusion was not justifiable and that the Court disagreed with the Commissioner, it could not be held that a reasonable decision maker in the exercise of his function could not have made such an award.

The review application was dismissed.

What we learn from this case is that the test for review under Section 145 of the LRA is reasonableness (confirmed by Sidumo) and that a error in judgement by a Commissioner will not automatically render an award reviewable. Awards will typically not be set aside if it is one that a reasonable decision maker could reach. Thus, an award is not typically about ‘correctness’, but reasonableness. It is also interesting to note that an employer can indeed take into consideration lapsed warnings. There is no prescription in law that stipulates a time period a warning remains valid for.


LC#01042019 First National Bank vs SASBO obo Woni, Vusumzi Isaac Trevor (2017).

There is a responsibility on decision makers to identify the real nature of a dispute and the appropriate procedure to follow in this regard. Arbitrators typically commit a reviewable irregularity should they incorrectly identify the nature of the dispute and the accompanied procedure to follow. With certain disputes, like those relating to incapacity or operational requirements, it can sometimes be difficult to understand the correct procedure to adopt.

Occasionally employees find themselves in a situation whereby they cannot adhere to their contractual obligation to continue in their position as per their contract of employment due to external factors that may be at play. In addition, these factors may be out of the control of the employer with not much to be done in terms of having its employee adhere to his/her contractual obligations. What does an employer do in such circumstances? Do they retrench based on operational requirements or should one follow an incapacity procedure due to an employee’s inability to adhere to his contractual obligations?

In FNB vs SABO obo Woni, Vusumzi Isaac Trevor, the employee was dismissed for failing to pass his exam that will accredit him to be a ‘fit and proper’ financial advisor in accordance with the Financial Intermediary (FAIS) Act. The financial advisors were required to pass these tests by stipulated dates. They received letters to the effect that should they fail to pass these exams that an incapacity inquiry would be convened and if found guilty, that their services would be terminated.

The employee failed his exam, but was granted an extension, however again failed the exam. After three further extensions granted, the employee still did not manage to pass the exam. The employee was then advised to apply for a non-FAIS position, which he did, but was not appointed due to another employee also from the non- FAIS pool, being more senior, was appointed. There were no further alternatives available.

The employer dismissed the employee after being subjected to an enquiry. At arbitration, the arbitrator held that the employee was dismissed for operational requirements and not incapacity as claimed by the employer.

The court found that incapacity can arise from other circumstances not directly recognized by the LRA and the commissioner’s view that it does not, was incorrect. The commissioner had based his conclusion that the dismissal was for operational requirements on the definition of that terms in the LRA. However, the requirements of section

189 militate against dismissing employees who have become incapacitated by a statutory prohibition for operational requirements. An employer can, after all, argue that they can’t ‘afford’ any employee guilty of misconduct. The court held that the commissioner committed an error of law by ruling that the employee’s dismissal was for operational requirements.

Cases then that affects the ability of the employee to meet its contractual obligations is typically an issue relating to incapacity, however operational requirements are those that typically relates to the structural, financial or technological needs of the employer.


CCMA#080419 Megedezi and others vs Swissport SA (Pty) Ltd and The Workforce Group (Pty) Ltd (March 2019)

Much had been said in terms of the ‘deeming’ provision found in Section 198A of the LRA that assigns labour relations rights to the client of a TES. The dispute was eventually brought before the Constitutional Court, what is now known as the Assign Services case. In many ways, the Assign Services case leaves us with more questions than answers. Can employees now claim a transfer of a contract of employment from a TES to that of the client? Is there a break in continuity of service once the deeming provision becomes effective? What is the future of labour brokers? This debate is endless with no end in sight.

This case study today assesses a recent CCMA Arbitration Award, post the Assign Services case and is of great

value in understanding the CCMA’s interpretation and application of the Assign Services case.

In Megedezi and others vs Swissport SA (Pty) Ltd and The Workforce Group (Pty) Ltd, the employees was represented by GIWUSA a registered trade union. The application brought before the CCMA was an interpretation application in accordance with Section 198D of the LRA, with specific reference to the interpretation of Section 198A (3) (b) (i) (ii) and Section 198A (5) of the LRA. In this dispute, the employees, employed by a labour broker (The Workforce Group) sought to be deemed indefinite employees of the client (Swissport SA) and for them to be transferred onto the books of the client. In addition, the employees sought to receive the same benefits as employees of the client for performing the same or similar work.

It is undisputed that the employees were employed by the labour broker for periods exceeding three months. Some of the employees was employed as forklift drivers and one employed as an acceptance clerk. Further it was also undisputed that the employees rendered their services at the premises of the client of the labour broker. Swissport offers ground handling and cargo services at the airport.

Both the TES and its client agreed that Swissport is deemed to be the employer for purposes relating to the LRA and that Swissport accepts liability for the employees on all issues related to the LRA. Swissport is responsible for daily operations and supervision. The TES, on the other hand, is responsible for human resources and industrial relations. The employees are on the books of the TES and receive the same benefits as that of the other TES employees and not that of Swissport employees. Swissport offer additional benefits such as a pension fund, medical insurance, shift allowances and end of year discretionary bonuses.

It was undisputed that all forklift drivers were employed by the TES and that Swissport does not employ fork lift drivers. The employees, however, was of the view that the position of cargo controller was sufficiently similar to that of a forklift driver. Cargo controllers enjoy better benefits than the employees. It was common cause that the employees earned below the threshold and as such Section 198A finds application.

Section 198A (3) of the LRA in essence states that an (i)‘employee not performing temporary work for the client of the TES is deemed to be the employee of that client and the client is deemed to be the employer…and (ii)subject to the provisions of Section 198B, employed on an indefinite basis by the client.

In casu, the employees had been working for Swissport for a number of years and there was no indication that the work they performed was temporary in nature. The deeming provision therefore does find application. In terms of Section 198A (5) of the LRA then, the employees must be treated on the whole not less favourably than an employee of the client performing the same of similar work, unless it could be justified.

It was undisputed that Swissport does not employ forklift drivers. After leading evidence, it was also evidenced that the position of Cargo Controller was also not sufficiently similar to the of fork lift drivers as most of the work done by fork lift drivers was done under the supervision of cargo controllers. The CCMA found that a deemed employee must be treated on the whole not less favourably than an employee of the client performing the same or similar work, but under the circumstances, as there were no comparators employed by the client, the employees cannot succeed in their claim.

In addition, the CCMA highlighted the fact that in the Assign Services case, “the Constitutional Court provides in Section 75 that Section 198 (2) gives rise to a statutory employment contract between the TES and the employee, which is altered when Section 198A (3)(b) is triggered. This is not a transfer to a new employment relationship, but rather a change in the statutory attribution of responsibility as employer within the same triangular relationship. The triangular relationship then continues for as long as the commercial contract between the TES and its client remains in force and requires the TES to remunerate its workers.”

The CCMA accepted that there is legally no requirement for a client to step in the shoes of the TES. The relationship between a placed worker and the client arises out of the operation of law. This is independent of the terms of any contract between the placed worker and the TES. Thus, there is no requirement for the employees to be on the books of Swissport. The Court made it clear that there is no requirement to transfer the employees to a new employment relationship.

In addition, the Constitutional Court accepted that:

  1. The TES retain a role in the practicalities of the relationship;
  2. Maintain a contractual relationship with the employee;
  3. Maintain a contractual relationship with the client;
  4. May participate in litigation where the employee seeks to pursue a claim founded on the TES’s joint and

several liability;

The relieve sought by the employees to have their permanent contracts transferred to Swissport was not granted.

What we learn from this case is that the client of a TES accepts labour relations (responsibility)between itself and that of a placed worker, but that this does not mean a transfer of a contractual relationship and does not hinder the involvement of the TES in this relationship. My view has always been that the intention of the legislator was not to ban labour brokers, but to eliminate abusive practices in circumstances whereby marginalized workers are denied indefinite employment in circumstances whereby their services rendered are not temporary and client companies shifting labour relations accountability to the TES, who often is left without any relieve. The triangular relationship is now more structured with workers being the victor.


LC#0150419 Robor (Pty) Ltd vs MEIBC (April 2016)

Misconduct that relates to negligence is probably one of the more frequent types of misconduct that employers faces in the workplace. To deal with this type of misconduct, however, is not without its challenges. In the first instance, it is often challenging to differentiate between negligible conduct and that of dishonest conduct. As example, a supermarket cashier may be running at a monetary loss at the end of her shift, leaving it to the employer to decide whether the employee was dishonest in construing the circumstances for personal, financial, gain or was it a mere act of negligent conduct whereby no dishonesty was at play. What constitute negligible conduct then? In addition, the CCMA and Courts seems to be weary to uphold the fairness of a dismissal for negligence if such conduct is not regarded as severe or ‘gross’ to warrant a dismissal. What is the correct test to apply and when is negligence considered as gross that may warrant a dismissal?

There are no clear and fast rule as there are no such thing as an ‘automatic dismissal’ (not to be confused with an automatic unfair dismissal-Section 187 LRA) for misconduct as each case must still be assessed on its own merits. The courts , however, gave some principles to assist employers in this often-challenging situation.

In Robor (Pty) Ltd vs the MEIBC, the employee, Mr. Singh was dismissed for gross negligence in that he caused the company financial losses of over R40 000 in that he failed to pick up that his subordinates were being paid for work they already got paid for. In addition, he was also dismissed for abuse of the employer’s IT email policy in that he uses the company email excessively to send private emails. Mr. Singh referred the dismissal to the MEIBC as an unfair dismissal, where the Commissioner found that the dismissal was procedurally fair, but substantively unfair. The Commissioner agreed that Mr. Singh was guilty of negligence, but that the Commissioner being of the view that the test for gross negligence was that the employee must be guilty of a ‘complete neglect to do things correctly.’ The Commissioner doubted that the employee was grossly negligent as his general performance was rated at 95%. The employer’s only concern then was in terms of the employee’s failure to adequately analyze the cost allocation of its staff.

The Commissioner ordered a reinstatement of Mr. Singh, however with no back pay. The reason for no back pay was due:

  • He was guilty, but his first mistake in 30 years;
  • A Final Warning would have been sufficient;
  • The offence not as serious as employer suggested;
  • The Trust Relationship was not tarnished;
  • Dismissal too harsh for a first offence;

The employer filed for a review application to the labour court arguing in its founding affidavit that:

  • There is a disjuncture between the finding of serious misconduct and dismissal as sanction;
  • The trust was broken due to the serious losses and that he was a supervisor not to be trusted;
  • The employee effectively sent 3495 private email messages with 12645 attachments;
  • The employee was reprimanded in 2012 for abuse of the email policy;

The employer further argued that the Commissioner applied the incorrect test for gross negligence and that the correct test should have been whether the employee exercised the standard of care and skill that could be expected of someone with his skill and experience and that his failure to do so had caused loss to the employer, which was gross. Whether the conduct of the employee was persistent or particularly inexcusable.

The Labour Court found that the Commissioner acted unreasonably in his finding that a dismissal was not appropriate as it was based on a mere ‘downplay’ of the seriousness of the misconduct. The Commissioner’s finding that the employee’s breach of its IT email policy was merely ‘his second offence’ was illogical as there was no evidence that the employee had any intention to amend his behavior. “There is no basis on which the Arbitrator could say that a R40 000 loss was not significant.” To say the amount in comparison to 30 years of service is insignificant, is illogical.”

The Court further found that the Commissioner misconstrued the charge of gross negligence to mean it should relate to a complete neglect to do things correctly. There is no logical reason why a particular act of negligence will not be construed as serious. Once negligence is established, one must determine ‘how serious the negligence’ was. In casu, the cause of loss of over R40 000 occurred over a period of many months and the loss was indeed significant. The employee’s negligence indeed amounted to that of being ‘Gross’.

What we learn from this case is that in deciding whether an employee’s conduct can be regarded as negligence, the test to apply is whether the employee’s conduct portrays a standard and care that is reasonable and to that of a person, comparative to his/her skill and experience. To elevate the misconduct to that of ‘gross’ will depend on the merits of the case, but should include factors such as actual losses or damages, potential loss, damages or risk, whether the negligible conduct is continues and whether the negligible conduct is plainly inexcusable.

The seniority of the person should also be taken into consideration and whether the employee portrays any willingness to amend his/her behavior.


LC#2950419 Umicore Catalyst SA (Pty) Ltd vs M D Nogantshi (August 2015)

Over the years I have come to learn that each company has its own environment and set of circumstances. Each industry is different, hence there is no such thing in our labour legislative dispensation, that a dismissal is automatic when charging employees for alleged misconduct. An employer must still allow employees an opportunity to be heard and take a holistic approach to the special circumstances at play in the workplace. In the vast array of misconduct in the work places, some of these are repetitive and common, like petty theft, absenteeism, being under the influence of alcohol and so forth. Over the years, I have also realized the increase in the submission of fraudulent sick notes by employees and often wondered why there is this growing tendency of employees to absent themselves under the false disguise of being booked of ill, submitting fraudulent and altered sick notes upon return?

One possible reason for this tendency, I believe, is the fact that one still often find employers being oblivious to our labour laws, especially the Basic Conditions of Employment Act, which, inter alia, regulates sick leave, annual leave and family responsibility leave. I am surprised how often I find employers grudgingly approve leave or not approving leave at all. I still find circumstances whereby employees will for many years not be afforded any opportunity to go on leave, yet when under the circumstances employees absent themselves for a day or two, they are threatened with dismissal. This tendency, I believe, is probably one of the key factors as to why employees opt to obtain fraudulent sick notes.

Similarly, many employers who operates within a fast-paced environment and cannot afford employees absenting themselves, adopts a very arbitrary approach to assessing sick notes submitted by employees. This often results in human resource managers having to take disciplinary action against employees allegedly submitting fraudulent sick notes, purely due to speculation, rumor or historical conduct. It is trite in our labour laws that the onus to prove rest with the employer, that the burden of prove is based on the balance of probabilities and that an employer must justify a dismissal, taking the totality of circumstances into consideration.

In Umicore Catalyst SA (Pty) Ltd vs MD Nogantshi the employee, Mr. Nogantshi, went to a doctor either on the 31st of May or the 3rd of June 2013. The employee was meant to work night shift on the 31st of May, which he failed to do. Upon his return to work, he explained that he had to take his son to the doctor as he was ill and had to stay at home with the child to look after him. The employee did provide a sick note and was provided with ‘childcare leave’.

Upon closer investigation it was found that the medical certificate issued by the doctor stipulated that the employee himself, instead his child was the patient. The employee was charged and dismissed for fraudulent misrepresentation. Subsequently, the employee referred an unfair dismissal dispute to the Motor Industry Bargaining Council, where the arbitrator found the dismissal to be unfair. During arbitration the employer called witnesses, inter alia, Dr. Patiwe, the employee’s doctor. In this case the arbitrator was faced with two completely opposing versions of what transpired. As such, the arbitrator correctly pointed out that, ‘where he is faced with two irreconcilable versions, he had to make findings on the credibility of those witnesses; their reliability; and the probabilities’.

Dr. Patiwe was found to be an unreliable witness as the administration at his practice was undesirable as Dr. Patiwe often contradicted himself and it was evident that he could not say with certainty as to who his patient was on the day. In addition, the Dr’s assistant completed medical aid forms for the child. The arbitrator found that it could be that the child was the patient and that the doctor made an error in writing the sick note.

The employer’s other witnesses, the chairperson of the hearing and the payroll administrator was found to be credible. The arbitrator also found the employee to be a credible witness and his testimony to be consistent.

The court found that:

‘The arbitrator applied his mind to the evidence before him. He carefully analyzed the witnesses’ credibility, their reliability, the probabilities, and the onus. He came to the conclusion that the employee’s evidence was more reliable than that of Dr Pakiwe. That was a reasonable conclusion’.

The labour court found that the employer was not successful in discharging the burden of proof and that the employee’s testimony was more credible than that of the doctor. What is interesting to note is the employer’s use of the doctor as its main witness, yet, on the face of it, they clearly did not investigate or applied their minds to the testimony of the doctor during the preliminary investigations. This is a typical example of an employer making an arbitrary, rushed, decision without having its facts in order.

What we learn from this case is that an employer should not simply jump to conclusions when faced with a potential fraudulent sick note. In addition, an employer should not use the occasion to easily try and get rid of unwanted employees. Employers should investigate properly and ensure that witnesses are properly investigated and prepared for a hearing. Employers should also justify why a dismissal is justified under the circumstances.


CC#050519 Karin Steenkamp & 1817 others vs Edcon Limited (April 2019)

The Constitutional Court recently issued a judgment, clarifying the purpose and correct application of compensation relief sought in terms of Section 189A(13(d) of the LRA, under circumstances whereby an employer failed to adhere to the requisite procedural timelines in terms of Section 189A(8) of the LRA. In Steenkamp vs Edcon, the employer embarked on a largescale retrenchment exercise between 2013 and 2015, upon which, about 3000 employees were retrenched. Edcon failed to adhere to the Section 189A(8) timelines, which allows for an employer to terminate a contract of employment after 30 days have lapsed since applying for facilitation, provided that no facilitator was appointed. Under such circumstances, the employer must wait 30 days and also adhere to any agreed timelines in terms of Section 64 (1) of the LRA, before issuing dismissal notices.

Having recourse available under the LRA, inter alia, referring an unfair dismissal to the CCMA in terms of Section 191(1)(a), embarking on a retaliatory strike in terms of Section 189A(8)(b)(ii)(aa) or applying to the Labour Court for an order to compel the employer to adhere to a fair procedure in terms of Section 189A(13), the employees failed to follow available remedies under the LRA. Instead the applicants applied to the Labour Court to declare the dismissals invalid, what is known as the Steenkamp I referral. The applicants largely depended on the De Beers ruling, known as the De Beers Principle, where the Labour Appeal Court upheld that in circumstances whereby an employer dismissed employees and failed to adhere to prescribed timelines in terms of Section 189A(8) in large scale retrenchments, that such dismissals are invalid. In Steenkamp I, the Labour Appeal Court sitting as the court of first instance, overruled its previous ruling on the De Beers principle and declared the ruling as incompetent and wrong. The result thereof, being that an employer dismissing employee in contravention of the timelines required in terms of section 189A(8) is not invalid and therefore stands.

The applicants then changed their strategy and under Steenkamp II, they now sought compensation in terms of Section 189A(13) (d) of the LRA, which states that if an employer fails to comply with a fair procedure, the employees may apply to the Labour Court to, (d) “ make an award of compensation, if an order in terms of paragraphs (a) to (c) is not appropriate” Of note is the fact that the applicants were between 10 months to 2.5 years late for the referral to the Labour Court. Section 189A (17) states that an application in terms of Section 189A(13) must be brought within 30 days after receiving notice by the employer to terminate the contracts of employment. The issues of condonation became an issue of much debate, with the Labour Court granting condonation. Edcon appealed the decision with the Labour Appeal Court overruling the decision of the Labour Court and the Constitutional Court, on appeal, agreed with the Labour Appeal Court. The main dispute, however, before the Constitutional Court was whether compensation in terms of Section 189A (13)(d) could be regarded as a ‘stand-alone’ remedy, divorced from the other remedies available in 13 (a) to (c). The applicants were of the view that it could, whereby Edcon opposed the argument.

In addressing the merits of the argument, the Constitutional Court stated that in finding application for Section 189A(13)(d) it must be read within context of the purpose of Section 189A(13). The Court stated:

“Section 189A(13) was introduced in 2002 and was intended, broadly speaking, to provide for the adjudication of disputes about procedural fairness in retrenchments at an earlier stage in the ordinary dispute-resolution process, and by providing for their determination, inevitably as a matter of urgency, on application rather than by way of referral” Disputes about procedural fairness have been removed from the adjudicative reach of the Labour Court and may no longer be referred to the Labour Court as a distinctive claim or cause of action (Section 189A(18). The wording of Section 189A(18) is to remove the option of claiming compensation for procedural unfairness long after a retrenchment, especially due to the prejudice an employer may suffer because of the lapse in time. The purpose of Section 189A (13) is to compel an employer to adhere to a fair procedure and to get the parties back to the consultation process and a such, Section 189A(13) follows a hierarchy of appropriate relief (a – c). Section (d) only finds application as exceptional remedy where the primary remedy (a-c) is inappropriate. Section (d) is thus not a stand-alone remedy.

What we learn from this case is that under large scale retrenchments if an employer is not adhering to a fair procedure, employees or their representatives should seek relief under the LRA with the purpose of getting consulting parties back to the consultations. The purpose thereof is to compel the employer to adhere to a fair procedure. Compensation in terms of Section 189A(13) (d) only finds application if an order in terms of (a) to (c) is not appropriate and could not be considered as a stand-alone remedy. Of note is that the De Beers principle had been overruled and as such, if an employer dismisses employees in circumstances whereby, they failed to follow the timelines as per Section 189A(8), then the dismissal itself is not invalid.


LC#130519 Nama Khoi Local Municipality vs SALGBC & IMATU (March 2019)

During 2015 the LRA was amended to now include provisions to Section 198A, Section 198B and Section 198C, with a specific dispute resolution function provided for in Section 198D. Some uncertainty, however, existed whether an employee had relief in terms of the Section 198D’s mechanism, under circumstances whereby an employer was, inter alia, in breach of Section 198B of the LRA, had terminated the employment relationship and with the employee now seeking reinstatement to indefinite employment after the termination of said employment.

Section 198B regulates fixed term employment, with a specific focus on marginalized employees, those employees earning below the earnings threshold. In essence, an employer employing such an employee on a fixed terms contract for periods longer than three months, without the reasons thereof being properly justified in terms of Section 198B (4) may have his employee claiming indefinite employment in terms of Section 198B (5). Considering then that a mechanism for relief now exists in terms of Section 198D, how does an employee seek relief in terms of Section 198D after the employment relationship had been terminated. More importantly, is it even possible?

Section 198D, states:

  1. Any dispute arising from the interpretation or application of sections 198A, 198B and 198C may be referred to the Commission or a bargaining council with jurisdiction for conciliation and, if not resolved, to arbitration.
  2. A party to a dispute contemplated in subsection (1), other than a dispute about a dismissal in terms of section 198A (4), may refer the dispute, in writing, to the Commission or to the bargaining council, within six months after the act or omission concerned.
  3. The party that refers a dispute must satisfy the Commission or the bargaining council that a copy of the referral has been served on every party to the dispute.
  4. If the dispute remains unresolved after conciliation, a party to the dispute may refer it to the Commission or to the bargaining council for arbitration within 90 days.’

In Nama Khoi Local Municipality vs SALGBC & IMATU, the employer (Applicant on Review) and the employee, Mr. Raymond August, concluded two written fixed term contracts of employment. Anticipating the non-renewal of the contract the employer issued a notice of termination to the employee of his contract of employment. It should be noted that a termination of a fixed term contract of employment does not constitute a dismissal but a termination of employment by operation of law.

In seeking relief, in context of a termination of a fixed term contract of employment, an employee may refer an unfair dismissal dispute in terms of Section 186 (1)(a) of the LRA if the employee believed that the employer’s trust in the termination of the employment by operation of law was misplaced (like an employee continuing working even after the contract had ended), or alternatively, the employee may file for an unfair dismissal claim in terms of Section 186 (1)(b) in which the employer created a reasonable expectation to renew the contract or to offer employment on an indefinite basis.

Thus, once the fixed term contract of employment has been terminated an employee can challenge the fairness thereof in terms of Section 186 (1)(a)(b), with relief obtainable under Section 193 and Section 194 of the LRA. Section 198(A)(B)(C), however, comes with its own resolution process in the form of Section 198D. The reason thereof is to make it possible for employees to pursue disputes about whether any of these provisions apply to their employment relationship whilst the employment relationship is still ongoing, with the view of obtaining declaratory relief.

As such, Section 198D is a process designed to be proactive. It allows for employees to remedy a state of affairs as contemplated in Section 198(A)(B)(C) during the course of employment and as such a Section 198D dispute resolution process was not intended to apply after the employment relationship had been terminated.

This however does not mean that an employee cannot rely on Section 198D as part of an unfair dismissal dispute brought under Section 186, but that it is not a stand-alone remedy after the employment relationship had been terminated. The view of the Bargaining Council therefore to offer reinstatement is not competent, as it is not possible to offer reinstatement when in fact the employer terminated the contract of employment, yet the employee failed to file an unfair dismissal dispute. An employee party cannot rely on a declaratory order in support of indefinite employment, if indeed the employment had been terminated. One will have to file for an unfair dismissal dispute and then also relay on Section 198B and Section 198D.

The situation is similar to that of an unfair labour practice dispute, relating to a promotion as for example. By the time the dispute appeared before the Bargaining Council, the employment relationship had long been terminated. In Independent Municipal and Allied Trade Union on behalf of Joubert v Modimolle Local Municipality and Another, the court found:

An unfair labour practice dispute, and then the obtaining of relief as a result of pursuing same, contemplates a continued existence of an employment relationship between the parties. Where the employment relationship comes to an end prior to the relief afforded under the unfair labour practice dispute being implemented, then that relief may well be rendered incompetent. As a simple example, where an arbitration award directs that an employer promotes an employee, but the employee then resigns before this promotion is affected, that is simply no need or purpose to still promote the employee. Therefore, and once the employment relationship has terminated, an employer cannot be expected to thereafter take positive action in the form of promoting the employee, reversing a demotion, subjecting the employee to training, reversing a final written warning and the like, being the kind of relief flowing from unfair labour practice arbitration awards. In short, circumstances have overtaken the relief, rendering compliance incompetent.’

The similarities are striking. An employee cannot rely on Section 198D for a declaratory order of indefinite employment, if the employment relationship had been terminated as it will render the challenge moot. The employee will have to challenge the fairness of the dismissal and also rely on Section 198D.

The court further stated:

‘to accept that a referral as contemplated by section 198D may by its nature include a dismissal dispute is to ignore the two distinct and separate dispute resolution processes under sections 191 and then 198D of the LRA. It is similar to the situation where an employee is given a final written warning which is not challenged by way of an unfair labour practice dispute, and when the employee is then later dismissed based on such warning, the employee seeks to challenge the warning as part of the unfair dismissal dispute. It has been held that in order for the final written warning to be open to challenge, it had to have been specifically referred as an unfair labour practice.’


‘In summary therefore, the second respondent committed a material error of law when he proceeded to determine whether the fourth respondent was employed indefinitely by virtue of the application of section 198B(5), when it was patently obvious that the employment of the fourth respondent had already been terminated, and there was no unfair dismissal dispute before him.’

What we learn from this study is that Section 198D is a process whereby employees can proactively redress non- compliance to Section 198(A)(B)(C) of the LRA in the form of a declaratory order and not a stand-alone process of redress once the employment relationship had been terminated.


LC#200519 PRASA vs Sheriff for the District of Goodwood (December 2018)

It often happens that an employer participated in an arbitration process only to be aggrieved if the award is not in its favour. This is especially so in circumstances whereby an employer believed that it followed a fair procedure in dismissing an employee and where dismissal was properly justified given the circumstances at play.

Unfortunately, employers cannot appeal the decision of a commissioner, however an employer may opt to take the award on review at the labour court. In essence, a review is brought in terms of Section 145 or Section 158 of the LRA and is aimed at whether the award is an unreasonable outcome or whether the commissioner committed an error in law. A Review process is primarily not a process to have the merits of the case reheard , but for the applicant to state its ground for review and to show that the extent of the commissioner erring in law or having made an unreasonable outcome is material to the extent that a different commissioner would have arrived at a different result.

However, given the protracted period for the settling of review applications, employees still opt to have an award certified and the resultant writ of execution enforced. Soon the employer is faced with the predicament of the sheriff arriving at its front door to write up its assets in settlement of the arbitration award.

Even if a review application is pending, such application does not stay the enforcement of the arbitration award and the sheriff will still continue with the enforcement of the writ of execution. Employers will then have no choice but to submit an urgent application to the labour court, interdicting the sheriff from executing its mandate. But what are the principles applicable to adopt when determining whether a writ of execution should be stayed?

In PRASA vs the Sheriff for the District of Goodwood, the Passenger Rail Agency approached the labour court on an urgent basis to stay the writ of execution in respect of an arbitration award issued by the CCMA, pending the outcome of a review application. In this case the employees previously referred a Section 198B, read with Section 198D dispute to the CCMA, seeking an order declaring them to be permanent employees since 1 April 1995. They sought financial compensation from the date of implementation of Section 198B to the date of the arbitration.

On the 17th of July 2018, the Commissioner issued an award on terms of which the employee’s employment was deemed indefinite since the 1st of April 2015, entitling them membership to the employer’s provident fund and bonusses. In addition, PRASA was ordered to pay the employees a total amount of R35 455 140.00

The award was certified by the CCMA on the 18th of September 2018 and served on PRASA for enforcement by the Sheriff on the 24th of October 2018. The Sheriff compiled an inventory of movable assets to the amount of R2 040 000.00, including vehicles and 84 carriages, valued at R10 000 each.

Before the court PRASA argued that it has 450 rail carriages in use and already has a shortfall as a consequence of vandalism and burning of its rail carriages in Cape Town. The application was brought on urgency as the sheriff have already attached the said assets and confirmed that removal is imminent. PRASA contended that given the shortfalls a further loss of 84 carriages would impact negatively on its operations. Given this situation, PRASA contended that there is an element of public interest related to this matter as the Cape Town economy depend heavily on its ability to transport commuters to and from work.

The court stated, “The application having been brought on the basis of ‘extreme urgency’, PRASA needs to satisfy the requirements set out in Rule 8 of the Rules for the Conduct of Proceedings in the Labour Court. Thus, a party seeking relief on an urgent basis has to set out in the founding affidavit the reasons for urgency, why the relief is sought on an urgent basis and why the Rules of the Court were not complied with.”

The court reiterated the principles in Gois t/a Shakespeare’s Pub vs van Zyl in determining whether to stay a writ of execution:

“ (a) A court will grant a stay of execution where real and substantial justice requires it or where injustice would otherwise result. (b) The court will be guided by considering the factors usually applicable to interim interdicts, except where the applicant is not asserting a right, but attempting to avert injustice. (c) The court must be satisfied that:

  1. the applicant has a well-grounded apprehension that the execution is taking place at the instance of the respondent(s); and
  2. irreparable harm will result if execution is not stayed and the applicant ultimately succeeds in establishing a clear right.
  3. Irreparable harm will invariably result if there is a possibility that the underlying causa may ultimately be removed, i.e. where the underlying causa is the subject-matter of an ongoing dispute between the parties. (e) The court is not concerned with the merits of the underlying dispute-the sole enquiry is simply whether the causa is in dispute.”

The court found that given the nature of the writ sought to be executed and the consequences of the attachment and the removal that may follow, that indeed the complaint is not confined to financial prejudice to PRASA. More is at stake as it is the members of the public, who will be severely inconvenienced.

The court ruled that in light of the circumstances, the interest of justice and the balance of convenience, that the stay be granted pending the determination of the review application.

What we learn from this case is that a review application does not automatically stay a writ of execution and that an employer must consider the principles set out in Gois before applying for an urgent application, staying the enforcement of the arbitration award. Of note is that with an urgent application, staying the enforcement of the award, the employer does not have to establish the merits of the main dispute, but merely that it is in dispute.


LC#260519 PRASA vs Sheriff for the District of Goodwood (December 2018)

Section 145 (8) of the LRA states that ‘unless the Labour Court directs otherwise, the security furnished as contemplated in subsection (7), must – a.) in the case of an order of reinstatement or re-employment, be equivalent to 24 months’ of remuneration, or b.) in the case of an order of compensation, be equivalent to the amount of compensation awarded.

Even though it is widely known that parties applying for the review of an arbitration award should provide securities to the effect stipulated in Sect 145 (8) (even though the court could use its discretion to exempt a party from providing such security), the matter is slightly more complicated when it comes to organs of state or state departments due to these departments being governed by, inter alia, the Public Finance Management Act, Municipal Finance Management Act and Treasury Regulations.

It is held that Section 66 of the PFMA is contrary to the providing of security and that the Minister of Finance will have to publish in a government gazette should such security be provided. Should state organs therefore be automatically exempted from providing security?

In Freestate Gambling Liquor Authority it was held that Section 145 (7) (8) of the LRA should allow that the court may decide whether a litigant is compelled to put up security or not. The phrase ‘unless the court directs otherwise’ should be read widely to mean that unless the court direct an exemption from the provision of security, or that security is to be paid in a lesser amount. In Rustenburg Local Municipality vs South African Local Government Bargaining Council, the court accepted the above interpretation and argued that a proper case must always be made out by the applicant in seeking to dispense with the requirement of providing security. The default position remains that the court will require the providing of security. The party seeking to be exempted should show good cause, which should involve a proper explanation as to why this request should be entertained, with particular emphasize placed on prejudice that may be suffered should it not been granted.

However, the ruling in Freestate, went further and suggested that public enterprises are automatically exempted due to the complications provided by the PFMA and the MFMA. Rustenburg took an issue with this and argued that exonerating public entities merely because they are subjected to the PFMA would be clearly wrong. There is no reason why all employers, whether in the public or private service should not be subjected to provide securities.

In PRASA vs Sheriff for the District of Goodwood the court stated:

“Insofar as it can be said that the application of Sections 145(7) and (8) is in conflict with the PFMA or the MFMA or any kind of related legislation, where it comes to government departments or municipalities or similar public service entities, then the simple answer is that in terms of Section 210 of the LRA, the LRA must prevail.”

Ultimately, the provisions of the PFMA, MFMA and related legislation cannot serve as a basis to exonerate any government departments or municipalities or public service entities from having to provide security under Section 145 (7)(8) of the LRA.

In Prasa, the court indeed exempted the employer from providing for security due to the following reasons; a.) given the exceptionally high amount of compensation awarded by the CCMA, this amount was not budgeted for, b.)It’s available liquidity was totally consumed by working capital, c.) That it had no surplus, d.) It was impracticle as under Sect 66 of the PFMA, the Minister of Finance would have to publish the security in the government gazette, after seeking approval from the Minister of Transport, e.)whether Prasa would be able to repay the security within 30 days of the end of the current financial year as contemplated in Treasury Regulation

32.1.1 (a), f.) the employee was still employed by Prasa and where not as prejudiced as the employer would be.

We thus learn from this case that no employer, whether in the private or public sector is automatically exempted from providing security when applying for the review of an arbitration award. That each party applying for exemption must lay out a proper case, based on merits, as to why it should be granted.


CCMA#100619 Nkosithandile Ngono vs Grand Parade Investments (Pty )Ltd (2019)

It seems that employees misrepresenting their skills and qualifications are on the rise in our country. The effect and the extent this situation have on our country is visible to all almost on a daily basis. Government has now passed legislation that opens the door for criminal prosecution, should an employee be found guilty of such misrepresentations.

Misrepresentation of one’s skills, experience and qualifications on his or her CV can indeed have a material impact on the performance and sustainability of a company, which leaves many an employer without knowing how to deal with such a matter.

In Nkosithandile Ngono vs grand Parade Investments (Pty) ltd, the CCMA was called upon to decide on the procedural and substantive fairness of a dismissal of an employee who made himself guilty of a misrepresentation on his CV. The employee was employed on the 15th of October 2018 and dismissed on the 2nd of November 2018. The employee was not in Cape Town on the day of the disciplinary hearing and complained that the dismissal was procedurally unfair as the employer should have conducted the hearing via Skype, instead of in his absentia.

The employer expressedly told the employee to attend to the disciplinary hearing in person as they did not have the facility to do a Skype hearing. The employee was employd into the position of IR Officer based on incorrect information he provided on his CV. The employee gave the name of a person who was on the same level as he was, and he did not give the name of his immediate superior as a reference.

Soon after the appointment of the employee, Ms Phillips became suspicious of the employee’s ability to do the work. To test the employee, Ms. Phillips gave the employee a task to draft a replying affidavit for a condonation application. The employee made several crucial errors.

On the 23rd of October 2018, her colleague, Mr Shahid Abdool, Talent Acquisition Manager, informed Ms. Phillips that he had done further checks into the references that the employee provided in his CV and that there were serious inaccuracies. According to the submissions of the employee he worked for Lewis Stores Group (Pty) Ltd from october 2016 to February 2017 as Divisional Human Resources Manager. The employee provided the name of Ms Shonisani with the title Senior Human Resources Manager, as his immediate line manager who could provide a complete picture of the employee’s performance and qualifications. The employer contacted Shonisani who confirmed that the applicant had reported to her and she scored the applicant’s skills and behavior as good, that he was never disciplined and that she would re-employ him.

However, after the ability of the employee was brought into question, they contacted Lewis Stores again and this time spoke to a Mr Tebogo Lentani, who was the real person in charge of all the Divisional HR Managers including Shonisani and the employee. The employer called a fact-finding meeting in order to understand why the employee submitted a different name as to that of his immediate line manager as reference. During the meeting, the employee admitted that he reported to Mr Tebogo and that he did not have a good relationship wth him.

The employee agreed there was a breach of trust and that he required a two-month separation package, which had denied him. He then asked to go on a disciplinary hearing. The employee accepted and signed the charge sheet. According to the employee he then commenced new employment in KZN and requested that the disciplinary hearing be conducted over Skype. This request was denied due to the employer not having the facilities and that the employee had to be physically present. The employee responded by stating that it is clear the hearing will be done in his absentia and that he awaits the outcome.

At arbitration the employer testified to the mistakes the employee made and his non-performance. The employer had a witness who testified that the employee was made aware during his appointment that his appointment is based on the results of reference checks. She also testified to the fact that the employee admitted to being dishonest about who his line manager was. Evidence was also led at arbitration that the employee was charged to appear before a disciplinary hearing at his previous employer, that he resigned before the outcome was made known and that he had filed for a constructive dismissal dispute at the CCMA. The employee contended that at Lewis Stores he was instructed telephonically by Mr. Tebogo to report to Shonisani, but he could not provide any evidence to this effect.

The Commissioner held the view that the reason why the employee failed to disclose the name of his line manager was that he knew he would not have received a favorable reference, he then substituted it with the name of a colleague who he knew would not mention to the employer the circumstances relating to his termination of employment. The Commissioner further found that the employee caused his own demise by not attending to his disciplinary hearing and gave no plausible or reasonable explanation why he could not attend the hearing. The employee acted in a willful and dishonest manner. The dismissal was both procedurally and substantively fair.

What we learn from this review is that employees have an obligation to disclose truthful and accurate information on their CV’s and failure to do so, may result in disciplinary action to be taken against you, which may include a dismissal.


LAC#230619 NUMSA vs Aveng Trident Steel and Imperial Dedicated Contracts (2019)

Occasionally it transpires that a company restructures in order to increase profitability, but in doing so have to amend the terms and conditions of employment. Generally, an employer cannot dismiss employees who refuses to give in to a demand to change terms and conditions of employment, however this is not always so.

In Numsa vs Aveng Trident Steel and Imperial Dedicated Contracts, The Labour Appeal Court had to decide whether to upheld the Labour Court’s ruling that under the circumstances the respondent/s did not commit an automatic unfair dismissal in dismissing employees who refused to accept a change in terms and conditions of their employment contracts. The court had to apply its mind to factual causation, e.g. where the real reason for the dismissal due to the employee’s refusal to accept the change to their terms and conditions of employment and then also legal causation e.g. whether the refusal to accept the change in terms and conditions of employment was the more probable reason.

The applicant’s contention was that the dismissal of the employees was in contravention of Section 187 (1)(C) of the LRA which provides that a dismissal is automatic unfair if the reason for the dismissal is ‘a refusal by employees to accept a demand in respect of any matter of mutual interest between them and the employer.

Aveng is a large steel manufacturer comprised of a number of facilities with branches throughout the country. The company’s sales volumes fell by 20% and its cost structure could not be maintained by its income. Trading margins have dropped significantly. In order to remain viable, it needed to restructure and thus contemplated the possibility of retrenchments. It then entered into a consultation process in terms of Section 189A.

During the consultation process the company proposed the following: 1.) a review of the organizational structures, 2.) redefinition of some of the job descriptions, 3.) mothball under-utilised equipment, 4.) review of limited duration contract positions and 5.) a review of the employee transportation benefit at Roodekop and Alrode.

Aveng realised that a reduction of staff would not be sufficient to resolve its operational problems. It needed an improvement in productivity and to review job descriptions in order to combine certain functions. As example, the company proposed combining the jobs of general worker, labourer, conductor truck assistant, packer and sling man under the title ‘General Handler.’ The company offered voluntary severance packages, which was accepted by a large number of the employees. The parties also agreed to retrench employees on limited duration contracts. The only matter relevant to the consultation process was the amendments of the job descriptions.

Numsa proposed a 5-grade structure, effectively collapsing 13 grades into 5. In essence, the union was accepting the principle of restructuring. Its motivation for a 5-grade structure was that it would allow for multi-tasking, training, mobility between grades and a false premise that it would allow for higher wages for its members. The union, however, did not appreciate once realising that the remuneration between the grades would be narrowed resulting in employees not being better of on a 5-grade structure. The parties agreed to an interim agreement whereby the union’s member will adopt extra duties by those retrenched, however the union later send an email that its members are no longer willing to perform the additional duties as agreed in the interim agreement.

On the 30th of March 2015, the company addressed a letter to Numsa informing it that the consultation process in terms of Section 189 had now been exhausted and gave notice that the company would implement the new structure with the new redesigned job descriptions. It further advised that the positions as it currently existed was redundant and that the staff faces retrenchment. Alternatives was proposed, but none of the employees accepted the change in job description nor the alternatives and was accordingly retrenched.

At the Labour Court, Numsa contended that the reason for the dismissal was the refusal by the employees to accept the company’s demands in respect of the altered job descriptions and grade structure, which are matters of mutual interest and thus automatically unfair. Aveng denied that the dismissal was automatically unfair and maintained that the reason was based on its operational requirements. The labour court found that the employees were not dismissed for refusing to accept any demand, but for operational requirement reasons after rejecting the alternatives to dismissals proposed by the employer.

The court further found that the proposal to alter the job descriptions was an appropriate measure aimed at avoiding or minimizing the number of dismissals. Aveng was faced with operational difficulties and the only viable answer was to restructure and redesign the jobs. Had the employees continued working in line with the new job descriptions they would have remained in employment and suffered no adverse financial consequence.

On appeal, the union contended, inter alia, that the Labour Court erred in its interpretation of Section 187 (1)(c) of the LRA as amended. The union submitted that the wording of Section 187 (1)(c) makes it clear that the intention is to render automatically unfair ‘any’ dismissal where the reason relates to the employee’s refusal to accept a demand in relation to matters of mutual interest and that there are no exceptions in this regard. The prohibition therefore envisages only three elements: a demand, a refusal and a dismissal. It even applies to those circumstances where the demand was motivated by the genuine operational requirements of the employer to change terms and conditions of employment.

The Labour Appeal Court referred to Eccawusa and Others vs Shoprite Checkers t/a OK Bazaars Krugersdorp where the Labour Court held that where amendments to terms and conditions of employment are proffered by an employer as an alternative to dismissal during a bona fide retrenchment exercise and it is a reasonable alternative based on the employer’s operational requirements, the employer will be justified in dismissing employees who refuse to accept the alternative offer.

In Fry’s Metals (Pty) Ltd vs Numsa and Others, the Labour Appeal Court held that a dismissal could not be a lock- out if the dismissal was intended to be final and irrevocable and not intended to compel compliance with a demand. A dismissal falls within the scope of Section 187 (1)(c) only if it is conditional in the sense that the employer retains an intention to accept the employees back into its employ if they accede to the changes. The target of Section 87 (1)(c) was not final dismissals but temporary or strategic dismissals. The Labour Appeal Courts decision was confirmed by the Supreme Court of Appeal.

The question now is whether the amendment to Section 187 (1)(c) has altered the law in this respect, which now states that a dismissal is automatically unfair…if the reason for the dismissal is, inter alia, ‘a refusal by employees to accept a demand in respect of any matter of mutual interest.’ The difference in wording is where the previous provision stated, ‘to compel the employee to accept a demand’ it was now replaced with ‘is a refusal by employees to accept a demand.’

On the upside the new provision shifts the focus away from the intention of the employer in effecting the dismissal to the refusal of the employees to accede. It no longer matters what the employer’s intention or purpose might be. It is thus irrelevant whether the dismissal was intended to induce employees to comply with a demand. The distinction between final or conditional dismissal has thus fallen away.

“Even though the amendment is less clear about when it is permissible to dismiss on operational grounds employees who refuse to accede to the employer’s demands for changes to their terms and conditions of employment, our prevailing jurisprudence has interpreted the LRA to permit dismissal on such grounds. The right to retrench is implicit in Section 187 (1)(c) of the LRA and that the purpose of the amendment was not to change the law in this respect.”

The court further stated that the question whether Section 187 (1)(c) is contravened does not depend on whether the dismissal is conditional or final, but rather what the true reason for the dismissal of the employee is. The proven existence of the refusal merely prompts a causation enquiry. The actual reason for the dismissal must be determined and there is no reason to exclude the employer’s operational requirements from the consideration as a possible reason to dismiss.

The Labour Appeal Court held that the dominant reason for the dismissal of the employees was the company’s operational requirements and not the employee’s refusal to accept a demand.

What we learn from this case is that an employer is not necessarily dismissing employees automatically unfairly in terms of Section 187(1)(c) of the LRA under circumstances whereby employees refuses to accept a demand such as a change to terms and conditions of employment, if it can be shown that the proposed change in terms and conditions of employment is as a result of a bona fide operational requirements of the employer.


CC#08072019 Khanyile Nganezi vs Dunlop (2019)

Section 67 of the LRA prevents an employer from dismissing an employee for participating in a protected strike or for any conduct in contemplation or in furtherance of a protected strike. On the 22 August 2012 employees of Dunlop embarked on a protected strike, however a month later on the 26th of September 2012 Dunlop dismissed all the staff. How did this happen?

An unfortunate characteristic of our labour relations within the context of strike action is that often strike action is accompanied with violence, which was also so with the Dunlop employees. The employer obtained an interdict to prohibit the employees from participating in violent conduct, however the interdict did not have the desired effect. When negotiations between NUMSA and the employer failed, Dunlop dismissed its employees who were involved in violence and the rest on derivative misconduct. It was this dismissal on derivative misconduct that was challenged at arbitration.

The Commissioner identified three types of employees under the circumstances. A.) those who were identified to have actively participated in violence, b.) those who were identified to have been present when violence was committed, but did not actively participated and c.) those who were not identified as having being present nor participated in violence. The Commissioner found that the dismissal for the type a and b employees was fair, substantively, but unfair towards the type c employee and ordered their reinstatement.

Dunlop successfully took the matter on review at the Labour Court, where the award was set aside. Numsa appealed to the Labour Appeal Court who dismissed their application. Numsa sought leave to appeal against the dismissal of the employees to the Constitutional Court, those employees, who were not individually identified as being present during the violence. The Constitutional Court agreed that there is a broader issue of principle applicable, that of “Derivative Misconduct.”

At the time of the dismissal, Dunlop allowed the employees dismissed on derivative misconduct to appeal their dismissal. Only one employee attended the hearing and she was reinstated on the strength of her evidence that she did not participate in the violence and did not know who the perpetrators were.

On review at the Labour Court the court found that the:

“Commissioner acted unreasonably in finding there was no evidence that the employee was present during the violence in the strike as he ignored the circumstantial evidence and inferential reasoning that should have followed from it. Had he done so, their presence at the scenes of violence would have been proven. Their derivative misconduct consisted in the failure to come forward and either identify the perpetrators or exonerate themselves by explaining that they were not present and could not identify the perpetrators. The applicants

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breached their duty of good faith in the employment relationship by failing both the duty to disclose and the duty to self-exonerate.”

Coppin JA for the Labour Appeal Court expressed concern that the Labour Court’s judgment creates the impression that the mere presence of an employee at a scene where the misconduct occurred triggered a duty for him to exonerate himself. He recognized the potential for abuse inherent in a duty to exonerate and, accordingly, silence as a ground for dismissal:

“While one appreciates that the employer must at least be able to invite an employee to disclose his or her actual knowledge of misconduct, and warn the employee of the consequences of refusing to do so, the absence of rules regulating for more extensive questioning by the employer leaves ample room for abuse. The very notion that an employee can be sanctioned for not speaking, irrespective of whether he or she has actual knowledge of the principal misconduct, or the identity of any of its perpetrators, is in itself potentially tyrannical.”

Savage AJA had regard to the policy considerations which should shape the approach to derivative misconduct in the particular context of a strike:

“The policy consideration referred to in Food & Allied Workers Union vs Amalgamated Beverage Industries Ltd, which require consideration in determining the scope of the employee’s duty to assist an employer protect its legitimate interest must, therefor, in my view, reflect appropriate regard for the position of both parties in the relationship. This would include an assessment of the appreciable risks which may arise for an employee in speaking out, in naming perpetrators or for purposes of exoneration and the dangers inherent which arise in doing so.”

At the Constitutional Court, Dunlop supported the majority judgment’s view that inferential reasoning would have led the Commissioner to a finding that the third category of employees were also present where violence occurred and that the duty of good faith underlying the employment relationship necessitated the disclosure of the identities of other or personal exoneration. Numsa on the other hand contended that even though an inference could be drawn that the employees may have been present, derivative conduct was not established.

Numsa felt that the employer’s reciprocal duty of good faith required that employees’ safety should have been guaranteed before expecting them to come forward and disclose information or exonerate themselves, which was not done. Interesting to this case is the Casual Workers Advise Office who argued that there can be no derivative misconduct in the form of a duty by employees to disclose information about the conduct of their co- employees in the context of strike action. This is so as this kind of duty, according to them, could only flow from a fiduciary (legal) relationship and not merely from reciprocal ‘good faith’ employment relationships. In addition, in the context of strikes, a duty to disclose would undermine a fundamental underlying feature of the history of collective bargaining, that of solidarity between workers. No duty to disclose exists in that context, and there can be no form of derivative misconduct based on it.

The Constitutional Court explained that the origins of the doctrine of derivative misconduct has its roots in the doctrine by Nugent J in FAWU:

“ In the field of the industrial relations, it may be that policy consideration require more of an employee than that he merely remained passive in circumstances like the present, and that his failure to assist in an investigation of this sort may in itself justify disciplinary action.”

In Hlebela the Labour Appeal Court stated that in principle a breach of the duty of good faith can justify a dismissal. Non-disclosure of knowledge relevant to misconduct committed by fellow employees is an instance of a breach of the duty of good faith. Both FAWU and CHAUKE made the critical point that a dismissal of an employee is derivatively justified in relation to the primary misconduct committed by unknown others, where an employee, innocent of actual perpetration of misconduct, consciously chooses not to disclose information known to that employee pertinent to the wrongdoing.

The Constitutional Court, however, agreed that in neither our criminal law nor our civil law, generally requires us to be our neighbour’s keeper. To expect employees to be their employer’s keeper in the context of a strike where worker solidarity plays an important role in the power play between worker and employer would be asking too much without some reciprocal obligation on an employer’s part.

In addition, the Court found:

“ To impose a unilateral obligation on an employee to disclose information to her employer about the participation of a co-employee in misconduct in a protected strike would be akin to imposing a fiduciary duty on the employee. In the context of a strike, the imposition of a unilateral duty to disclose would undermine the collective bargaining power of workers by requiring positive action in the interest of the employer without any concomitant obligation on the part of the employer to give something reciprocally similar to the workers in the form of guarantees for their safety and protection before, when and after they disclose.”

In the context of violent strike action, the court found that the perspectives of both the employer and employee are important in finding the right balance between the parties in fair labour practice. On the one hand, the impact of violence on the employer and their trust of the employee. On the other hand, the intimidation of innocent, non-striking workers makes safe disclosure a prerequisite for the possibility of this kind of misconduct. To find the right balance, the court found that the reciprocal duty of good faith should not, as a matter of law, be taken to imply the imposition of a unilateral fiduciary duty of disclosure on employees. In determining whether a unilateral fiduciary duty to disclose information on the misconduct of co-employees forms part of the contractual employment, caution must be taken not to use this form of indirect and separate misconduct as a means to easier dismissal rather than initially investigating the participation of individual employees in the primary misconduct.

Evidence, direct or circumstantial that employees in some form associated themselves with the violence before it commenced, or even after it ended, may be sufficient to establish complicity in the misconduct. Presence at the scene will not necessarily be required. Even prior knowledge of the violence and the necessary intention in relation to association with the misconduct will still be sufficient.

The Constitutional Court found that the Commissioner, the Labour Court and the Labour Appeal Court all proceeded on an acceptance that a derivative duty to disclosed existed on the authority of Hlebela. This duty was based in the contractual duty of good faith without any reference to an employer’s reciprocal good faith obligations. Dunlop’s reciprocal duty of good faith required, at the very least, that employees’ safety should have been guaranteed before expecting them to come forward and disclose information or exonerate themselves. That was not sufficiently done.

The Court found that the inferential reasoning failed in casu as it would have been shown that each of the employees was present as an instance during the strike where violence was committed; would have been able to identify those who committed violent acts; would have known that Dunlop needed that information from them; with possession of that knowledge, failed to disclose the information to Dunlop and did not disclose the information because they knew they were guilty and not for any other innocent reason.

Three possible inferences exist, a.) none of the applicants were present, b.) all of the applicants were present, c.) some of the applicants were present.

The Constitutional Court ruled against Dunlop and overturned the Labour Court’s ruling to that of ‘the application is dismissed.’

What we learn from this case is that in context of strikes that turned violence, there is no unilateral fiduciary duty on employees to disclose information on employees guilty of the primary misconduct, but that the employer has a recirpocal duty of good faith to at least guarentee the safety of employees. In addition, an employer cannot hide behind contrau policy regulations that states that an employee has a fiduciary duty to disclose as the employer has a reciprocal duty of good faith towards the employee. The incident must still be investigated and the evidence, direct or indirectly, of the employee’s involvement should still be established.


MIBCO#21072019 (2019) Coetzee vs Autohaus Centurion (2019)

Legal representation at the CCMA or Bargaining Councils has been a contentious issue for a number of years. The processes at the CCMA focuses on speedily resolution of labour disputes with the aim of simplifying dispute resolution and to this end CCMA Rule 25 gives a Commissioner, serving at the CCMA or Bargaining Council, the discretion whether to allow legal representation in certain classes of disputes.

Legal Representation is not automatically allowed if the disputes relates to the fairness of a person’s conduct or capacity and typically a legal representative has to apply in advance for the right to appear. The Commissioner will then apply his or her mind to the complexity of the dispute, the matters raised in law as well as the comparative ability of both parties.

Legal practitioners on the one hand, argues that this specific rule infringes on their right to practice their trade, but on the other, the CCMA is of the view that having legal practitioners involved in the dispute resolution process at arbitration may overcomplicate disputes and thus defeat the purposes of having disputes resolved speedily.

A twist in this debate occurred recently at the Motor Industries Bargaining Council (February 2019) whereby the legal practitioner of the applicant to an unfair dismissal dispute argued that the Legal Practice Act of 2014 now deprives a Commissioner of this discretion to refuse legal representation, regardless of the rules.

Section 25 of the LPA states:

“ (2) A legal practitioner, whether practicing as an advocate or an attorney, has the right to appear on behalf of any person in any court in the Republic or before any board, tribunal or similar institution, subject to subsections

(3) and (4) or any other law.”

The dispute was set down for arbitration on the 4th of February 2019, with the applicant being represented by J Geldenhuys (attorney) and the respondent by J Dickenson (AHI).

At the offset of the proceeding Mr Geldenhuys for the applicant submitted that Section 25 of the new Legal Practice Act of 2014 gives an attorney right of appearance at any court, tribunal or any board, subject to any other law. The only other law applicable in the circumstance is the LRA, which does not deal with legal representation and that the Bargaining Council rules are not a law, hence he is not prevented from representing the applicant.

The Commissioner confirmed that the prevailing case law, that of the Supreme Court of Appeal in CCMA and others vs Law Society of the Northern Provinces (2013), confirmed the validity and constitutionality of the CCMA’s rules (which also extends to the Bargaining Council Rules) confirming the discretion of the Commissioner in deciding whether to allow legal representation or not. The Commissioner, however, further argued that this case law was before the Legal Practice Act came into effect on 1 November 2018.

The Commissioner considered the matter and ruled that both parties has a right to legal representation without having to make application as this right is granted in the Legal Practitioner’s Act.

In essence, this ruling confirms the view that considering the LPA is an act of Parliament, that the CCMA rules are in breach of the LPA as the rules in itself is not a law.

What complicates the debate further is that the CCMA issued a Directive No.1 of 2019 in January, stating that as the CCMA Rules are empowered by the LRA, the Rules trump any other as the LRA, in Section 210 states that in times of conflicting legislation, it will always prevail (save the Constitution or amendments to the LRA).

Section 115 (2A) of the LRA empowers the CCMA to make rules regulating the practice and procedure in connection with the resolution of a dispute through conciliation or arbitration. In my view the essence of the dispute now is that, considering the CCMA is empowered by the LRA to establish rules to regulate proceedings before the Commission, whether such rules may be in breach of any act of Parliament? It is further my view (but debatable) that the LPA in itself is not in conflict with the LRA, but with the CCMA Rules; and that the CCMA probably does not have the jurisdiction to establish rules contrary to an act of Parliament, whereby the act in itself is not in breach of the LRA. Even though the case in CCMA and others vs Law Society of the Northern Provinces (2013), predated the LPA, it dealt with the Constitutionality of the CCMA Rule 25 and did not deal with the issue of the CCMA Rule being in direct conflict with another act, the LPA. The courts will have to bring finality to the matter.


CC#05082019 Sizwe Myathaza vs Johannesburg Metropolitan Bus Services t/a Metrobus (Dec 2016)

Often an applicant to a CCMA dispute will be issued an Award in his or her favour but fails to speedily have the Award enforced upon non-adherence by the employer. Occasionally these Awards are not enforced for a number of years with the applicant then suddenly turning to the courts to have it enforced.

Does an arbitration award prescribe after three years as is the case with an ordinary debt as stipulated in the Prescription Act? Does a review application interrupt prescription? The Constitutional Court gave direction on these important questions in Sizwe Myathaza vs Metrobus (2016)

The Court set out to answer three important questions, relevant to the dispute. Firstly, whether the Prescription Act applies to matters governed by the LRA, Secondly, if it does, whether the award constitutes a debt as envisaged in section 10 of the Prescription Act and Thirdly, if it is, then whether the debt has prescribed.

The applicant was employed at Metrobus as a bus driver for a period of seven years. During 2007 he was suspended with other drivers for failure to issuing tickets yet collecting money from commuters. The employer entered into an agreement with the union that should the employees plead guilty; they will be issued with a final written warning only. The applicant failed to admit guilt and requested to be subjected to a disciplinary enquiry. The applicant stopped coming to work and notice was served on the applicant to attend the disciplinary enquiry. The applicant failed to arrive for the hearing and was found guilty for being absent without permission, with the disciplinary enquiry held in his absentia.

At arbitration the employer admitted that the procedure for the dismissal was unfair but was contesting the substantive fairness of the dismissal. The arbitrator found that the dismissal was both procedurally and substantively unfair. The arbitrator awarded reinstatement and back pay of R90 747.00 excluding tax.

When the employee, however, turned up for work, the employer sent him home telling him that they will be applying for a review of the arbitration award. The employee opposed the review, however no date was sought and fixed for the hearing, which resulted in the review being pending seven years later. The employee then, out of desperation, approached the labour court to enforce the award.

Metrobus apposed the enforcement of the award arguing that the award cannot be enforced pending a review application and also that the award had prescribed on the expiry of three years under the Prescription Act. The employee, on response, argued that the award was not a debt as envisaged by the Prescription Act.

The labour court ruled that the Prescription Act applies and that the award prescribed three years after publication. The Labour Appeal Court ruled that an arbitration award indeed does amount to a debt as envisaged by the Prescription Act, but then focused its argument on whether it is to be considered a judgment debt, which prescribes after thirty years or a simple debt, which prescribes after three years. The court ruled that an arbitration award is classified as a simple debt expiring after three years. The Labour Appeal Court, however found that a review application does not interrupt prescription as it is not considered a process whereby the creditor claims payment of the debt. The court ruled that the award prescribed.

The Constitutional Court started its argument explaining that when interpreting legislation, like the Prescription Act, one should do so in a manner that “promote the spirit, purport and objects of the Bill of Rights”. The LRA creates dispute resolution forums that operates separately from the courts, unless when an award is reviewed or made a court order. The entire dispute resolution mechanism established by the LRA could not have been contemplated when the Prescription Act was enacted in 1969 and as such the differences between the LRA and the Prescription Act is vast. As such, the objectives of both Acts are vastly different.

The Court explained that the purpose of the Prescription Act is to prompt creditors to institute legal proceedings without delay as it may affect the quality of adjudication if witnesses are no longer available or their memories have faded. On the contrary all prescription periods in terms of section 11 of the Prescription Act is contrary to the LRA as it is out of line with the speed and periods within which the LRA requires disputes to be resolved. Thus, the period of three years is far too long to have an award enforced. Employment disputes by its very nature are urgent matter and requires speedily resolution. A three- year delay may have adverse consequences to both the employer and the employee.

With reference to the Supreme Court of Appeal in Shoprite Checker, the court emphasized:

“The entire scheme of the LRA and its motivating philosophy are directed at cheap and easy access to dispute resolution procedures and courts. Speed of result was its clear intention. Labour matters invariably have serious implications for both employers and employees. Dismissals affect the very survival of workers. It is untenable that employees, whatever the rights or wrongs of their conduct, be put through the rigors, hardships and uncertainties that accompany delays of the kind here encountered. It is equally unfair that employers bear the brunt of systemic failure.”

It is in this context that the interpretation of section 16 of the Prescription Act must be approached. Section 16 of the Prescription Act Provides:

“Subject to the provisions of subsection (2)(b), the provisions of this chapter shall, save in so far as they are inconsistent with the provisions of any Act of Parliament which prescribes a specified period within which a claim is to be made or an action is to be instituted in respect of a debt or imposes conditions on the institution of an action for the recovery of a debt, apply to any debt arising after the commencement of this Act.”

What is clear from this provision is that the Act recognizes that there are other pieces of legislation that regulates prescription and that it further states that the whole of Chapter III shall not apply to matters regulated by an Act of Parliament that is inconsistent with it and which prescribes a period within which to claim or institute an action in respect of a debt.

The Prescription Act envisages civil courts as the only forums to enforce debts, whereas in terms of the LRA the CCMA and Bargaining Councils are forums that must resolve labour disputes and do so far more expeditiously than the time taken in courts. In addition, the Prescription Act bars creditors from instituting legal action for failing to enforce their debts in periods which are far longer than the periods prescribed by the LRA. In addition, an arbitration award is an outcome of which a dispute has been finally settled between parties. Lastly, the Prescription Act is designed to extinguish the right to enforce a claim that is still to be determined by a court, contrary to the sense of finality that of arbitration awards. Thus, the Prescription Act does not cater for a situation whereby the claim had already been adjudicated with a binding outcome. The LRA provides that a certified

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arbitration award is an order of court. Considering the award is final and binding it is difficult to determine a prescription period.

The other difficulty the Court addressed in applying the Prescription Act to arbitration awards is the times in which prescription begins to run. In terms of the Prescription Act, prescription commences when the debt becomes due. It cannot apply to arbitration awards as under the Prescription Act a debt is due immediately when it is claimable or recoverable, whereas under the LRA the debt is only due after the award is publicized. In addition, prescription can also not run from the date when the award is published as the LRA allows a party to challenge the award on review.

One matter remains. The insertion of section 145 (9) into the LRA in 2015, which provides for review applications interrupting prescription. This section does not apply in the current circumstances due to it only becomes effective in 2015, however the court gave an opinion that the reason for the insertion of the section probably has nothing to do with giving power to the Prescription Act in matters relating to the LRA, but rather to effect justice to applicants who often had their awards prescribed by lengthy court proceedings.


LC#08122019 Ockert Jansen vs Legal Aid South Africa (May 2018)

It is trite that in our labour laws that a decision- maker to dismiss should correctly understand the real nature of the dispute put before him or her as if not, it may render a dismissal unfair.

In Ockert Jansen vs Legal Aid South Africa an employee was dismissed for misconduct in circumstances whereby there was a link between the employee’s mental condition (depression) and his misconduct. The employee subsequently claimed that his dismissal was automatically unfair in terms of Section 187 (1)(f) of the LRA in that through his dismissal, the employer unfair discriminated against him on the ground of his disability as well as unfairly discriminating against him in terms of Section 6 of the Employment Equity Act on the same grounds.

Mr. Jansen was employed at the respondent as a paralegal since March 2007 and held the position throughout his employment. The respondent issued the applicant a notice to attend a disciplinary enquiry on the 7th of November 2013 to answer to the following allegations; (1) unauthorized absenteeism for a period of 17 days, (2) breach of the respondents rules and regulations in that the applicant failed to inform his manager of his absence before 07:30 on the given days (3) insolence in that he disrespected management by turning his back, walking away whilst they were addressing his absenteeism (4) refusal to obey a lawful instruction in that he refused to conduct a prison visit at Mosselbay Youth Correctional Centre after being instructed to do so.

In addition, the applicant also told the respondent that the reason he no longer arive for duty is because he is awaiting his dismissal notice from the respondent and that he no longer wishes to work for the employer. The disciplinary enquiry was conducted, and the chairperson recommended a summary dismissal as sanction.

During the labour court proceedings the applicant testified that for most of his employment he performed his duties well, that he always made extra effort to help the respondent’s clients and often received performance awards. He was also appointed as brand ambassador for the respondent.

During April 2010 he visited his doctor for an open eye wound following a fall. At the consultation, he also disclosed certain medical problems he had, which he did not understand. The doctor’s diagnoses were that he was suffering from major depression and referred him to hospital and prescribed anti-depressants. The doctor issued a medical certificate to this effect, which was handed in to the respondent.

The applicant then approaches a company manager and asked to be put on the wellness program. The manager agreed and the applicant went to FAMSA at Mossel Bay where he consulted a social worker. During November 2011, the applicant consulted another doctor who indicated the applicant having depression with high anxiety. Again, a medical certificate was issued and submitted to the respondent.

The applicant then on the 29th of August 2012 send an email to the respondent advising of his personal and work problems, which resulted in him being treated for depression. The applicant also attended to the divorce court as he was separated from his wife. The respondent eventually arranged for the applicant to see Mrs. Farre a clinical psychologist, whom he consulted for four sessions. Mrs. Farre submitted a report to the respondent advising them that the applicant was showing signs of frustration and displayed symptoms of burnout.

During October 2012, the applicant then submitted a letter to the CEO informing her about differential treatment by management and the resultant depression, however there was no response. At this juncture, the applicant’s emotional and mental condition had deteriorated to such an extent that he would, as his coping mechanism, disengage from everything and lock himself up in his room for days. The applicant’s condition worsened, resulting in him staying away from work. During this time, he was diagnosed with manic depression.

It was during this time that he was delivered with the notice to attend a disciplinary hearing by Mr. Terblanche. The mental condition of the applicant had worsened to such a stage that he lost control of himself and acted out of character. It was due to this conduct that he was regarded as being grossly insolent towards his manager. At the disciplinary enquiry, the applicant admitted to the allegations, but raised his mental condition as his defense. The chairperson of the disciplinary enquiry rejected his version stating that there was no evidence that he was suffering from reactive depression and that in any event, she was dealing with a misconduct enquiry and not incapacity.

Following an adjournment, the applicant handed in Mrs. Farre’s report to the chairperson, however she rejected it stating that it would be prejudicial to the respondent should she now re-open the matter.

During a meeting with the Chief Legal Executive, the respondent concluded that there was no evidence submitted during the disciplinary hearing to conclude that the applicant’s alleged ill-health had the effect as presented. The applicant was dismissed.

At the labour court, the respondent applied for absolution from the instance as they were of the view that the applicant failed to make out a prima facie case and as such the respondent could not rebut anything. The court rejected the application and cited Janda v First National Bank where it was found that considering that the onus in automatic unfair dismissals is with the defendant, that absolution of the instance cannot be granted.

Turning to the merits of the dispute, the court noted that it was common cause that the applicant indeed acted as alleged by the respondent. The applicant, however, maintained that it was his depression that was the actual reason for his dismissal. The applicant showed that during the course of his enquiry that he submitted proof of his mental condition, yet the respondent failed to consider or to challenge its authenticity. The court found that the applicant at all material times suffered from reactive depression. The applicant was under treatment for his condition as evidences by the medical certificates submitted to the respondent.

At the time the applicant committed the misconduct, he was suffering from his condition and was using medication. The respondent, despite denial, was aware of the fact that the applicant was undergoing medical treatment for his mental condition as was illustrated by the testimony of the applicant and Farre.

Considering these facts, the court found that the respondent had knowledge that the applicant was a person with a disability. As such, the respondent was under a duty to reasonably accommodate him and the respondent failed to comply with its duty in this regard. Instead of dismissing the applicant for misconduct, the respondent had a duty to institute and incapacity enquiry.

In addition, the court argued:

“ Considering that the respondent had been made aware of the applicant’s condition, the respondent in deciding to dismiss the applicant did not have any regard to the circumstances under which the infractions happened and the effect of the applicant’s condition upon his conduct.”

The court further argued:

“That the conduct of the respondent in ignoring the applicant’s condition and deciding to dismiss him in the circumstances, when viewed objectively against the applicant’s depression, had the potential to impair the applicant’s fundamental human dignity and, accordingly, falls within the grounds envisaged by Section 187 (1)(f) of the LRA.”

In application to decide whether dismissal was automatically unfair, the court referred to SACWU v Afrox, stating that the enquiry into the reason for a dismissal is an objective one. The court applied the test of causation (also known as the Afrox Test, that of factual causation and legal causation.

Firstly, one should determine factual causation, asking a question as to whether the employee would have been dismissed if the employee did not have a mental condition. If the answer is ‘yes’, then the employee was not automatically unfairly dismissed. If the answer is ‘no’ then one need to consider legal causation whereby one has to establish the most likely reason for the dismissal; whether or not the mental disorder of the employee was the ‘dominant’ or most likely cause for the dismissal. The court will determine what the most probable inference is that may be drawn from the established facts as a cause for the dismissal.

In Kroukam v SA Airlink the court stated:

“..Thus, if an employee simply alleges an unfair dismissal, the employer must show that it was for a fair reason permitted by section 188. If the employee alleges that she was dismissed for a prohibited reason, for example pregnancy, then it would seem that the employee must, in addition to making the allegation, at least prove that the employer was aware that the employee was pregnant and that the dismissal was possibly based on this condition.”

Some guidance on the nature of evidence required is found in Maund v Penwith District Council (1984) where it was held that:

“it is not for the employee to prove the reason for his dismissal, but merely to produce evidence sufficient to raise

the issue..or.. that raises some doubt about the reason for dismissal.”

In casu, the labour court ruled that the respondent would not have dismissed the applicant had he not suffered from his condition. His conduct was inextricably linked to his mental condition. The applicant acted in the way he did because of his mental condition. The most probable inference to be drawn from the uncontested evidence led by the applicant and Farre is that the probable cause for the applicant’s dismissal was his mental condition. The applicant led adequate evidence to indicate that he had suffered from depression and the respondent was throughout aware of his mental condition.

The applicant satisfied the court that a prima facie case was made and thus discharged the evidential burden that the reason for dismissal related to his mental condition. The respondent, in electing not to produce any evidence, has failed to discharge the onus to prove the reason for dismissal was permissible, as contemplated in Section 191 (2) of the LRA.

The labour court ordered full reinstatement with retrospective compensation and costs.

What we learn from this case is that as part of the investigation process into an employee’s alleged misconduct, one should be alive to the reasons provided by the employee as well as the totality of circumstances. If it is alleged that the employee is suffering from a mental disorder that may have an impact on his conduct or

performance, then it is advisable to consider an incapacity process instead. Of note is that a dispute relating to an automatic unfair dismissal, the employee merely needs to establish a prima facie case that the reason for dismissal may relate to his or her mental condition. The onus will then shift to the employer to prove that the dismissal was for fair reasons. Further of note is that it is rather clear that the employer’s tactic of overly depend on its application for absolution from the instance did not work and that the employer could have prepared a better case in its defense. However, the detail in terms of the employees’ mental condition is overwhelming and the employer should have followed the incapacity process.


CCMA#19082019 NUMSA obo Baloyi and Others vs O-Line (Pty) Ltd (2019)

As a young democracy, South Africa in many ways have to deal with issues that was inherited from our past. One of these issues that is on the forefront, especially in the media these days, are racism and the use of racist rants and expressions infringing on the human dignity of others. Even though the theatre has mostly been set in society at large, the workplace has caught up, with the courts having to deal with racial utterances by people in the workplace.

It does seem, however, that accusations of racial misconduct can also be used as a political tool to divert attention away from workplace misconduct. In NUMSA obo Baloyi and Others vs O-Line (Pty) Ltd (2019) the CCMA recently were called upon to deal with a matter whereby employees falsely accused the company CEO of making racial remarks against them.

The four employees and applicants in the matter, were found to be playing cards and was confronted by the CEO. Already being on a final written warning for playing cards, the employees approached their union, who advised them that should they be accused of playing cards, then they should accuse the CEO for using racially offensive language against them.

On the morning of the 7th of October 2018, the CEO stopped with his vehicle and found the applicants playing cards whilst on their tea break. The CEO got out of his vehicle and walked towards the applicants angrily, using the word ‘f*ck” while addressing them. The next day the applicants approached the CEO to have a meeting with him in this regard, however the CEO failed to give them an audience. Instead, the applicants were issued with a notice to attend a hearing. The applicants, in turn, filed a grievance against the CEO accusing him of calling them “k*****s’ in the Afrikaans language.

At the disciplinary hearing, the applicants were found guilty of insubordination for not adhering to the instruction that they should not play cards outside the gate of the respondent and were issued with final written warnings. The applicants were then issued with notices to attend a hearing for making false accusations of racism against the CEO in their grievances. The applicants were found guilty and were dismissed. The applicants then challenged the substantive fairness of the dismissal, but also the procedure claiming that the employer failed to attend to the grievances submitted.

During arbitration, the respondent’s witnesses argued that the CEO could not have uttered those words as he is English speaking and cannot speak Afrikaans. The applicants, however, were adamant that the CEO spoke in Afrikaans to them and did utter those words. Both parties agreed that the use of the K-word is deeply offensive in our democratic society who strive to eradicate discrimination. In arriving at a decision, the Commissioner considered what transpired between the applicants and the trade union straight after the initial confrontation with the CEO. The applicants approached the shop steward and tried several attempts to speak to the CEO in order to apologize for them playing cards. They had no intention to address the issue of racial discrimination with the CEO. The next day the applicants, with the two shop stewards, approached the NUMSA offices where they were advised to submit grievances for racial remarks only if they were charged for insubordination in that they were playing cards outside the company gates.

Noteworthy is that the union officials did not consider writing a letter to the CEO and the board to complain about the behaviour of the CEO, especially considering the reputation NUMSA enjoys in the labour relations sphere of South Africa. Instead, the union advised that the accusation of racial allegations should be used as a defence against a disciplinary hearing. At first, the grievances were not submitted, but only after the applicants were eventually charged for misconduct, but before the commencement of the disciplinary hearing for insubordination. This was the first time the respondent became aware of the racial allegations.

The respondent claimed that he is from Zimbabwe, English speaking and cannot speak Afrikaans. He admitted though that he was angry and probably did use the word ‘f*cken’ and ‘idiot’ when addressing them, but that he never made any racial remarks. The respondent asked why he will make these remarks in Afrikaans when he is angry and cannot speak the language. The Commissioner asked the respondent to read the Afrikaans sections in the grievance letter and it was apparent that he could not speak Afrikaans.

It was clear that the allegations of racial remarks were a fabrication and a defense against the misconduct hearing of the applicants. The Commissioner argued that NUMSA could definitely have explored additional forums to address this serious issue in that they could have filed an unfair discrimination dispute at the CCMA, a crimen injuria case at the South African Police Service or the Equality Court, referred the matter to the Human Rights Commission and write a complaint to the Board, which they failed to do. Surely this would have resulted in the suspension of the CEO as no company would like to be associated with a CEO who practice racism in the workplace.

The Commissioner ruled that on the balance of probabilities that the respondent did not make these racial slurs and that it was indeed fabricated. In terms of the fairness of dismissal as sanction, the applicants contended that should they be found guilt that a dismissal was too harsh. The Commissioner ruled that given the seriousness of the allegations against the respondent, that it could have ended his career at O-Line and that he may have suffered severe reputational damage. None of the applicants were remorseful and the dismissal of the applicants were upheld.

In terms of the procedural fairness of the dismissal the Commissioner ruled that it is trite that the submission of a grievance does not interrupt a disciplinary hearing. The dismissals of the applicants were found to be procedurally and substantively fair.

What we learn from this case, naturally, is that one must be careful in making false racial accusations against other employees as these allegations are typically so serious in nature that it can cause tremendous harm and reputational damage to others. The precedent has now been set that making false racial accusations against others are indeed a fair reason to dismiss. In addition, given the seriousness of racial discrimination, especially in the South African context, employees will also have to answer as to why no other recourse were followed if these allegations are legit. Personally, I find this award welcoming within a context whereby South Africans tend to use racism as a political tool to even scores.



Is allowing an employee an opportunity to lead evidence in mitigation a critical component to the procedural fairness of a disciplinary hearing and does an employer stand to have a dismissal declared unfair should a chairperson not call on the employee to lead evidence in mitigation?

In Prushothman Subramoney Pillay vs CCMA (2014) the applicant was employed as an associate Professor and the CFO at the University of Kwa Zulu Natal and a MCOM student at the University. The issue in dispute is in regard to an anonymous email, which was send to the University concerning the awarding of a postgraduate degree to the applicant, which was not approved by external examiners as required. In this context then the applicant was questioned in the Magid Tibunal as to the amount of money advanced to a certain Professor Mbange in obtaining the MCOM degree.

The Magid Tribunal made a report finding that the applicant had lied, under oath, about his relationship with professor Mbanga. At a subsequent council meeting, the Council voted to dismiss the applicant. The Council resolved to subject the applicant to a disciplinary enquiry, chaired by Adv. Pretorius. The applicant was then found guilty at the disciplinary enquiry with the Pretorius report recommending a dismissal of the applicant as CFO and Professor at the University.

The Pretorius report was put before the Council for a vote. The applicant also believes that the dismissal to be procedurally unfair, partly, due to some of the witnesses called to testify before Adv Pretorius, was part of the Council who voted to have him dismissed. The gravemen of the applicant’s submission for claiming a procedurally unfair dismissal, however, was due to Adv. Pretorius not calling for evidence in mitigation from the applicant during the disciplinary enquiry.

In arriving at a judgment, the court referred to Van Jaarsveld and Van Eck Principles of Labour Law and the Ten Golden Rules that must be applied to determine procedural fairness in a disicplinary hearing, i.e. 1.) the employee must be fully informed about the charges brought against him prior to the hearing, 2.) the employee must be informed about the charges timeously and also when and where the hearing will take place, 3.) the hearing must be held within a reasonable time, 4.) the hearing must be conducted in the employee’s presence, 5.) the employee is entitled to be represented at the hearing by a co-employee, or a trade union official or a lawyer, 6.) the employee must be given a fair opportunity to state his case to a disciplinary committee after the employer has presented his case. In other words, 7.) the chairman and his disciplinary committee must be unbiased and must consider all relevant circumstances and facts to the charges objectively with a just and open mind, 8.) after a finding of guilty but before the imposition of a penalty the employee must be afforded the opportunity to adduce evidence in mitigation of sentence, 9.) the decision and the reasons for the decision must be made known to the employee and 10.) the employee must be reminded that he is entitled to appeal the decision and may also render the dispute to the CCMA or a bargaining council for resolution. It is clear that, in casu, point 5, 7 and 10 was not complied with.

In Davis vs Tip and Others, it was held:

“..the LRA permits commissioners to conduct the arbitration in a manner that the commissioner considers appropriate. In doing so, commissioners must be guided by at least three considerations. The first is that they must resolve the real dispute between the parties. Secondly, they must do so expeditiously. And, in resolving the labour dispute, they must act fairly to all the parties as the LRA enjoins them to do.”

The court found that the Commissioner did not deal with the non-compliance with a fair procedure in that some of the witnesses to the disciplinary hearing also participated in the decision to dismiss. The court referred to Murray vs Minister of Defence, stating that:

“..the common law of employment must be held to impose on all employers a duty of fair dealing at all times

with their employees – even those the LRA does not cover.”

To this effect the court stated that procedural fairness requires compliance with natural justice, the audi et alteram partem rule and company policies and procedures. The court found that the Commissioner committed a reviewable irregularity due to the error of the applicant not being invited to address evidence in mitigation. The court agreed that the dismissal of the applicant was procedurally unfair and awarded compensation.

What we learn from this case is that for a disciplinary hearing to be procedurally fair that employers should deal fairly with its employees, which includes natural justice and a fair opportunity to be heard. Presenting factors in mitigation is a key factor to procedural fairness, being an important component of Schedule 8 3 (5) of the LRA.


LAC#160919 Gemalto South Africa (Pty) Ltd vs CEPPWAWU (August 2015)

Often misconduct in the workplace can be so severe that an employer may be blinded by a sense of natural justice. ‘Someone’s head must roll!’ and with this a company lose focus of the real issues and venture into discriminatory practices in order to satisfy the need for justice. Polygraph testing is a contentious issue as employers often believe that the result of such tests will be proof of guilt. The purpose of a polygraph test is to assist with the investigation process, but due to some believe that these results are definitive, employers and employees get involved in disputes emanating purely out of the use of these tests. In one such an incident the employer lost focus of the main incident, which resulted in compensation being ordered by the CCMA of over R1 million with the decision of the Commissioner confirmed as reasonable by both the Labour and Labour Appeal Court.

Gemalto SA is a company engaged in the manufacturing and personalizing of secure operating devices such as smart cards and sim cards. These products are predominantly sold to banks within South Africa. In order to produce these products, the company’s clients will entrust the company with their client details. Naturally then the company operates in a high security environment.

Around 31 December 2010, Standard bank, one of the company’s biggest clients, advised Gemalto of a breach in security whereby cards and data relating to the bank was removed from Gemalto’s premises, resulting in a loss amounting to R50 million. Gemalto then proceeded with an investigation and wrote the union that all employees who has access to sensitive data will be required to undergo a polygraph examination.

The union, however, responded with a letter to the company, advising Gemalto of the unwillingness of its members to participate in the polygraph test process. The company responded that it is surprised by the union members’ unwillingness to be subjected to the polygraph tests given this was properly addressed during a staff meeting and that all staff understand the seriousness of the situation. As such, the company advised the union that any member who refuses to subject themselves to a polygraph test, a reasonable and lawful instruction, will be faced with disciplinary action, which may result in termination of employment.

The union maintained that polygraph testing should be voluntary and that the company should explore alternative investigation tools as polygraph testing will not work. It was argued that testing will not work due to the majority of employees not participating in the tests. The company argued that some of the employees had it as a term and condition of their employment contracts that the employer may demand them to be subjected to a polygraph test and that they risk disciplinary action should they refuse to undergo the test. To ease the process the company arranged for polygraph operators to conduct an information session regarding the use of polygraphs, however only a few employees attended.

The employees submitted a petition representing 189 employees stating that a polygraph is not accurate and that they will not subject themselves to a polygraph test. In addition, they requested information as to what will happen with employees who fail the test. On the 27th of June 2011 the company then issued a letter to 28 employees noting that any attempt by the company to consult them regarding polygraph testing was unsuccessful and that a final extension of 48 hours was given. The employees refused and was subsequently charged and dismissed for Gross Insubordination.

Aggrieved by the outcome, the employees referred an unfair dismissal dispute to the CCMA. The company stated that it was common practice for employees to be subjected to polygraph tests and that employees typically participate in order to assist the company in its investigations. In addition, the company highlighted the fact that certain employees are contractually bound to subject themselves to polygraph testing.

The union argued that the dismissals was unfair as its members were not obliged to undergo polygraph testing and that they were singled out among many employees. The Commissioner found that considering the employees did not undergo the polygraph test, that they are guilty as charged, but the appropriateness of dismissal was questioned under the circumstances; that the company presented no evidence to show whether the employees had a history of misconduct; that dismissal for misconduct should be for instances of such gravity that makes continued employment intolerable; the company’s view that dismissal was fair was based on the employees’ refusal to adhere to their contractual obligations, which will result in anarchy should it be allowed to happen; that one employee was allowed to continue working until eventually being retrenched; that the company did not justify why the singled employees were treated differently than the other employees, who did not had these provisions in their contracts; why only 28 out of 189 employees were charged was not justified by the company.

On review at the Labour Court the company argued that the award was not one that a reasonable decision- maker would have reached based on the evidence before him. In addition, the company argued that the Commissioner committed a gross irregularity in terms of the parity principle in that they only took disciplinary action against those employees they could prove had breached their contractual obligations. The Labour Court found that it would have been easy for the company to charge all 189 employees considering that employees probably would not have denied signing similar contracts (as their annexures disappeared) and that it was industry norm for employees to be subjected to polygraph tests. The Labour Court dismissed the application.

On appeal to the Labour Appeal Court the company maintained that the decision to dismiss was not arbitrary nor capricious nor was it induced by improper motive. The court found that what distinguished the 23 (reduced) employees from the rest was merely the fact that the records of the employees had the annexure attached to their contracts binding them to be subjected to polygraph tests. As such, 23 employees became a soft target whereas it was common cause that the other employees in a similar position all refused from accepting the tests. The company’s view had always been that all employees signed a similar provision, but that it was either removed or lost and that they only took action against those employees who they could prove for being in breach of their contracts.

The court found that it is thus not unreasonable to conclude that the dismissal of these employees had nothing to do with the purpose of a polygraph test. What started off as an investigation of the Standard Bank claim ended up not being the reason for the employee’s dismissals. In addition, it is illogical to accept that subjecting only 23 people to polygraph tests would have assisted the company to uncover what transpired in the main investigation. There is thus no rational connection between the purpose of discipline and the alleged misconduct to be investigated. There is thus no causal link between the reason for dismissal and the alleged losses suffered by Standard Bank. The differentiation between the employees were unfair.

The appeal was dismissed with cost.

What we learn from this case is that employers often lose focus of the intended purpose of a polygraph test, which is to investigate an incident. Often employers are faced with severe levels of misconduct in the workplace, which demand an intervention. It is just normal that an employer will feel a strong sense of natural justice. Under such circumstances an employer can often lose focus of the core investigation. In this case, the employer lost focus on the Standard Bank investigation and concentrated on 23 employees out of a group of 189 who refused to undergo the polygraph test. The parties got side-tracked with a case all the way to the Labour Appeal Court about an issue which is discriminatory in nature, yet no closer to finding closure on the alleged syndicates operating within the company. We should also highlight that this case is not about the fairness of disciplining employees for failure to adhere to reasonable instructions (polygraphs), but rather employer’s application of rules, consistency, discipline and discriminatory conduct. Lastly, in circumstances where employees refuse to be subjected to polygraph tests, the employer’s conduct should be rational, drawing a link to the purpose of the test and that of the primary investigation.


LAC#30092019BMW (South Africa) (Pty) Limited v National Union of Metalworkers of South Africa and another [2018] JOL 40518 (LAC)

Section 187 1 (f) of the LRA makes it clear that a company commits an act of an automatic unfair dismissal, should a dismissal of an employee be on either direct or indirect grounds, such as, inter alia, the age of a person. Naturally, the retirement of an employee may become a contentious issue as sending a person on forced retirement may be perceived as unfair discrimination, thus breaching both the Employment Equity and the Labour Relations Act. How does our courts deal with the matter of retirement? Even more importantly, what if an employer never had a retirement age policy and wishes to introduce one?

In BMW (South Africa) (Pty) Limited v National Union of Metalworkers South Africa the employer restructured its business and introduced a policy, effectively lowering the retirement age from 65 to 60 years of age. The company sent out communication to all employees advising them of the new retirement age, inviting them that should any employee wishes to remain at an retirement age of 65, that they should do so and formally indicate of their choice. The employee, Mrs van der Bank, failed to do so. Two years later, during 1997, the employer became aware that not all employees were aware of the policy change and of the request to indicate their preferred retirement age. This time around, communication by the employer included a list of the affected employees, of which, Mrs van der Bank was also one of those implicated. Mrs van der Bank allegedly indicated on the form provided that she prefers having her retirement to remain at age 65, however whether she submitted the form back to the employer became the focus of the litigation that followed.

In 2014 the employer sent Mrs van der Bank on forced retirement. Mrs van der Bank filed an automatic unfair dismissal dispute to the Labour Court claiming that she did submit the form indicating of her desired retirement age being 65 not 60. At the Labour Court the issue in dispute was whether the employer can prove that the employee never submitted the form. It was common cause that during 2010 a transfer of data occurred to a new SAP system and that not all data transferred properly. During this time, it was also established that a certain employee, Mr Voster’s, data did not transfer properly even though he had a copy of the form he initially submitted, indicating his preference to retire at age 65. To this extent, the Labour Court ruled that in all probability the employer also lost the data of the applicant and thus ruled the forced retirement of the applicant to be an automatic unfair dismissal.

On appeal to the Labour Appeal Court, the applicant (employer) argued that the respondent (employee) received numerous benefit statements from her provident fund and could have taken issue with her retirement age being changed on the statement from 65 to 60 around 2000 already, yet she failed to do so. In addition, the employee did in later years submitted two grievance regarding her retirement age, however, at no stage did she argued or stated that she indeed did submit the form indicating her preferred choice. The first time she actually informed the employer of her positively submitting the form was at the time of litigation before the Labour Court. The applicant further argued that the employee’s retirement cannot be regarded as a dismissal but a termination by effluxion over time and that the employee accepted the change in retirement age acquiescently.

The Labour Appeal Court found in favor of the employer and found that the Labour Court erred in establishing that the onus was primarily on the employer to disprove that the employee failed to submit her form. There is on the employee an evidentiary burden to reasonably show that she did submit the forms, before the burden shifts to the employer to prove why the dismissal was not unfair. In casu, the employee could not produce a copy of the form submitted. Surprisingly it was never the view of the employee that she submitted the forms in her communication with the employer (up to the Labour Court that is). The normal retirement age was 60 as introduced by the company in 1995. The employee failed to discharge her evidentiary burden to prove that she elected to retire at age 65. Age 60 was the normal retirement age within the company and thus the termination of the employee was not considered an automatic unfair dismissal.

What we learn from this case is that our legal system does recognize retirement as a termination through the effluxion of time and that it does not necessarily constitute a dismissal. Employers should, however, be careful as it will have to be shown that a retirement age was either the agreed or normal retirement age within the company as, if not, a termination may be considered a dismissal and even potentially unfair discrimination.


LC#28102019 Delmas Coal (Pty) Limited vs CCMA, Commissioner Lizelle Kriel Wessels and Doctor Simon Sehaladi (June 2018)

Arbitration can be quite a challenging process, with both parties having to properly apply their minds to the arguments and evidence to put forward. Considering the burden of proof is based on the balance of probabilities, parties need to carefully analyze what evidence are relevant and plan how to lead this evidence in a simple, yet structured way that will enhance one’s prospects.

During arbitration, proceedings are recorded. Opportunity to forward evidence typically happens during your evidence in chief, in which, you will have an opportunity to present your arguments and evidence to the opposing party as well as the Commissioner. During this time a party may put forward any documentary evidence, witnesses, audio, video recording and any evidence that may be relevant to one’s case. One important aspect for subtracting evidence though, yet often forgotten, is during cross-examination of the witnesses of the opposing party.

I have often found that employer representatives during a discipline enquiry do not adequately prepare for cross- examination and is often just too happy to say ‘no questions’. What representatives often forget is how valuable a tool cross-examination is as a source of information. What representatives also often forget is that a Commissioner commits a latent irregularity (when a Commissioner fails to properly apply his/her mind to the evidence that was put before him/her, including cross-examination). It goes without saying then that a Commissioner must closely follow the cross-examination process and scrutinize information that was gathered this way, especially uncontested evidence. It is critically important for parties to take note of the testimony of witnesses during cross-examination and properly rebut any evidence that you may be in disagreement with, as if not, uncontested evidence will have to stand for what it is.

The importance of this fact was demonstrated in the Delmas Coal vs CCMA case whereby the Commissioner, failed to apply her mind to uncontested evidence during cross-examination. The employee, Doctor Simon Sehaladi, was employed as a fitter on a mine. He was dismissed on the 4th of October 2016 on charges relating to the theft of company property, being in the possession of stripped cables, gross dishonesty, illegally entering the work area and failure to carry out a legitimate instruction.

During arbitration, four witnesses was called to testify. The second witness, a security officer, testified that he received a report on the 9th of September 2016 that the employee and a co-employee had been seen the previous day using a mine vehicle, without authorization, exiting a gate not recognized as a general access gate. Another security officer also testified that on the night of the 15/16th of September 2016, suspicious activity was reported at a T-Junction on a gravel road close to the mine. He testified that whilst on his way to the mine he actually met the employee on the road. The witness testified that the employee was on fatigue shift and was thus not permitted to be on the mine’s premises.

The employee’s vehicle was searched but nothing was found. Later, however, stripped cables were found, in bags, dumped next to the gravel road where the employee had been seen. In addition, the employee was dressed in his work overalls, which is not allowed outside the mining area. Another witnesses testified that on the night he saw a mine vehicle exiting the mine and turn a T-junction on the gravel road. He saw the passengers off-loading bags; however, he could not see who the passengers were. A certain Mr. Mothutsi testified that on the night of the 15/16 September 2016 he received a call from the employee to assist him underground, to open the gate in order for them to load a bin containing rubbish.

The employee’s defense was that at the time he went to visit a friend when he was spotted on the road, that he was not identified as the culprit, that there was no record of him entering the mine and that nothing was found in his vehicle.

The Commissioner found that the employer’s evidence was merely circumstantial and that there was no proof that the employee was guilty of the allegations against him. She found that the dismissal was procedurally fair, but substantively unfair. She ordered reinstatement with retrospective effect.

The employer then approached the Labour Court on Review arguing that the Commissioner failed to consider material evidence presented during the hearing. The employer argued that a witness, Dlamini, gave undisputed evidence that at the time of the incident that the employee was being monitored on account of suspicious conduct. The employee did not dispute that his conduct on the evening had been suspicious. In addition, Dlamini testified that on the night when the employee was pulled over, he was wearing his mine uniform. This version was also confirmed under cross-examination of Mafastela that he saw two people wearing mine overalls. The testimony of both witnesses was left undisputed. It was only during the third witness that the employee put it to him that the uniform he was wearing was not mine uniforms. He failed to put this version to the two previous witnesses. Under the pressure of cross-examination, the employee changed his version when confronted as to why he failed to contest the testimony of the two witnesses put before him. As such, his failure to rebut the two witnesses should have led to any reasonable decision-maker to conclude that the evidence was not circumstantial but instead demonstrably indicative of the fact that the employee was in fact on the mine of the night of the 15 to 16 September 2016. Furthermore, Dlamini’s uncontested testimony that strip cables were found in bags on the gravel road close to the mine was ignored by the arbitrator.

Judge van Niekerk of the Labour Court found:

“In short, in my view, the only decision that a reasonable decision-maker could reach on the available evidence is that the uncontested evidence of the applicant’s witnesses, together with the Blessing statement, demonstrated that the third respondent and Blessing were being monitored for suspicious behavior on the night of the incident, that they were on the mine that night, that a mine vehicle was seen leaving the mine and the driver and passenger of that vehicle seen offloading something into the grass area where stolen cables were later found. The holistic evaluation of all of the evidence points only toward the undeniable conclusion that the third respondent was guilty of the misconduct with which he was charged.”


“ Had the arbitrator properly considered and assessed the evidence before her, she would have arrived at the conclusion that the third respondent was guilty of the misconduct that he was charged for.”

What we learn from this case is that cross-examination is a critical component of subtracting evidence from a witness and should not be ignored. Decision-makers should be alive to uncontested evidence during cross- examination. In addition, representatives should ensure that details of evidence during cross-examination are carefully noted and that any evidence that one is not in agreement with is properly rebutted.

How stringent is the requirement for a procedurally fair misconduct dismissal?

LC#11112019 Avril Elizabeth Home for the Mentally Handicapped vs CCMA and others-(2006).

Many of us operating in the HR space have learned the finer detail of our profession from our predecessors or management inside our respective organizations. However, I have also come to realize over many years that the generational transfer of knowledge is not always correct and often lead to the incorrect application of laws in the workplace. One of these matters that so often transfers throughout the generation within an organization is the stringent requirement (or lack thereof) of a fair procedure when it comes to misconduct dismissal. This is now in terms of Schedule 8 (4) of the LRA.

How stringent should the typical disciplinary enquiry be before a potential dismissal may be considered fair? Many of us (myself included) have been the subject of many hours of labour experts teaching us the ‘criminal’ model of disciplinary hearings, i.e., the opening statement, evidence in chief, cross examination of witnesses, re- examination, mitigation, aggravation and closing arguments. I do admit that I am guilty of training my clients the exact same process. However, is this stringent form of holding a disciplinary hearing really what is required by our law or courts?

Schedule 8 (4) in the Code of Good Practice: Dismissals establishes the fair procedure to adopt in dismissal proceedings relating to misconduct. In Avril Elizabeth Home for the Mentally Handicapped vs CCMA and Others- 2006, the Labour Court held a significant departure from the ‘criminal justice model’ that was developed and applied under the 1956 LRA, which likened a workplace disciplinary enquiry to a criminal trial. Even so, one often still find the Commissioners at the CCMA or Bargaining Council to adopt similar models, however it is important to realize that these are for procedure only and bears little value to either parties.

Van Niekerk AJ found that the rules relating to procedural fairness introduced in 1995 do not replicate the criminal justice model of procedural fairness. With reference to the explanatory memorandum that accompanied the draft Labour Relations Bill, the court held:

‘there is no place for formal disciplinary procedures that incorporate all of the items of a criminal trial, including the leading of witnesses, technical and complex charge sheets, requests for particulars, the application of the rules of evidence, legal arguments and the like. ‘

With reference to article 4 of the ILO Convention 158 on the Termination of Employment and its interpretation by the ILO’s Committee of Experts, the court held:

‘When the code refers to an opportunity that must be given by the employer to the employee to state a case in response to any allegations made against that employee, which need not be a formal enquiry, it means no more than that there should be dialogue and an opportunity for reflection before decision is taken to dismiss.’

In terms of how the courts considered procedural fairness, a fair procedure may be narrowed to the following extend: 1.) provided that the employee was entitled to respond to the allegations made against him and that the employer took a decision and communicated it to the employee; 2.) it is permissible for witnesses not to be called and for the employee instead to be provided with the complaint in writing and invited to respond thereto, but the employee must be advised of this at the outset and afforded an opportunity of obtaining representation; 3.) reliance on hearsay evidence may be permissible. 4.) where the misconduct of the employee is common cause, an invitation to the employee to make written representations will be sufficient. 5.) it is permissible for an employer not to follow a two-stage inquiry (guilt and sanction) and to deal with the merits and mitigation at once.

However, in a number of cases, the courts have found that the Commissioner applied too high of a standard: 1.) a finding that the employee was unaware of the charges against him, even though not formally charged, the employee was interviewed regarding the complaint against him; 2.) a finding that the employer acted procedurally unfair because the charges was on the day changed to ‘Gross’; 3.) a finding that the perception of bias arose by virtue of the fact that the chairperson was a subordinate of the initiator. 4.) a finding that the chairperson did not conduct the enquiry with sufficient detachment merely because he frequently intervened and descended ‘into the arena’.

It is worth noting that in Moropane vs Gilbeys distillers and Vintners (Pty) Ltd -1997, the Labour Court held:

“the guidelines in the Code of Good Practice: Dismissals do not give rise to rights. Only when their exercise or non-exercise leads to an unfair dismissal are, they recognized and can the results of a failure to abide by them be remedied.”

In BIFAWU & another vs Mutual and Federal Insurance Company Ltd -2006, the Labour Appeal Court held:

“Deviations from the provisions of the Code will not give rise to a finding of procedural unfairness where this

causes no prejudice and where, judged holistically, the employee was afforded a fair disciplinary enquiry.”

It is also noteworthy that many small and medium size companies, do not have the resources to make use of expensive consultants and attorneys and that they do not necessarily possess the skill or knowledge to embark on overly complicated dismissal procedures. As such, the audi alteram partem rule (opportunity to be heard) merely requires a fair opportunity to defend allegations that was brought against an employee, that the employee had an opportunity to be represented, to an interpreter and that the procedure adopted was exercised consistently and fairly to both parties.

Private Arbitration and the jurisdiction of the CCMA

LC#24112019 Krean Naidoo vs Liberty Holdings (2019)

Often employers insert into the contract of employment a provision that binds the parties to private arbitration for any dispute that may arise out of or the termination of employment. Private arbitration has its benefits, but may also be costly. Often employees who are dismissed would still refer a dispute to the CCMA to resolve. Does the CCMA have jurisdiction to attend to a dispute in circumstances where the parties agreed to private arbitration?

In Krean Naidoo vs Liberty Holdings, the employee was employed as a senior manager-Group Tax. In terms of the contract of employment the employee agreed to be bound by the employer’s terms and conditions of employment, which incorporated the employers Employee Relations Handbook. The said Employer’s Relations Handbook provides that dismissal disputes are to be dealt with via private arbitration.

Upon being dismissed for misconduct the employee filed an unfair dismissal dispute at the CCMA as he did not want to go the route of private arbitration. The CCMA ruled that it does not have jurisdiction to hear the matter, and that the employee may elect to instead refer the matter to private arbitration. The review before the labour court is to review this jurisdiction ruling.

The employee argued that private arbitration would mean automatic legal representation, arbitration costs after the first R30 000 that would be covered by the employer and leeway for the arbitrator to order other costs. The employee further argued that the Commissioner erred in finding in favour of the employer and had he considered the cost involved, that he would have found that given the circumstances, he would have warrant the CCMA to hear the matter.

The employer argued that the employee agreed to private arbitration when signing his contract of employment, that it is common practise in the company to make use of private arbitration and that they would have covered all the cost and not only the first R30 000, even though the Employee Relations Handbook states that the employer will only cover the first R30 000.

In addition, the rules of natural justice would still apply, and that the employee would have recourse to review any award at the labour court. The employer further argued that the decision to refer the matter to private arbitration or to not to refer a dispute at all as set out in section 147 (6) of the LRA, lies solely with the employee and not with the Commissioner.

The court ruled that the employee ought to have understood that by signing the contract of employment that he was agreeing to be bound by the terms in the Employee Relations Handbook. The Commissioner’s ruling was based on the agreement between the parties, that there would have been no financial prejudice to the employee and that a private arbitrator would have the same powers as a CCMA Commissioner and that the rules of natural justice would apply.

Section 147(6) of the LRA states that:

  1. If at any stage after a dispute has been referred to the Commission, it becomes apparent that the dispute ought to have been resolved through private dispute resolution in terms of a private agreement between the parties to the dispute,

the Commission may –

    1. refer the dispute to the appropriate person or body for resolution through private dispute resolution procedures: or
    2. appoint a commissioner to resolve the dispute in terms of this Act;

The court found that the Commissioner correctly adhered to that the decision to refer a matter to private arbitration (or not refer a dispute at all), lies with the employee. Once the route is determined to be that of private arbitration, the CCMA steps aside and the aggrieved party has the recourse of private arbitration.

The court ruled that the CCMA has no jurisdiction in this matter.

What we learn from this case is that the CCMA does not have automatic jurisdiction to entertain a dispute in circumstances whereby the parties agreed to private arbitration. What should also be noted is that in section 147 (6A) its states that the CCMA must appoint a Commissioner to resolve the dispute if (a) an employee earning below the earnings threshold is required to pay any part of the cost, or (b) where the person or body appointed to resolve the dispute is not independent to the employer.


LC#19012020Rustenburg Local Municipality vs Edna Kelebogile Ngake (June 2017)

As many of us who makes a career out of human resources, legal and/or IR will know, losing a case at the CCMA or Bargaining Councils can indeed be very costly. Many of us had to grapple with arbitration awards going against us as employers and so often one is faced with uncertainty as to how this came to be and how we could have avoided this.

Even more so, so often one indeed feels that a case is strong, only to be left disappointed. Even though the intention of the legislator is to allow for CCMA arbitration to bring finality to a dispute, Section 145 of the LRA does allow for a review of the arbitration award. In general terms, this is not considered an appeal if one does not agree with the outcome, but merely to review the conduct of the arbitrator as he or she may have committed an irregularity, made an unreasonable award with the believe that a different decision-maker would have come to a different result or when an arbitrator may have either misinterpreted or misapplied the law.

A respondent to a dispute, so often an employer, has six week to file a Review Application to the Labour Court, but to the surprise of many, the mere filing of a Review Application, does not suspend the operation of the arbitration award (Sect 145 (7)), thus, enabling the beneficiary of the award to still approach the CCMA to enforce the award.

Fortunately, the LRA in Section 145 (7 & 8) does allow for the suspension of an arbitration award, inter alia, by the furnishing of securities to the satisfaction of the court. Amongst others, securities for compensation awards should be equal to the amount stipulated in the award.

The question, however, is whether the furnishing of securities whether it will automatically suspend the operation of the award? What if the employee still proceeds in having the award enforced? Secondly, how is it determined whether a security is ‘to the satisfaction of the court, or should one wait until the applicant try to have an award enforced and every time approach the court with an urgent application to stay the award in order to interdict the process of execution? Is there a process that actually deals with the declaration of suspension of an award?

In Rustenburg Local Municipality vs Edna Kelebogile Ngake, the employer lost a dismissal dispute at the Bargaining Council and had to pay the employee an amount of R271 684.27 as part of a reinstatement order. The employee proceeded to have the award enforced due to the employer’s lack of compliance.

The employer brought a Review Application to the Labour Court to have the matter reviewed based on alleged irregularities committed by the arbitrator. In addition, the employer also brought an Urgent Application to suspend the operation of the arbitration award and to interdict the Sheriff from enforcing the award. Besides the merits of the review, the Court also had to deal with the process of having an arbitration award suspended once securities was furnished in terms of Section 145 (7 & 8) and also whether the applicant should be absolved from furnishing security for reasons supplied. For purposes of this writing we will only focus on the process of having the arbitration award suspended under circumstances whereby securities were furnished.

The Court explained that from the outset an arbitration award issued under the dispute resolution process under the LRA is final and binding and that the filing of a Review Application, in itself, does not stay or suspend the operation of an arbitration award. The award remains executable despite the pending review. It thus enables the beneficiary of an arbitration award to still execute and enforce compliance with an award despite it being challenged.

It is thus the duty, under Section 145, of the applicant for review to seek relief in having the operation of the award suspended. Section 145 of the LRA allows for the suspension of an arbitration award by either way of purchasing a security or by obtaining leave of the Labour Court (meaning an applicant could apply to the Court to have the requirement for security be suspended).

Of note though is that the LRA does not prescribe how or in what form security must be provided. The Court referred to Moqhaka Local Municipality vs Motloung and Others and found that typically a Bond of Security furnished by one’s attorney or bank is generally considered acceptable, other forms of security, such as a payment into the Court or the Sheriff’s trust account may also be sufficient. Other forms of security, like handing an asset as a security may also be sufficient, however with these the court will have to be satisfied on a case by case basis.

The dilemma though is what should be done once the security had been furnished? Should one wait for the employee to enforce and then the employer deal with the matter by way of an urgent application? The Court found that the phrase ‘to the satisfaction of the Court’ cannot be interpreted to mean that the Labour Court must on every instance determine whether the security is sufficient and then declare it as such. This will unnecessarily inundate the Courts with Urgent Applications. The Judge stated, “ The simple point is that if a security bond by an attorney, as example, is provided for the exact prescribed amount, then why should it be necessary for the Court to declare it to be satisfactory’?

The Judge stated further, “ In my view the principle behind the introduction of Section 145 (7&8) was to secure automatic suspension of the enforcement of the arbitration award.”

The Court continued by stating that a party who furnishes security as prescribed is automatically considered to be to the satisfaction of the Court and that the party merely have to file the proof of the security to the Court as well as the opposing parties. Should the opposing party still proceed to enforce the award then the applicant will have to bring an Urgent Application, however, the party seeking to enforce the award will be faced with an adverse cost order against them. In this way, the message will be filtered through to all who deals with the LRA that when sufficient security had been provided, then it suspends the operation of the arbitration award.


LAC#260120 Pick n Pay Retailers vs LMAZA (November 2016)

Unauthorized absenteeism is probably one the most common challenges employers have to deal with in the workplace. Over the years I have noted that inconsideration has become imbedded in our society’s employment culture. So often employees will absent themselves, failing to show common decency in gaining the required permission from his or her employer. This trait is also reflected in so many employees not showing the decency to submit a formal resignation if intending to exit employment. Of course, I am generalizing, as it is not true of all, however, this is a bigger issue than many would admit.

There is no such thing as an automatic dismissal (not to be confused with an automatic unfair dismissal) in our labour laws as all employment disputes should still be subjected to the rules of a fair dismissal. Besides the procedural aspect of a fair dismissal, substantive fairness is based on, inter alia, whether an employee is guilty of an offence and whether the trust between the parties had been tarnished. One principle, key to a dismissal, is the prejudice an employee’s misconduct did or may cause an employer?

It happens, that those who deals with labour relations, often regard dismissal for certain forms of misconduct almost ‘a given’ and that going through the procedural requirement is merely a formality. Unauthorized absenteeism for lengthy periods of time is typically regarded as a guaranteed dismissal, especially if an employee was absent for five consecutive days or more.

The Labour Appeal Court in Pick n Pay Retailers and L Mzazi did not regard a dismissal as a given when an employee took absence without leave for an extended period. The employee, a storeman for Pick n Pay, took unauthorized leave for a period of 45 days from the 22nd of December 2013 to the 4th of February 2014. This period was a critical time for the employer due to the holiday season and increased demand. The employer dismissed the employee who appealed the fairness of the dismissal at the CCMA. The Commissioner found the dismissal to be procedurally unfair, but substantively fair. On review at the Labour Court, the Court ruled that the dismissal was both procedurally and substantively unfair. A decision upheld by the Labour Appeal Court upon appeal.

The employer’s leave policy, requires that annual leave be taken:

subject to…trading requirements and business needs …[and] the joint agreement of both management and the employee. If agreement cannot be reached, then management will get together with the employee and his/her representative for [purposes of] reaching an amicable solution’.

Once leave is agreed upon, a written document must be signed by both parties. In casu, the employee took leave during this period without the permission from the employer. The employer sent two telegrams to the employee on the 28th of December and the 2nd of January. Both telegrams, however, were sent to the incorrect address. In these telegrams, the employee was informed that he had been absent without authorization and had not communicated the reasons for his absence. He was asked to contact his employer and that failure to do so may lead to disciplinary action. On the 11th of January, a third telegram was sent to the same incorrect address stating that a disciplinary hearing will proceed in his absence if he fails to attend. The employee did not receive any of these telegrams. On the 15th of January, a disciplinary hearing was held in the employee’s absence. The employee was dismissed for ‘absconding from your workplace since the 22nd of December 2012 without authorization.’

Aggravating the employee’s misconduct, as put forward by the initiator, were the severe negative impact that absconding from the workplace had on the employer’s business, the shortage of staff caused poor service delivery and the employee’s failure to respond to the telegrams sent him. The employee was informed of his dismissal upon his return on the 4th of February.

At arbitration, the evidence was that the employee approached Mr Oyekunle on the 21st of December, at a time when the store manager was with him in the office, with a request to take leave from the 27th of December. Mr. Oyekunle told the employee that given that the employee does have leave available, they can talk about it, but that it is not fair for him to give such short notice. The employee was advised that he can’t be granted leave on such short notice as the company would need time to find a replacement and given the time of the season.

Mr. Oyekunle told the employee that he could take leave as from the first week in January and that he should come to him so that the paperwork can be completed. The employee told Mr. Oyekunle that he always took leave during December, upon which he was told that it is really about the short notice. The employee then told Mr. Oyekunle that he had a crisis at his house with the passing of a family member. The employer then asked for the documentation as proof so that he can book the employee off for occasional leave. The employee could not provide the documentation and no leave was authorized.

The employee who was the only storeman at the time, then did not return to work as from the 22nd of December. He took the amount of annual leave available to him. The company argued that the trust relationship is broken due to the employee’s disregard of the employer’s rules in circumstances whereby absenteeism had a huge impact on the business over the festive season.

The Commissioner found that the employee took leave without authorization and that he had committed misconduct. The Commissioner considered that it was over the busiest time of the year and that the parties failed to reach an agreement regarding his leave. Turning to the procedure followed by the employer, the Commissioner found that the employer should have dealt with the situation differently when the employee eventually returned and should have subjected him to a disciplinary hearing.

The Labour Court ruled that the fact that the employee was charged for ‘absconding from work’ put the employee’s conduct in a different light as he did eventually return for work. The Court further found:

The issue of [the employee’s] clean disciplinary record, the reason for his need to return to the Eastern Cape to unveil tombstones for his parents and [his] relatively long employment history with the company were all considerations that should have been addressed by the Commissioner in the process of coming to a decision regarding the substantive fairness of the dismissal. They were not. Further, the reasoning that a disciplinary hearing may have put [his] absence in a different light, highlights the flaw in this approach.’

The Court found that the decision that the dismissal was substantively fair was one that a reasonable decision- maker could not reach.

On appeal, the Labour Appeal Court found:

With an emphasis on corrective and progressive discipline, the Code of Good Practice recognises that dismissal for a first offence is reserved for cases in which the misconduct is serious and of such gravity that it makes continued employment intolerable. For leave without authorisation to justify summary dismissal for the first offence, the material before the commissioner must exist to show that the misconduct was of such a serious nature as to justify dismissal the imposition of the most severe of available sanctions.’

The LAC further stated that even though it was suggested that the employee’s absence caused operational strain over the busy festive period, no evidence showed that it caused harm of such a serious nature that it warranted summary dismissal for the first offence. This was more so given the employee’s lengthy period of service and clean disciplinary record. The LAC agreed that the employee committed misconducted in showing no regard for the employer’s rules, but there was no element of dishonesty. His conduct has caused mere inconvenience as there was no proof of any loss or damage to the employer. Given the size of the employer, they had the resources to make contingency plans and such plans were made.

The LAC upheld the decision of the Labour Court that the dismissal was both procedurally and substantively unfair.

What this study shows us is, first and foremost, to allow an employee the opportunity to a fair disciplinary hearing, upon his return after a period of absence. Employers should refrain from denying an employee of this right as the employer itself could be at risk should they not appreciate the full context of the issue at hand. In addition, trust is tarnished in circumstances of real prejudice and damage to the company. Prejudice could also be anticipated, however under such circumstances the potential harm should be material and critical to be avoided.


LAC#020220G4S Secure Solutions vs Ntloko (November 2016)

In Edcon vs Pillmer ir was found that a decision-maker to dismiss an employee should lead evidence when it is alluded that the trust relationship between an employer and employee had been tarnished. All relevant circumstances, such as the employee’s disciplinary record and length of service as relevant factors to take into consideration.

Given the LRA’s position that generally an employer should follow measures of progressive discipline before a decision to dismiss is taken, dismissals are also warranted for misconduct that is of a severe nature, even on the first instance. Gross Dishonesty is typically a form of misconduct whereby a dismissal on the first instance is justified. The employment relationship is based on trust and typically one can’t depend on a lengthy and clean disciplinary record.

In G4S Secure Solutions vs Ntloko, the employee was dismissed after being a security guard for 14 years for being dishonest in his initial application. During his application, he was asked ‘Have you ever been convicted of a criminal offence?’. He indicated that he had not and was subsequently employed.

Fourteen years later the employee applied for a promotion. A criminal check was undertaken, which indicated that he indeed had two previous criminal convictions. One for rape in 1982, being 17 years old at the time. For this offence, he received six lashes. The employee was also convicted of assault in 1991 and received a fine of R200.

On the 1st of November 2010, the employee was notified to attend a disciplinary hearing and was subsequently charged for-

“misrepresentation and/or dishonesty concerning an application for employment and/or breach of PSIRA Regulations code of conduct.”

The employer has a disciplinary code, which states that:

“Dishonesty Concerning an Application for Employment – This offence occurs where information provided in suppoer of an application for employment is subsequently found to be false, and such information has a material effect on the employer/employee trust relationship.”

Section 23 (1)(d) of the Private Security Industry Regulation Act 56 of 2001 (PSIRA Act), which only came into operation after the employee’s employment with the employer, provides that a person may be registered as a security service provider provided he or she ‘was not found guilty of an offence specified in the Schedule within a period of 10 years immediately before the submission of the application to the Authority.’

At the disciplinary hearing, the employee’s defence was that he was not aware that he had a criminal record as he did not go to jail. The employee was found guilty of misconduct and was dismissed.

Being unhappy with the outcome of the disciplinary hearing, the employee referred an unfair dismissal case to the CCMA. The Commissioner was not convinced that the employee misrepresented himself during his application as at the time as his defence of not being aware of having had a criminal offence was rather plausible. In addition, the employee was found not to have breached the PSIRA code of conduct in that his convictions fell outside of the 10-year period prescribed by the PSIRA Act. The Commissioner took into consideration the employee’s 14 years’ good service, his clean disciplinary record and his national key point training. In the arbitration award the Commissioner found the dismissal of the employee to be substantively unfair.

On Review at the Labour Court, the Court found that the employee indeed committed Gross Dishonest Misconduct, however the view of the Court was that the employer put its focus of the employee having breached the PSIRA code at the core of its defense of the dismissal. The Court was not convinced that had the employee not breached the code that the employer would have dismissed the employee. In essence, the employer leads no evidence that the trust was broken and only relied on the code. Given that the employee’s criminal offences fell outside the 10 -year window provided for by the PSIRA code of conduct, the Labour Court also found the dismissal to be substantively unfair.

On appeal at the Labour Appeal Court the Court found that the Commissioner’s finding that the employee was ‘not convinced that the employee contravened the rule’ or that he misrepresented himself, was not borne out by the evidence as the employer’s disciplinary code makes it clear that such conduct was an offence.

The Appeal Court argued-

“In determining the fairness of a dismissal, each case is to be judged on its own merits. Item 3(4) of the Code of Good Practice recognises that dismissal for a first offence is reserved for cases in which the misconduct is serious and of such gravity that it makes continued employment intolerable, with instances of such misconduct stated to include gross dishonesty. When deciding whether dismissal is appropriate, the Code requires consideration, in addition to the gravity of the misconduct, of personal circumstances including length of service and the employee’s previous disciplinary record, the nature of the job and the circumstances of the infringement itself. Other relevant considerations include the presence or absence of dishonesty and/or loss and whether remorse is shown.”

And also-

“The employment relationship by its nature obliges an employee to act honestly, in good faith and to protect the interests of the employer.5 The high premium placed on honesty in the workplace has led our courts repeatedly to find that the presence of dishonesty makes the restoration of trust, which is at the core of the employment relationship, unlikely.6 Dismissal for dishonest conduct has been found to be fair where continued employment is intolerable and dismissal is “a sensible operational response to risk management”.7 Obtaining employment on false pretences whether by misrepresenting qualifications, skills, experience or prior work history has been found to justify dismissal,8 with it stated in Boss Logistics v Phopi and others9 that if this were not so, a sanction short of dismissal would only serve to reward dishonesty.”

The Court highlighted that a conviction for rape and assault is antithetical to employment in the position of a security guard given the nature of the position. The fact that the PSIRA Act bars the employment of a person in the security industry until 10 years has elapsed from the date of the criminal conviction illustrates the seriousness criminal convictions are viewed. An employer is entitled to full disclosure of all relevant information when a decision is made to employ a person and can expect an honest answer in response.

The Court agreed that a lengthy and clean record is a factor to consider, however that there are certain acts of misconduct which are of such serious nature that no length of service can save an employee who is guilty of them. Gross Dishonesty is such act of misconduct. The fact remained that the employee was employed under false pretenses and that he deliberately concealed the true state of affairs from the employer.

The Labour Appeal Court replaced the order of the Labour Court stating that the arbitration award is reviewed and set aside; and replaced with the order that the dismissal of the employee was substantively fair.


LAC#090220 Lufil Packaging vs CCMA and Others (June 2019)

Section 4 (1)(b) states that every employee has the right to join a trade union, subject to its constitution. Even though employees have the right to Freedom of Association, it has been common practice that employees would often join trade unions without the said unions having the scope within their constitution to organize within a certain sector.

Section 21 of the LRA provides that a registered trade union may notify an employer in writing that it seeks to exercise one or more of the rights conferred by Part A of Chapter III of the LRA in a workplace. The legal requirement for a union to organize within a workplace is that they should show to be sufficiently representative of that workplace in order to exercise some of the rights conferred by the LRA. Does this, however mean that a registered trade union can seek to organize within industries that does not fall within the scope of its constitution? One point of view is that the correct interpretation of Section 4 (1)(b) of the LRA should be that the constitution of the union merely governs the relationship between the union and its members and could not be exploited by employers to attack the validity of the union membership of its employees.

In Lufil Packaging (Pty) Ltd vs CCMA and Others Numsa sought organizational rights within the company, holding 70% of its employees as members. The employer responded in writing that after seeking legal counsel, that they are of the view that Numsa cannot organize outside the scope of its constitution and that no organizational rights would be granted to the union. The Numsa constitution list 21 industries in which it seeks to organize labour, however the packaging industry was not one of them.

In response, Numsa referred an organizational rights dispute to the CCMA. The employer filed an application to the CCMA in terms of CCMA Rule 31 disputing the validity of the employer’s employees being members of the union. The Commissioner was of the view that a union could seek organizational rights in a workplace as long as it is a registered trade union having as its members sufficient representation. In casu, the union membership stood at 70%. The Commissioner granted the union organizational rights with immediate effect.

The employer filed for a review application at the labour court, which sided with the CCMA Commissioner. On appeal at the Labour Appeal Court, the court clarified that the real question is not whether the union has a right to seek organizational rights, but whether they are sufficiently represented to claim rights in terms of the LRA. The question in law then is whether the employees could be regarded as members of the union, legally, taken in context of the scope of the union’s constitution?

The court found that Section 95 of the LRA is concerned with the requirements for the registration of trade unions or employer’s organizations. Section 95 (1)(b) provides that a trade union may apply for registration if, inter alia, it has adopted a constitution that meets the requirements of Section 95(5) and 95(6) of the LRA. Section 95(6) provides that the constitution of a trade union may not include any provision that discriminates against any person on the grounds of race or sex. Section 95(5) is concerned with matters such as membership, rules for meetings, decision-making, the election of office bearers, officials and so on. Section 95(5)(b) is of particular interest as it provides that the constitution of any trade union must prescribe qualification for and admission to membership. The obvious implication of Section 4 (1)(b) of the LRA is that the right to join a trade union will be circumscribed by the membership eligibility criteria in the trade union’s constitution as adopted by the trade union’s relevant decision-making body and registered by the registrar.

The court further stated that in Van Wyk and Taylor v Dando and Van Wyk Print (Pty) Ltd Landman J held correctly that a union acts ultra vires its own constitution when it allows membership of individuals who are not allowed to be members of that union in terms of that union’s constitution. A union cannot create a class of membership outside the provisions of its constitution. The Labour Appeal Court set the award of the CCMA and the order of the Labour Court aside.

This judgement will go a long way in confining trade unions to operate within the scope of their constitutions. One matter that was not addressed, though relevant, is to what extend this judgement will impact a trade union’s ability to represent individuals before the CCMA or Bargaining Council in circumstances that the employee’s membership to the union is invalid if recruited outside the scope of the union’s constitution? What typically happens, by way of example, is that an employer may dismiss an employee. At the time of the dismissal the employee was not a member of a trade union, however, at arbitration, the employee is represented by a trade union official who only became a member to the union after the dismissal date. If interpreted correctly, employers may question the validity of the membership to the union if in breach of their constitution, which may affect the union’s locus standi to represent the employee.


LAC#230220 South African Tourism vs Tebogo Brian Monare and the CCMA-Labour Appeal Court (2015)

Numerous South African companies competes internationally with divisions or branches in different regions, globally. Labour Relations with overseas employees can be complex, raising questions regarding the jurisdiction of the CCMA and South African Labour Legislation, specifically the LRA in terms of dismissal law and unfair labour practice legislation. Does the CCMA and by extension the LRA, have extraterritorial jurisdiction, or does the LRA only find application within the borders of South Africa?

In South African Tourism vs Tebogo Brian Monare, the employee was employed as Finance and Administration Manager in the London office in terms of a fixed term contract for three years. The employee was charged for misconduct and subsequently dismissed. The employee then filed an unfair dismissal dispute under the auspices of the CCMA, which in terms of the LRA, had no extraterritorial jurisdiction. Before the Commission, the matter of jurisdiction was not raised, and it was only raised on review at the Labour Court.

The Labour Court applied the test for jurisdiction assumed in Astral and held, in effect, that the London office was an independent undertaking and that the employee was employed by the undertaking in London. In addition, he performed his duties in the United Kingdom, that his disciplinary hearing was held there and that he was given a notice of dismissal there. The Labour Court ruled that the LRA did not find application and that the employee had no right to refer the dispute to the CCMA. The Labour Court reviewed the arbitration award and set it aside.

The main issue before the Labour Appeal Court is the matter of jurisdiction of the CCMA and the applicability of the LRA to the dispute arising from the employee’s dismissal. The LAC first considered the background of the dispute. The employee was previously employed by the company in the Amsterdam office, before commencing work in the London office. The employee was charged for dishonesty and fraud pertaining to subsistence and travel claims which he made in 2010 as well as the use of an access code to the employer’s computer system. Subsequently to his dismissal he filed an unfair dismissal dispute to the CCMA, claiming both a procedural and substantive unfair dismissal and claimed reinstatement.

The Commissioner found the dismissal to be procedurally fair, but substantively unfair and ordered reinstatement ‘and no loss of salary to the amount of R37 509.50 pounds.’ On review, the Labour Court had regard for Astral. In that case the employee had been employed by the company until he was retrenched. He then agreed to be employed by a subsidiary of the company and relocated to Malawi. After a period, the company ended its operation in Malawi and the employee returned to South Africa, with the employment of the employee being terminated. A dispute was declared. Eventually before the Labour Appeal Court, the Court referenced:

When all the facts of this matter are considered and the question is asked as to where the undertaking was carried on in which the respondent worked, the answer would be an easy one, namely Malawi!’

Accordingly, the LAC ruled that the LRA did not apply to the company’s operation in Malawi and the Labour Court had no jurisdiction to entertain the employee’s claim. It also held that the Basic Conditions of Employment Act did not apply.

Applying then the Astral principle, the Labour Court found:

“there is no such residual nexus with the South African office. The employees may be South African and they may have worked for an entity whose head office is located in South Africa, but he was recruited overseas, his employment contract was concluded overseas, he was obliged to work overseas for an agreed fixed term with no right to return to South Africa and continue employment there on conclusion of that fixed term and he performed services only in the United Kingdom. His disciplinary hearing was held there, and he was dismissed

there. The LRA has no territorial application.”

In casu, it was submitted to the Labour Appeal Court for the employee that the Labour Court erred in a number of respects. Firstly, in finding that certain aspects of his employment in the London office was common cause, whereas they were not. Some factors mentioned was; that the employee’s contract of employment was concluded outside the Republic of South Africa; that Ms Mokhhesi, the Country Manager of the company in the London office; had overall managerial control of the London offices; that the London office had its own information technology system and its own controls; that the London office had its own established operational site in London; that the office was subject to a separate audit; that the employee was recruited overseas and only performed services in the United Kingdom and was paid in pounds sterling in the United Kingdom. In addition, the employee submitted that the Labour Court erred by not taking into account the fact that the employer was a statutory body established in terms of the Tourism Act, by failing to find that the employer’s undertaking was based in South Africa and that the London office was not a separate undertaking, but merely an extension of the South African undertaking. The applicant argued that the CCMA indeed had jurisdiction to hear the dispute.

The LAC started by addressing ‘the principle of pleadings’ the Court stated that if a claimant has alleged facts that satisfy the jurisdictional test and the other party has not taken issue with those facts, the CCMA, may, arguably, have jurisdiction in the matter. The CCMA has rules that facilitate dismissal dispute, both in terms of Conciliation and Arbitration. At no stage did the employer contest the matter of jurisdiction and just on this fact alone, prima facie, the CCMA had jurisdiction.

“The Court argued that in terms of Astral that the undertaking where the employee was employed has to be separate and divorced from the employer’s undertaking which is located within the jurisdictional territory of the relevant forum (CCMA).”

In Astral, the employer’s Malawi operation was separate and divorced from the employer’s South African undertaking. It was an incorporated concern with a separate personality. It was an independent company. The nub of the issue thus is not where the employee was employed, but whether the London office was an undertaking which was separate and divorced from its undertaking in South Africa. In the view of the LAC it was not.

The employer, the South African Tourism Board, is a creature of statute, established as a juristic person in terms of the Tourism Act. The London office does not have a separate corporate personality. It is part and parcel of the employer, which is one undertaking. It is clearly not ‘divorced or separated’ from the South African national undertaking and is linked to it.

“The Tourism Act contains provisions relating to its funds (section 16 ) and the submission of its statement of accounts to the Minister (section 17). The provisions of that Act apply to the first respondent; inclusive of its offices, wherever they may be situated. The Tourism Act does not empower the first respondent from conducting the London office as a separate undertaking.”

The Labour Appeal Court found that the Labour Court erred in reviewing and setting aside the CCMA award.

What we learn from this case is that the CCMA may assume jurisdiction in matters related to the LRA if no jurisdictional point was raised during the pleadings or did not become apparent during the course of the proceedings. It is thus important for a party to properly apply his / her mind to jurisdictional matters. The question regarding extraterritorial jurisdiction of South African companies having business interests abroad, the LRA does not find application where a business/division or undertaking is a separate entity and not an extension of the South African operation. Questions of systems, technology, accountability, reporting structures, financial statements, reporting & accountability, contracts of employment are all key factors in determining whether an undertaking is a separate personality or an extension of the South African business.


LAC#080320 Murray & Roberts vs Amcu & CCMA (August 2019)

Many employers have a number of trade unions operating in the workplace; some holding as members the majority of the work force, others merely being sufficiently represented. Often, however, majority unions, or unions acting jointly, will enter into Section 18 (LRA) collective agreements that set minimum thresholds for acquiring Sect 12,13 and 15 organizational rights.

Typically trade unions may enter into such agreements with the aim of denying minority unions an opportunity to gain sufficient representation and thus a foothold in the workplace. Hence, Sect 18 collective agreements are typically regarded as measures to lock out minority unions from gaining organizational rights.

Section 18 of the LRA basically states that an employer and a trade union holding as members the majority in the workplace, may enter into a collective agreement to set thresholds of representation in respect of Sect 12,13 and 15 organizational rights.

Is this the correct interpretation of Section 18 and does Section 18 deny minority unions from gaining organizational rights in the workplace in circumstances whereby a collective agreement was concluded that sets a threshold of representativity?

In Murray & Roberts vs Amcu & CCMA the Labour Appeal Court had to decide on whether to set aside a settlement agreement between Murray & Roberts and AMCU, which was allegedly entered into on a false premise and legal interpretation of Section 18 of the LRA. In this matter, Murray & Roberts, who is one of the construction companies working at Eskom on the Kusile project, entered into two collective agreements with seven unions who enjoy organizational rights in the company. They effectively entered into a Labour Project Agreement (LPA) and a Final Project Agreement (PA), which regulates remuneration and terms and conditions of employment to all employees in the workplace. In addition, these agreements has threshold provisions, which in essence states that any union can become a party to these agreement if they sign the agreement, are a registered member of the MEIBC or the BCCEI and who holds a minimum of 300 members in the workplace.

At the time, AMCU sought organizational rights with Murray & Roberts. After failing to meet with AMCU after the legislated 30 days, AMCU filed a organizational rights dispute to the CCMA. At Conciliation, the parties entered into a settlement agreement based on the interpretation of Section 18 of the LRA. Murray & Roberts advised

AMCU and the CCMA that they cannot assign organizational rights to AMCU, considering the threshold requirements in the LPA and PA agreements and that AMCU will first have to become a member of the MEIBC. In order to become a member of the MEIBC they will further have to show that they hold a minimum of 5000 members within the industry. AMCU agreed they will have to submit their audited numbers to the MEIBC and first become a member in order to obtain organizational rights at Murray & Roberts.

Almost one and a halve years later, AMCU again applied for organizational rights and again the matter appeared before the CCMA. In this instance, Murray & Roberts claimed that the dispute is res judicata in that it was already previously determined and that the CCMA subsequently lacked jurisdiction. The CCMA agreed. AMCU approached the Labour Court to have the settlement agreement set aside claiming that the settlement agreement was entered into based on the incorrect legal position in terms of the interpretation of Section 18 of the LRA.

The Labour Appeal Court agreed that the settlement agreement was entered into based on a common mistake

to the parties and referred to the Constitutional Court’s judgment in SACOSWU;

The notion that threshold agreements served as a “shield” for the majority trade unions was debunked by the Constitutional Court on appeal in SACOSWU.”

Section 18 does not prevent a minority union from seeking organizational rights as Section 20 of the LRA very clearly states that nothing prevents an employer from entering into a collective agreement with a union to exercise organizational rights. The LPA and PA agreements therefore does not deny AMCU the right to collectively bargain with Murray & Roberts to conclude a settlement agreement in regard to the exercising of organizational rights.

The Court stated that a Minority Union has three mechanisms of gaining organizational rights in the workplace. First, by reaching the threshold in any collective agreement. In this regard the minority union would not have to bargain for these rights as they will automatically qualify. Secondly, they could collectively bargain for organizational rights, upon which a employer may assign rights to the union and Thirdly, should a union meet the minimum thresholds as per the LRA they can have organizational rights assigned to them through litigation.

The Labour Court has set aside the settlement agreement between the parties.


LAC#130320De Beers Consolidated Mines vs Evodia Landela (November 2019)

Our Constitution protects the rights of the people of South Africa to be economically active. To this end, people seek to do business with one another and some people exercising their rights to employment. The workplace is often characterized by the seemingly competing interests of the employer (capital) and that of its employees (labour). Of course, both parties have the right to have their interests protected, but not at the expense of the other, unless of course if there are genuine interests to be protected.

In an effort to protect its interest, employers typically design policies that prevents employees from entering into situations that may be in conflict with the interest of its business. Typical examples would be that of Restraint of Trade Agreements and Conflict of Interest Policies, either within a contract of employment or stand-alone HR policies. Unfortunately and due to contending interests, employees often involves themselves in compromised situations and enter into interests that are in conflict with the employer. Once the employer finds out, these employees are often dismissed for misconduct due to their failure to disclose their conflict of interest and involvement in such situations.

However, is it a foregone conclusion that an employee who enters into a conflict of interest with its employer and who potentially may cause serious harm to the employer, that such a person should be dismissed for this misconduct? The CCMA, Labour Court and Labour Appeal Court does not necessarily think so.

In De Beers Consolidated Mines vs Evodia Landela, the employee was working at the company for about 15 years before her dismissal. At the time of her dismissal she had a clean disciplinary record and was employed as a procurement clerk, responsible for contract management and procurement of outside service providers for De Beers. De Beers had two security service providers, one GRACE Security and the other GENESIS. At one stage, the employer approached GENESIS to fix an alarm system. Upon assessing the project, GENESIS, realized that they cannot do the work and sub- contracted the work to GRACE SECURITY. During the negotiations, GRACE approached GENESIS and asked them for a loan of R20 000 to complete the project, which GENESIS approved. The employee of the company was present during the negotiations. The two technicians from the security companies also happened to be her tenants. GRACE approached her to make her bank account available as apparently, they did not have a bank account, which she accepted. GENESIS then paid R20 000 into the bank account of the employee.

After completion of the task, GRACE billed GENESIS for the work done who, in turn, billed De Beers an amount of just over R11 000. GENESIS then failed to pay GRACE and offset the outstanding loan against the payment received. GRACE did not accept this and threatened to sue De Beers as, ultimately, the work was done for them. At this point, the employee disclosed the contention between the parties, to her employer. An investigating officer was appointed, and the employee was charged and dismissed for failure to disclose her Conflict of Interest, a direct breach of a well-established company policy.

The employee referred an unfair dismissal dispute to the CCMA, at which the Commissioner found that the dismissal was substantively unfair as the employee was the ‘sacrificial lamb’ who merely tried to facilitate the transaction. The employee argued that she only knew the two technicians on their first names and that she had no idea who the contracting parties were and where the money was coming from. Her facilitation of the payment is merely a private matter and has nothing to do with her employer. In addition, considering she did not have any understanding of the contracting parties and what the money was for, she could not be guilty of failing to disclose her Conflict of Interest as one cannot disclose information if you did not have an understanding to this effect in the first place.

Upon Review at the Labour Court the Court supported the finding of the Commissioner and argued that there was no evidence that the employee was involved or received any benefit from the transaction. Upon Appeal at the Labour Appeal Court, the Court disagreed with the rationale of both the CCMA and the Labour Court. The LAC argued that evidence that was placed before the Commissioner at arbitration was clearly ignored. The evidence showed that the employee was present at the negotiations between the parties where it was agreed that R20 000 for the project would be paid into her account. The court further found that the employee’s argument that she did not know who they were contracting parties is far-fetched. The court further took exception from the fact that the employee’s argument is that she withdrew R17 000 of the money and gave it over and for the remainder of the balance she gave them her bank card. It is highly unlikely that a person will give one’s bank card and password to ‘strangers’ of who you only know their first names.’

In addition, the court argued that her very presence at the negotiations was a conflict of interest. Whether she benefitted or not was irrelevant. Even though De Beers could easily have defended themselves in terms of a potential lawsuit the fact of the matter remains that the employee was a company representative and could have caused reputational harm to the employer.

The LAC noted that during the disciplinary enquiry the line manager of the employee testified that the employee should not be dismissed, which suggested that the trust relationship could be restored, but that the mere fact that a witness testified to this effect does not mean that the presiding officer is bound by the testimony. In a bizarre decision (in my opinion), the LAC ruled that the dismissal was substantively unfair and ruled Reinstatement but on a shorter term so that the employee can understand the seriousness of the offence.

Unfortunately, the court failed to provide us with its reasons for this decision and presumably it probably had to do with the employee’s 15 years’ service, clean record and the testimony of her line manager. What we learn from this case is that even with conflict of interest disputes, a dismissal is not automatic, and one still have assessed the prejudice or potential prejudice to the employer and whether damages are real.

Protected Disclosure as a response to suspension.

LAC#300320 The National Institute for the Humanities and Social Sciences vas Kibiti Lephoto (September 2019)

As a constitutional state, we are committed to principles of transparency and accountability. As such, those exercising power must be subjected to scrutiny. To this extend, the Protected Disclosures Act (PDA) fulfils an important role to vindicate these commitments. However, often employees will abuse this mechanism in order to justify wrongful conduct. As such, the disgruntled employee often makes protected disclosures with the aim of fending off disciplinary action taken against him by way of recourse to the PDA.

In The National Institute for the Humanities and Social Sciences vas Kibiti Lephoto, the respondent, Kibiti Lephoto was appointed as CFO of the applicant in 2015. His contract was for a fixed period of five years, reporting directly to the CEO.

The company did not confirm the contract of employment after the end of the probationary period, but instead terminated his contract of employment. The respondent referred the dispute to the labour court and was of the view that his dismissal was unfair as it was the result of a protected disclosure that he made and that his termination constituted an occupational detriment as defined in Section 1 of the PDA and thus automatically unfair in terms of Section 197 (1) of the LRA. The employee claimed compensation equivalent of twenty-four months of remuneration.

The labour court ruled in favor of the employee and ordered that the dismissal of the employee was procedurally and substantively unfair, that the employee should be re-instated and that the employer should pay compensation equivalent to twelve-months’ of remuneration and pay for the costs. The labour court found that the employee indeed made a protected disclosure and that there exists a clear nexus between the termination of his services and the protected disclosure he made. The court accepted as protected disclosures that the CEO had a questionable relationship with an auditing firm, which was contracted to provide fund management services to the company as well as that the CEO undermined the rule of law by disregarding her legal obligations relating to the supply chain management of the company and thus in breach of the Public Finance Management Act (PFMA).

On appeal, the appellant contended that the Labour Court:

fundamentally misconceived the true reason for the dismissal, erred in finding that there was a protected disclosure made in terms of the PDA and was wrong in relation to a finding that the PFMA had any applicability to the conduct of the CEO and hence the disclosures which had been made by the respondent. The appellant also contended that the court a quo had erred in finding that both the reinstatement and compensation should be granted.”

The purpose of the appellant is to ‘dynamize’ the fields of study for the humanities of social sciences for South Africa’s higher education system through enhancing scholarship, research and the ethical practice in these areas. It is governed by a board and the day to day running is supervised by the CEO. During September 2013, the Department of Higher Education and Training (DHET) issued a request for proposals regarding the management of the appellant’s funds. Deloitte Consulting was the successful bidder. As correctly noted by the appellant at the Labour Appeal Court, it should be noted that the contract for the management of the

appellant’s funds was not between the appellant and Deloittes, but rather DHET and Deloittes.

On the 11 and 18th of August 2015, the CEO consulted with Mr. Anton Roskam, an attorney acting on behalf of the appellant, that she had concerns with the performance and conduct of the respondent. Some of these concerns was regarding his failure to attend meetings, late submission of reports, failure to provide feedback to the CEO, failure to bring important information to the CEO’s attention, how he handled the CEO’s disbursement claims, the manner in which he questioned his appointment as chair of the Bid Adjudication Committee for the appellant’s office space tender and his role in the implementation of the appellant’s payroll system.

Mr Roskam, however, informed the CEO on the 18th of August that he is in possession of a letter from the respondent in which he alleges a series of improprieties. The letter was headed ‘Disclosure of Impropriety in terms of the Provisions of the Public Finance Management Act, Public Service Act, the Code of Conduct for Public Servants and other Prescripts.’ Two fundamental allegations were made, i.e. that the CEO has a questionable relationship with Mr Slingsby Mda of Deloitte and the CEO is undermining the rule of law by disregarding her legal obligations relating to Supply Chain Management of the NIHSS. The appellant’s attorneys then appointed an investigating officer on the 20th of August to investigate both the respondent’s performance and conduct with the allegations of impropriety, which the respondent had made against the CEO.

During the investigations, the investigating officer had numerous interviews with nine people, including the CEO. One interview was held with the respondent as he refused to participate further in the investigations, basically accusing the investigating officer of not being impartial. The final report revealed that the respondent felt the relationship between the CEO and Mr Mda was questionable not on a personal level, but that the effect of the relationship was measured against the PFMA and subsequent irregularities. In this regard the respondent made allegations of irregular conduct as identified by the National Treasury Regulations, however, were not able to provide any references to these regulations. In addition, he referred to Section 38 and 45 of the PFMA, however these were found not to apply to the appellant as the appellant is not a listed company. There was therefore nothing untoward about a service provider having a direct business relationship with the CEO.

It was further found that in terms of the supply chain management allegations that this was a contractual issue between Deloitte and the DHET and as such had nothing to do with the CEO. Considering the suspension notice, which was issued to the respondent, the investigating officer found that there was an irreconcilable breakdown in the trust relationship between the applicant and the respondent. The respondent failed to substantiate his allegations against the CEO and in his view prima facie evidence of serious misconduct existed against the respondent for exposing the appellant to reputational and operational risk. The appellant sent the report for comment to the respondent. After missing three deadlines the respondent never commented on the findings of the report.

The appellant then requested the respondents’ written representations by 27 December 2015 in order to respond to the Board’s preliminary review that his probation period should be terminated. The respondent requested a further extension of the deadline, upon which the appellant felt it was unreasonable. They issued him with a letter terminating his probationary period. In the meantime, the respondent lodged a complaint with the Auditor General, who also subsequently advised that they found no irregularities.

The Labour Appeal court referred to Radebe and another vs Premier Free State Province [2012]:

“the definition of disclosure, contains the following essential requirements: that the employee making the disclosure must have “reason to believe’ that the information disclosure “shows” or “tends to show” that an impropriety as defined has been committed or has continued to be perpetrated. “

Thus, the key question in this case was whether the respondent had a reason to believe that the questionable relationship between the CEO and Mr Mda could show that a criminal offence had been committed, or that there may have been a likelihood that there may have been a failure to comply with any legal obligation or a miscarriage of justice.

The Labour Appeal Court noted that the Labour Court’s finding was based on the applicability of the PFMA and the regulations to the appellant. It is, however, clear from Section 3 of the PFMA that this legislation was only applicable to a Public Entity if that entity appears in Schedule 2 or Schedule 3 of the PFMA. The appellant was not listed in either of the Schedules. The Labour Appeal Court further agreed with the investigating officer that there is nothing in the PFMA that prohibit a service provider from working directly with the CEO.

The Labour Appeal Court further argued:

The evidence indicates compellingly that the complaint of the respondent was, at core, that he was being marginalized by the CEO. This might, at best for him, constitute a problem to be dealt with by the human resources department of appellant or possibly the Board, but certainly could not fall under any of the key components of the definition of disclosure, being a criminal offence, failing to comply with any legal obligation or a miscarriage of justice. The fact that the CEO increasingly was concerned about the CFO and his performance, is evident from the various difficulties with his performance which she had expressed to Mr Roskam when she sought his legal advice on 11 August 2015.”

The Court continued in stating that the CFO’s averments is nothing more than ‘anemic allegations’ and not justified.

Turning to whether the termination of the respondent’s services was justified, the Court noted that his conduct prior to his suspension revealed significant problems, which jeopardized the long-term sustainability and legitimacy of the operations of the appellant. The conduct and performance of the respondent justified the decision of the CEO to contemplate suspending the CFO on the 11th of August, one week before the respondent’s purported disclosure. The evidence suggests that there was an irretrievable breakdown in the relationship between the respondent and the CEO, that he had failed to substantiate allegations of impropriety against her, he had impugned her character and professional standing and authority as CEO and that he had made unfounded allegations which, on any reasonable inference, appear to be in retaliation for the difficulties in which he found himself in as a result of his own incompetence or lack of performance.

The Labour Appeal Court upheld the appeal with costs.

The lesson taught in this case is rather simple, that one (employee) should tread carefully if one intent of making a protected disclosure as a response to suspension or potential disciplinary action that one may be subjected to. A protected disclosure should be legitimate as defined in Section 1 of the Protected Disclosures Act and should be substantiated by reasonable evidence.

Enforceability of the COVID-19 Lockdown regulations.

HC#060420 Karel Willem van Heerden (27 March 2020)

COVID-19 has an unprecedented impact, not only on the world but also South Africa. The pandemic will have far-reaching consequences with a damaging impact on the world economy. The virus typically spreads during close contact and via respiratory droplets when people cough or sneeze.

South Africa implemented regulations to restrict the movement of people from midnight Thursday the 26th of March 2020 to midnight 16 April 2020. In terms of the regulations the movement of people and goods are restricted. Every person is confined to his or her place of residence unless for the purposes performing an essential service, obtaining an essential good or service, collecting social grants or seeking emergency, lifesaving 8) or chronical medication.

Every gathering is prohibited, except funerals as provided for in sub-regulation (8) with the movement of persons between provinces and between metropolitan and district areas are prohibited. How strictly does these regulations apply and can one expect to reasonably successfully challenge these regulations under extremely difficult circumstances, and have it overruled?

In casu, the applicant, resides in Mbombela in the Mpumalanga Province. Early one morning on the 27th of march he received a call from his mother informing him that his grandfather passed away in a tragic fire at his home in Hofmeyr, Eastern Cape. The applicant brought this application to the High Court to be exempted from the travel regulations as he desperately wanted to travel to the Eastern Cape to be with his mother and attend to the funeral.

The applicant committed himself to adhere to all safety measures and regulations and that he will be no threat of contaminating others. In addition, the applicant confirmed that he had not been in contact of any person who was abroad and that her had not been in contact with any person who had the virus.

The High Court, however, argued that the Constitution of the Republic of South Africa is the supreme law of our country. Section 165 of the Constitution vests the High Court with the authority and the bounds within which that authority must be exercised. Section 165 (2) of the Constitution provides as follows:

“The courts are independent and subject only to the Constitution and the law, which they must apply impartially and without fear, favor or prejudice.”

The Court ruled that even though he has extreme sympathy for the applicant, that the law prohibits that which the applicant wants to do, regardless of how urgent and deserving. The Executive invoked the provisions of the Management Disaster Act, declaring the state a disaster in order to curb the spread of COVID-19. The Act and lockdown regulations applies to everyone within the borders of the Republic and thus the Court cannot accede to the relief the applicant seeks. The Court dismissed the application.

What we learn from this case is that considering the Disaster Management Act was revoked that the regulations is law and as such enforceable even in dire, deserving instances.

Can an employer discipline an employee for misconduct outside the work environment?

LC#08062020 Edcon Limited vs Ms Teresa Cantamessa (2019)

Often employers face a situation of employee misconduct outside of the working environment, but do not know how and whether they can discipline employees in this regard. The legal question often arises as to whether an employer is entitled to discipline employees for conduct of which the employer may have some interest, but falls outside of the work environment.

In Edcon Limited vs Ms Teresa Cantamessa, the employee, Ms Cantamessa, was employed as a Specialist Buyer in the ladies’ wear division. She was considered a senior employee, but not part of management. During December 2015, then President Zuma replaced Minister Nhlanhla Nene with Minister Des van Rooyen as Minister of Finance. It was widely published in the media that this cabinet reshuffling caused a loss of between R250 and R500 billion on the South African economy. Subsequently South Africa saw the #ZumaMustFall marches in Cape Town and Johannesburg. President Zuma then replaced Minister van Rooyen with Pravin Gordhan as Minister of Finance.

The reshufflings caught significant media attention with Carte Blanch airing a program on the reshuffling. Whilst Ms Cantamessa was on leave, she published the following on her Facebook account:

“Watching Carte Blanch and listening to these fucking stupid monkeys running our country and how everyone makes excuses for that stupid man we have to call a president… President my fucking ass!! #zumamustfall. This makes me crazy ass mad.” (sic)

At the time Penny Sparrow also took to Facebook and stated that from now on she will refer to black people as ‘monkeys’. Her conduct lead to numerous marches and various public demonstrations. Some of these marches were directed against Mrs Sparrow’s employer. Mrs. Sparrow since died whilst all of this played out in the media.

At the time that Ms Cantamessa posted her message on Facebook, her profile stated that Edcon was her employer. On the 12TH oF January 2016, Edcon received a complaint from a customer about Ms. Cantamessa’s post. In addition, people started to respond via Twitter with over 350 Tweets mentioning her post between the 21st and 22nd of January 2016. Some of the Tweets stated:

“@EdgarsSA what are your thoughts on the degrading racist remarks made by one of your buyers??we demand answers #MsTeresaCantamessa” and “Another one!! #Ms TeresaCantamessa #RacismMustFall.”

Several Twitter users demanded answers from Edcon and threatened not to do business with it again. Edcon then initiated an investigation into Ms Cantemessa’s misconduct and subjected her to a disciplinary enquiry with reasons being that; her Facebook profile clearly identified Edcon as her employer; that her post was made public and was read by customers and the public at large; that her post attracted negative media attention and negative social media activity, which placed Edcon’s reputation at risk; that he post was considered racist and did not conform to the values of Edcon’s business.

Subsequently to the investigation she was called in to a disciplinary enquiry and charged for making inappropriate racial comments on Facebook. As a result of the disciplinary hearing, the chairperson stated, inter alia, that Edcon was associated with her post even though it was done outside of working hours. Ms. Cantamessa was dismissed.

Aggrieved by her dismissal she referred the dispute to the CCMA where the Commissioner found her dismissal to have been substantively unfair. The Commissioner found that Ms. Cantamessa posted whilst she was on annual leave and not at work and awarded her with 12 month’s compensation. Briefly, the Commissioner stated; that her post did not pertain to her work or to Edcon; that a reasonable internet user would not have associated Edcon with the content of Ms. Cantamessa’s post simply because she had stated on her profile that she worked for Edcon; that in terms of the High Court from the United Kingdom (Smith vs Trafford Housing Trust) a reasonable reader of her post would not have associated her comment with Edcon; that Edcon’s policy on social media did not apply as it only applied if she used Edcon’s equipment and facilities, which she did not; that Edcon’s Code of Ethics did not apply because the Code states how employees should behave ‘when at work’; that Edcon failed to comply with the parity principle in that they dismissed Ms. Cantamessa, but only issued final written warnings to those employees who ‘liked’ her post and lastly that her statement that President Zuma was ‘stupid’ did not constitute racism.

The court acknowledged that when Ms. Cantamessa made the comment on Facebook, that she indeed was on leave and used her own computer and data. The comment thus had nothing to do with her duties as an employee. As such, one first need to determine whether her conduct put her within disciplinary reach of her employer.

The general rule is that an employer has no jurisdiction or competency to discipline an employee for conduct that is not work related, which occurs after working hours and away from the workplace. In addition, the Commissioner’s finding that none of Edcon’s disciplinary policies were applicable to her misconduct constitute no defect and is thus not reviewable. However, where misconduct does not fall within the express terms of a disciplinary code, such misconduct may still be of such nature that the employer may, nonetheless, be entitled to discipline its employee. Similarly, the fact that misconduct occurred away from the workplace would not necessarily preclude the employer from disciplining its employee in respect thereof. In this regard the court referred to Hoechst (Pty) Ltd v Chemical Workers Industrial Union that:

“In our view the competence of an employer to discipline an employee for misconduct not covered in a disciplinary code depends on a multi-faceted factual enquiry. This enquiry would include but would not be limited to the nature of the misconduct, the nature of the work performed by the employee, the employer’s size, the nature and size of the employer’s work force, the position which the employer occupies in the market place and its profile therein, the nature of the work or services performed by the employer, the relationship between the employee and the victim, the impact of the misconduct on the work force as a whole, as well as on the relationship between the employer and the employee and the capacity of the employee to perform his job. At the end of the enquiry what would have to be determined is if the employee’s misconduct ‘had the effect of destroying or of seriously damaging the relationship of employer and employee between the parties.’

In addition, it was also upheld in Dolo v CCMA that the Commissioner was correct in his finding that an employer fairly dismissed a female employee who was a Casino Floor Supervisor for being in cahoots with her boyfriend, defrauding his employer over a period of time. Even though the employee claimed her conduct occurred outside of her workplace, the fact remained that her employer cannot trust her, especially taking into consideration that she was working with money.

In Custance v SA Local Government Bargaining Council it was found:

“…the derogatory terms used manifest a deep-rooted racism which has no place in a democratic society. Whether the word was uttered on or off duty was immaterial as it is the attitude that persists which, when on duty, affects the employment relationship.”

And in Crown Chickens (Pty) Ltd t/a Rocklands Poultry v Kapp it was found that the main principle is to determine the connection between the misconduct and the employer’s business. Thereafter, the employer has to prove to which extent it has affected the employment trust relationship.

It was therefor for Edcon to draw the necessary connection between Ms. Cantamessa’s misconduct and its business as the comments, in itself, did not relate to the employer-employee relationship. The only connection then lies in that her Facebook profile indicated that she worked for Edcon. Edcon’s success is largely dependent on how it markets itself to the general public and as such a good name is an essential asset or quality of Edcon to the general public. Being a buyer within Edcon it is imperative that she avoid being a controversial employee in the public eyes where she could be associated with Edcon. Herein lies the connection.

Given the fact that South Africa constitute largely by black citizens and as such they operate in an environment where black citizens are likely to be the main or majority source of its past, present and future customers. Given our racist past whereby the white minority where known to refer to black citizens by various derogatory expressions, including the monkey slur, the usage of the monkey slur by Ms. Cantamessa should therefor never be seen in isolation as though such usage had no history. One must therefore consider the history of the slur she used. Edcon thus was entitled to take disciplinary measures, lest its name be put into disrepute for tolerating racism.

What happened to Mrs. Sparrow and how she and her employer was haunted by South Africans at large could also have happened to Ms. Cantamessa. She clearly exposed Edcon to reputational damage. The fact that no damage was proved by Edcon was not a valid defence. Even though our Constitution upholds the right to Freedom of Speech, this right do not extend, inter alia, to advocacy of hatred that is based on race, ethnicity, gender of religion and that constitutes incitement to cause harm.

The court ruled that the Commissioner misconceived the nature of the enquiry he was called to determine and failed to evaluate the evidential material placed before him properly, with the result that he reached a conclusion, which no reasonable decision maker could have made. The court reviewed and set the arbitration award aside.

What we learn from this case is that even though, generally speaking, an employer cannot discipline an employee for conduct outside of its business environment and outside of working hours, an employer could do so if a nexus exist between the conduct of the employee and the employer. The onus will fall on the employer to prove such nexus and that the conduct of the employee caused damages to the employment relationship.

Constructive Dismissal: Intolerable, but fair!

SCA#250520 Murray vs Minister of Defence (2008)

COVID-19 is continuing to put strain on the employment relationship, with many employers opting for malicious tactics to protect their businesses. Companies are retrenching, downsizing, cutting remuneration and some simply refuse to pay TERS UIF over to their employees. What is most concerning is the breach of fair procedures that is required by our labour laws and the distrust that is reminiscent between employers and their employees.

Last week, whilst at the CCMA, I was informed that they are expecting a huge influx of retrenchment and Section 73A referrals, even to the extent whereby the CCMA are considering setting down disputes on Saturdays and Sundays. The ground is ready for devious (those who are) employers to be challenged whether their conduct was fair or arbitrary. I also suppose many employees will resign from their employment due to unfair and illegal conduct by their employers and claim constructive dismissal. However, constructive dismissal is probably the most difficult form of dismissal to prove at the CCMA or Bargaining Council. Whereas in a standard dismissal dispute the onus typically lies with the employer to show that the dismissal was fair both as far as the substance and the procedure are concerned, with a constructive dismissal, the onus is with the employee to prove that the employer made conditions intolerable and that it lead to his or her resignation.

In determining whether an employee was constructively dismissed the courts have endorsed the principle that the employment relationship, objectively, had become intolerable and that these conditions were created and caused by the employer. In this regard the courts seem to differentiate between an employer who is responsible for creating conditions that are intolerable and simultaneously also to be blamed for the intolerable conditions that the employee was subjected to. Even though conditions of employment may have become intolerable, the underlying question is whether the employer dealt unfair with the employee and the resignation of the employee was not voluntary, but caused by the intolerable conditions. Put differently, the inquiry is whether the employer (irrespective of its intention to repudiate the contract of employment) had without reasonable and proper cause conducted itself in a manner likely to destroy or serious damage the relationship of confidence between the parties. Looking at the employer’s conduct as a whole and its cumulative impact, whether judged reasonably and sensibly, was such that the employee could not be expected to put up with it.

The mere fact that an employee resigned because work has become intolerable does not by itself make for a constructive dismissal. This is so as the employer may not necessarily have control over what makes conditions intolerable. The critical circumstances, thus, must have been of the employer’s making. In addition, if an employer is responsible, it may not necessarily be to blame. It is imperative that the employer’s conduct must have lacked ‘reasonable and proper cause.’

In Murray vs Minister of Defence, the Supreme Court of Appeal dealt with a constructive dismissal dispute on appeal from the High Court. In this matter, the appellant, Mr. Murray joined the South African Navy in 1984 after nine years in the South African Police. He rose through the ranks and at the time of the controversy he had the rank of commander, where in charge of the Simonstown military police station and the most senior policeman in the navy. Year after year his superiors lodged appraisals that lauded his commitment, dedication, and managerial ability.

His fortunes turned in 1992 when he came into conflict with members in his unit whose accusations of criminal conduct led to a series of investigations and two court-martials against him. Despite some of his staff writing affidavits and testified against him during the court proceedings, none of the allegations culminated in a serious adverse finding. Concerned by the impact the investigations had on his reputation, the navy removed him from his position and transferred him to work in a supernumerary position at the naval staff college in Muizenberg.

Mr. Murray summarised his grievances as follows:

‘Since September 1992 I have been subjected to a board of inquiry, a procrastinated investigation carried out arbitrarily and with ignorance of my rights, as well as two courts martial. After all these events, I have a clean disciplinary record as an employee of the SANDF. However, I have been removed from my post and placed in a position where, since March 1995 to date, I have been literally without a desk and have not received a single responsibility, task or function commensurate with my rank, experience, skills and expertise. I have been deprived of any prospect of aspiring to higher goals, of achieving any promotion or of furthering my career in the SA navy

… For this I have not received any reasonable explanation.’

During the time of his second court martial the navy restructured, having a reduced budget of 14% and needing to cut back from 10500 to 8500 staff. The restructuring left his position at the Simonstown military police station at a lower rank, that of lieutenant commander. After the conclusion of the investigations and proceedings with no adverse finding against Mr. Murray, the navy offered him a position in Pretoria in the protection service. Mr. Murray expected to be reinstated in his position at Simonstown instead. Disappointed with developments Mr. Murray walked out of the meeting. The navy later send him a letter advising him to either accept the position or to enter into discussions with the navy in terms of accepting a separation package.

Mr. Murray then resigned and claimed damages from the navy to the value of R2.97 million as a constructive dismissal. The High Court found that Mr. Murray was not constructively dismissed. On appeal at the Supreme Court of Appeal the court found:

That the employee was indeed subjected to intolerable conditions. The inquiry then shifted to whether the employer treated Mr. Murray unfairly. To this the court found that considering Prima Facie evidence did suggest Mr. Murray may have been involved in criminal conduct, that the subsequent investigations against him was indeed fair. That the way an external investigator, Colonel van Raad harshly dealt with Mr. Murray was also not unfair as it was based on a fairly initiated process. The fact that Mr. Murray sat for years at the naval college with nothing to do as everyone avoided him, was a situation created by the employer, but the employer was not to blame. The alternative could have been a suspension, which would have been worse than being idle at work. Further, the court stated that Mr. Murray’s operating capacity as a military policeman had been injured by the controversies around him and therefore the conduct of the navy was justified not to reinstate him into his former position.

The court, however, did find fault with the navy in that the law requires a bona fide consultation between the employer and employee and in this regard the navy failed to consult with Mr. Murray upon learning that his position as commander was no longer available. In addition, when the navy offered Mr. Murray a position at the protection services they failed to consult with him in terms of the scope of his duties and responsibilities. The employee’s lack of knowledge caused him to reject the offer as in his mind he would not have been able to make a meaningful contribution in the new position. The employer argued that the employee should have enquired for more detail about the position, however the court argued that the responsibility to consult rests with the employer and cannot transfer that responsibility to the employee, something the employer failed to do.

The court corrected the High Court in stating that the High Court merely ‘ticked the boxes’ in terms of each event and incident as to whether it made the employment relationship intolerable or not, but what the court should have done was to look at the culmination of events, holistically and inquire as to whether it was the conduct of the employer, without good reason, that ultimately resulted in the employee resigning. In this case, in context of the intolerable conditions as a whole, it was the lack of consultation with Mr. Murray in terms of his position at Simonstown that was no longer available and the lack of scope of the new position offered that resulted in him resigning. The employer was indeed to blame.

The Supreme Court of Appeal granted the appeal and confirmed Mr. Murray been constructively dismissed.

What we learn from this case is that ultimately the inquiry into a constructive dismissal is whether the employee resigned voluntary or whether it was as a result of intolerable conditions created by the employer, of which, the employer are to be blamed and dealt unfairly towards the employee. One matter that the case highlighted, not dealt with in this review, is that employees of the National Defence Force have recourse under Section 23 of the Bill of Rights to fair labour practices and the common law principle of fairness, even though they may not necessarily have recourse under the LRA.

Consulting on VSP’s as an alternative to retrenchment prior to the rationale for retrenchment. Is the order of Section 189 (3) set in its sequence?

LC#10052020 South African Communication Union, Communication Workers Union vs Telkom SA SOC Ltd and others (5 March 2020).

Dismissing employees for reasons relating to the operational requirements of an employer, or forced retrenchments as it is more commonly known, holds severe consequences for employees. The Section 189 (3) consultation process therefor sets the theatre whereby the interests of both capital and labour unfold.

On the one hand the employer often finds itself in a position having to restructure its business due to changing market conditions. It necessitates that employers need to streamline its business to be more effective and adapt to an ever-changing business environment. On the other, employees, or their union representatives, seek to serve the interest of its members in negotiating job security and improved employment conditions. Ultimately, both parties are interdependent and serve the interest of the company, employees, and society at large.

However, due to the challenging nature of the consultation process and the differences in opinions as to how the interest of the company and its employees may be served best, one often finds that the consultation process can be very frustrating and often results in a deadlock.

Often during a consultation process, particularly large scale, or Section 189A, processes, a union may object against the perceived unfairness of the procedure adopted by an employer. Understandably, the employer wishes to conclude the process effectively and in a timely manner, however unions on the other hand are concerned about the effect a retrenchment may have on its members and thus would prefer negotiating in a transparent manner that serves the interests of the employees.

One such procedural dispute that arise is whether the items in Section 189(3)(a)-(j) are set in sequence. Can an employer consult on ‘alternatives’ before consulting on the “reasons” for the proposed retrenchments? Can an employer propose consulting on both matters simultaneously?

In South African Communication Union, Communication Workers Union vs Telkom SA SOC Ltd and others (5 March 2020), Telkom embarked on a Section 189A processes, effectively proposing the possibility of having to retrench 3000 out of its 9500 employees. At the start of the consultation process, Telkom informed its employees that the company intend on allowing employees to apply for Voluntary Severance Packages (VSP’s) and Voluntary Early Retirement Packages (VERP’s) as an alternative to retrenchments. The employer’s view was that consulting on this as an alternative to dismissal at the offset of the consultation process may ultimately minimize the number of employees to be placed on forced retrenchments. The employer opted to simultaneously consult on the proposed alternatives and the rationale for the retrenchment. The majority unions, known as ‘The Alliance’ objected against this approach, stating that this may prejudice employees who may opt for a severance or early retirement package in the absence of first knowing whether they will feature in the proposed new structure of the employer. Thus, the unions hold the view that the consultation process in terms of Section 189(3) is set and that an employer must consult within the same sequence as set out in Section 189(3).

Having reached deadlock at the CCMA, the facilitator advised that the parties need to explore their legal options in this regard. Considering Telkom’s view was that it was open to have simultaneous consultations on alternatives and the reasons for having to embark on a retrenchment process, they opened applications for severance and early retirement packages. The unions, on the other hand, brought an application to the Labour Court in terms of Section 189 (13), which states:

“If an employer does not comply with a fair procedure, a consulting party may approach the Labour Court by way of an application for an order – (a) compelling the employer to comply with a fair procedur;…”

The court first confirmed the purpose of Section 189 (13) within the LRA and referred to Edcon vs Steenkamp

where the Labour Appeal Court held that the purpose was to:

“to oversee the process of retrenchment while it is taking place or shortly thereafter where precipitate dismissals make intervention before actual dismissal impossible, and to reverse the dismissals.”

The court also referred to RAWUSA v Schuurman Metal Pressing (Pty) Ltd, where it was held:

“The aim of section 189A(13) (Act 66 of 1995) is to provide a remedy to employees to approach the Labour Court to set their employer on the right track where there is a genuine and clear cut procedural unfairness which goes to the core of the process. The section is aimed at securing the process in the interests of a fair outcome. It follows that not every minor transgression of a procedural nature will invite the benefit of the court’s discretionary power to grant a remedy.”

And further:

“Section 189A(13) is aimed at unjustifiable intransigence, it is not available as a tool to thwart a retrenchment process where the process, as in the present case, is otherwise capable of being rescued by genuine efforts to cure such flaws as may exist.”

Judge Lagrange argued that the Court’s intervention is limited to instances of a refusal or failure by the consulting employer to comply with a fair procedure. The intention of Section 189(13) is to extend to the Court a real-time supervisory role over the consultation process and not for parties to use the Court to micro-manage a consultation process. Intervention ought to be limited to a substantial failure or refusal to comply with the relevant statutory requirements.

With the above considerations then the Court had to decide whether it will intervene in the deadlock between the parties. To do so, the Court must consider whether the employer acted in such a way that it has fundamentally prevented or obstructed a fair consultation process in keeping with the intentions of Section 189.

The unions was not prepared to engage in discussion about the use of voluntary separation packages at such an early stage of the consultation process and argued that the provisions of Section 189(3) do not merely list items that the parties should consult on, but also sets out the sequence in which discussions should take place. In addition, without having concluded discussions on the rationale for retrenching it would be premature to discuss alternatives. The Court noted that Telkom was prepared to continue to discuss the rationale for the retrenchments and to explain the proposed new structure. However, it also wanted to put VSP’s on the table for consultation at the same time because of the significant impact that voluntary terminations could have on the need for any forced retrenchments.

The Court first considered whether the sequence of items for consultation in Section 189 (3) is set and whether a discussion on a certain item could only be embarked upon once the previous item was discussed and that a failure to do so would be unfair. Judge Lagrange argued:

“I am not persuaded that they prescribe a rigid sequence in which consultations can only proceed on a step-by-step basis. The first point to make is that the provisions of section 189 [3] cannot be read in isolation from section 189 [2], which sets out the primary obligations of both parties to the consultation process.”

This section emphasizes the importance of the employer finding alternatives to a dismissal. VSP’s are indeed such an alternative.

Typically, it makes sense to deliberate on the rationale for retrenchments first, however, failure to agree on this issue does not mean that the entire process must come to a halt. Even if a party has reservations about whether there is a need for retrenchment, it must still be prepared to engage in consultations on alternatives. Nothing prevents a party from engaging on a provisional basis, by making it clear upfront that its consent to the adoption of alternatives is subject to it being persuaded by the reasons for retrenchment. The unions declared a deadlock over the very timing of consultation on VSP’s at a point when Telkom wanted to consult on this together with the rationale for the proposed new business structure.

Considering in this light the Court was not convinced that Telkom was a stumbling block to the consultation

process. The stumbling block was caused by the unions when it set preconditions for consulting over VSP’s.

The Court stated:

“It is regrettable that this matter has come to court. With a bit of imagination and mutual commitment to engagement, despite their differences over VSPs, I believe the parties could have had a constructive engagement on the use, content and timing of VSP ’s, which might have resulted in a consensus on the issue.”

The Court dismissed the Application.

Partial paid salaries. Can employers be excused for failing to pay full salaries because of the COVID-19 Lockdown?

SCA#040520 Transnet Limited t/a National Ports Authority and MV ‘Snow Crystal’ (March 2008)

The COVID-19 pandemic is having an unprecedented impact on our economy with far reaching consequences to companies and their employees. The National Treasury forecasted this week that up to 7 million people may be expected to be retrenched, which will increase the unemployment rate up to about 50%. That is one of every two South Africans that are of working age that may be unemployed due to the COVID-19 pandemic. The effect is felt not only on market conditions, the closing or downscaling of business and possible retrenchments, but also many employers that have experienced a substantial drain on their resources and cash reserves. Suddenly employers are faced with the dilemma of having to pay employees during the lockdown, but not having sufficient cash reserves to maintain its infrastructure. Many employers could not pay employees their full remuneration leading up to the Lockdown, with some employers only being able to pay 75% or 50% of staff remuneration.

In addition to the courts (and by extension the CCMA and Bargaining Councils) potentially being over-extended with Section 189 retrenchment disputes, it is also anticipated that the CCMA will experience a high influx of Section 73A disputes based on outstanding remuneration still owed to employees that arise out of their contract of employment. How will the CCMA deal with the high influx of Section 73A disputes and what position will Commissioners take in context of outstanding remuneration not paid? More specifically, one would like to see the approach of Commissioners to Section 73A disputes in context of force majeure provisions in a contract of employment or if no such provisions were entered into, then the common law principle of supervening impossibility to perform the obligations a party may have in terms of a contract. Afterall, the Lockdown was forced upon us and it is no one’s fault that companies were forced into the predicament they now face. The conditions that arise to the impossibility to adhere to one’s contractual obligations under force majeure can typically be ascribed to as an Act of God or an Act of State, with forces outside the control of a party to a contract resulting in the impossibility to perform.

The South African lockdown, in response to the COVID-19 pandemic, may very well create a situation whereby parties to a contract may not be able to meet their respective contractual obligations by virtue of an Act of State, thus giving rise to the possibility of being pardoned of such obligations. What are the general principles upheld by our courts in terms of supervening impossibility to perform?

In Transnet Limited t/a National Ports and Snow Crystal, a legal dispute arose due to the National Ports’ inability to service the agreement between itself and a cargo ship MV Snow Crystal when the latter was supposed to dry dock for general maintenance between the 1st and the 14th of December 2002. The dispute was successfully challenged by Snow Crystal at the High Court and later upheld by the Supreme Court of Appeal. Among the number of issues in dispute, of most relevance to the topic in discussion, is the court’s finding on the principles relating to supervening impossibility to perform, which the National Ports, inter alia, was relying on.

In casu, Snow Crystal entered into an agreement with the National Ports, six months before the scheduled time to be dry docked at the Sturrock dry dock in the Cape Town harbour. The agreement entered into was in terms of Regulations 61(1) of the Regulations for the Harbours of the Republic of South Africa. In terms of the Regulations the harbour will have certain obligations to meet in turn for payment by the owners of Snow Crystal.

The regulations empower the port captain, amongst other things, to have a ship removed from dry dock once it reaches the expiration of the period agreed upon between the parties. At the time of the arrival of Snow Crystal to the Cape Town harbour, it was found that another ship, Gulf Fleet 29 was scheduled for the Sturrock dry dock as from the 7th to the 30th of November 2002, however Gulf Fleet 29 entered the dock six days late and only on the 13th of November.

On the 26th of November, Globe Engineering (Pty) Ltd, (owner of Gulf Fleet 29) informed the port that they were running late, upon which the port captain and the Master of Snow Crystal discussed putting Globe Engineering on notice in terms of Regulation 61 (10). Globe Engineering, however, adopted an aggressive approach and refused to move the ship stating that they will only move once the ship was ready.

On the 28th of November, the ports captain met with the commercial manager of Globe Engineering to offer him the use of the Robinson dry dock, which was big enough for their ship, but too small for Snow Crystal. Globe Engineering refused. The port then sent a confirmation email to Snow Crystal that the dry dock is running behind schedule and they could only enter the dock on about the 6th of December. On the 10th of December Snow Crystal cancelled the dry docking, which was also the same day the Gulf Fleet 29 finally left the dry dock. Immediately Snow Crystal commenced painting the ship at sea in order to make it more presentable as a charter as well as engaging a diving company to scrape the bottom of the vessel and polish the propeller. This was necessary as when a ship stand still at see the bottom of the vessel will experience substantial growth attached to the vessel. This in turn will impact fuel efficiency and retard the movement of the ship through the water and increase fuel consumption. It was these expenses that formed the crux of the case against the port as well as damages that arise out of the failure of the port to adhere to the agreement in terms of potential loss of commerce as they were a chartered service.

The respondent (National Ports) were claiming, inter alia supervening impossibility to perform in meeting its obligations in terms of the agreement between the parties due to them not being able to force the Gulf Fleet 29 to leave the dry dock and thus they were unable to meet its obligations. The court, however, did not accept this claim as the port captain was indeed empowered by regulation to have the Gulf Fleet 29 removed from the dock. In addition, Mr Gouws testified that he did not do so as he wanted to resolve the matter amicably without any confrontation as Global Engineering was already aggressive.

The Court highlighted some principles that must be satisfied in order to claim supervening impossibility to perform and stated:

“It is always possible, as a matter of law, for a party to raise the defense of impossibility of performance. The onus of establishing that defense is upon the party raising it…”

The court continued by stating:

“This brings me to the appellant’s defence of supervening impossibility of performance. As a general rule impossibility of performance brought about by vis major or casus fortuitus will excuse performance of a contract. But it will not always do so. In each case it is necessary to ‘look to the nature of the contract, the relation of the parties, the circumstances of the case, and the nature of the impossibility invoked by the defendant, to see whether the general rule ought, in the particular circumstances of the case, to be applied’. The rule will not avail a defendant if the impossibility is self-created; nor will it avail the defendant if the impossibility is due to his or her fault. Save possibly in circumstances where a plaintiff seeks specific performance, the onus of proving the impossibility will lie upon the defendant.”

Taking away from the above principles, what we learn from this case is that due to the Act of the State, it may be possible in certain circumstances that an employer could successfully argue impossibility to perform, but the onus to prove will rest on the party making the claim. The courts will take into consideration the nature of the relationship between the parties and the full context of the circumstances between the parties. A word of caution to those employers who would like to exploit the impossibility to perform its obligations that arise out of contract, as an easy way out of having to pay employee’s outstanding renumeration. The total circumstances of non- performance and of the defendant will have to be explored, which begs the question as to whether the courts won’t potentially adopt a view that many employers could indeed meet their financial commitments through pay-back agreements, having payment staggered over time? What about taking out loans to meet one’s financial commitments? The employer in such circumstances would have to show the ability of the employer to enter into such agreements, the inability to secure loans at feasible rates as well as the effect such agreements or loans may have on the business, holistically.

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