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Dispute Resolution Workshop

Dispute Resolution Workshop. August / September 2012 Roadshow. Contents. Overview of referrals Types of issues Some practical examples of cases at MEIBC Outcome of arbitrations Latest case law on issues relevant to MEIBC

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Dispute Resolution Workshop

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  1. Dispute Resolution Workshop August / September 2012 Roadshow

  2. Contents • Overview of referrals • Types of issues • Some practical examples of cases at MEIBC • Outcome of arbitrations • Latest case law on issues relevant to MEIBC • 2012 Labour Relations Amendment Bill relating to Dispute Resolution

  3. Total Referrals -2% -15% 14% 9%

  4. Scope of who can refer • LRA Amendment – section 188B • Section applies to employees earning above prescribed threshold on dismissal • In determining the threshold in consultation with NEDLAC, Minister must take into account “the extent to which employees, by reason of their earnings level, level of skills or position, have sufficient bargaining power to ensure that adequate provision may be made in their contracts of employment for protection against unfair dismissal” • Provided it is not automatically unfair, dismissal of an employee to whom this section applies is deemed to be fair if employer gives employee prescribed notice or pays him in lieu thereof (>= 3 months) • In respect of contracts concluded before commencement date of this section, the section will take effect 2 years after commencement date • Likely that threshold will be 4x BCEA threshold • If dismissed summarily of with less than 3 months’ pay, they will be entitled to exercise remedies prescribed in LRA

  5. Assistance in Processes: NATIONALLY 2011 • Statistics have remained relatively constant over the years • The Council has a higher level of representation of parties than the national figure • Unions and employer organisations are the majority of the representation • LRA Amendment – will give authority of CCMA/BC to make rules which regulate the rights of parties to be represented in proceedings. • LRA Amendment – will give authority to CCMA/BC to make rules regulating consequences of non-attendance • MEIBC Rules differ to CCMA Rules i.r.o representation currently 2008-2010 Source: Tokiso Research: screening of a sample of MEIBC awards 2008- 2011

  6. Assistance in Processes: KZN 2011 2008-2010

  7. Assistance in Processes: EASTERN CAPE (East London) 2011 2008-2010 Source: Tokiso Research: screening of a sample of MEIBC awards 2008- 2011

  8. Assistance in Processes: EASTERN CAPE (Port Elizabeth) 2011 2008-2010 Source: Tokiso Research: screening of a sample of MEIBC awards 2008- 2011

  9. Assistance in Processes: WESTERN CAPE 2011 2008-2010 Source: Tokiso Research: screening of a sample of MEIBC awards 2008- 2011

  10. Assistance in Processes:GAUTENG (Johannesburg) 2011 2008-2010 Source: Tokiso Research: screening of a sample of MEIBC awards 2008- 2011

  11. Assistance in Processes: GAUTENG (Tshwane) 2011 2008-2010 Source: Tokiso Research: screening of a sample of MEIBC awards 2008- 2011

  12. Assistance in Processes:FREE STATE 2011 2008-2010 Source: Tokiso Research: screening of a sample of MEIBC awards 2008- 2011

  13. Types of dismissal cases arbitrated (Nationally) 2011 • Dismissals account for 93% of cases arbitrated • Misconduct remains the main reason for dismissal • Existence of dismissal disputes most often pertains to fixed term contract employees where the emloyer argues that no dismissal took place as the contract expired • Surprise increase in incapacity cases which pertains to an increase in poor performance dismissals rather than ill-health – need to see if this is a new trend developing, or a one year anomaly 2008-2010 Source: Tokiso Research: screening of a sample of MEIBC awards 2008-2011

  14. Types of dismissal cases arbitratedBy Region Source: Tokiso Research: screening of a sample of MEIBC awards 2008- 2011

  15. Types of Misconduct(Nationally) 2011 2008-2010 Source: Tokiso Research: screening of a sample of MEIBC awards 2008-2011

  16. Types of Misconduct by Region Source: Tokiso Research: screening of a sample of MEIBC awards 2008- 2011

  17. GROSS DISHONESTY (theft)Woolworths case Woolworths (Pty) Ltd v CCMA & others [2011] ZALAC15; JA30/10 (26/7/11) Certain acts of gross dishonesty regardless of an employee’s length of service and clean disciplinary record cannot save them from dismissal. • An employees with 23 years of service and a clean disciplinary record as a customer service supervisor was dismissed by Woolworths. • The employee was found guilty of concealing merchandise without paying for it. • This resulted in a loss to the company and a violation of the company’s disciplinary code. • The merchandise stolen was “returns” or “second-grade goods”. • The LAC found that the LC erred by confining the sanction to whether the arbitrator’s sanction was fair, instead of a consideration of the wider issues / merits of the dispute. • The DVD evidence of the gross misconduct established a prima facie case of concealment and dishonest intent in which the employee failed to provide an explanation for her actions. • The LAC overturned the arbitrator’s award and the LC judgment, and found that the dismissal was fair. Summary taken from , and adapted ,from WORKL@W ANNUAL LABOUR UPDATE 2012

  18. MEKN 4333Sexual harassment • The matter was heard as a pre-dismissal arbitration. • The allegations were of sexual harassment of a serious nature. • These allegations were denied by the Employee ,however he admitted to having a consensual relationship with the complainant . • The complainant was the only person who could give direct evidence, but refused to attend the hearing. • The Employee gave extensive evidence and brought a witness to support his version. • The employee was found not guilty and the matter was dismissed.

  19. MEPE1603 Interpretation/ application vs enforcement • An employee sought to enforce compliance with the Main collective agreement relating to the interpretation / application of the clauses relating to short time / lay off, payment for Public Holiday and grading • The employer raised a point in limine that the matter was one of enforcement and should not be subject to conciliation/ arbitration. • John Grogan in his book “Collective Labour Law: the 2010 version’ on page 132 writes that:   “A dispute over the interpretation of a collective agreement exists if the parties disagree over the meaning of a particular provision. A dispute over the application of a collective agreement exists arises when the parties disagree over whether the agreement applies to or in a particular set of facts and circumstances.” • The employer argued that an agent had come out to assess whether there was non-compliance and found everything was in order and the employee was correctly graded. • The Commissioner found that the issues raised were a matter of enforcement. The employee’s case was dismissed because it should have been dealt with in terms of clause 4.2.2 of the MEIBC dispute resolution agreement.

  20. MEGA 31720Dismissal of an employee without working permit • The applicant , a Zimbabwean citizen, employed as a spray painter, was dismissed on the grounds that he had supplied the respondent with a false South African identity document and did not have a valid work permit. • He was dismissed without being afforded a proper disciplinary hearing. • The applicant admitted to dishonesty. • The respondent is not allowed to employ a foreign national unless the foreign national is in possession of a work permit issued by the appropriate South African authority. • The Commissioner concluded that the fact that the applicant was a foreign national without a work permit does not alter the fact that he was employed by the respondent, albeit unlawfully. Therefore, the applicant was entitled to the protections afforded under South African legislation. • Reinstatement could not be afforded to the applicant as a remedy, therefore, due to the applicant’s length of service (6 years), he was awarded 3 months compensation.

  21. MEGA 32203Gross misconduct • A senior executive who was a procurement manager of a construction company, was nearing retirement age and was dismissed for gross dishonesty. • The employee was found guilty of the following charges: • Dishonesty • Giving false/ misleading information • Gross negligence • Bringing the company’s name into disrepute • These charges were based on the applicant dishonestly procuring a contract to his wife who was a supplier of fly screen services in the area. The employee claimed he did not know his wife was involved with the procurement process. • The Commissioner found that the applicant failed to take the commissioner fully into his confidence which detracted from his credibility and argument. • The employee argued that the disciplinary hearing was procedurally unfair because he did not have a legal representative. The Commissioner found that this was not a reason for unfairness and evidence showed that the chair conducted the hearing fairly. • The employee was found guilty of dishonesty and gross negligence and dismissal was found to be a fair sanction.

  22. MEFS 1429Strike misconduct • This case involved the dismissal of 17 employees for strike related misconduct. • The majority of the employees went on a protected strike. • The striking employees were interdicted and restrained from in any way interfering with, harming or damaging, intimidating, harassing and/or assaulting any clients, customers, suppliers, vehicles, non-striking employees, replacement labourers and goods of the respondent. • Once the strike ended, the employees were brought before a disciplinary hearing for not complying with the interdict, found guilty and dismissed. • The respondent provided oral evidence to support their case. The applicant chose not to lead witnesses and only gave argument. • The Commissioner found that the respondent had proved the allegation and that they were guilty. • The Commissioner gave an extensive analysis of the mitigating and aggravating factors and found that dismissal was the appropriate sanction.

  23. Strike Misconduct – CC Judgment • The Constitutional Court handed down judgment in SATAWU v Garvas (CCT 112/11 [2012] ZACC 13 dated 13 June 2012)about the constitutionality of a law which makes organisers of gatherings liable for damages caused by the gathering unless they took all reasonable steps to avoid the damage and they did not reasonably foresee that damage. The SCA had previously upheld a decision of the WC High Court saying that the law was valid, and this was referred on appeal to the CC. • In a majority judgment the CC held that the law aims to afford victims effective recourse where a gathering becomes destructive and results in injury, loss of property or life. The majority held that the defence provided for by the law is viable and that the limitation on the right to freedom of assembly in section 17 of the Constitution is reasonable and justifiable, because it serves an important purpose and reasonably balances the conflicting rights of organizers, potential participants and often vulnerable and helpless victims of a gathering or demonstration which degenerates into violence. • The Constitutional Court emphasised that the 'reasonable steps' taken on the one hand and 'reasonable foreseeability' on the other hand, were inter-related. Organisers are obliged at all times to take reasonable steps to prevent all reasonably foreseeable conduct that causes damage and the reasonable steps must be of the kind that render the conduct causing damage unforeseeable. For these reasons, the Constitutional Court dismissed SATAWU's appeal. Summary from Workl@w

  24. Outcome of arbitrations:NATIONALLY (including default awards) • Consistent with national trends • Employers do not attend at their own peril • Out of jurisdiction increases where both parties are present 2011 2008-2010 Source: Tokiso Research: screening of a sample of MEIBC awards 2008- 2011

  25. Outcome of arbitrations (including default awards) Source: Tokiso Research: screening of a sample of MEIBC awards 2008- 2011

  26. Outcome of arbitrations (excluding default awards) Source: Tokiso Research: screening of a sample of MEIBC awards 2008- 2011

  27. Sanction • In South African Breweries Ltd v Commission for Conciliation Mediation and Arbitration and Others (C 665/2011) [2012] ZALCCT 17 (24 May 2012), the employee, a process operator with 22 years' service, was found to have entered the employer's laboratory, taken a bottle of beer from the fridge and drank some of it. Three charges were brought against the employee: - drinking alcohol on duty, unauthorised removal and consumption of SAB products, and operating machinery after having consumed alcohol at the workplace. On the third charge, the employee was only tested some seven hours after the incident and showed no alcohol in his system. The arbitrator considered the first two charges to be the main elements of the misconduct. • In line with Sidumo, the arbitrator took into account the following factors in determining whether the dismissal was fair: • The totality of circumstances; • The importance of the rule that had been breached; • The reason the employer imposed the sanction of dismissal; • The harm caused by the employee's conduct • Whether additional training and instruction may result in the employee not repeating the misconduct; • The effect of dismissal on the employee; and • The employee's service record. • The arbitrator noted that the employee only had 'a few sips' of beer, his long service and 'generally unblemished record', and the fact that no evidence was led to establish an irretrievable breakdown in the trust relationship, and found the dismissal to be substantively unfair. He ordered reinstatement (subject to a final warning) from a future date, which effectively meant that the employee was suspended without pay for four and a half months. Summary from Workl@w

  28. Remedy to unfair dismissal:NATIONALLY 2011 • LRA provides that reinstatement is primary remedy for substantively unfair dismissals • Compensation however remains most common form of remedy • Compensation preferred by dismissed employee • Slightly higher level of reinstatement in this industry compared to national average of 72% 2008-2010 Source: Tokiso Research: screening of a sample of MEIBC awards 2008-2011

  29. Remedy to unfair dismissal: KZN 2011 2008-2010 Source: Tokiso Research: screening of a sample of MEIBC awards 2008-1020

  30. Remedy to unfair dismissal: EASTERN CAPE (Port Elizabeth) 2011 2008-2010 Source: Tokiso Research: screening of a sample of MEIBC awards 2008-2011

  31. Remedy to unfair dismissal: EASTERN CAPE (East London) 2011 2008-2010 Source: Tokiso Research: screening of a sample of MEIBC awards 2008-2011

  32. Remedy to unfair dismissal: WESTERN CAPE 2011 2008-2010 Source: Tokiso Research: screening of a sample of MEIBC awards 2008-2011

  33. Remedy to unfair dismissal: GAUTENG (Johannesburg) 2011 2008-2010 Source: Tokiso Research: screening of a sample of MEIBC awards 2008-2011

  34. Remedy to unfair dismissal: GAUTENG (Tshwane) 2011 2008-2010 Source: Tokiso Research: screening of a sample of MEIBC awards 2008-2012

  35. Remedy to unfair dismissal: FREESTATE 2011 2008-2010 Source: Tokiso Research: screening of a sample of MEIBC awards 2008-2012

  36. Enquiry by Arbitrator • Section 188A provides for enquiry by arbitrator (previous terminology was “pre dismissal arbitration”) • There are a number of formal amendments to facilitate use of the process, including that consent can now be given even for those under the threshold “in accordance with a collective agreement”

  37. PRIVATE ARBITRATIONCarlbank LAC decision • Takes a turn in a new different direction regarding private arbitration. • LAC judgment suggests that private arbitration be revisited and revised, and emphasizes the importance of conciliation for the resolution of a dispute. • NBCRFI & another v Carlbank Mining Contracts (Pty) Ltd & another(201 2) 21 LAC 1.11.18 • The first respondent, a labour broking business in the road freight industry, fell within the registered scope of the Road Freight bargaining council. • The employer raised a preliminary objection to the bargaining council’s jurisdiction because the parties had agreed to refer any dispute arising from the contract of employment to private arbitration. • The Labour Court found that the clause did not contravene section 199 of the LRA as it was not less beneficial to what was in the collective agreement. • The LAC overturned the LC decision and found that the private arbitration clause was invalid. One of the primary reasons was that there was no option of conciliation. Note: It is important that if parties want a private arbitration, that the clause meets the requirements as outlined in this judgment.

  38. Private Arbitration • LRA Amendments – section 147(6) providesthat the CCMA must assume jurisdiction of a case where there is a private arbitration clause when – • The employee earns less than 4 times the prescribed BCEA threshold and the employee is required to pay for the arbitration; or • If the arbitrator is not independent of the employer

  39. LABOUR COURT REVIEWSAndre Herholdt v Nedbank Limited (Unreported LAC decision) - Herholdt was a senior financial broker with 13 years experience and was appointed as a beneficiary in a dying client’s will - £92 000. He failed to disclose this to his supervisors in terms of a conflict of interest policy and was dismissed for dishonesty. • He was found not guilty and reinstated by a CCMA commissioner. Nedbank brought a review application. • There are types of unreasonableness in the context of a reviewable award - • Substantive unreasonableness is unreasonableness that may be put to the Sidumo test as that which may fall within a range of reasonableness; • Process related unreasonableness is where a Commissioner fails to have regard to material facts which will constitute a gross irregularity in the conduct of the arbitration proceedings.  A Commissioner is duty bound to properly consider all relevant and material facts and issues and a failure to do so would be a breach of his/her mandate; • If a Commissioner fails to take material evidence into account and a party is likely to be prejudiced as a result, that decision is liable to be set aside regardless of the result. • The test for review is whether the decision is one that a reasonable decision maker could not reach as well as the factors outlined in section 145. • Dialectical or procedural and substantive reasonableness are usually intertwined and process related irregularities carry the inherent risk of a decision being unreasonable.

  40. Review and Enforcement of Awards • LRA Amendment – it will no longer be necessary for the CCMA to lodge original arbitration award with the Labour Court (s138) • LRA Amendments to s143 • Award for payment of money which has been certified may be enforced as if it were an order of the LC ‘in respect of which a writ has been issued” • Award for reinstatement which has been certified may be enforced, “without further order’, by way of contempt proceedings in the LC Note: 11 800 enforcement applications were made to the Labour Court in 2010 – 2011 financial year (source: Workl@w) • LRA Amendment to s144 – award or ruling can be rescinded if good cause is shown • LRA Amendment to s145 (reviews) • Applicant must apply for a hearing date within 6 months • Review will not suspend the operation of the award, unless security is furnished (24 months if reinstatement, or amount if compensation is awarded) • Judgment must be handed down within 6 weeks • Review interrupts prescription

  41. Other 2012 LRA amendments Section 115 CCMA & Dispute Resolution • Section115deals with the functions of the CCMA/ Bargaining councils. • The CCMA/BC may now provide administrative assistance to employee’s earning below the BCEA threshold in serving notices or documents relating bargaining council proceedings. • The CCMA may provide advice or training on the primary objects of the LRA. • S127 - Functions to be performed by accredited councils and agencies has been expanded to include certifying that ballots have been conducted in accordance with the LRA. • S150 Aims to further empower the CCMA to intervene in significant, high profile disputes when it is in the public interest. Summary taken from , and adapted ,from WORKL@W ANNUAL LABOUR UPDATE 2012

  42. End of presentation We would welcome any questions or points of discussion Our contact details Centre for Dispute Resolution – Tel. 011 834 4660 MEIBC National Office – Tel. 011 639 8000 Email: info@meibc.co.za Website: www.meibc.co.za

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