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22 nd Annual Current Labour Law Seminar 2011 Alec Freund Peter le Roux Clive Thompson

22 nd Annual Current Labour Law Seminar 2011 Alec Freund Peter le Roux Clive Thompson Johannesburg, Pretoria, Durban, Port Elizabeth & Cape Town. INDIVIDUAL LABOUR LAW. PETER LE ROUX. Highlights:. Contract principles: An update Administrative law principles: An update

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22 nd Annual Current Labour Law Seminar 2011 Alec Freund Peter le Roux Clive Thompson

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  1. 22nd Annual Current Labour Law Seminar 2011 Alec Freund Peter le Roux Clive Thompson Johannesburg, Pretoria, Durban, Port Elizabeth & Cape Town

  2. INDIVIDUAL LABOUR LAW • PETER LE ROUX

  3. Highlights: • Contract principles: An update • Administrative law principles: An update • Delictual principles • Automatic termination of employment • Labour Appeal Court decisions dealing with dishonesty • Intoxication • Dismissal for refusal to undergo polygraph testing • Formulating disciplinary charges • What is a benefit? Current Labour Law

  4. Contract principles and fairness: SA Maritime Safety Association v McKenzie [2010] 5 BLR 488 (SCA) The existence of a common law duty of fair dealing rejected. But what about the exceptional cases? Current Labour Law

  5. Contract principles and fairness: Mahumani v Member of the Executive Council: Finance, Economic Affairs and Tourism, Limpopo (2010) 31 ILJ 2009 (NGP) –procedural fairness can be incorporated into contracts of employment via applicable collective agreement. Nyathi v Special Investigating Unit[2011] JOL 27537 (LC) – employer not contractually entitled to extend suspension beyond a period 90 days. This was prohibited by the disciplinary code that had been incorporated into the contract of employment.However, dismissal was lawful and not in breach of contract. The disciplinary procedure not applicable in this case. Current Labour Law

  6. Contract principles and fairness: Mahlalela v Office of the Pension Funds Adjudicator[2011] 6 BLLR 587 (LC) and Ebrahim and Others v Sans Fibres (Pty) Ltd (2011) 32 ILJ 304 (LC) – principle that disciplinary and other policies can be incorporated into contract of employment accepted but on the facts held that there had been no such incorporation. Current Labour Law

  7. Contract principles: SAMWU v Matjhabeng Local Municipality [2011] 3 BLLR 299 (LC) – employees enjoying a contractual right to free transport despite this not being contained in their written contract of employment. Contractual term based on practice and oral undertakings given by employer representatives. Current Labour Law

  8. Contract principles : Fourie v Stanford Driving School and 34 Related Cases (2011) 32 ILJ 914 (LC) and Makume v Hakinen Transport CC; Moyi v Inkhunzi Contractors (Pty) Ltd; Shashape v Tswaing Local Municipality (2011) 32 ILJ 928 (LC) – employees relying on contractual right to claim certain BCEA rights. Section 4 of the BCEA . Oasis Group Holdings (Pty) Ltd v Bardien [2011] 3 BLLR 284 (LC)–period of resignation not extended if the employee takes sick leave during the resignation period. Current Labour Law

  9. Administrative law principles: Chirwa v Transnet Ltd and Others [2008] 2 BLLR 97 (CC) and Gcaba v Minister of Safety and Security[2009] 12 BLLR 1145 (CC) – the decisions of employers in the public sector to dismiss or not to promote do not constitute administrative action. Current Labour Law

  10. Administrative law principles: Section 158(1)(h): Section 158(1)(h) of the LRA empowers the Labour Court to – … review any decision taken or an act performed by the State in its capacity as employer, on such grounds as are permissible in law; … Current Labour Law

  11. Administrative law principles: Section 158(1)(h): MEC Department of Education Kwazulu Natal v Khumalo and Another[2010] 11 BLLR 1174 (LC) – employer seeking to overturn decision to promote which was tainted by irregularities. Section 158(1)(h) applied. National Commissioner of Police and Another v Harri NO and Others(2011) 32 ILJ 1175 (LC) – employer seeking to review a decision of a disciplinary chairman not to dismiss an employee. Section 158(1)(h) applied. Current Labour Law

  12. Administrative law principles: Section 158(1)(h): Grootboom v National Prosecuting Authority and Another (2010) 31 ILJ 1875 (LC) – the decision not to reinstate an employee in terms of section 17(5)(b) of the Public Service Act (Proclamation 103 of 1994) can be challenged in terms of section 158(1)(h) of the LRA. See also Mahlangu v Minister of Sport & Recreation (2010) 31 ILJ 1907 (LC). Current Labour Law

  13. Delictual principles: Mokone v Sahara Computers (Pty) Ltd (2010) 31 ILJ 2827 (GNP) – employer held liable for damages on the basis that it infringed the employee's right to a safe working environment by not taking steps to protect her against sexual harassment. The employer should have had management and disciplinary structures in place that would immediately and effectively have dealt with the plaintiff's complaint. Current Labour Law

  14. Fixed term contracts: • University of Pretoria v the Commission for Conciliation, Mediation and Arbitration and Others (unreported JA38/2010 dated 28 October 2010 / 28 October 2011). The expectation of permanent employment does not fall within the ambit of section186(1)(b). Current Labour Law

  15. Fixed term contracts: • “[21] The words chosen by the legislature, absent an amendment to the legislation, cannot carry the burden of the third respondent’s case in that it covers a restrictive set of circumstances, namely a reasonable expectation of renewal of that which had previously governed the employment relationship, namely a fixed term contract which had previously been enjoyed, which had now expired and, by virtue of the factual matrix created, at best, a reasonable expectation of a renewal.” Current Labour Law

  16. Fixed term contracts: • “[18] … these words do not, however, carry the meaning which is urged by third respondent, namely that, by being employed on the basis of a series of fixed term contracts, an employee has without more a reasonable expectation of a permanent appointment. The distinction between a fixed term contract and a permanent contract has a clear economic rationale. An employee in the position of appellant may have discretionary funds for a limited period. During this period, it offers a series of fixed term contracts to a particular employee. At some point these funds are depleted and the employer can no longer afford a further fixed term contract. By contract, the creation of a permanent post would necessitate a more permanent source of funding.” Current Labour Law

  17. Automatic terminations of employment: Contractual mechanisms other than fixed term contracts • Contracts linked to term of office as director. • Contracts of employment of employees of TES’s or contractors expiring automatically if client no longer needs their services. | Current Labour Law

  18. Automatic terminations of employment: Section 5 of the LRA Section 5(2) provides, inter alia, that – “… no person may do, or threaten to do, any of the following – … (b) prevent an employee … from exercising any right conferred by this Act. …” Current Labour Law

  19. Automatic terminations of employment: Section 5(4) states that – “A provision in any contract, whether entered into before or after the commencement of this Act, that directly or indirectly contradicts or limits any provision of … this section is invalid, unless the contractual provision is permitted by this Act.” Current Labour Law

  20. Automatic terminations of employment: Mahlamu v CCMA and Others [2011] 4 BLLR 381 (LC) “[22] In short: a contractual device that renders a termination of a contract of employment to be something other than a dismissal, with the result that the employee is denied the right to challenge the fairness thereof in terms of s188 of the LRA, is precisely the mischief that s5 of the Act prohibits. Secondly, a contractual term to this effect does not fall within the exclusion of s5(4), because contracting out of the right not to be unfairly dismissed is not permitted by the Act.” Current Labour Law

  21. Automatic terminations of employment: Mahlamu v CCMA and Others [2011] 4 BLLR 381 (LC) “[23] This is not to say that there is a “dismissal” for the purposes of s186(1) of the LRA in those cases where the end of an agreed fixed term is defined by the occurrence of a particular event. This is what I understand the Ratio of Sindane (supra) to be – that ordinarily, there is no dismissal when the agreed and anticipated event materialises (to use the example in Sindane (Sindane v Prestige Cleaning Services [2009] 12 BLLR 1249 (LC)), the completion of a project or a building project), subject to the employee’s right in terms of s186(1)(b) to contend that a dismissal has occurred where the employer fails or refuses to renew a fixed-term contract and an employee reasonably expected the employer to renew the contract. Current Labour Law

  22. Automatic terminations of employment: Mahlamu v CCMA and Others [2011] 4 BLLR 381 (LC) In other words, if parties to an employment contract agree that the employee will be engaged for a fixed term, the end of the term being defined by the happening of a specific event, there is no conversion of a right not to be unfairly dismissed into a conditional right. Without wishing to identify all of the events the occurrence of which might have the effect of unacceptably converting a substantive right into a conditional one, it seems to me that these might include, for example, a defined act of misconduct or incapacity or, as in the present instance, a decision by a third party that has the consequence of a termination of the employment.” Current Labour Law

  23. Constructive dismissal: Eastern Cape Tourism Board v CCMA and Others [2010] 11 BLLR 1161 (LC) Test for constructive dismissal – coercion, duress or undue influence. Current Labour Law

  24. Alcohol and drugs: • Transnet Freight Rail v Transnet Bargaining Council and Others [2011] 6 BLLR 594 (LC) • Arbitrator had erred by applying the principles relating to incapacity in the situation where the employee was not an alcoholic. The fact that an employee was experiencing difficult circumstances at home did not justify treating the matter as one of incapacity. • The fact that the employee was 'caught' before any serious incident arose does not mean that the employee should be treated more favourably than the person who was not caught. Current Labour Law

  25. Alcohol and drugs: • Transnet Freight Rail v Transnet Bargaining Council and Others [2011] 6 BLLR 594 (LC) • The job function of the employee is relevant in determining the fairness of dismissal. Where the job is highly skilled, responsible or hazardous, or the offence is committed by a senior employee who should be beyond reproach, dismissal for a first offence is justified. Where the job function of an offending employee is such that misconduct of this nature would be extremely dangerous and could result in death, injury or damage, a strict application of the rule forbidding alcohol use must be applied. Current Labour Law

  26. Alcohol and drugs: • Transnet Freight Rail v Transnet Bargaining Council and Others [2011] 6 BLLR 594 (LC) • The strict application of such a rule is of importance to the company, its employees and public policy. • The implications of being lenient in the application of an important rule, and the message such leniency sends to other employees regarding their infringement of such a rule also needs to be considered. The need to deter other employees from committing the same misconduct is a response to risk management and is as legitimate a reason for dismissal as a breakdown in trust. Current Labour Law

  27. Alcohol and drugs: • Transnet Freight Rail v Transnet Bargaining Council and Others [2011] 6 BLLR 594 (LC) • The period of validity of a final written warning may differ, depending on the gravity of the offence. This is consistent with the principles of progressive discipline. Generally a final written warning valid for 12 months serves as a clear and strong communication to the employee that his conduct is regarded as extremely serious and will not be tolerated by the employer. • Usually, the presence of a valid final written warning at the time of the commission of the same or similar form of misconduct should be properly interpreted as aggravating in nature. Current Labour Law

  28. Alcohol and drugs: • Transnet Freight Rail v Transnet Bargaining Council and Others [2011] 6 BLLR 594 (LC) • The principles of progressive discipline requires such a re-offending employee to usually be considered irredeemable. • Even in circumstances where a final written warning or a string of warnings have expired, a sanction of dismissal may be justified. Current Labour Law

  29. Derivative misconduct: • CEPPWAWU obo Hlebela v Lonmin Precious Metals Refinery [2011] 8 BALR 814 (CCMA) • Employer suffering huge losses of product – 1 security employee for every 4 employees. • Employer informed by SAPS that employee may be involved in criminal offences. • Investigation revealed that he had an irregular and illogical clocking pattern. • Also discovered that his lifestyle could not be maintained on the salary he earned. Current Labour Law

  30. Derivative misconduct: • CEPPWAWU obo Hlebela v Lonmin Precious Metals Refinery [2011] 8 BALR 814 (CCMA) • On the advice of his union he refused to undergo a "lifestyle audit" and to answer questions regarding his extensive assets. • Employee charged with the following – • It is alleged that you have knowledge of the enormous losses of PGM’s at PMR but you have made no full and frank disclosure to PMR about what could assist PMR in its investigation therein. Current Labour Law

  31. Derivative misconduct: • CEPPWAWU obo Hlebela v Lonmin Precious Metals Refinery [2011] 8 BALR 814 (CCMA) • Found guilty of derivative misconduct. • What about a charge of insubordination? Current Labour Law

  32. Dishonesty: FAILURE TO DISCLOSE INFORMATION MEC for Education, Gauteng v Mgijima[2011] 3 BLLR 253 (LC) – failure to disclose at the time of the recruitment process that the employee faced disciplinary charges. Fipaza v Eskom Holdings Ltd(2010) 31 ILJ 2903 (LC) - employee not disclosing the fact that she had previously been employed by the employer and had been dismissed. Dismissal unfair. The employee did not have exclusive knowledge of this fact. Court also appears to take the view that there is no general duty on a prospective employee to disclose material facts. Current Labour Law

  33. Dishonesty: FAILURE TO DISCLOSE INFORMATION Sotsepo v Kloof Gold Mine [2011] 6 BALR 684 (CCMA) – employee fairly dismissed for participating in a selection panel which interviewed his wife for a job and not disclosing this relationship. Current Labour Law

  34. Dishonesty: THEFT Miyambo v CCMA and Others[2010] 10 BLLR 1017 (LAC)– "[13] It is appropriate to pause and reflect on the role that trust plays in the employment relationship. Business risk is predominantly based on the trustworthiness of company employees. The accumulation of individual breaches of trust has significant economic repercussions. A successful business enterprise operates on the basis of trust. In De Beers Consolidated Mines Ltd v CCMA and Others [2000] 9 BLLR 995 (LAC) para 22, the court, per Conradie JA, held the following regarding risk management: Current Labour Law

  35. Dishonesty: THEFT Miyambo v CCMA and Others[2010] 10 BLLR 1017 (LAC)– 'Dismissal is not an expression of moral outrage; much less is it an act of vengeance. It is, or should be, a sensible operational response to risk management in the particular enterprise. That is why supermarket shelf packers who steal small items are routinely dismissed. Their dismissal has little to do with society's moral opprobrium of a minor theft; it has everything to do with the operational requirements of the employer's enterprise.' " Current Labour Law

  36. Dishonesty: THEFT Miyambo v CCMA and Others[2010] 10 BLLR 1017 (LAC)– “[21] Miyambo undoubtedly breached the relationship of trust built up over many years of honest service. The Company had a consistent policy of zero tolerance for theft and this had been clearly conveyed to all the employees including Miyambo. I agree with the Labour Court's ruling that the Commissioner's award was not justifiable in relation to the reasons given for it. On the basis of the factual findings made by the Commissioner, the dismissal of the Appellant was justified for operational reasons and was fair.” Current Labour Law

  37. Dishonesty: THEFT Woolworths (Pty) Ltd v CCMA and Others [2011] 10 BLLR 963 (LAC) “[48] It has long been held that the employer’s decision to dismiss an employee will only be interfered with if that decision is found to have been unreasonable and unfair. The fact that an employee has had a long and faithful service with the employer thus far is indeed an important and persuasive factor against a decision to dismiss the employee for misconduct, but is by no means a decisive one. In Toyota South Africa Motors (Pty) Ltd v Radebe and Others, this Court held: Current Labour Law

  38. Dishonesty: THEFT Woolworths (Pty) Ltd v CCMA and Others [2011] 10 BLLR 963 (LAC) “Although a long period of service of an employee will usually be a mitigating factor where such an employee is guilty of misconduct, the point must be made that there are certain acts of misconduct which are of such a serious nature that no length of service can save an employee who is guilty of them from dismissal. To my mind one such clear act of misconduct is gross dishonesty.” Current Labour Law

  39. Dishonesty: THEFT Woolworths (Pty) Ltd v CCMA and Others [2011] 10 BLLR 963 (LAC) DVD footage implicating the employee created an "evidentiary burden" to demonstrate her innocence. See also Rainbow Farms (Pty) Ltd v CCMA and Others [2011] 5 BLLR 451 (LAC). Current Labour Law

  40. Bringing the employer’s name into disrepute: Mvembe v Cathorus Community Radio (2010) 31 ILJ 2217 (CCMA) – criticism of the employer's board and the station manager on facebook justifying dismissal – employee given the opportunity to apologise on facebook but refusing to do so.  Sedick and Another v Krisray (Pty) Ltd [2011] 8 BALR 879 (CCMA) – disparagement of managers of employer on face book justifying dismissal – issue of invasion of privacy considered. Current Labour Law

  41. Bringing the employer’s name into disrepute: Smith v Partners in Sexual Health (Non-Profit) (2011) 32 ILJ 1470 (CCMA) – employee denigrating manager and disclosing information relating to the employer's affairs to third parties though her Gmail account. Employer initially gaining access to employee's account accidentally and subsequently doing so intentionally. Intentional access on the second occasion contravening Regulation of Interception of Communications and Provision of Communication-related Information Act, 70 of 2002. Evidence obtained as a result thereof not permitted on the basis of the infringement of the constitutional right to privacy. Current Labour Law

  42. Inconsistency: • CEPPWAWU v NBCCI and Others [2011] 2 BLLR 137 (LAC) • In cases of collective misconduct the employer is only obliged to discipline employees in respect of whom it has evidence. • An employer is not obliged to investigate the identity of every person who may have participated in wrongful activity. • In the case of collective misconduct a "wrong decision" resulting in an acquittal of an employee who did commit an offence will only be unfair "if it is a result of some discriminatory management policy“. Current Labour Law

  43. Insubordination: Polygraph testing Nyathi v Special Investigating Unit [2011] JOL 27537 (LC) – refusal to undergo a polygraph test constituted a material breach of contract which could justify the lawful termination of the contract of employment. But see the following excerpt: Current Labour Law

  44. Insubordination: Polygraph testing Nyathi v Special Investigating Unit [2011] JOL 27537 (LC) “[33] I do not intend dwelling on the issue of the requirement of a polygraph examination. Suffice to point out that the court accepts that the respondent has sound reasons for including such an obligation, to submit to, inter alia, a polygraph, in light of the core business and functions of the SIU which is to investigate corruption and maladministration in government departments and State institutions. Current Labour Law

  45. Insubordination: Polygraph testing Nyathi v Special Investigating Unit [2011] JOL 27537 (LC) The court also accepts that although some of the measures, such as having to submit to a polygraph examination, having to provide urine and blood samples, may seem to be intrusive, these measures are reasonable in the context of an organisation such as the respondent (provided, of course, that these measures are applied fairly and only when reasonably necessary to do so).” Current Labour Law

  46. Insubordination: Nyathi v Special Investigating Unit [2011] JOL 27537 (LC) “[39] I am firstly persuaded on the papers that it is a material term of the contract to submit to a polygraph test and that the applicant by refusing to do so has repudiated a material term of the contract entitling the respondent to terminate the contract. As already pointed out, it is not at issue here whether or not the termination would be fair. I am therefore not persuaded by the submissions advanced on behalf of the applicant that this refusal does not go to the root of the agreement and therefore not material. Current Labour Law

  47. Insubordination: Nyathi v Special Investigating Unit [2011] JOL 27537 (LC) I am persuaded in light of the facts contained in the answering affidavit that it is not unreasonable nor unlawful – taking into account the nature of the business of the respondent and the high premium placed on integrity in light of the SIU's functions – for the respondent to require of an employee to submit to a polygraph test. She had, after all, contractually agreed to do so. The refusal to undergo a polygraph test may also constitute misconduct and may even be a ground for dismissal. Current Labour Law

  48. Insubordination: Polygraph testing Blignaut v The Core Computer Business (Pty) Ltd[2011] 6 BALR 642 (CCMA) – the dismissal of an employee because he had failed to undergo a polygraph test fair on the basis that the employee's contract of employment required the employee to undergo such testing. SATAWU obo Mashiane v Swissport South Africa (Pty) Ltd[2010] 10 BALR 1121 (CCMA) – the dismissal of an employee for a similar refusal was unfair because the employer had failed to establish that there was a tacit term in the contract of employment to the effect that she could be required to undergo such a test. Current Labour Law

  49. Polygraph testing and operational requirements: SA Transport and Allied Workers Union and Others v Khulani Fidelity Security Services (Pty) Ltd (2011) 32 ILJ 130 (LAC) – dismissal for failing a polygraph test could justify dismissal on the basis of the employer's operational requirements. National Union of Mineworkers and Others v Coin Security Group (Pty) Ltd t/a Protea Coin Group (2011) 32 ILJ 137 (LC) – Labour Court (reluctantly) accepted that it was bound by the abovementioned decision but found that, on the facts of the case before it, dismissal was not justified. Current Labour Law

  50. Negligence: Transnet Freight Rail v Transnet Bargaining Council and Others [2011] 6 BLLR 594 (LC) “[44] Negligence can be defined as ‘a failure to comply with the standard of care that would be exercised in the circumstances by a reasonable person’. [45] It is obvious from that definition, there is some times an overlap between poor work performance and negligence. Negligence can be treated as either incapacity or as misconduct, depending on the circumstances. The basis for culpability and negligence cases is the lack of care and/or diligence accompanying the act or omission. The test for negligence is an objective one, namely, whether the harm (or potential harm) was foreseeable and whether a reasonable person would have guarded against its occurring … Current Labour Law

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