May 2011
Dear Industrial Law Journal subscriber,
We take pleasure in presenting the May 2011 issue of the monthly Industrial Law Journal Preview, authored by the editors of the ILJ: C Cooper, A Landman, C Vosloo and J Wilson.
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Hightlights to the Industrial Law Reports
Applying the Sidumo Principles
Applying the principles for the review of awards laid down by the Constitutional Court in Sidumo & another v Rustenburg Platinum Mines & others (2007) 28 ILJ 2405 (CC), the Labour Appeal Court in Samancor Chrome Ltd (Tubatse Ferrochrome) v Metal & Engineering Bargaining Council & others has reinstated a bargaining council award in which the arbitrator upheld the dismissal of employees for a breach of safety rules with potentially life threatening consequences. The court held that, to determine whether the award was one that a reasonable decision maker could reach, the enquiry must address both whether the employees were guilty of misconduct, and whether the sanction was fair. On the question of sanction the court suggested several other factors that should be taken into account, in addition to those mentioned in Sidumo. These included the importance of the safety rules in the workplace, and the serious consequences if they were broken. In the case before it the court found that the consequences would be most serious, and that on the Sidumo test there was no reason to interfere with the arbitrator’s decision to uphold the dismissal.
The commissioner’s award in National Union of Mineworkers & another v Commission for Conciliation, Mediation & Arbitration & others was handed down before the Constitutional Court’s decision in Sidumo, and the commissioner expressly deferred to the decision by the employer to dismiss the employee for misconduct. On review later the Labour Court found that, although the commissioner had applied the law correctly as it stood at the time, the court undoubtedly had to apply the test for review as clarified by Sidumo. Nevertheless, the court did not find the commissioner’s conclusion to be one that a reasonable decision maker could not reach. In this case, too, the employee had ignored important safety rules and the trust relationship had broken down.
The Labour Court’s Jurisdiction to Issue Declaratory Orders
In Louw v Eden District Municipality the Labour Court was approached by agreement between the parties to issue an order declaring whether certain disputes should correctly be heard and determined by a bargaining council or by the CCMA. The court found that it had no jurisdiction to make such a ruling as a court of first instance, because it did not have jurisdiction to determine the disputes in question. It was for those bodies to rule on their own jurisdiction to hear the matters, and if any party was aggrieved by that ruling, that party had to take the decision on review.
Jurisdiction over International Contracts of Employment
Global Outdoor Systems Ltd v Du Toit & others concerned the breach of an international contract of employment in terms of which a South African employee undertook to carry out work in Nigeria applying the laws of Mauritius. At conciliation, relying on a number of factors which he believed connected the parties to South Africa, the CCMA commissioner found that he had jurisdiction to hear the matter and ruled accordingly. On review the Labour Court set that ruling aside, finding that the commissioner had applied the wrong test to determine jurisdiction and that he should have applied the ‘locality of the undertaking’ rule laid down in Astral Operations Ltd v Parry (2008) 29 ILJ 2668 (LAC). As the employee was working outside of South African territory the CCMA had no jurisdiction.
Damages for Breach of Contract of Employment
The applicant in Mangope v SA Football Association claimed damages both at common law and in terms of the BCEA 1997 for the breach of his three-year fixed-term employment contract, which was not confirmed at the expiry of an initial probationary period. The Labour Court noted that the contract made specific provision for instruction and guidance to be given to the applicant during the probationary period, and found that the respondent’s failure to provide this amounted to a repudiation and material breach of contract which entitled the applicant to damages equal to the salary he would have received over the three-year period. In Moloto v City of Cape Town the Labour Court found that the respondent employer had not repudiated an indefinite contract of employment by giving the employee the requisite four weeks’ notice of termination; that the contract had been terminated lawfully, and that the employee was not entitled to claim damages for its breach. The court further found, following the decision of the Supreme Court of Appeal in SA Maritime Safety Authority v McKenzie (2010) 31 ILJ 529 (SCA), that there is no implied term of ‘fair dealing’ in employment contracts.
Expectation of Renewal of Fixed-term Contracts
Having had their fixed-term contracts renewed on one or more occasions, the applicants in National Union of Metalworkers of SA on behalf of Nkosi & another and Packspec claimed that they had a reasonable expectation that they would be renewed further, and that they had been dismissed in terms of s 186(1)(b) of the LRA. After analysing the employees’ arguments the arbitrator found that the employees were not in fact seeking the renewal of their contracts, but a remedy in terms of which they should have been granted permanent employment. They had therefore failed to establish a reasonable expectation that they would be renewed.
Strikes and Secondary Strikes
The respondent bus drivers in Johannesburg Metropolitan Bus Services (Pty) Ltd v SA Municipal Workers Union & others sought to strike after their employer unilaterally changed their shift system, which they maintained amounted to a change in their terms and conditions of employment. The Labour Court found that the employees had no vested right to any specific shift system either in their collective agreement or in their contracts of employment, and that the change implemented was no more than a change in work practice. It therefore granted an order interdicting the proposed strike. However, in Swissport (SA) (Pty) Ltd v SA Transport & Allied Workers Union & others, in which the employer party unilaterally implemented a new roster system for airport baggage handlers, the Labour Court found that the change did amount to a change to their terms and conditions of employment, and that a strike on the issue would be protected.
In Clidet No 957 (Pty) Ltd v SA Municipal Workers Union & others the Labour Court considered the conditions that employees have to meet before they may engage in a secondary strike. The court granted the applicant an interdict prohibiting a secondary strike by members of the respondent union where the secondary employer was not in a position to influence the primary employer, and was not reasonably capable of exerting pressure on the primary employer to meet the union’s demands.
Consultation Before Retrenchment
The Labour Court was approached by the applicants in SA Society of Bank Officials v Standard Bank of SA to grant a blanket order in terms of s 189A(13) of the LRA 1995 compelling the respondent employer to disclose information and to engage in consultations in order to comply with a fair retrenchment procedure. The court considered the purpose of a s 189A(13) order, which had a short-term aim to provide an opportunity for discussions before retrenchment, as opposed to a long-term aim to provide compensation to employees after their retrenchment. In the court’s view blanket orders which were not specific about what the parties should do were of little value. As far as possible s 189A(13) orders should be crafted to address the defects specifically shown to exist in the consultation process. The court found that the consultations so far had only partly met the requirements for joint consensus seeking, but were not yet a fait accompli, and that the union also had to assert its rights at the appropriate time or be found wanting. The parties were ordered to hold two further meetings to allow more time for consulting and attempting to reach consensus.
Automatic Termination of Employment
Following the decision of the Labour Appeal Court in SA Post Office Ltd v Mampeula (2010) 31 ILJ 2051 (LAC) the Labour Court has found in Mahlamu v Commission for Conciliation, Mediation & Arbitration & others that a clause in an employment contract which provides for its automatic termination on the happening of given external events is not permissible in law. The parties may not contract out of the employee’s right not to be unfairly dismissed, whether through the device of automatic termination or otherwise.
Unfair Dismissal
As in Mangope v SA Football Association, so in SA Football Association v Ramabulana NO & others the fixed-term contracts of football officials were not confirmed after the expiry of extended probationary periods. However, in the Ramabulana matter the employee sought compensation for unfair dismissal, not damages for breach of contract. In both cases the employer’s right to terminate the contract at the end of probation was considered but not supported. In Ramabulana the court found that the employee’s dismissal had nothing to do with his probationary status, but that probation had been used as an excuse to justify an unfair dismissal based on unsubstantiated allegations of theft against the official.
Basic Conditions of Employment Act 75 of 1997
In SA Municipal Workers Union v Matjhabeng Local Municipality the Labour Court granted an order in terms of s 77A(c) of the BCEA 1997 directing the respondent employer to restore a benefit of providing free transport to and from work for its employees. The court found that, applying the doctrine of quasi-mutual consent, when the employer’s oral offer to provide free transport was accepted by the employees it gave rise to a contractual right and could not be withdrawn by the employer unilaterally.
The applicant in Public Servants Association on behalf of Jonase and Department of Justice & Constitutional Development claimed at arbitration that he was entitled in terms of a collective agreement (which duplicated the wording of s 27 of the BCEA) to claim family responsibility leave when his brother-in-law died. He argued that by Xhosa customary law his wife’s brother was regarded as his own brother, without distinction, and was therefore a member of his ‘immediate family’ for the purposes of family leave. However, the arbitrator found this interpretation highly unlikely in view of the administrative problems involved and believed that the definition of ‘immediate family’ could best be addressed by the parties to the collective agreement at the negotiating table.
Employment Equity Act 55 of 1998
The Labour Court found in Minister of Safety & Security & another v Govender that it lacked jurisdiction to consider an alleged unfair discrimination dispute arising out of the SAPS’ failure to adhere to its employment equity plan when granting promotion, because the claim was not one that an individual could raise until after the enforcement provisions of chapter V of the Act had been exhausted. The court did not find the parties’ failure to conciliate the dispute to be an obstacle to a referral to court, once the statutory period for conciliation had elapsed and a certificate of non-resolution had been issued.
The Powers and Duties of Arbitrators and Commissioners
In Director-General: Office of the Premier of the Western Cape & another v SA Medical Association on behalf of Broens & others, in which a public service doctor had been dismissed by the applicants, a bargaining council arbitrator had ordered his reinstatement, but in a non-clinical position. On review the applicants argued that it was not open to the arbitrator to make such an order as s 193 of the LRA 1995 only provides three remedies for unfair dismissal, namely reinstatement, re-employment or compensation. The Labour Court found that on a purposive interpretation the LRA did not prevent the arbitrator from using his discretion to make any appropriate award, including, but not limited to, an award that gave effect to the primary objects of the Act, and that the arbitrator had not exceeded his powers. An arbitrator who made three conflicting rulings on condonation in respect of the same matter was found in Gauteng Department of Local Government v Mulima NO & others to have been functus officio after making his first ruling. The Labour Court found the first ruling to be final and binding and that the arbitrator had exceeded his powers by replacing that ruling by the second and third rulings.
In Mondi Packaging SA (Pty) Ltd v Harvey NO & others the Labour Court reviewed and set aside an award where the commissioner had joined an interested party to the proceedings when they were part-heard, but had thereafter continued with the hearing without giving the joined party the opportunity to cross-examine earlier witnesses or to call others. The court found that this resulted in the denial of a fair hearing for that party, and stressed the duty of the presiding officer to ensure that all parties receive a fair hearing of their dispute. Similarly, in Pernod Ricard SA (Pty) Ltd v Commission for Conciliation, Mediation & Arbitration & others the Labour Court held that a commissioner is obliged to consider the totality of the facts in arriving at his or her decision on the evidence, to prevent that decision being based on a piecemeal approach and in disregard of material evidence, and that a failure to do so constitutes a reviewable irregularity.
Disciplinary Code and Procedure
The Labour Court refused in Dyasi v Onderstepoort Biological Products Ltd & others to interdict the holding of a disciplinary enquiry by the respondent into the applicant’s alleged misconduct, finding that, although the Minister of Agriculture, Forestry & Fisheries retained the power to appoint and dismiss the applicant, he was nevertheless an employee of the respondent company. In Munnik Basson Dagama Attorneys v Commission for Conciliation, Mediation & Arbitration & others the Labour Court confirmed that in disciplinary proceedings, as in civil proceedings, amendments to pleadings and documents can be sought at any stage, and will be allowed if the other party is not prejudiced. A commissioner’s finding that such an amendment was procedurally unfair amounted to a material error of law, and was set aside. The Labour Court found in National Commissioner of Police & another v Harri NO & others that the decision of a chairperson of a disciplinary enquiry in the public service constitutes administrative action, and as such must be lawful, reasonable and procedurally fair. Where such a decision is shown not to be rational or reasonable it is open to review by the court.
Practice and Procedure
The respondent business in Sheriff for the High Court, Stellenbosch v High Rustenberg Hydro & others was sold as a going concern after a number of its employees had been dismissed but before the Labour Court had, on review, pronounced their dismissals to be unfair and ordered compensation. The court was not aware of the transfer, but the new owner was aware that s 197 of the LRA applied. When the employees’ union sought to execute against the property of the transferred business the new owner applied in interpleader proceedings to stay the writ of execution and to require the union to obtain a separate order declaring the new owner to be liable for the judgment debt before it could execute against the business property. The court held that it would be contrary to the purpose of s 197 to require the employees to comply with such a costly and lengthy court application before they could execute their claim against the new employer. The court confirmed their right to enforce the claim against the new employer and authorized the sheriff to execute the writ.
In Mondi Packaging SA (Pty) Ltd v Harvey NO & others , where the employee of a labour broker claimed that the broker’s client was his true employer, the Labour Court confirmed that the client had a direct and substantial interest in the proceedings, and that he had correctly been joined as a party to the proceedings.
Please note: This newsletter serves as a preview of the printed and electronic Industrial Law Journal. At the time of its dissemination, the full-length cases and determinations are still being prepared for publication in the Industrial Law Journal. The material mentioned in this newsletter only becomes available to subscribers when the Industrial Law Journal is published.
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