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Worklaw subscribers receive a monthly newsletter containing commentary on the latest labour law cases and trends. This newsletter contains an article which looks at Incompatibility as a ground for dismissal. We also discuss three new cases: The first case - a Constitutional Court case - finally gives clarity on whether claims brought under the LRA prescribe if not brought within certain time limits. The second case deals with how an arbitrator should go about assessing the facts when there are two very different versions of what happened. The third case confirms what an employer must be able to show before relying on the 'derivative misconduct' principle.

This public newsletter is a free edited version of the subscriber newsletter.


The final word on prescription?

A debt or claim for money owed 'prescribes' under the Prescription Act if it is not brought within three years. That seems straightforward enough but the courts have struggled to find a clear and united voice on whether the Prescription Act applies to disputes under the LRA. When we reported on the Constitutional Court case of Myathaza v Johannesburg Metropolitan Bus Services (SOC) Limited t/a Metrobus and Others (2017) 38 ILJ 527 (CC); [2017] 3 BLLR 213 (CC) we advised that the applicability of the Prescription Act to an arbitration award issued by the CCMA is an unsettled matter - there was no consensus or majority view about the main issue, namely whether the Prescription Act applied to the LRA.

The Constitutional Court has recently had the opportunity to hear a slightly different matter which also involves prescription. During June 2001, FAWU and Pieman's Pantry (Pty) Ltd were engaged in wage negotiations which resulted in a strike. On 1 August 2001, FAWU's members were dismissed for participating in the unprotected strike following a disciplinary hearing. FAWU referred an unfair dismissal dispute to the CCMA. There were several legal missteps so it was only in March 2005 that FAWU referred the claim to the Labour Court for adjudication in terms of section 191(5)(b) of the LRA. Note: this happened more than 3 years after the dismissals.

In the Labour Court Pieman's objected to FAWU's claims by contending, amongst other things, that FAWU's claim had prescribed in terms of the Prescription Act. The LC upheld the plea of prescription, holding that the Prescription Act applies to labour disputes including unfair dismissal claims. The LC also rejected FAWU's suggestion that the referral of a dispute for conciliation to the CCMA interrupted the running of prescription and, as a result, held that FAWU's claim had indeed prescribed. FAWU then appealed to the LAC against the LC's judgment.

The LAC held that the LRA and Prescription Act are compatible and therefore reconcilable. In dealing with FAWU's contention that a claim for unfair dismissal does not constitute a "debt" for the purposes of the Prescription Act, the LAC concluded that the "debt' in this instance could be described as the workers "claim of right", namely that their employment was terminated unfairly and that the unfairness should be remedied. As a result, the LAC concluded that the Prescription Act applied to all litigation proceedings under the LRA, specifically unfair dismissal referrals. The LAC also rejected FAWU's contention that the referral of the dispute to the CCMA is a "process" which interrupts prescription. The LAC held that a referral to the CCMA is merely a functional requirement and is a condition precedent to approaching the LC. The LAC agreed with the LC and concluded that FAWU's claim had indeed prescribed, as prescription began running from the date of dismissal.

The Constitutional Court heard the appeal against the LAC judgment in Food and Allied Workers' Union obo J Gaoshubelwe v Pieman's Pantry (Pty) Limited (Case No CCT 236/16, 20 March 2018). The CC's majority judgment held that the provisions of the Prescription Act and those of the LRA are consistent and compatible with one another. A claim for unfair dismissal does constitute a debt as contemplated in section 16(1) of the Prescription Act. The time periods in the LRA and the Prescription Act are reconcilable and exist in harmony alongside each other.

Dealing with whether the conciliation referral interrupted prescription, the CC held that it did: the referral of disputes to the CCMA for conciliation constitutes the service of a process commencing legal proceedings. In this case, although the debt became due on 1 August 2001, it was interrupted by the referral to conciliation on 7 August 2001 and continued to be interrupted until the review proceedings on 9 December 2003. When the dispute was referred to the Labour Court on 16 March 2005, it had accordingly not prescribed, and for these reasons the appeal was upheld.

The significance of this CC case is that we now have certainty on the following:

  • The provisions of the Prescription Act and the LRA are consistent and compatible with one another.
  • A claim for unfair dismissal constitutes a debt as contemplated in section 16(1) of the Prescription Act, and so can prescribe after 3 years.
  • Referral of disputes to the CCMA for conciliation constitutes service of a process commencing legal proceedings, which interrupts prescription.

The practical significance is that there is now no tactical advantage to employers after conciliation in dragging a matter out and letting it remain unresolved, hoping the claims will prescribe: it is now clear that conciliation is a decisive step in interrupting the prescription process.

What to do when faced with diametrically opposed versions of the same event

In many disputes, whilst certain details might differ and be contested, the basic factual scenario is often agreed or 'common cause'. But sometimes two very different versions are put forward, forcing the chairperson or arbitrator to make a choice as to which of the versions is more probable.

In a recent case, at the heart of the dispute was a factual controversy as to whether two employees, when transporting a patient from a hospital in Durban to a hospital in Port Shepstone, left the patient alone in the patient compartment of the ambulance; whether they allowed one of the two who was not driving the ambulance to occupy the front seat of the ambulance, leaving the patient unattended and finally, whether they abandoned the patient in the ambulance without making proper handover arrangements for the patient when they knocked off.

The arbitrator in the bargaining council was faced with two conflicting versions. Did the two employees hand over the patient or did they abandon her in an ambulance and go home? Did one of the employees attend to the patient en route to their destination or did both employees sit in the front part of the ambulance leaving the patient unattended in the patient compartment? The arbitrator found that employer's version was more probable than that of the employees.

On review in the Labour Court, the arbitrator's award was set aside. The LC held that the arbitrator failed to give reasons for rejecting the evidence of the employees and as such, he failed to apply his mind to the evidence before him. The employees' conviction on the charges was found to be a conclusion that a reasonable commissioner could not reach.

On appeal to the Labour Appeal Court in Department of Health KZN v Public Servants Association of South Africa and Others (DA4/15) [2018] ZALAC 6 (20 March 2018), the LAC held that the determination of such disputes needs an assessment of the credibility of the evidence and decision arrived at on a balance of probabilities. The question that needs to be asked is whether the arbitrator's preference for the employer's witnesses' version over that of the employees and their witnesses was a decision that a reasonable decision-maker could not reach?

The LAC found that the common cause facts and improbabilities put the employees' version in doubt. The events following the discovery of the patient in the patient compartment of the ambulance - the surprise by the shift supervisors when the report was made to them, the immediate telephone calls to the employees and report to the manager - were inconsistent with the conduct of persons who had accepted a handover of the patient to them. Also, the version that the one employee was not in the patient compartment with the patient seemed more probable than that of the employees, because the security guard's statement of what he observed shortly after the incident (not being aware of the significance of what he observed) was corroborated by the fact that there were no patient's stats or data form. Further, he did not inspect the ambulance on arrival because of the fact that the two paramedics were sitting in front.

The LAC found that the arbitrator was alive to the nature of the dispute, assessed the credibility of the witnesses and arrived at a reasonable decision. The LC had failed to analyse the approach of the commissioner in dealing with the mutually destructive versions of the witnesses. The LAC upheld the appeal, set the LC's judgment aside, and dismissed the employees' review application.

The lesson of this case is that a chairperson of a hearing or commissioner faced with diametrically opposed versions must be able to show that he/she weighed up:

  1. the credibility of the various factual witnesses- eg their behaviour as witnesses;
  2. their reliability- eg how clearly they observed and recalled the disputed facts; and
  3. the probabilities of the parties' versions.

The test for derivative misconduct confirmed

Derivative misconduct results if an employee fails to reasonably assist an employer to detect those responsible for misconduct. It violates the trust relationship (RSA Geological Services Division of De Beers Consolidated Mines Ltd v Grogan [2007] JOL 20800 (LC)).

The courts have supported the notion that an employee has a duty to assist the employer to bring guilty employees to book and a failure to assist in this respect amounts to misconduct (South African Municipal Workers Union obo Abrahams and Others v City of Cape Town and Others [2011] ZALCCT 27 (17 June 2011)). The leading case is regarded as Western Platinum Refinery Ltd v Hlebela and Others (JA32/2014) [2015] ZALAC 20 (3 June 2015) which held that an employee's duty of good faith towards the employer is breached by remaining silent about knowledge that undermines the employer's business interests.

A recent case heard by the LAC tells the story of a breakaway union, National Transport Movement (NTM) which embarked on protected strike to assert organisational rights. During the strike three of the employer's train coaches were burned. The employer suspected that the burnings could be connected to the striking workers as a result of comments made by three union officials, allegedly inciting the burning of trains.

The employer called upon employees to make representations as to why they should not be dismissed. A union collective representation on behalf of its members was rejected by the employer, while some individual representations were accepted. On the basis of an evaluation of these responses, 700 employees were dismissed.

The LC found that the dismissals were justified on grounds of derivative misconduct because the members of NTM who participated in the strike breached their duty of good faith owed to PRASA by remaining silent about their knowledge or information about the burnings, or about the identity of individuals who torched the coaches. In addition they failed to disassociate themselves from the arson when called upon to do so or to take reasonable steps to help PRASA to identify the individuals who torched the coaches.

On appeal to the LAC (National Transport Movement & others v Passenger Rail Agency of South Africa Limited (PRASA)[2018] 2 BLLR 141 (LAC)) it was held that the employer had failed to prove that the train burnings were committed by the strikers or persons associated with the strikers. Nor was the employer able to prove that the dismissed strikers had any actual knowledge of the train burnings or the persons responsible for them. Moreover, the termination letter made it clear that the real reason for dismissing the employees was not their failure or refusal to disclose information about the train burnings. This demonstrated that the employer had invoked the principle of derivative misconduct as a means to justify the dismissals after they had taken place - and that it was not the true reason for dismissing the employees. In essence, the striking employees were dismissed not for derivative misconduct but rather for "collective misconduct", a notion which is wholly repugnant to our law, running counter to the tenets of natural justice and also incompatible with the established principle of innocent until proven guilty.

The appeal was upheld and the Labour Court's judgment set aside; the LAC found the employees' dismissals to be procedurally and substantively unfair and ordered their reinstatement.

The LAC judgment confirmed this principle: In establishing derivative misconduct, it is not sufficient that the employees may possibly know about the primary misconduct: the employer must prove on a balance of probabilities that each and every employee charged with derivative misconduct was in possession of information or ought reasonably to have possessed information that could have assisted the employer in its investigations.

ARTICLE: Incompatibility - managing the elephant in the room?

By Prof Alan Rycroft

Worklaw has received three recent Helpline queries on how to deal with employee conduct that constitutes incompatibility, so we thought it was a good idea to discuss this issue in this month's Newsletter article.

Incompatibility as a ground for discipline or dismissal is problematic because often it cannot be accurately located in any one of the three grounds for a fair dismissal specified in the LRA, namely misconduct, incapacity or operational requirements. Most of us have encountered a really difficult person in the workplace who creates tension and conflict. The term 'toxic' has been used to describe the effect this kind of person has on others. For this reason incompatibility is regarded as the inability of an employee to work in harmony either within the corporate culture of a business or with fellow employees, leading to an irremediable breakdown in the working relationship.

Prof Alan Rycroft discusses the leading cases and suggests practical approaches for dealing with this difficult issue.

Read more (note - only available to Worklaw subscribers)


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Bruce Robertson
April 2018
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