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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 'when is the refusal to work overtime a strike?' We also look at three new cases: The first case looks at procedural fairness in the context of an unprotected strike. The second case looks at the necessity of proving damages for breach of contract under the BCEA. The third case looks at how an arbitrator should approach a case where there is no challenge to the fairness and validity of a disciplinary rule.
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Procedural fairness and the unprotected strike
It is worth telling this story fully so you can judge for yourself if the employer acted unfairly in not holding disciplinary enquiries before dismissing strikers in an unprotected strike. Power Construction dismissed 33 workers after they had participated in an unprotected strike. The union argued that the nature and extent of the strike did not warrant the dismissal of the employees and that they were dismissed without a disciplinary hearing.
On Wednesday, 14 August 2013, the company informed the employees that they did not have to work on Thursday due to expected bad weather. They asked if they could also take Friday 16 August off as rain was predicted for that day as well. The company refused and instructed the employees to report for duty on Friday 16 August, telling them that anyone who did not would be disciplined.
As agreed, the employees did not go to work on Thursday 15 August. They did report for work at about 07:15 on Friday 16 August. There is a dispute about the state of the weather on that day. The employer said that rainfall had ceased by 10:00. The weather data for the nearest recording station shows that drizzle had stopped by 10:00. The employees still refused to go to work. At 11:00 the site manager and the senior site foreman addressed the employees and demanded that they return to work, failing which they would not be paid for the day. They refused.
The HR practitioner, Cupido, arrived at approximately 13:30. He told the employees for the third time to go to work. He reminded them that, should they have a grievance, they could refer it to the CCMA. He asked the workers to nominate two representatives who should meet in his office while the rest of them returned to work. They refused. At 14:30 the employer issued a first ultimatum to all employees, reading it out to them. The employees still did not return to work. They went home on the company transport at about 15:00 when the site manager decided to book the site off.
On Monday, 19 August 2013 the employees did return to the site at 07:30 but they still refused to work. Cupido had contacted Phibantu, a NUM shop steward who works at the company's head office. Phibantu arrived at the site with Cupido. Phibantu spoke to the employees and asked them what their grievances were. He then went into the site office and told management that the employees wanted payment for Friday 16 August as the weather had been inclement. Cupido asked Phibantu to return to the employees and asked them to nominate four representatives to enter into discussions while the rest of the employees returned to work. They refused. Phibantu left at approximately 09:00. He called the NUM organiser at the Bellville regional office, Eugenia Peter, to assist. Cupido addressed the employees again and instructed them to return to work and to lodge a grievance. They refused.
At about 12:00 the company issued a second ultimatum. Peter only arrived at the premises at about 15:00. She met with the company management and the employees. She could not resolve the issue and left.
Jacobs issued a third ultimatum at about 15:00. The workers still did not heed the ultimatum. They left the premises and returned on Tuesday, 20 August 2013 at about 07:30. This was day three of the unprotected strike.
The workers again congregated outside the gate at the site offices. Peter arrived at about 09:00 and spoke to Cupido. Cupido asked her to speak to the employees and ensure that they return to work. She tried to persuade the employees to do so while she attended to their grievance. Instead, the employees insisted on taking their tea break before returning to work. Cupido pointed out that they had not worked at all; and that, in the circumstances, they were not entitled to a tea break; and that they should return to work immediately. They refused. Peter left. Cupido issued notices of dismissal at about 11:30 on Tuesday, 20 August 2013.
After the dismissal, a meeting was held between some of the employees, Phibantu, and management at the company's head office on Thursday, 22 August 2013. At the meeting, the company offered to reinstate the employees on their previous conditions of employment, subject to them signing an undertaking to return to work. The employees refused to sign the undertaking. That resulted in the offer to reinstate them being withdrawn retrospectively.
The union referred an unfair dismissal dispute to the CCMA. Conciliation failed and the matter was referred to the Labour Court. The LC in NUM and Others v Power Construction (Pty) Ltd (C85/2014)  ZALCCT 24 (27 July 2016), noting that there had been no disciplinary hearing, held that it was difficult to see how a formal disciplinary hearing could have made any difference before the striking workers were dismissed. They were made aware of the unprotected nature of the strike, not only by management, but also by their own union representatives. They were told at least three times that they ran the risk of dismissal, should they continue. Yet they persisted. They were given the opportunity to make representations through the union representatives and invited to appoint their own representatives. They refused. In these circumstances the LC held there was no procedural unfairness.
What can we learn from this case? It provides confirmation that in an unprotected strike, the form that the pre-dismissal hearing can take will depend on the circumstances. The ultimate test is whether the strikers were given a fair hearing, in the sense of being given the opportunity to make representations before being dismissed.
Where strikers are (1) made aware of the unprotected nature of the strike, not only by management, but also by their own union representatives; (2) given the opportunity to make representations through the union representatives and invited to appoint their own representatives; and (3) given another opportunity to make representations after the dismissal, the dismissals will be procedurally fair.
Damages for breach of contract under the BCEA
An employee who has been dismissed has a choice: use the LRA procedures for unfair dismissal or the BCEA procedures for breach of contract. In our August Newsflash about the recent SABC case, the dismissed journalists opted to go the breach of contract route. Here is another case in which the same tactic was used, but with disastrous consequences for the employee.
The employee was employed as the Chief Operation Officer (COO) of the KwaZulu-Natal Tourism Authority on a fixed term contract for a period of five years. A week or two before the Two Oceans Marathon, the employee sought permission from the CEO to travel to Cape Town to attend the Two Oceans for purposes of "activating and promoting" the Comrades Marathon at that event. The CEO granted the permission and the employee instructed her subordinate to travel with her to Cape Town to assist her in performing her tasks.
Prior to the employee's departure to Cape Town, some members of the employer's staff attempted to discourage her from attending the Two Oceans because the trip was not planned. In addition it coincided with an annual research project the employer was conducting over the same weekend. The employee's presence at this event was considered to be important. Despite this protest, the employee with her assistant travelled to Cape Town at the employer's expense to attend the Two Oceans. The total expenses incurred by the employer for the trip amounted to R21 049.31.
The employer then discovered that, although the employee had instructed her assistant to accompany her to Cape Town, the assistant was not asked to perform any task; the employee also did not seek, and was not granted, accreditation to attend the event; the employee had registered as any other athlete to participate in the event; and had, indeed, competed in the Two Oceans. The employee admitted that she participated as an athlete but stated that she conducted a survey at the race and did so while running the race. An internal audit report indicated that the employee planned the trip to Cape Town to participate in the Two Oceans and not for any official purpose. It called for the employee to be charged, amongst other things, for dishonesty.
The employee was duly charged, a hearing was held and the employee was found to have committed the misconduct complained of. The Chairperson of the hearing recommended that she be dismissed. The CEO dismissed the employee, a decision which was later ratified by the Board.
After her dismissal, relying on the BCEA, the employee instituted Labour Court application proceedings, asking for her dismissal to be declared an unlawful breach of her employment contract and for the employer to be ordered to pay damages for the breach in an amount equal to what she would have earned for the remainder of her fixed term contract, and for payment of certain other monies which she alleged were due to her. As regards the damages and repayment of monies claimed, the employee provided no proof at all.
The Labour Court curiously found that there were no factual disputes on the application papers and that the employer had failed to follow its own disciplinary procedures. It held that the employee's contract was unlawfully breached and ordered the employer to pay to the employee an amount equal to what the employee would have earned for the balance of her contract period, as damages, and to repay the amount R21 049.31 being the amount deducted by it in respect of the costs incurred on the Cape Town trip.
On appeal in the LAC, in KwaZulu-Natal Tourism Authority and Others v Wasa (JA113/14)  ZALAC 35 (28 June 2016), the court criticised the employee for proceeding by way of application and not through trial action which would have included the leading of evidence and an opportunity for cross examination. The consequence of contested facts in the affidavits lodged by the applicant employee and the employer, meant that the applicant had not proved her case and the LAC was accordingly obliged to accept the employer's version - not because it was necessarily the truth but because that is the consequence for the applicant where the court has no basis to decide disputes of fact between affidavits. The LAC also criticised the employee for leading no evidence on the alleged damages suffered. A claim for breach of contract under the BCEA requires proof of damages.
This case provides the following valuable lessons:
- Where an applicant can or should anticipate that the facts essential for it to prove its case will be challenged, it should not proceed by way of application but by way of action.
- In the absence of disputed facts being tested by oral evidence, the applicant will be found to have not proved his/ her case, resulting in a finding in favour of the respondent.
- Where an employee seeks compensation based on unfair dismissal under the LRA there is no need for the employee to prove damages; but where an employee seeks damages for a breach of contract in terms of the BCEA, the employee has to prove: (i) that s/he suffered damages as consequence of the breach, (ii) that there is a link between the damages s/he suffered and the breach; and (iii) the quantum of damages s/he actually suffered.
The employee was a till operator at Woolworths and was found to have till takings in excess by an amount of R628.78. Woolworths has a disciplinary rule which says that for the first incident of a discrepancy of an under or over amount exceeding R500, dismissal is the sanction. Following a disciplinary enquiry, the employee was found guilty of what the chairperson described as gross misconduct and was dismissed.
At the CCMA the arbitrator found that the dismissal of the employee was substantively unfair on the basis that the sanction of dismissal was too harsh under the circumstances. The arbitrator also found that it had not been established that the employee's till discrepancy was as a result of any negligence on her part because the employer could not find any irregularities on her transactions. The arbitrator further found that there was no evidence that the employee was dishonest towards the employer or that she intended benefitting from the surplus in her till. He further held that the employer did not suffer any loss and that it was the first time that the employee had an excess. The employee was reinstated.
On review at the Labour Court, the court upheld the employer's review concerning the unreasonableness of the arbitrator's finding regarding the absence of negligence on the part of the employee which had resulted in the "over", but did not uphold the challenge to the reasonableness of the award concerning the appropriate sanction.
On appeal at the LAC, in Woolworths (Pty) Ltd v South African Commercial Catering and Allied Workers Union and Others (JA38/15)  ZALAC 41 (27 July 2016) the court held that the type of misconduct in question did not require dishonesty to be proved. The court held the arbitrator failed to appreciate the nature and importance of the rule breached, and failed to consider the reason and circumstances in which the employer imposed the sanction of dismissal. The LAC upheld the dismissal, putting emphasis on the fact that the reasonableness, fairness and validity of the employer's disciplinary rule had not been challenged.
We find this a strange decision. The Code of Good Practice: Dismissal expressly requires any person who is determining whether a dismissal for misconduct is unfair, to consider whether or not the applicable rule was valid or reasonable. Here there was a rule based not on dishonesty or negligence, and when investigated the employer itself could not explain how the employee came to have excess funds. Certainly a retailer has a strong interest in preventing 'under' or 'over' till takings. But it does not seem to us to be fair to charge an employee with misconduct if the employer having investigated the matter cannot find the reason for the excess funds and instead attempts to rely on a strict liability approach in such circumstances.
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