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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 on what an employer must prove to establish ‘derivative misconduct’. The term ‘derivative misconduct’ was discussed in the recent case of RSA Geological Services Division of De Beers Consolidated Mines Ltd v Grogan  JOL 20800 (LC) and is a form of ‘team’ or collective misconduct.
We also look at two new cases in this newsletter: the first dealing with whether it is unfair discrimination to exclude temporary staff from applying for vacancies. The second considers mitigating circumstances, and whether the failure to hear evidence on mitigating circumstances constitutes an irregularity.
This public newsletter is a free edited version of the Worklaw subscriber newsletter.
Limiting eligibility for vacant posts to exclude temporary staff
It is a fairly usual practice for employers to advertise vacant posts internally first. This is often as a result of a collective agreement to do so, and is designed to ensure that existing staff are considered first so that they can develop a career path. It also demonstrates an employer’s commitment to existing staff – to mentor and train them for future opportunities.
What constitutes ‘existing staff’ is a contested area. For many employers it means existing permanent staff. As a result temporary or contract staff may not apply, at least at the internal advert stage. This often causes resentment, but the restriction is understandable in the light of the reasons for the ‘internal advert first’ policy.
A recent case however makes us reconsider the matter. In the case of McPherson v UKZN & another  JOL 20803 (LC) an employee had been employed in a five-year post as the Head of the School of Physical Science at a university. As a result of a merger with another university, some posts were internally advertised to "any permanent member of staff" at the level of senior lecturer. He applied for the post of Head of the School of Physics (effectively his old post renamed in the new merged stricture), but his application was not considered. He referred a dispute to the CCMA but it was not resolved. Facing allegations of unfair discrimination, the employer denied that the exclusion of temporary/ contract staff amounted to discrimination under section 6(1) and (2) of the Employment Equity Act 55 of 1998. It argued that its Employment Equity Policy needed to be measured against the operational requirements of the university.
The Labour Court held that there was overwhelming evidence that the employer had in its employ a sizeable number of temporary staff. The employee’s position was not isolated. The eligibility requirement was therefore discriminatory to the members of staff who had been appointed on a temporary basis. Although discrimination can be justified in law, justification focuses on the purpose and reason for the discrimination. The court found that the employer's reasons based on operational requirements came across as requirements based on the preferences of the employer’s senior employees. The court held that the employee (who had found alternative employment elsewhere) was entitled to compensation equivalent to six months remuneration.
Maybe we can make sense of this case by saying that it happened in the university sector where things are different to the commercial world. Maybe one could say that temporary employees at a university are different to temporary workers at a factory. Maybe. But the LRA does not distinguish between temporary and permanent employees in its definition of employee. It follows that any differentiation between permanent and temporary employees has to be done on clear operational grounds. The judge said this:
“As I consider the reasons preferred for the inherent operational requirements of the [employer], I find none that I can regard as permanent attributes or quality, forming an essential element of such requirements. The reasons given, in my view, come across as requirements based on the preferences of the first respondent's senior employees.”
Preferring existing employees is usually the basis for the ‘internal advert policy’. The court seems to be saying that that is not enough. We find the judgment lacking in guidelines, so all that we can do is alert you to this development. If you have a collective agreement on internal adverts, that will go a long way to establishing the fairness of the policy, simply because our law promotes collective bargaining. But if the policy is without a collective agreement, we think that employers may need to find a clear business reason to justify the exclusion of temporary employees from the application process.
It is also important to note that it may be possible to draw a distinction between fixed term contract employees and other temporary employees. The outcome of the case was probably influenced by the fact that the applicant, who the court described as a temporary employee, was on a 5 year contract and the post he was applying for was a 3 year contract post. We think the longer the contract period of a temporary employee, the less likely the court would accept that person being excluded from being considered for a permanent post.
The Code of Good Practice: Dismissal requires employers, when considering dismissal, to take into account mitigating and /or aggravating circumstances. The idea is that, having found the employee guilty, the employer should be able to lead evidence of aggravating circumstances which justify a specific sanction, while the employee can lead evidence of mitigating circumstances justifying a lighter sanction. Factors to consider include..”gravity of the misconduct,….the employee's circumstances (including length of service, previous disciplinary record, and personal circumstances), the nature of the job and the circumstances of the infringement itself.”
In the public service it is customary for this sort of evidence to be led only after a finding of guilt, but at CCMA / bargaining council arbitrations it is normal to weave in this sort of evidence before the chairperson or arbitrator makes a finding of guilt. The explanation is that this makes it more time efficient – the parties don’t have to come back for a second hearing after the arbitrator decides on guilt.
Evidence in mitigation is complex. Why should long service be regarded as a mitigating and not an aggravating circumstance where there has been theft or dishonesty? Should an employee with long service know better? Does being a breadwinner or having a number of dependants make dishonesty any less serious?
The importance of mitigating evidence emerged in the recent case of Kalik v Truworths Gateway & others  JOL 20534 (LC). An employee was dismissed for dishonesty after she was charged with removing a cosmetic tester sample from the employer's shop without permission. She referred a dispute to arbitration, where the arbitrator found the dismissal to have been fair. The employee approached the Labour Court for the review of that decision. In particular she alleged that the Commissioner had failed to hear, assess and examine mitigating factors which were in favor of the employee. The judge said:
In my view, it is not necessary to hear mitigating circumstances where the relationship between the employer and the worker has irretrievably broken down due to misconduct relating to dishonesty.
The court explained this by saying that an employment relationship broken down as a result of dishonesty can never be restored by whatever amount of mitigation. The underlying reason for this approach is that an employer cannot be expected to keep dishonest workers in his/her employ. The other reason for this is to send an unequivocal message to other employees that dishonesty will not be tolerated. The court added that a worker with an unblemished record cannot after an incident relating to an act of dishonesty continue to be trusted. It is the operational risk to the business of an employer that arises from the dishonest conduct, which cancels off whatever good record the worker may have had before the commission of the offence. In other words there would be no purpose in conducting an inquiry into mitigating circumstances where a worker is guilty of misconduct relating to dishonesty.
The court pointed out however that this approach may not apply in cases involving other forms of misconduct. This seems to us to make sense. It means that employers should view the list of potential mitigating factors in the Code of Good Practice: Dismissal within the context of the type of offence committed and decide whether they need to be considered.
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