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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 deals with "When is an employer not required to re-instate / re-employ?" in cases of unfair dismissal. We also discuss three new cases: The first case asks when is a retrenchment arising from a restructuring an automatically unfair dismissal? The second case considers whether the carrying of weapons during a picket constitutes misconduct warranting dismissal. The third case looks at the consequences of trade unions organising in industries not included in their constitution.

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When is a retrenchment arising from a restructuring an automatically unfair dismissal?

There is a potential contradiction in the LRA. Sections 188 and 189 accept that there can be fair dismissals based on an employer's operational requirements, defined as the "economic, technological, structural or similar needs of the employer". Yet Section 187(1)(c) says that a dismissal is automatically unfair if the reason for the dismissal is "a refusal by employees to accept a demand in respect of any matter of mutual interest between them and their employer". So if employees are dismissed for refusing to accept changed working conditions arising out of a restructuring exercise, the employer could possibly be in serious trouble.

How do we make sense of this apparent contradiction? Let's consider the recent LAC decision in NUMSA and Another v Aveng Trident Steel (A Division of Aveng Africa Proprietary Limited) and Others (JA25/18) [2019] ZALAC 36 (13 June 2019) that sheds light on this.

With the steel industry in decline and a 20% fall in its sales volumes and profitability in 2014, Aveng had to reduce costs to maintain its profit margins. In order to survive or remain viable, it needed to restructure. The company initiated a consultation process with NUMSA in terms of section 189A of the LRA, and an extended consultation process followed which resulted in various measures being put in place to address the situation, including discussions about restructuring the company's grading system. An "interim agreement" was reached, in terms of which an interim structure with redesigned job descriptions was agreed, whilst consultation about job descriptions and the long-term viability of the proposed job grade structure would continue. In terms of the interim structure, employees performed additional functions and were paid extra.

NUMSA subsequently gave written notice to terminate the interim agreement, declaring its members were no longer willing to perform the additional duties. Further negotiations took place between the parties in an attempt to agree on the job grading structure and the rates to be paid, but these were unsuccessful.

After a year of consultations, Aveng informed NUMSA that the consultation process in terms of section 189 of the LRA had now been exhausted and gave notice that Aveng would implement the new structure as per the redesigned job descriptions. Employees however refused to accept offers of employment in terms of the redesigned job descriptions. Given that their previous positions had become redundant and due to their refusal to accept the alternative employment offered, all the employees were dismissed for operational reasons.

At the Labour Court NUMSA contended that the reason for the dismissal was the employees' refusal to accept Aveng's demands in respect of the altered job descriptions and grade structure, which were matters of mutual interest, and thus the dismissal was automatically unfair in terms of section 187(1)(c). Aveng denied that the dismissal was automatically unfair and maintained that the reason for dismissal was a fair reason based on its operational requirements.

The Labour Court in NUMSA obo members v Aveng Trident Steel (A Division of Aveng Africa (Pty) Ltd) (JS596/15) [2017] ZALCJHB (13 December 2017) concluded that the employees were dismissed not for refusing to accept any demand but for operational requirements reasons after rejecting the alternative to dismissal proposed by the employer during retrenchment consultations. The Labour Court held that the proposal to alter the job descriptions was an appropriate measure aimed at avoiding or minimising the number of dismissals and thus the dismissal was for a fair reason. Aveng was faced with operational difficulties and the only viable answer was to restructure and redesign the jobs. The LC was satisfied that Aveng had done everything reasonably possible to save the jobs and had the employees continued working in line with the new job descriptions, they would have remained in employment and suffered no adverse financial consequence.

On appeal at the Labour Appeal Court, it was held that Section 187(1)(c) of the LRA must be read in the context of LRA's protection against unfair dismissal. The prohibition in section 187(1)(c) must be read with section 188. It follows that even where there is evidence suggesting that dismissal occurred following employees' refusal to accept a demand, the employer can still show that the dismissal was for a different, more proximate, fair reason.

The fact that a proposed change is refused and a dismissal thereafter ensues does not mean that the reason for the dismissal is necessarily the refusal to accept the proposed change. The question of whether section 187(1)(c) of the LRA is contravened no longer depends on whether the dismissal is conditional or final (subsequent to a change in the wording of the section in 2014), but rather on what the true reason for the dismissal of the employees is. The actual reason for the dismissal needs to be determined.

The LAC said the court must determine factual causation by asking whether the dismissal would have occurred if the employees had not refused the demand. If the answer is yes, then the dismissal is not automatically unfair. If the answer is no, as in this case, that does not immediately render the dismissal automatically unfair; the next issue is one of legal causation, namely whether such refusal was the main, dominant, proximate or most likely cause of the dismissal.

The LAC concluded that the dominant reason or proximate cause for the dismissal of the employees was Aveng's operational requirements, which underpinned the entire process throughout 2014 and 2105 and informed all the consultations regarding the changes to the terms and conditions of employment. The employees' dismissals accordingly fell within the zone of permissible dismissals for operational requirements and did not fall foul of section 187(1)(c). The LAC accordingly confirmed the LC decision.

Whilst this might seem like playing with words, what we learn from this LAC judgment is that the key question is to determine whether the main or more dominant cause of the dismissal was (a) the employees' refusal to accept operational changes or (b) the operational requirements of the employer.

Weapons and Picketing

In a recent case employees took part in a national strike called by NUMSA. The employer's disciplinary code made the "brandishing or wielding of dangerous weapons" a dismissible offence. In response to the impending strike, the employer posted its picketing policy on company notice boards. On 2 and 3 July 2014, the policy was displayed on the gates to the employer's premises and on 4 July 2014 it was signed by NUMSA. The picketing policy stated that picketers may not "engage in unlawful or violent actions"; that "no weapons of ANY kind are to be carried or wielded by the picketers"; and that the employer may take disciplinary action "where an employee's actions during a picket are in breach of the organisation's Disciplinary code".

On 2 and 3 July 2014, four employees each carried a stick while picketing with a group of strikers outside the employer's premises. Another employee carried a length of PVC pipe and another, in addition to a stick, carried a sjambok. A person in the crowd with the employees carried a golf club and another an axe. The employees were charged with "brandishing or wielding of dangerous weapons during the strike" and following disciplinary hearings they were dismissed.

Aggrieved with their dismissals, NUMSA referred an unfair dismissal dispute to the CCMA. At the arbitration, graphic photographs of severe injuries sustained by two individuals during the course of the strike were placed before the arbitrator.

The arbitrator found that the employees had not been shown to have "brandished or wielded" weapons but were "carrying" them, and there was no evidence that they intended to threaten or intimidate anyone. As a result the arbitrator found they were in partial breach of the valid and reasonable rule. Turning to the issue of sanction, the arbitrator relied on the evidence that the employees did not brandish or wield the weapons but carried them. The sanction of dismissal was found to be inappropriate and the dismissal was found substantively unfair. The employees were consequently reinstated from the date of the arbitration award subject to a final written warning valid for 12 months.

Dissatisfied with the arbitration award, the employer sought its review by the Labour Court. In its judgment, the Court found there to be no reason to interfere with the arbitration award since it was not unreasonable and the review application was accordingly dismissed with costs. The Labour Appeal Court in Pailprint (Pty) Ltd v Lyster N.O and Others (DA18/2017) [2019] ZALAC 43 (13 June 2019) overturned the LC judgment. The LAC found that the CCMA arbitrator had committed a reviewable irregularity by arriving at a decision which a reasonable decision-maker could not reach on the evidence before him. The dismissals of the employees were found to be substantively fair.

The LAC confirmed that an unduly technical approach to the framing and consideration of allegations of employee misconduct should be avoided, which the arbitrator had showed in making a distinction between 'carrying' and 'brandishing' weapons. The arbitrator had failed to consider the purpose of the rule and the harm it sought to avoid. Carrying a sjambok, PVC pipe and sticks at a protest, at which others were in possession of a golf club and axe, was not only a clear breach but was aimed at sending a message which was threatening to others. Within the context of the strike violence committed, the LAC found the seriousness of this breach was overlooked by the arbitrator.

The lesson of this case is that it is inappropriate to consider charges in an overly technical or narrow way. The key issue was that the employer was entitled to prohibit weapons from the picket line in order to preserve the safety of its premises and employees and to avoid strike violence.

Union organising in industries not included its constitution

An employer refused to recognise NUMSA's recruitment of 70% of its workforce on the basis its core business of packaging fell within the definition of the Printing and Packaging Sector, and it did not form part of NUMSA's revised scope in terms of its constitution approved by the Department of Labour. The employer fell under the ambit of the Statutory Council for the Printing, Newspaper and Packaging Industries ("PNPI"). NUMSA was not a member union of the PNPI and did not participate in the PNPI.

When this dispute was referred to the CCMA the employer alleged that because the members NUMSA claimed were not eligible under its constitution to become members, NUMSA did not have the requisite locus standi to refer the dispute to the CCMA. The CCMA nevertheless concluded that a union had standing to seek organisational rights in workplaces that are not included within the scope of its constitution. The commissioner found that as NUMSA had approximately 70% of the employees as members, NUMSA's application for organisational rights should be granted. The commissioner directed the employer to grant the union access to the canteen hall on 72 hours' notice and to deduct union fees from members and pay them to NUMSA with immediate effect.

The Labour Court dismissed the employer's application to review the CCMA's award, but this decision was overturned on appeal by the Labour Appeal Court in Lufil Packaging (Isithebe) (A division of Bidvest Paperplus (Pty) Ltd) v Commission for Conciliation, Mediation and Arbitration and Others (DA8/2018) [2019] ZALAC 39 (13 June 2019).

The LAC held that the LRA requires unions to determine in their constitutions which employees are eligible to join them, and it is implied that this precludes them from admitting employees as members who are not eligible in terms of the union's registered constitution. Their admission would be ultra vires the union's constitution and invalid - a union cannot create a class of membership outside the provisions of its constitution. The LAC found that the CCMA could not grant NUMSA organisational rights if the basis for seeking these rights was not legally valid. NUMSA had to show that it was sufficiently representative in terms of its membership within the scope of its constitution.

This case is a reminder that the LRA requires a union to determine in its constitution which employees are eligible to join it, and it will be precluded from claiming representivity based on employees who are not eligible to be members.

ARTICLE: When is an employer not required to re-instate / re-employ, in cases of unfair dismissal?

By Prof Alan Rycroft

The 1994 drafters of the LRA wanted to make sure that reinstatement / re-employment for unfair dismissal was the default remedy to prevent employers from just paying to get rid of an employee, however unfair the dismissal was. For this reason, section 193(2) provides that the Labour Court or an arbitrator must require the employer to re-instate or re-employ the employee unless certain specific factors exist.

In this article Prof Rycroft discusses how the courts have dealt with the specific exceptions to the general rule established through s193(2), including the recent LAC judgment in AFGEN (Pty) Ltd v Ziqubu.

Read more (note - only available to Worklaw subscribers)

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Bruce Robertson
July 2019
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