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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 whether new technology (eg skype) can be used in disciplinary hearings without compromising procedural fairness. We also look at three cases: the first deals with circumstantial evidence. The second looks at whether changing an employee’s contract amounts to a repudiation of that contract. The third looks at whether the imprisonment of an employee terminates employment automatically, with no dismissal involved.
This public newsletter is a free edited version of the Worklaw subscriber newsletter.
Who moved the cheese?
Over a period of several months an employer received complaints from its clients about incorrect and short deliveries of goods ordered. The major concern was mainly with regard to cheese and polony products. Because of several complaints received from clients on the route done by the employee, the employer decided to set up a trap on the employee’s route. A block of cheese was placed in the truck to be driven the following day by the employee. On return from his delivery the cheese was not there and when asked what happened to it the employee denied knowledge thereof. However when informed that a disciplinary hearing would be convened, the employee blamed the disappearance of the cheese on his assistant. The employee was dismissed at an internal disciplinary hearing.
At the CCMA the Commissioner found the dismissal of the employee to have been unfair and ordered his reinstatement with back pay. On review - Adcan Marine v CCMA & others (LC Case No: D352/06, Judgment 19 March 2009) - the Labour Court held that it was clear that the employer relied on circumstantial evidence in seeking to prove that the employee was responsible for the disappearance of the cheese, which was placed on his truck in his absence the previous night. The court confirmed that the onus in civil cases where the case is based on circumstantial evidence, is discharged if the inference to be drawn is the most readily and acceptable inference from a number of possible inferences - ie it is the most probable inference. Because of the risk inherent in relying on an inference drawn from circumstantial evidence, it is always important to ensure that a distinction is drawn between a permissible inference and a mere conjuncture.
Note that this case appears to have adopted a different approach to circumstantial evidence than the case of NUMSA & another v Kia Motors & others (2007) 28 ILJ (LC) which we discussed in our December 2007 / January 2008 newsletter. This stated that when relying on circumstantial evidence, the inference sought to be drawn must be consistent with all (our emphasis) the proved facts. If it is not, then the inference cannot be drawn. The NUMSA / Kia Motors judgement stated that true facts should be such that they exclude every reasonable inference from them save the one sought to be drawn. If they do not exclude other reasonable inferences, then there must be doubt whether the inference sought to be drawn is correct. – (These differences in approach in dealing with circumstantial evidence may be the subject of an article in a subsequent newsletter).
Returning to the Adcan Marine case, the employer argued that the award was reviewable because the Commissioner considered only the possibility that the assistant driver could have taken the cheese. The court was of the view that the employer did not discharge its duty of establishing a prima facie case which would then have called upon the employee to provide an explanation as to what happened to the cheese. There were a number of possibilities that indicate that the employee was not the only person who could have been responsible for the disappearance of the cheese. The one possibility which the commissioner considered and accepted as plausible was that the assistant could not be ruled out in the disappearance of the cheese. The court found that the commissioner could not be faulted for deciding to resolve the issues before him on the basis of this possibility alone, regard being had to the provisions of Section 138 of the Act. (Section 138 of the Act gives the commissioner the power to conduct the arbitration proceedings in the manner in which he or she considers appropriate in order to determine the substance of the dispute fairly and quickly but must deal with the substantial merits of the disputes with the minimum legal formalities.) The court held that the fact that the driver was responsible for the delivery did not make him responsible for goods he was never made aware of.
This case is a reminder of the dangers of a case based largely on circumstantial evidence.
Changing terms & conditions: Repudiation of the contract of employment
An employer advised the employee that his position would become redundant should his work performance not improve and should he and his team not reach the target of R150 000-00 in membership fees. The employee was later informed that if he and the team failed to meet the target, the members of his team would be incorporated into another team and this would result in the redundancy of his position.
After a period for the employee to improve, the continuing failure to reach the target resulted in the employee not being dismissed but being moved from the position of manager to that of consultant. This was not a permanent post and he would no longer be a salaried employee but would have to rely on commission. The employee did not agree that he was not dismissed and referred an unfair dismissal case to the CCMA. The employer then charged him with absenteeism and abscondment, and despite his absence from the hearing, dismissed him. He was told that the reason for his dismissal was desertion.
The Labour Court, in Marneweck v Seesa Limited(LC Case No: JS 814/07, Judgment: 17 March 2009), had to decide whether the employee was dismissed for reasons of misconduct or due to the employer's operational requirements. The Court said that the enquiry into whether or not there is a dismissal goes beyond investigating whether the employer used the word “dismissal” in terminating the employment relationship with the employee. In other words it is not the label placed on the termination that determines whether or not there is a dismissal. As a matter of principle, an employment contract can be regarded as terminated based on the objective construction of the employer’s conduct which unequivocally repudiates the contract.
The court held that the employer had terminated the employment relationship and offered a totally different contract to the employee. By introducing a new contract that radically changed not only the terms and conditions of employment of the employee, but also the nature of the relationship from that of employment relationship to that of an independent contractor, the employer repudiated the contract, which repudiation the employee accepted.
The disciplinary hearing about desertion was held to be a sham and a smoke screen.
The facts and the circumstances of this case indicate very clearly that the dismissal of the Applicant was for operational reasons. There was no evidence that the termination of the contract was the last resort after all other options had been considered. There is also no evidence as to what measures the employer took into account to avoid the dismissal. Accordingly the court found the dismissal to be unfair.
This case has two important learnings. First, the termination of the employment contract can take place without use of the word ‘dismissal’. As the court said, an employment contract can be regarded as terminated based on the objective construction of the employer’s conduct which unequivocally repudiates the contract. Second, the court will scrutinize the reason for dismissal and will reject a sham ‘misconduct’ dismissal where there should have been a proper procedures for an incapacity or operational requirements dismissal.
Does the imprisonment of an employee end the contract automatically?
The employee commenced employment in 1985. In 2002 he was arrested about the death of another person that was not work related. After his release on bail, he with representatives of the first applicant (NUM) had a meeting with members of management where he was informed what the possible consequences of a term of imprisonment could be. The employee was convicted on a charge of culpable homicide and was sentenced to five years imprisonment. He started serving his sentence on 22 January 2003. Soon after being taken into custody, his term of imprisonment was changed from 5 years to 10 months. He was informed in writing by the employer that because he was unable to render his services, the employer could no longer accept the situation that amounted to a repudiation of his employment contract, that was accepted by it. The employer’s attitude was that it could not wait for the 10 month period since the employee was an operator and the work had to continue. NUM appealed on his behalf but was informed that he had not been dismissed or discharged and that its disciplinary code was not applicable.
The applicants referred an unfair dismissal dispute to the CCMA for conciliation and arbitration. At the arbitration the employer persisted that the termination of employment did not amount to a dismissal. The applicants contended that the employee was dismissed and challenged the fairness of the dismissal on several grounds, including that the employer had dealt with his case in a different manner from the way in which it had dealt with other employees who had been imprisoned and after their imprisonment sought to continue their employment.
At the CCMA the arbitrator held that in terms of the ordinary contractual principles, where a contract has become permanently and objectively impossible to perform due to no fault on either party, the contract automatically terminates. In the context of the employment relationship and unfair dismissal law, this would mean that no dismissal took place. The commissioner said that where employees find it impossible to perform, the ordinary principle would apply. If the impossibility is temporary, such as illness or incapacity, the contract is suspended for the period of incapacity. This would also mean that the employer does not need to perform its obligations in terms of the contract either, ie no payment would be required for the period of incapacity. However, if the impossibility to perform is either permanent or for a lengthy period such as permanent incapacity or lengthy jail term, the contract automatically terminates once the permanency has been established. The commissioner found that no dismissal took place as the contract automatically terminated because of the impossibility of the performance of the employee. The matter was taken on review to the Labour Court in NUM & others v CCMA & others (LC Case No JR2423/06; Judgment 13 March 2009).
At the Labour Court, the judge referred to Sidumo & another v Rustenburg Platinum Mines Ltd & others  12 BLLR 1097 (CC), in deciding whether an award is reviewable. The only question that needs to be asked is: Is the decision reached by the commissioner one that a reasonable decision maker could not reach? In other words, the Labour Court is concerned with the reasonableness of the conclusion itself. If the outcome is reasonable, it does not matter that there are flaws in the reasoning employed by the commissioner. The Court is not concerned whether the commissioner was correct or whether it agrees with the commissioner. There is a range of decisions that will fall within the bounds of reasonableness. The Court must simply ensure that the commissioner’s decision falls within those bounds. To succeed, the applicants must establish that the decision falls outside the bounds of what are reasonable.
In this case the Labour Court held that the commissioner’s finding was not one that a reasonable-decision maker could reach and was therefore reviewable. The Court was influenced by the fact that the commissioner didn’t refer to any of the decided case law dealing with termination of a contract through impossibility of performance. The Court also found that the award was contradictory, having distinguished between temporary and permanent impossibility but having then not decided which category applied.
The Court referred the matter back to the CCMA. The judge said that he did not wish to express any views about whether the period of incarceration could be construed as lengthy or a permanent one. These are the issues that a commissioner should decide, clearly guided by case law. The outcome of this case is controversial. Many will say that 10 months is an intolerable length to wait. Some will say that there could have been a different outcome if the employer had dismissed the employee on the basis of operational requirements. Others will question the court’s assessment that the commissioner came to a decision that a reasonable decision maker could not come to. Our view is that another judge may well have reached a different conclusion.
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