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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 asks "when is there a reasonable expectation of renewal of a fixed-term contract of employment?" We also discuss three new cases: The first case looks at the fairness of disciplining different groups of strikers in different ways. The second case considers when a grievance can constitute a 'protected disclosure' under whistle-blowing legislation. The third case concerns the consequences of a mistake made in announcing new salary rates.

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Fairness and treating different groups of strikers differently

County Fair informed staff that annual discretionary bonuses would not be paid due to its financial position. In response, on 15 December 2010, more than 200 employees embarked on an unprotected strike. Three ultimatums were issued to employees. 64 employees returned to work on 15 December 2010 and 58 employees returned on 17 December 2010. All signed a 'comeback' document, which included an undertaking that they would desist from such action in future, and received a final written warning for their conduct.

A group of employees (the second respondents) failed to comply with the final ultimatum to return to work on 17 December 2010, despite it being extended to provide additional time for them to do so. County Fair then instituted a lock out. The second respondents returned to work on Monday 20 December 2010, signed the comeback document but were suspended from duty pending disciplinary hearings at which they were found to have committed misconduct and were dismissed.

The Labour Court found the dismissals unfair on the basis that the sanction was harsh, since the employees had only remained on strike for an extra 1 1/2 days. County Fair was ordered to reinstate the respondents on a final warning with 6 months' back pay.

On appeal to the LAC in County Fair Foods (Epping), a division of Astral Operations Ltd v Food and Allied Workers' Union and Others (CA02/2017) [2018] ZALAC 9 (11 May 2018) it was held that the group of employees' failure to adhere to the final ultimatum distinguished them from their fellow employees who had returned to work in response to the ultimatum. In such circumstances, the dismissal of the respondent employees was fair.

The LAC said that our courts have repeatedly stated that fairness generally requires that like cases should be treated alike and that disciplinary consistency is the hallmark of progressive labour relations. While discipline should be neither capricious nor selective, this applies within reasonable bounds and subject to the proper and diligent exercise of discretion in each individual case, with fairness remaining a value judgment. There may exist valid grounds in a particular case to distinguish the conduct of one employee from another, even though they have engaged in similar conduct.

The LAC held that the Labour Court did not have appropriate regard to the fact that-
  • the unprotected strike action was embarked upon in a critical business period;
  • the final ultimatum had been issued calling on the respondent employees to return to work;
  • the final ultimatum had been extended to provide the respondent employees with additional time within which to comply with it;
  • the final ultimatum was ignored by the respondent employees with no bona fide reason given to explain why this was so;
  • no remorse was shown for this conduct by the respondent employees;
  • and to the conduct of the respondent employees at the disciplinary hearing.

Treating employees differently is a precarious task - in many cases inconsistency has resulted in a finding of unfairness. But this case reminds us that there may be valid grounds in a particular case to distinguish the conduct of one employee from another, even though they have engaged in similar misconduct.

The case holds a further warning to parties engaged in protracted legal battles - the LAC judgment was given 8 years after the strike happened.

When is a grievance a protected disclosure?

Recently we reported on the case of Chowan v Associated Motor Holdings (Pty) Ltd and Others (22142/16) [2018] ZAGPJHC 40 (23 March 2018) where the High Court had no hesitation in treating a grievance as a protected disclosure because it related to discrimination. We expressed caution about this because few employees in filing a grievance would probably say that they are whistle-blowing - rather they want their problem resolved through internal processes.

In the recent case of Kabe v Nedbank Ltd (JS633/13) [2018] ZALCJHB 173 (8 May 2018), the Labour Court took a different approach to whether a grievance could be regarded as a protected disclosure.

The employee, employed as an Assistant Relationship Governance and Compliance Officer at Nedbank, responded to criticism of her performance by filing 5 grievances against her manager in the course of 11 months, as well as referring three disputes to the CCMA in the same period. She is a qualified attorney who previously had unsuccessfully litigated against the principal attorney in her law firm and had failed to pay the legal costs.

She was eventually charged with poor performance by Nedbank and dismissed. She initially referred an unfair dismissal claim to the CCMA but after the matter had proceeded to arbitration she suddenly referred an automatically unfair dismissal dispute to the Labour Court. The basis of the claim was that the grievances filed against her manager were protected disclosures under the PDA.

During the court proceedings she engaged in behaviour that the court later assessed as vexatious and frivolous:
  • She subpoenaed another judge who 8 years previously had worked at Nedbank. She did this, the judge said, to intimidate her employer.
  • She canvassed issues of a case she consciously abandoned at the CCMA. She was also argumentative and did not present facts that supported her case.
  • Without reason or counter-demand she publically rejected an offer of settlement of R200 000 because it was not R204 000, saying that she would take her chances with a costs order.
  • The transcript of the disciplinary hearing revealed that she and her legal representative at the hearing conceded that the employer had a legitimate cause for concern about her performance.

The Labour Court considered whether the grievances could be regarded as protected disclosures. It held that the Protected Disclosures Act is not intended to deal with personal feelings but with criminal and irregular conduct. An employee seeking the protection of the PDA, bears the onus of showing both that a workplace grievance amounts to a disclosure as defined by the PDA and that there is credible evidence that the employer is in violation of the law.

As regards costs, the court acknowledged that the default position in the Labour Court is not to award legal costs against a party. But it held that if the evidence is overwhelming that a case is frivolous, the scale must tip in favour of making an order as to costs against that litigant. The LC found that the employee had not proved her case and awarded costs against her.

This case has sound lessons: although we accept there could be an overlap between a grievance and a protected disclosure, an employee who files a grievance needs to make clear what outcome is required. If the primary intention is to raise the unlawfulness with the person(s) the matter is referred to, it will probably be regarded as a protected disclosure. A grievance on the other hand is normally a different process which aims at resolving mostly inter-personal conflict and perceptions of irregular treatment.

The other major lesson is that if litigation is 'vexatious and frivolous' a costs order may be made - a harsh outcome for a party on the receiving end of such an order.

Can costly mistakes be rectified?

The General Manager at Kulisile Power Station signed letters dated 10 May 2012 under the head "Salary Review - Salary Adjustment" which were handed over to employees. The letters read almost the same except for the difference in the salary amounts.

On 22 May 2012 Eskom issued payslips to the employees. The amounts appearing on the payslips differed from those as contained in the letters.

Aggrieved by the salary discrepancy, employees lodged a grievance with the Human Resources Department of Eskom. They contended that they had accepted the original offers as contained in the letters dated 10 May 2012. They had considered the offer by Eskom and had accepted it as a binding contract between the parties, which Eskom had now breached. The employees also contended that Eskom had unilaterally changed the terms and conditions of their employment. They did not regard the letters of 10 May 2012 as an error, because they were signed by the general manager who should have picked up the error but did not.

On 30 July 2012 a grievance session was held. The General Manager's explanation in that session was to the effect that the salary letters were written and quality checked by the Human Resources Shared Services Unit staff who are not part of Kusile Power Station, and the error occurred between the two groups. He further explained that the fact that letters had been issued to the employees with incorrect figures was brought to his attention before the payment of salaries and the filing of the grievance by the employees.

The representative trade union referred a claim to the Labour Court in National Union of Mineworkers and Others v Eskom Holdings SOC (JS257/15) [2018] ZALCJHB 170 (8 May 2018) in terms of s 77(3) of the BCEA. The issue for determination was whether or not there was a breach of contract by Eskom or whether a bona fide mistake was made on 10 May 2012.

Eskom raised two defences. First, Eskom claimed that the employees failed to accept the offers made on 10 May 2012; second, if the offers were accepted, the letters contained reasonable and justifiable errors which were of no force and effect. The argument presented on behalf of the employees that the adjustment of salaries involves vigorous quality checks by various departments and that Eskom should have picked up the so-called mistake prior to issuing the letters dated 10 May 2012, was accepted by the LC as sound.

The LC said there was no set method of accepting or rejecting the offer of the salary adjustment. The fact that the letters dated 10 May 2012 were signed by an Executive Member gave credence to the assertion that due process was followed.

The Court ordered Eskom to comply with the terms and conditions of the contract entered into on 10 May 2012 with the applicants; to pay arrear salaries in adjustment of the difference that the applicants received for the period 01 May 2012 to date and to pay the employees' costs.

The sad lesson of this case is this: Where an employer cannot show that a mistake in calculating an increase was reasonable and where the other party made no representation inducing the mistake, the employer will be liable for salary adjustments represented to the employees.

ARTICLE: Reasonable expectations of renewing fixed-term contracts

By Prof Alan Rycroft

When fixed term contracts end, there is normally no dismissal that can be challenged - unless the employee has acquired a 'reasonable expectation' of it being renewed.

Prof Alan Rycroft analyses the cases dealing with this topic, including the recent LC judgment in Smith & another v Office of the Chief Justice & others. He discusses the subjective and objective elements necessary for a reasonable expectation of renewal of a fixed-term contract to arise.

Read more (note - only available to Worklaw subscribers)


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Bruce Robertson
June 2018
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