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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 "changes to terms and conditions of employment in a time of Covid-19". We also discuss three new cases: The first case considers whether an employer is liable for racism by a customer towards an employee. The second case deals with a dismissal for refusing to undergo a polygraph test. The third case looks at whether the filing of a grievance prior to a dismissal can be an automatically unfair dismissal.

This public newsletter is a free edited version of the subscriber newsletter.


Racism by a customer towards an employee

A recent case concerned the question of whether an employee can hold an employer liable in terms of s60 of the EEA for race discrimination perpetrated by a customer against the employee. S60 holds an employer liable for contraventions of the EEA by its employees.

The employee was employed as a cashier by Shoprite at its Fish Hoek branch. According to the employee, a white woman customer approached her to pay for goods and to draw cash at her till. After some confusion about the transaction between them, this astonishing conversation allegedly took place:
"I don't even know why you are sitting there. I don't know what you are doing there, you should go back, because you are so stupid. You are stupid.
And I said, Ma'am, we assisted you and we did what you required us to do. And I don't understand now why, what is the reason for you to keep calling me stupid.
She said - You are stupid. You are a stupid k....... That is what you are, I don't know why you are sitting there, you don't know what you are doing there, you should go back to missionary."
According to the employee, the manager adopted the view that because the customer was a regular shopper who had patronised the store for at least 30 years, she knew that this customer would not be rude to the employee and said 'she pays your salary'.

The lack of reaction by her employer induced the employee to take her case to the CCMA. The arbitrator held in favour of the employee, concluding that the approach adopted by the employer was insufficient to address the extreme racist abuse that the employee suffered and that this amounted to indirect racial discrimination. Accordingly, he found that the employer had contravened s 6(1) of the EEA.

The employer approached the Labour Court on appeal in terms of s 10(6) of the EEA against this order. The LC questioned whether an employer could be held liable for the racist utterances of a customer as opposed to an employee? On the basis of the clear language of s60 of the EEA, the court held that it could not because the section envisaged that, if an employee while at work discriminates against another employee, the employer is liable if it does not take the necessary steps to eliminate the racist conduct. The provision could not be extended to hold that an employer was liable for the conduct of a customer directed towards an employee.

On appeal to the Labour Appeal Court in Samka v Shoprite Checkers (Pty) Ltd and Others (CA15/18) [2020] ZALAC 11 (18 May 2020), it was held that the applicability of s60 is expressly confined to an employee as defined in s1 of the EEA. An employer exercises authority over an employee but none over a customer, and has no control over how a member of the public might behave when entering its store.

The LAC noted that whilst the employee could not sue her employer under s60, she was not without a remedy. She could sue the customer for damages, and she could also pursue an unfair discrimination claim against the customer in the Equality Court in terms of the Promotion of Equality and Prevention of Unfair Discrimination Act. But what she cannot do is to bring a case against her employer under s60 of the EEA.

The lesson of this case is that s60 of the EEA only applies only to conduct by an employee. Because an employer exercises authority over an employee but not over a customer, the scope of s60 cannot be broadened to include customer behaviour.

Refusing to undergo a polygraph test

On commencing employment, employees were required to enter into contracts of employment which contained the following clause dealing with polygraph testing:
"You hereby agree to submit to polygraph testing. The decision as to whether or not to conduct these tests rests solely with the employer, provided that testing will be conducted by competent, qualified persons and only tests recognised as reliable will be used.

Refusal to submit to polygraph tests in the circumstances set out above will be regarded as a serious breach of this contract, which may lead to disciplinary action and possible termination of the contract."
A situation arose where high-value goods were changed to low-value goods which resulted in no tax being payable by the particular client, to the detriment of the South African Revenue Services. An investigation took place during which all of the employees at the bond store were requested to undergo a polygraph test in terms of their employment contracts. All employees consented to undergoing the polygraph test except for four who refused.

Meetings were held with the employees to explain the purpose of undergoing the polygraph test in order to aid the investigation. Four joint meetings and individual meetings were held with the employees, in an attempt to convince them to undergo the polygraph tests in terms of their employment contracts, and the consequences of a failure to do so were pointed out to them.

Despite these attempts the four employees refused to take the polygraph tests, resulting in charges being levelled against them and disciplinary enquiries held. All four of the employees were found guilty and dismissed for failing to co-operate with the company in conducting its investigation.

Two of the employees referred an unfair dismissal dispute to the CCMA. The arbitrator held that the dismissals were substantively unfair.

On review at the Labour Court in Crossroads Distribution (Pty) Ltd t/a Skynet Worldwide Express v National Bargaining Council for the Road Freight and Logistics Industry and Others (JR1335/14) [2020] ZALCJHB 78 (12 May 2020), it was held that the arbitrator's award did not take into account the employer's evidence that the sanction of dismissal was warranted because of the seriousness of the incident, which may have led to SARS revoking the employer's licence. If this had occurred numerous employees would have lost their jobs. The Court seemed to accept that the conduct of the employees had a negative impact on both the business and the employment relationship. The Court also held that the arbitrator had failed to take into account the evidence that the purpose of the polygraph testing was not to establish guilt but was to narrow the investigation to assist in identifying the perpetrators.

The LC set aside the arbitrator's award and found the dismissals of the two employees to be procedurally and substantively fair. Unfortunately the LC did not refer to two relevant previous judgments in coming to its decision.

In Nyathi v Special Investigating Unit [2011] ZALCJHB 66;J1334/11 (22 July 2011) the Labour Court held that where it is a material term of the contract to submit to a polygraph test and the employee, by refusing to do so, repudiates this material term of the contract, the employer is entitled to lawfully terminate the contract. But it would be a separate enquiry as to whether or not the dismissal will be fair.

A later decision of the LAC in Gemalto South Africa (Pty) Ltd v Ceppwawu obo Louw and Others (JA 54/14) [2015] ZALAC 36 (27 August 2015) held that even where employees are in breach of their employment contract which permits polygraph testing, the enforcement of the term is fair only where there is reason to suspect those employees of involvement in wrongdoing. The implication of the LAC decision is that other evidence is required first before the right to test by polygraph is triggered. On this basis, it may be unfair to dismiss where the purpose of testing of an entire workforce is to narrow down the investigation, as in the Crossroads case discussed above.

Although the principle emerging from the Crossroads judgment is that a refusal to undertake a polygraph test when it is required in conditions of employment, may be serious and dismissable misconduct, we recommend that this be read in the context of the earlier Gemalto LAC judgment mentioned above.

Is filing a grievance 'taking action' against the employer?

Consider these facts: During 2015, a meeting was held in the employer's boardroom to resolve a contractual dispute with one of its subcontractors. Prior to the meeting, the employee and the employer's Project Director had a disagreement during a conference telephone call. The Project Director and the employee were amongst those who attended the meeting and openly differed about the contractual dispute during the meeting. The Project Director left the meeting shortly before it was adjourned. The employee alleged that as the Project Director was leaving the meeting, he hit her over the head with a file.

The employee immediately reported the matter to her supervisor, and visited a doctor to seek medical attention. In the days following, the employee consulted an attorney and lodged a formal grievance in terms of the employer's grievance procedure, wherein she alleged that she was assaulted by the Project Director. She also laid a criminal charge of assault at the SAPS.

A grievance enquiry was convened and chaired by an external chairperson. The enquiry held that the alleged assault was not proved and dismissed the grievance. The employee appealed against the initial finding, and the grievance appeal hearing upheld the finding of the grievance enquiry.

The employer then charged the employee with various counts of misconduct. Following a disciplinary enquiry chaired by a member of the Bar, the employee was found to have committed gross misconduct for having falsely accused the Project Director of assault and by preventing other employees from performing their duties. The chairperson of the enquiry recommended that the employee be dismissed. An appeal in terms of the disciplinary code was considered by another member of the Bar, who upheld the finding that the employee be dismissed for dishonesty. The employee was subsequently dismissed.

After conciliation at the CCMA failed, the employee referred a dispute to the Labour Court alleging that her dismissal was automatically unfair in terms of s187(1)(d) of the LRA. This section provides that a dismissal is automatically unfair if the reason for the dismissal is 'that the employee took action, or indicated an intention to take action, against the employer by - (i) exercising any right conferred by this Act or (ii) participating in any proceedings in terms of this Act.'

The Labour Court found that the evidence established a causal nexus between the employee exercising her rights to institute a grievance and her dismissal. It found that the proximate or predominant cause of the dismissal was the lodging of the grievance, rather than the alleged dishonest or false accusation against the Project Director. The Court held that the employee's dismissal was automatically unfair in terms of s187(1)(d) of the LRA, and ordered the employer to pay compensation equivalent to nine months' remuneration.

On appeal to the Labour Appeal Court in DBT Technologies (Pty) Ltd v Garnevska (JA61/2018) [2020] ZALAC 26 (18 May 2020) it was held that the filing of a grievance about the behaviour of another employee does not amount to 'taking action against the employer' for the purposes of s187(1)(d). It is a request by an employee for action to be taken to resolve an internal problem, and it does not involve the direct exercise of a statutory right against the employer. As such, the LAC found that s187(1)(d) is not concerned with the filing of a grievance. But the court said that if there was evidence to prove that an employee was dismissed for filing a grievance, the dismissal would be unfair because it would be for a substantively unfair or invalid reason.

But if there is no evidence that the employee was dismissed for taking or intending to take action against the employer, as in this case, the unfair dismissal will not fall into the category of automatically unfair dismissal contemplated in s187(1)(d) of the LRA. The employer's appeal therefore succeeded.

What do we learn from this case? It has been held that the filing of a grievance about the behaviour of another employee does not amount to 'taking action' against the employer and, on this technical level, falls outside of the automatically unfair provision. We think it is correct that s187(1)(d) of the LRA is not concerned with the filing of a grievance. But if an employee is victimised for filing a serious and valid grievance, a dismissal is likely to be found to be substantively unfair under s188.

ARTICLE: Changes to terms & conditions of employment in a time of Covid-19

By Prof Alan Rycroft

One of the grim features of lock-down has been notices to employees announcing a reduction in salary, retrenchment or other changes to terms and conditions of employment.

In this article we want to look at the legality and fairness of unilateral decisions in a time of pandemic and disaster. We recognise that a crisis understandably shifts norms - when a fire breaks out, we know we must obey the instruction to vacate immediately and it is inappropriate to require consultation at that time.

From the beginning of the pandemic, parties in commercial contracts have used the 'force majeure' or 'supervening impossibility of performance' principles to avoid contractual liabilities. Is there an equivalent principle in the employment relationship which allows management decisions to be made without consultation or negotiation?

Read more (note - only available to Worklaw subscribers)


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Bruce Robertson
June 2020
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