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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 who owns the copyright on software – employer or employee? We also look at three cases: the first looks at the power of the Labour Court to intervene in an internal disciplinary hearing. The second looks at the implications of wrongly classifying a dispute when referring it to the CCMA or bargaining council. The third looks at what constitutes unfair retrenchment.

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

Recent cases

Can the Labour Court interfere in an internal disciplinary hearing?

An employee was diagnosed with post traumatic stress disorder. While on sick leave, an investigation was instituted. On the basis of that investigation, disciplinary charges were brought against him on 11 July and he was called to attend a disciplinary hearing on 3 August. On 16 July, the employee’s attorney advised the employer of the employee’s illness and sought a postponement of the hearing. This was granted.

The employee attended the hearing that ultimately commenced on 31 October but suffered a ‘flashback/severe panic attack’ on 2 November. The disciplinary hearing was rescheduled to continue on 3 December. The employee, however, was hospitalised from 30 November and the hearing was postponed to 8 January 2008. At the hearing on 8 January, a further application to postpone the hearing was made on behalf of the employee. The evidence of the psychiatrist treating him and another psychiatrist was led in support of the postponement. The employer called a psychiatrist to counter the evidence led by the employee’s witnesses. The hearing was adjourned to 1 February in order for the chairperson to obtain the views of an independent psychiatrist. The hearing reconvened on 6 February when the independent psychiatrist gave evidence. The chairperson then decided that the employee was fit and capable of participating the hearing. Because the hearing was scheduled to commence on 13 February, the employee applied for an urgent order to prevent the disciplinary hearings from proceeding.

These were the facts in Booysen v South African Police Services & another (2008) 10 BLLR 928 (LC). The issue they raise is whether the Labour Court can interfere in the way an employer runs the internal disciplinary hearing. What the Labour Court held was that an employee has no right to review and interdict the conduct of disciplinary proceedings. The Labour Court does not have jurisdiction to intervene in disciplinary proceedings. Going further, the Court held that the employee cannot frame the issue as an unfair labour practice because unfair labour practices in terms of the LRA do not include an unfair act in the conduct of a disciplinary proceeding.

The cost of wrongly classifying a dispute

Have you ever had to fill out a CCMA (or bargaining council) referral form? If you have, you will know that you have to make a selection as to the basis of the claim. When these forms were first designed it was appreciated that laypersons are not trained to classify disputes in the way lawyers do, and the form made it clear that a person is not bound by an incorrect classification of the dispute.

The recent case of Junit Manufacturing CC and National Bargaining Council for the Clothing, Manufacture Industry & others (LC Case No: D 812/06) cautions parties against taking a casual approach to filling in these forms. At the heart of this case was what constituted the nature of the dispute. The arbitrator determined this and decided he did have jurisdiction to arbitrate, and ultimately decided the dispute in favour of the union. This was successfully challenged on review by the employer.

The background to this dispute was that an employer decided to lay off about 60 employees on short time, allegedly without consultation. A trade union referred this dispute to a bargaining council, describing the dispute as a “unilateral change to terms and conditions of employment”. The union approached the labour court with an urgent application, to interdict the employer from unlawfully locking out employees. Whilst an interim order was granted by the court, it discharged the interim order on the return date.   A subsequent dispute was referred by the union to the bargaining council arising out of the same circumstances, in which it described the dispute as a “remuneration issue - claim for unpaid wages whilst employees on short time”. On the form, the outcome sought was described as “applicants to be paid for period of lay off…” The box named “interpretation / application of collective agreement” was not ticked. The dispute was not resolved at conciliation and the conciliating commissioner categorised the issue in dispute as “Main Agreement”, and gave its description as “Arrear Wages”.

At the ensuing arbitration a debate ensued between the parties, concerning the true nature of the dispute that was placed before the arbitrator. The arbitrator made a jurisdictional ruling that the matter fell under s 24 of the LRA, stating in his view that he had been called upon to interpret and apply the bargaining council collective agreement regarding the period of short time. In terms of s 24 of the LRA, an arbitrator has jurisdiction to hear disputes about interpreting and applying collective agreements. The arbitrator subsequently came to a finding that the employer should apply the main agreement and ordered it to pay the affected employees in terms of the agreement during the period of short time.

On review at the Labour Court, the employer argued that the arbitrator lacked the jurisdiction to hear the matter because the dispute should correctly be described as an alleged “unilateral change to terms and conditions of employment”.  The Labour Court agreed, and found that the arbitrator did not have jurisdiction to arbitrate.

Using retrenchment to address poor performance

Managing poor performance is one of the more difficult aspects of people management. It is often neglected and there is sometimes no record of mentoring, counselling, advice or warnings given. In terms of the Dismissal Code of Good Practice, the employer is obliged to make the employee aware of the required work standard and give the employee a fair opportunity to meet the required standard. If there is no evidence of this, an employer will not be able to dismiss fairly for incapacity.  Regrettably some employers take their eyes off the ball and only react to performance issues once there is a crisis.

Because of the perceived difficulties in managing and proving poor performance, employers sometimes unwisely decide to deal with poor performance under the guise of a restructuring or retrenchment. A recent case in which the Labour Court found that retrenchment was used to deal with performance issues is King v Doughlasdale Dairy (Pty) Ltd  (LC Case No: JS69/07). The facts of this case show that management called a meeting with employees, at which the “constraints” to the business were discussed. Restructuring was only mentioned as an option should the employees’ performance not improve. Submissions were made by the employees about dealing with performance, but this was not followed up. After the meeting employees received an email which read “I expect drastic improvements on all levels of our business…We need to up our game and start reaching our goals. Employees, who fail to reach the required standards after being trained properly, should be dealt with.”  The Labour Court held that this meeting could not be regarded as a consultation meeting as envisaged in section 189 of the LRA. The employees were not notified before hand that they were invited to a restructuring meeting and were also not advised of the topics they would be consulted on.

A later letter about the proposed retrenchments was addressed to FAWU and not the employees. This letter was faxed to FAWU, and there was no proof that the employees received it.  The court did not regard this as adequate notice to employees.

At a subsequent retrenchment meeting, the employees were presented with a new structure, in which the positions of area sales managers and sales representatives were done away with and replaced with that of dispatch supervisor. The employees, including the applicant, were advised to apply for the new positions. There was however, conflicting versions as to how the applications were to be made – whether there would be application forms or  applications accompanied by curriculum vitae. On the same day the employees were sent a letter confirming that they had to apply for the new positions.

The Labour Court held that these facts confirmed the employee’s contention that he was not consulted before his position was declared redundant and no alternatives were considered by the employer before finalizing the new positions. Even assuming the applicant did not meet the skills requirements for the post, consideration could have been given to training to close the skills gap if it existed at all.

The applicant was then offered the position of a distribution supervisor; this position was lower than that which the applicant occupied and would, had the applicant accepted it, have resulted in more than double reduction in his salary. This position also entailed the applicant having to do work in the fridge from time to time. It was for these reasons, including the fact that the applicant was diagnosed with cancer, that the applicant rejected the offer.

The court found that a close analysis of the facts and circumstances of this case revealed very strongly that the employer used the retrenchment exercise to address the poor performance of its managers, including the applicant.  The retrenchment was found to be both procedurally and substantively unfair. While this case does not establish any new principles, it illustrates that the court will not hesitate to interrogate the true reasons for retrenchments and that if the required consultation is lacking, it will declare the dismissals to be unfair.

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Bruce Robertson
March 2009
Copyright: Worklaw