Public Newsletter


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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 restraint of trade agreements entitled “Is a restraint of trade agreement worth the paper its written on?” We also look at three new cases: the first, of relevance to those in the mining industry, deals with the compensation rights of mineworkers suffering from occupational diseases. The second deals with discrimination against employees with HIV. The third deals with whether s 197 transfers can take place even where a business has not been bought.

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


Constitutional Court judgement opens the door for mine workers to sue their employers for health damages

On 3 March 2011 the Constitutional Court in Thembekile Mankayi v AngloGold Ashanti Ltd CCT 40/10 [2011] ZACC 3 delivered judgment on whether the Compensation for Occupational Injuries and Diseases Act (COIDA) extinguishes the common law right of mineworkers to recover damages against their employer, when they have a claim under the Occupational Diseases in Mines and Works Act (ODIMWA).

Mr Mankayi, employed by AngloGold as an underground mineworker and falling within the scope of ODIMWA, alleged that during his employment he contracted occupational diseases - tuberculosis and chronic obstructive airways - which rendered him unable to work. He sued his employer for damages on the basis that the mine owed him a duty of care under both common law and statute to provide a safe and healthy working environment. He claimed R2.6 million for loss of earnings, medical expenses and general damages.

AngloGold claimed he had no right to institute action against them due to section 35(1) of COIDA. The effect of s35(1) is that employees are limited to claiming compensation under COIDA and may not sue their employer for damages. S35(1) states as follows:

“no action shall lie by an employee or any dependant of an employee for the recovery of damages in respect of any occupational injury or disease resulting in the disablement or death of such employee against such employee’s employer, and no liability for compensation on the part of such employer shall arise save under the provisions of this Act in respect of such disablement or death.”
Both the High Court and the SCA upheld AngloGold’s argument, but this was overturned on appeal by the Constitutional Court. The Constitutional Court found that s 35(1), whilst excluding the common law right of employees to sue the employer for damages in respect of occupational injury or disease, only covers employees who are entitled to claim under COIDA. Mineworkers excluded in terms of the Occupational Diseases in Mines and Works Act (ODIMWA), from claiming against their employer under COIDA for compensatable diseases in a controlled mine, are not covered by s 35(1).

The Constitutional Court’s judgement opens the door for Mr Mankayi and other affected miners to sue their employers for health damages not covered by COIDA. This judgement has significant implications for the mining industry.

Discrimination on grounds of HIV

An employee was appointed as stable yard manager and horse riding instructor for an equestrian centre. The appointment was announced in a notice to all stablers, pupils and riders, listing the applicant’s 27 years’ experience in horse riding, instructing, stable yard management and judging of dressage competitions.

After the employee commenced employment, he was requested to complete a Personal Particulars Form (“the PPF”). The PPF required information concerning allergies as well as medication taken by the employee. The employee, under illnesses, then listed asthma, DVT (“deep vein thrombosis”) and HIV. He listed his allergies and his chronic medication, which included antiretroviral drugs.

The following day a confrontation ensued and the employee was dismissed and instructed to vacate the premises. The employee did not leave immediately as he had not received formal notice of dismissal nor his salary, and his personal belongings (including medication) were on the premises. He also had no alternative accommodation. The employee was forcibly removed from the employer's premises and verbally abused by a security manager at the estate. Following the intervention of his attorneys he was given until 12:00 the next day to vacate the premises.

The dismissal was confirmed in a final notice which accompanied his salary payment. The notice declared the reason for his dismissal as “fraudulent misrepresentations”. It recorded that he did not qualify for one weeks’ notice on account of the reason for his dismissal, but offered him the equivalent amount as a “gesture of humanity”. The employee refused to sign the acknowledgement of receipt accompanying the notice.

These were the facts in Allpass v Mooikloof Estates (Pty) Ltd t/a Mooikloof Equestrain Centre (JS178/09) [2011] ZALCJHB 7 (16 February 2011) in which the employee claimed unfair dismissal. The court was wary of accepting ‘non-disclosure’ or misrepresentation to blur the fact of discrimination. Quoting from an earlier case, the court said that “camouflaging discrimination under the cloak of misconduct is one of the most insidious forms of unfair labour practice”.

The court found that the inescapable fact was that the employee had no medical or physical impediment preventing him from performing his duties. He had acquitted himself well in a strenuous and demanding job. This rendered spurious any notion that he was “severely ill” and belied the true rationale for his dismissal. The court went on to say that the notion that HIV is synonymous with serious illness emanates from a general stereotype about all people living with HIV, and which results in loss of dignity and a sense of self.

The evidence established that the employer’s primary concern was the employee’s HIV status, hidden by the expressed concerns about the other “illnesses”. Although the employer may have had legitimate concerns about non-disclosure, the nub of the employer’s sense of grievance was the failure to disclose his HIV status. This was the real or dominant reason for the dismissal. This constituted discrimination and was therefore an automatically unfair dismissal. The employer was ordered to pay the employee compensation in the sum of twelve months’ remuneration, reflecting both restitution as well as a punitive element for unfair discrimination on the grounds of HIV status.

A transfer as a going concern? – or a new company starting up?

The union applied to the Labour Court for an order that there had been a transfer of a business as a going concern in terms of section 197 of the LRA, from Hydro Colour Inks (Pty) Ltd) to Evergreen Coatings (Pty) Ltd. The companies opposed the application primarily on the basis that there had not been a transfer - Hydro ceased doing business and Evergreen merely started a new business. This was the background inCEEPAWU v Hydro Colour Inks (Pty) Ltd and Evergreen Coatings (Pty) Ltd (LC Case Number: J1346/2010 11 February 2011).

The companies argued that Evergreen acquired no business from Hydro and that the business was never transferred to Evergreen. Evergreen merely started its own, new business. 

The union submitted that whether or not a transfer as a going concern had taken place is a factual consideration taking into account factors such as the following:

  1. What happened to the goodwill of the business, the stock in trade, the premises, contacts with clients or customers, the workforce and the assets of the business.

  2. Whether there had been an interruption to the operation of the business and if so the duration thereof.

  3. Whether the same or similar activities are continued after the transfer.

In essence, the union argued that the question will be whether or not the business remains the same but in different hands.

It was common cause that:

  • Evergreen operated from the same premises as Hydro.
  • Evergreen had the same fax and telephone numbers as Hydro.
  • Evergreen had the same employees as Hydro. They did the same work at the same rate of pay and working the same hours.
  • Evergreen produced the same products as Hydro at the same prices.
  • There was no interval between the time Hydro stopped trading and Evergreen started trading.

The Labour Court held that there is a transfer of a business as a going concern as contemplated by section 197 of the LRA even where technically the business was not transferred because the one company came to an end and another company started out as a new business. The test in determining whether or not a transfer has taken place is to take a “a snapshot of the entity before the transfer and assessing its componentsand to compare the picture with the one of the business after the transfer to establish whether it is substantially the same business but in different hands.

The lesson of this case is that the Labour Court will not defer to legal technicalities such as ‘is there a contract to buy the business?’ or ‘was money paid to take over the business?’ A common-sense approach of comparing the ‘before’ and ‘after’ will persuade the court whether or not there has been a transfer in terms of s 197.

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Bruce Robertson
March 2011
Copyright: Worklaw