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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 strategic responses to the new LRA 'non standard' employment provisions.
Whilst the LRA Amendment Bill has been approved by Parliament, we still await the gazetted LRA Amendment Act. We realise we have not yet briefed Worklaw subscribers on all the amendments, and we will only do so once the Amendment Act is published and we can check its contents. In the meantime, it is vital that organisations start planning immediately (if they haven't already done so) about how to implement the amendments dealing specifically with 'non standard' employment relationships - TES employees, fixed term contracts and part time employees. In this newsletter's article, we highlight key issues to be considered and suggest possible action required.
We also look at four new cases: The first deals with inconsistency by the employer in disciplinary matters. The second looks at when hearsay evidence is admissible in disciplinary hearings and arbitrations. The third case looks at procedural and substantive fairness in the dismissal of probationary employees. The fourth case returns to the issue of whether claims arising from the LRA can prescribe.
This public newsletter is a free edited version of the subscriber newsletter.
A frequent allegation in disciplinary hearings and arbitrations is that the dismissal is unfair because the employer has not treated all employees the same way and has therefore acted inconsistently. The source of the duty to act consistently is Item 3(6) of the Code of Good Practice: Dismissal, which says:
The employer should apply the penalty of dismissal consistently with the way in which it has been applied to the same and other employees in the past, and consistently as between two or more employees who participate in the misconduct under consideration.The enduring problem is this: the same Code of Good Practice requires an employer to take into account mitigating factors - eg personal circumstances and the circumstances of the infringement, - and this inevitably results in inconsistent results. The employer then needs to explain why the sanction in one case was different to another which involved the same misconduct.
Inconsistent treatment was the main challenge in the recent case of Banda v General Public Service Sectoral Bargaining Council and Others (JR3273/ 2009)  ZALCJHB 46 (26 February 2014). The employee was employed by the Department of Home Affairs as a chief administration clerk in the customary marriages section. The position carries with it a duty of integrity and responsibility, because the clerk is given a discretion. The employee was charged with two charges of misconduct: the first was fraud and the second related to misconduct in that the employee registered a customary marriage outside the time limit prescribed by the Marriages Act.
The employee was dismissed and the decision confirmed at arbitration. In the Labour Court, a major part of the court challenge was based on the employer's inconsistency in dealing with similar matters. The Court held that the issue of inconsistency raised in this matter did not affect the outcome arrived at by the arbitrator by rendering it unreasonable, and in fact the outcome remained entirely reasonable. There was therefore no basis to interfere with the arbitration award, and it was upheld.
The court set out these clear principles involving consistency:
- An employee carries the evidentiary burden to at least establish a prima facie case of inconsistency before the employer is compelled to supply an answer of a defense.
- An inconsistency challenge will fail where the employer is able to differentiate between employees who have committed similar transgressions on the basis of differences in personal circumstances, the severity of the misconduct or on the basis of other material factors.
- An employer is not required in the name of consistency to repeat a previous decision made in error or one which is patently wrong.
Hearsay evidence is the evidence of those who relate not what they know themselves, but what they have heard from others. The reason why this evidence is suspect and sometimes inadmissible is because you can't cross-examine the person who originally saw the crucial event or said they did.
The recent case of Shoprite Checkers v Commission for Conciliation Mediation and Arbitration and Others (JR2259/11)  ZALCJHB 36 (13 February 2014) illustrates that employers need to be very cautious about relying on 'second-hand' evidence. A security officer informed the area manager that he saw an employee, A, taking money from a supplier. Upon receipt of the information, an investigation was undertaken and although A was initially unwilling to co-operate, she later made two statements which implicated another employee, M. She also confirmed the information recorded in the affidavits on video and apparently undertook a polygraph test.
In consequence of the information received from A, M was issued with a notice to attend a disciplinary hearing in respect of charges of misconduct. The chairperson found M guilty and she was summarily dismissed. The only witness who gave evidence on behalf of the employer in the disciplinary proceedings was the area manager. Through his evidence, the employer relied on the statements made by A for the purposes of securing a conviction of guilt against M.
When the dismissal was challenged at arbitration, much the same evidence was led, and neither the security officer nor A were called as witnesses on behalf of the employer. No explanation was tendered as to why the security officer was not called to give evidence, and insofar as any explanation was tendered in relation to A, it was sparse and lacked cogency. It was contended that A was simply reluctant to get involved in the arbitration proceedings.
In her first affidavit, A contended that she was in collusion with M in a scheme that was aimed at receiving deliveries less than what had been ordered, that arrangements were made with the driver's assistant to retain some of the stock, to sell such stock and to share the proceeds of such sales between her, M and the relevant driver's assistant of the suppliers.
As regards the evidence led at the arbitration proceedings, the Commissioner held that the evidence led on behalf of the employer constituted hearsay evidence; that there was no evidence as to why the security officer was not called as a witness, and no reasonable explanation was given as to why steps were not taken to secure A's evidence at the arbitration proceedings. The Commissioner concluded that the evidence of the area manager had to be rejected. The employee could not be found guilty on the basis of the video recording of A's confession because it would mean that M was found guilty on evidence she could not challenge through cross-examination.
Because there was no direct evidence against M that she had committed the misconduct which led to her dismissal, the Labour Court held that her dismissal was substantively unfair.
The lesson of this case is that for hearsay evidence to be admitted, an employer must explain and provide a reasonable justification for the absence of a relevant witness and, where the employee denies guilt, the employer should provide any corroborating evidence on which the hearsay evidence was based.
One of the advantages of probation is that it is a time for the parties to assess whether the contract they have entered into, is going to work. Although Item 8 of the Code of Good Practice: Dismissal suggests that a less formal process is allowed for the dismissal of a probationary employee, the Code still requires basic fairness and certain procedural steps.
In a recent LAC case the limits of an employer's liberty to dismiss a probationary employee were made clear. In Palace Engineering (Pty) Ltd v Ngcobo and Others (JA20/2012)  LAC (date of judgment 5 February 2014), the employee was employed as Chief Operations Engineer in a construction related business on a three year contract, at a commencing salary of R100 000 per month, and subject to an initial 6 months' probation. The contract stipulated that the employee's performance during probation was to be monitored on a monthly basis and if there was no substantial progress at the end on the second month, the employer would review the appointment. The contract set a performance target of R100 million per annum for the employee, inclusive of cost of sales.
After three monthly performance evaluations, an enquiry pertaining to poor work performance was held. The chairperson of the enquiry recommended that the employee be granted time to achieve a percentage of his target. The employer did not accept this recommendation and instead gave the employee a shorter period to meet 22% of his annual target. When this did not materialise, the employee was dismissed.
In her award, the commissioner found that the lack of tools of trade and resources collectively impacted on the employee's performance. She further stated that "the onus was on the employer to conduct a due diligence before employing such an expensive employee." She also found that the employee's work was dependant on various factors, i.e. available contracts, capacity to apply for contracts and that the employer's business lacked the capacity to attract big contracts. She further found that the employer was unconcerned about obtaining a fair outcome to the performance evaluations that were held.
In its judgment, the Labour Court considered the employer's contention that the employee, being a senior employee, did not need the degree of regulation or training that lower skilled employees required to perform their functions. It also considered the employer's submission that an employer's duty to avoid a dismissal of an employee that is not performing to standard is less onerous when the employee in question is still under probation. The court found that "whilst the employer may be afforded some leeway insofar as the reason for the dismissal during the probationary period, there remains a duty to effect a substantively fair dismissal."
The LAC did not agree that the arbitration award did not account for all the evidence that was adduced or that the Labour Court erred by placing too much emphasis on certain aspects of evidence. The LAC held that the commissioner's decision fell within the range of decisions that a reasonable decision-maker could reach, and the appeal was dismissed.
The lessons from this case are that even though less onerous reasons can be accepted for dismissing a probationary employee, the fairness of such reasons still needs to be tested against the stipulations of item 8(1)(a)-(h) of the Code of Good Practice. The onus rests on the employer to prove that the dismissal is substantively fair. Although a senior employee is expected to be able to assess whether s/he is performing according to the agreed standards and accordingly does not need the degree of regulation or training that lower skilled employees require in order to perform their functions, an employer is not absolved from providing such an employee with resources that are essential for the achievement of the required standard or set targets.
In our December 2013 - January 2014 newsletter we dealt with two cases about whether an employee's claim for compensation prescribed after three years. In particular we discussed the case of Circuit Breakers Industries Ltd v NUMSA obo Hadebe and Others (JR 1958/08)  ZALCJHB 286 (1 November 2013), in which the Labour Court confirmed that extinctive prescription applied to employment law.
A completely different approach has however been taken in a slightly later Labour Court case - Cellucity (Pty) Ltd v CWU obo Peters (C 39/2013)  ZALCCT 43;  2 BLLR 172 (LC) (14 November 2013). In this case the employee was awarded compensation of R42 000 for an unfair dismissal in August 2009. After a review application was dismissed in 2012, the employee obtained a writ of execution. The employer claimed that the employee was no longer entitled to payment of the sum awarded as compensation, because the claim had prescribed. It sought an order setting aside the writ.
In contrast to the Circuit Breakers case the Court held that the Prescription Act 68 of 1969 is incompatible with the LRA. The Court held that the present case provided a clear illustration of why the Prescription Act should not be applied to dismissal disputes under the LRA. The employer was seeking to evade paying compensation to which it had once admitted the employee was entitled. Such a tactic should not be condoned by the Court. The application was dismissed.
What it clear from this case (despite the confusion with the earlier cases) is that there is a strong case on public policy grounds to find that prescription does not apply to unfair dismissal claims under the LRA.
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