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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 "Refusing to re-employ ex-employees". We also discuss three new cases: The first case deals with the impact where an employee alleges racism by a manager. The second case considers when a court will overturn an arbitration award. The third case looks at the correct procedure to claim back-pay after reinstatement.

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


Alleging racism

After getting a poor performance rating it may be human nature to look for reasons other than your own performance to explain the poor rating. We often blame others, as happened in a recent LAC case where the employee wrote the following email:

'I just don't feel safe in my work anymore as an African manager in this region and I intend taking matter up with Management and Portfolio Committee. I honestly think that Africans are being vilified in the region under the coded name of poor performance and it's also clear in the non-appointment of African managers in the region.'

The employee, an African, was employed as the Justice Centre Executive managing the Kimberley Justice Centre of Legal Aid. He reported to the Regional Operations Executive for the Western and Northern Cape who is Coloured.

During the course of 2013, the relationship between the two deteriorated resulting in the employee being charged with numerous disciplinary infractions. After a disciplinary enquiry, he was found guilty of 17 charges and dismissed. He referred the matter to the CCMA which issued an arbitration award finding that the dismissal was substantively and procedurally fair. The Labour Court set aside that award and remitted the matter back to the CCMA for reconsideration. That commissioner also concluded that the employee was guilty and that the dismissal was substantively fair.

Back the matter went to the Labour Court on review. The LC upheld the procedural fairness of the dismissal, but held that the dismissal was substantively unfair as the commissioner had erred in his findings on six of the nine counts of misconduct.

The employer took this decision on appeal to the Labour Appeal Court in Legal Aid South Africa v Mayisela and Others (CA9/17) [2019] ZALAC 1 (5 February 2019).

While the LAC considered several charges, the one in particular concerning racist accusations was important. Looking at the email quoted above, the LAC held that unjustified allegations of racism against a superior in the workplace can have very serious and deleterious consequences. The court's advice was that employees who allege tacit racism should do so only on the basis of persuasive objective information leading to a compelling and legitimate inference, and in accordance with grievance procedures established for that purpose.

The court said that unfounded allegations of racism against a superior by a subordinate subjected to disciplinary action or performance assessment, referred to colloquially as "playing the race card", can illegitimately undermine the authority of the superior and damage harmonious relations in the workplace.

The LAC held that it was clear from the arbitration award that the commissioner properly applied his mind with reference to relevant considerations when determining the issue of whether dismissal was an appropriate sanction. He accepted the evidence that the extent and repetition of the employee's insubordinate and insolent conduct had broken the trust relationship irretrievably. His conclusion that the dismissal was substantively fair was reasonable and was not susceptible to review. The LAC accordingly overturned the LC's decision to review the award.

We all know that racism in the workplace remains a big problem and we have still to find ways of challenging perceptions of racism in a transformative way. As is seen in this case, accusatory emails tend to inflame a situation and destroy working relationships. But we have to find ways for employees to express perceptions. The LAC's suggestion that the grievance procedure is the right mechanism to do this, may be helpful.

When will a court overturn an arbitration award?

A recent case shows how difficult it can be to persuade the Labour Court to overturn an arbitrator's award. The facts are these:

The employee served as a Head of Department and was tasked to work on a project which would have to be performed outside normal working hours. Although the employee was not entitled to claim overtime (because his salary was more than the threshold set by the BCEA), he was given approval to claim this at his normal hourly rate for every hour of overtime worked as opposed to the prescribed 1.5 times in terms of the BCEA. The employee's claim forms were all approved and signed off by the employee's line manager without any queries.

An internal auditor and forensic investigator was later requested to conduct an investigation into the employee's overtime claims for a period of 13 months. The outcome of this audit process was that the employee had claimed overtime at an incorrect 1.5 hourly rate as opposed to the agreed 1.0 hourly rate. The investigation also revealed that the employee failed to "clock out" for the lunch breaks and thus claimed overtime when he was not at the workplace.

The employee was subjected to an internal disciplinary hearing on charges of dishonest conduct and/or falsification of overtime claim forms. The employee was found guilty and dismissed. He then referred his alleged unfair dismissal dispute to the CCMA. Only the substantive fairness of the dismissal was in dispute during the arbitration proceedings.

The commissioner found that the employee claimed overtime at the incorrect rate for three months. He further found that the employee had claimed payment for the time that he was not at the workplace, that is, during his meal intervals. But the commissioner found that the employer failed to discharge its onus to prove that the employee acted intentionally. He concluded that the employee "was merely slapdash or to put it in another way, negligent." Consequently, he found that the employer failed to prove that the employee had acted dishonestly and deliberately falsified his claim forms. He was of the view that the employee's negligent conduct was deserving of punishment short of dismissal. He found no evidence which would have restricted an award of reinstatement and held that the employer failed to show that the relationship of trust had been destroyed beyond repair. Accordingly, he retrospectively reinstated the employee with three months back-pay and substituted the sanction of dismissal with a 12-month final written warning for negligence.

The employer brought an application to review and set aside the commissioner's award in the Labour Court. The Court agreed with the commissioner that the employer did not prove the intention to falsify the overtime claim forms. It held that the commissioner's finding that the employee was careless, negligent, and had no intention to defraud the employer, was within the band of reasonableness.

On appeal to the Labour Appeal Court in DRS Dietrich, Voigt & MIA v Bennet CM N.O and Others (CA14/2016) [2019] ZALAC 2 (27 February 2019), the court used the test that arbitration awards should not be easily interfered with unless the decision was entirely disconnected with the evidence or is unsupported by any evidence and involves speculation on the part of the commissioner. In this case the decision was connected to the evidence and did not involve speculation. The LAC dismissed the appeal, confirming that whether or not conduct constitutes negligence ultimately depends upon a realistic and sensible judicial approach to all the relevant facts and circumstances.

For us, this case is helpful in two ways: first, it alerts employers that to charge an employee with falsifying claim forms is going to require evidence about intention to falsify rather than just negligence. It is often difficult to prove intention.

The second lesson is that the bar is set high for reviewing an arbitrator's award. If the award is based on the evidence and doesn't involve speculation, then the Labour Court is going to be reluctant to set that award aside on review. Even if the Labour Court would have come to a different decision, as long as the arbitrator's award is within the band of reasonableness, the award will stand. Rushing into the costs of review needs careful consideration.

Technicalities in claiming backpay

This case concerns a claim for arrear wages in terms of s 77 (3) of the BCEA. It is a shocking case, resolved unsatisfactorily 11 years after the employees' dismissals. And this result was because the wrong court process was used.

The employees claimed they were entitled to the backpay after the Labour Court on 24 July 2013 found their strike related dismissals to have been substantively and procedurally unfair. (The dismissals took place five years earlier, in mid-2008.) The original judgment of the Labour Court included an order that the employer reinstate the applicants, retrospective to the date of their dismissal.

The employer unsuccessfully sought leave to appeal the Labour Court judgment, and then approached every higher court for a reversal of this decision all the way up to the Constitutional Court, which dismissed its application on 12 November 2014. The effective date on which the employer's challenge to the Labour Court order was finally extinguished, however, was 18 November 2014 when the Supreme Court of Appeal (SCA) rejected a petition running in parallel to the Constitutional Court appeal. (We shudder to think what the legal costs were in this case).

When the SCA's ruling against the employer on 18 November 2014 finally extinguished all its appeals, the enforceability of the Labour Court's order revived. However, the employees instituted a contractual claim for backpay, instead of mounting contempt of court proceedings for not being reinstated. In doing so the employees missed the fact that what revived after the SCA's decision was the employer's obligation to reinstate them upon their tender of services. What did not revive was an obligation to pay them backpay in isolation. Only if the employer took the employees back into its employ would their contracts be restored and backpay become owing.

This problematic case was not about whether the employees were entitled to the full amount of backpay. They plainly were. But they used the wrong process to obtain the relief they sought. The Labour Court in Mhlupheki Willem Kubeka & Others v Ni-Da Transport (Pty) Ltd (D 726-18;J 5386-17) [2019] ZALCD 1 (31 January 2019) concluded that "it is with some reluctance that I find that the applicants have not made out a case for payment of arrear wages".

This might be a very technical point but it is important: Backpay is only contractually owing upon the full restoration of the employment contract. Backpay becomes due only after the employer has reinstated the dismissed employees. A failure to reinstate and pay backpay should be resolved by contempt proceedings.


By Prof Alan Rycroft

In this article, Prof Rycroft considers various reasons for why an employer may refuse to employ an ex-employee, and whether this is fair.

It may be uncontroversial if an employer prevents re-employment of a former employee who resigned to avoid a disciplinary hearing, or who was dismissed for misconduct or incapacity. Those would be fair reasons not to re-employ.

More controversial is the refusal to employ or re-employ a person because s/he has worked for a rival company. This happened in Kadiaka v Amalgamated Beverage Industries (1999) 20 ILJ 373 (LC).

The recent Labour Court decision in Mkoko v NHRBC (C781/14) [2019] ZALCCT 3 (6 February 2019) had to consider the even more controversial situation of an employer refusing to re-employ a former employee simply because she was a former employee.

Read more (note - only available to Worklaw subscribers)


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Bruce Robertson
March 2019
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