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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 "Sexual harassment: What is unwelcome behaviour?" We also discuss three new cases: The first case has to decide the moment when an employer contemplates retrenchments, thereby triggering the obligation to consult. The second case looks at the difference between a charge of theft as opposed to being in unauthorised possession. The third case considers whether a single employee's refusal to accept a demand which led to his dismissal, can be an automatically unfair dismissal.

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'Contemplating' retrenchment

The LRA provides that the moment an employer 'contemplates' dismissals for operational reasons, the employer must consult employees or their representatives in terms of s189(1). For employees threatened with dismissal, the earlier the consultation starts, the greater the chance of avoiding dismissal. It is therefore not surprising that there are many cases in which the moment of 'contemplation' is contested.

An unusual context for contemplating retrenchment occurred recently at SAA, in what has become a very political case. In an attempt to address its financial crisis, SAA management opted for a section 189 process, which would have seen around 900 employees losing their jobs. Whilst the section 189 process was on course, strike action hit SAA. This culminated into a collective agreement which deferred the retrenchment process to sometime in January 2020.

During the deferment period, around December 2019, SAA went into business rescue in terms of the Companies Act. One of the subsequent decisions taken by the business rescue practitioners, was to cancel certain routes operated by the SAA. The decision was announced around 06 February 2020. Numsa and the SA Cabin Crew Association then launched an urgent Labour Court application in terms of s189A(13) to compel SAA to consult about retrenchments and follow a fair procedure.

What fast-tracked the court application was the staff briefings that occurred to explain the impact of the decision to cancel the routes. According to the applicants, employees in Durban and Cape Town were informed that as a result of the decision to cancel the routes, the employees would be dismissed for operational reasons. Owing to that, the applicants took a view that the business rescue practitioners were intent on dismissing their members without following the provisions of s189 of the LRA.

SAA opposed the application, arguing that its management had not yet 'contemplated' retrenchments and also that the LC was not authorised to deal with this application, given that s133 of the Companies Act places a general moratorium on all legal proceedings against a company in business rescue.

The Labour Court in National Union of Metalworkers of South Africa (NUMSA) obo Members and Another v South African Airways (SOC) Ltd and Others (J149/20) [2020] ZALCJHB 43 (14 February 2020) noted that once a company undergoes business rescue, certain legal implications arise. A business rescue practitioner is appointed to oversee the company and employees' terms and conditions are protected. Part of the duties of the practitioner is to develop a business rescue plan, which may contemplate retrenchments. Once a company is in business rescue, the business rescue plan alone may contemplate retrenchment of employees. Section 136(1)(b) of the Companies Act requires that the business rescue plan must then comply with s189 and 189A of the LRA.

The Court noted that no business rescue plan has as yet been developed. Announcements by local management indicating possible retrenchments did not mean that the company met the requirement of 'contemplating' dismissals. It did not automatically follow that the decision to cancel certain routes would lead to retrenchments. A company that is under business rescue can only contemplate retrenchment in a statutory document known as a business rescue plan.

The Court confirmed that 'contemplating dismissal' in terms of Section 189(1) of the LRA means an unequivocal careful consideration and a possible intention to dismiss. The Court also found that the retrenchment process contemplated by SAA before business rescue proceedings commenced, had since become obsolete.

Theft and Unauthorised possession

Many disciplinary codes and policies distinguish between theft and being in unauthorised possession of the employer's property. The reason for this is that proving the intention to steal (which is a requirement to prove the criminal charge of theft) is not necessary to establish the factual event of finding the employee in unauthorised possession of the property.

In a recent case involving a loco operator employed by AngloGold, the issue of proving theft arose. The employee was dismissed for theft and illegal possession of gold bearing material. The employee had given permission to personnel from AngloGold's Security Department to conduct a search for traditional weapons in his hostel room in his presence. Gold bearing rocks, sjamboks and knobkerries were found during the search. AngloGold laid criminal charges against the employee and instituted disciplinary proceedings against him.

The employee denied any knowledge of the gold bearing material, saying he only became aware that it had been found in his hostel room during his Magistrate Court appearance in relation to charges over the sjamboks and knobkerries. However, this version was challenged as it was irreconcilable with his version during the disciplinary enquiry that someone placed the gold bearing material in his hostel room to frame him.

At the CCMA the commissioner accepted that the gold bearing material was found inside the employee's hostel room and that it belonged to AngloGold. However, on the charge of theft, the commissioner found that AngloGold failed to prove that the employee was guilty of theft simply because it failed to lead evidence to show where, when, how and by whom the gold bearing material was stolen. On the charge of illegal possession of gold bearing material, the commissioner criticised AngloGold for not specifically mentioning in the charge sheet why possession was illegal. The commissioner also tried to distinguish between physically possessing an object, and an object being found in one's room. The commissioner found the employee's dismissal to have been unfair and awarded him retrospective reinstatement with R48,509 backpay.

On review at the Labour Court in Anglogold Ashanti Limited v Association of Mineworkers and Construction Union obo Dlungane and Others (JR2099/16) [2020] ZALCJHB 46 (20 February 2020), it was held that the evidence had established that the gold bearing material belonging to AngloGold was found in the employee's hostel room. The evidentiary burden at that point shifted to the employee to provide a credible explanation as to how the gold bearing material ended up there. In this case the court said that this burden was not discharged by the employee.

The Labour Court was critical that the commissioner misconstrued what constitutes theft. Even if AngloGold failed to prove a charge of theft, the court said that unauthorised possession is a competent verdict in the circumstances. The commissioner had confused possession as only referring to having an object in your hand or 'physical possession'. The test is, however, whether a person has intentionally exercised control over a thing, which the employee did because the rock was found in his room.

The court said that it will normally be sufficient if the employee has adequate notice and information to ascertain what act of misconduct s/he is alleged to have committed. The categorisation by the employer of the alleged misconduct is of less importance.

Something an individual employee cannot do

The employee, a cardiologist, worked for a medical practice. The owner of the practice, Dr Saaiman, confronted him after he heard that the employee was joining Mediclinic Panorama, another practice in the area. Dr Saaiman indicated that he had no difficulty with the employee taking up another position in general, but that he should not take up a position at Mediclinic Panorama or establish a practice at Netcare Kuilsriver because this would lead to unfair competition with Dr Saaiman's practice.

Subsequently Dr Saaiman told the employee that if he wished to remain employed at the practice, he was required to sign a restraint of trade agreement, restricting/restraining him from practicing within a negotiable radius of Kuilsriver for a period of two years after termination of employment. When the employee refused to sign the agreement, Dr Saaiman indicated to the employee that his employment was terminated with immediate effect. The matter was initially referred as an unfair dismissal dispute to the CCMA but the employee later referred the dispute to the Labour Court in Hofmeyr v Saaiman t/a SA Endovascular Group Practice (C599/2017) [2019] ZALCCT 39 (3 December 2019). In terms of a pre-trial minute, the issues to be determined by the court included:
  • Whether the dismissal was automatically unfair under s187(1)(c) of the LRA, in that its reason was to compel the employee to accept a demand in respect of a matter of mutual interest;
  • Alternatively whether the dismissal was unfair under s188, not being for a fair reason, or in accordance with a fair procedure;
The court held that the dismissal was not automatically unfair, as an individual employee cannot rely on s187(1)(c) to allege an automatically unfair dismissal. S187(1)(c) refers to "employees" (as opposed to "employee") and is concerned with ensuring that collective bargaining and the associated right to strike is not undermined. These underlying rights are collective in nature, and do not concern individual rights. The LC did however find that the dismissal was substantively and procedurally unfair under s188, and ordered the employer to pay compensation of R1 028 639.

ARTICLE: Sexual harassment: What is unwelcome behaviour?

By Prof Alan Rycroft

The Code of Good Practice on the handling of Sexual Harassment Cases in the Workplace describes sexual harassment as "unwelcome conduct of a sexual nature". How clearly does the recipient of the harassment have to convey that the conduct is unwelcome, before it constitutes harassment? Alan Rycroft in this article discusses a recent somewhat controversial Labour Court judgment in V v Passenger Rail Agency of South Africa (PRASA) and Others (P60/2018) [2020] ZALCPE 6 (7 February 2020) that found a female employee who received unsolicited explicit videos through WhatsApp from a co worker, did not make it clear enough that these were unwelcome.

Read more (note - only available to Worklaw subscribers)


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Bruce Robertson
March 2020
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