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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 'Factors in deciding an appropriate sanction' and discusses two new judgments on this topic. We also discuss three other new judgments: The first case investigates when it is intolerable for an employer to reinstate an employee. The second case considers how to achieve a balance in restraint of trade agreements. The third case asks when does an employer act unfairly in handling promotions.

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


When is reinstatement 'intolerable'?

In Mathebula v General Public Service Sectoral Bargaining Council and Others (JA16/18) [2024] ZALAC 4 (7 February 2024) the LAC considered what is a fair procedure if an employer intends to later argue that reinstatement of an employee will be intolerable. Must this be brought to the attention of the employee? What weight is given to an employee's evidence that there is a conspiracy against him?

The employee was Chief Director of Corporate Services and acting head of the department at the Department of Agricultural and Rural Development and Land Administration. He was dismissed for wilful or negligent mismanagement of the State's finances and for being in breach of section 42 of the PFMA.

The Labour Court concluded that his dismissal was both procedurally and substantively unfair, and ordered the employer to pay 6 months' compensation but declined to reinstate him. In declining to grant reinstatement, the LC reasoned that as the employee testified that he was the victim of a conspiracy, it was difficult to see how the trust relationship between him and the Department could persist in circumstances.

The matter went on appeal to the Labour Appeal Court.

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Achieving a balance in restraint of trade agreements

In Torrente and Another v Grant Monaghan and Associates Incorporated (JA 45/23 & JA 25/23) [2024] ZALAC 3 (23 January 2024) the LAC asked what the correct way is to assess an employer's protectable interest when faced with an ex-employee resigning and starting a business as a competitor. The Court also had to find a balanced way of assessing the reasonableness of a restraint of trade agreement.

The employer was registered as a medical orthotic, prosthetics and podiatry practice. The employee was employed as a qualified orthotist and prosthetist. Her contract of employment contained a confidentiality clause and a restraint of trade agreement which prevented her from working directly or indirectly at any place within the greater Gauteng, for a period of two years in any capacity relating to the employer's business.

When the employee resigned, the employer sought to enforce the restraint of trade agreement because the employee was exposed to its patient database, trade secrets, business know-how and confidential information from the time of her employment. The employer said that by opening up her practice, the employee would continue to utilise - to her benefit - confidential information obtained during her employment in order to gain an unfair advantage as a competitor.

The Labour Court crafted a narrow restraint for one year and for a restricted area of closer than the radius of 27 kilometres from the employer's business premises, and from employing any employees of the employer.

On appeal to the Labour Appeal Court, the employee challenged whether a restraint of trade clause should have been enforced, arguing that the employer did not possess any legitimate protectable interest which justified a restraint of a former employee and accordingly, the applicable restraint clause was contrary to public policy.

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Promotions: When does an employer act unfairly?

In Department of Higher Education and Training v Commissioner Bheki Smiza and Others (JA53/2022) [2024] ZALAC 5 (22 February 2024) the LAC asked what makes a promotion process fair, and considered whether an error in the shortlisting process is automatically prejudicial to an excluded applicant.

In September 2016 the Department of Higher Education and Training advertised a vacancy for the post of Deputy Principal: Corporate Services in Tshwane North. An extensive number of applications were received for the post, including that of the applicant employee.

Given the number of applications received and in order to reduce the number of candidates to be interviewed, the selection committee introduced an additional selection criterion related to additional years of relevant work experience required beyond the five-year period advertised. It was common cause at arbitration that the employer's selection policy permitted the committee to introduce such an additional selection criterion. The applicant was not shortlisted, given that he lacked the years of experience required by this additional criterion, and he was not shortlisted or interviewed for the post.

Aggrieved, he referred an unfair labour practice dispute to the General Public Service Sectoral Bargaining Council (GPSSBC).

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ARTICLE: Factors in deciding an appropriate sanction

By Prof Alan Rycroft

The idea of the "substantive fairness" of a dismissal involves several factors. In this article we will consider these in the light of two recent court decisions.

Flowing from the right not to be unfairly dismissed in section 185 of the LRA is the requirement that a penalty of dismissal must be "appropriate". Item 2(1) of the Code of Good Practice: Dismissal says that "whether or not a dismissal is for a fair reason is determined by the facts of the case, and the appropriateness of dismissal as a penalty".

In his article Alan Rycroft discusses two recent judgments which turned on the impact of the misconduct on the employment relationship.

In the one case, Sibanye Gold Limited t/a Sibanye Stillwater v Commission for Conciliation, Mediation and Arbitration and Others (JR 1910/20) [2024] ZALCJHB 3 (19 January 2024), the crisp issue was the consequence of the employer's failure to lead evidence about a breakdown in the trust relationship.

The second case, Govender and Others v Commission for Conciliation, Mediation and Arbitration and Others (DA 2/2022) [2024] ZALAC 6 (26 February 2024), considered more generally the need to lead evidence about the nature, magnitude, and impact of the misconduct on the employment relationship. The case also considered the impact of a failure to show remorse as a factor for determining the sanction.

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Bruce Robertson
March 2024
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