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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 pregnancy, discrimination and operational requirements. We look at two new cases: the first, deals with special leave. The second deals with dismissal when an employee is in prison.

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


Can an employer put an employee on special leave for a protracted period?

This is how Judge Pillay began her judgment in Heyneke v Umhlatuze Municipality (LC D908/09; judgment date 5 May 2010), which is recently ‘hot off the press’:

“This case typifies how not to conduct investigations and discipline. It is yet another instance in which a public employer has put one of its senior managers off work on full pay for a protracted period pending investigation. Many such cases do not endure the scrutiny of courts often because public employers pay generous amounts to settle disputes. This case challenges the legality of special leave on full pay for a protracted period.”

When a judge starts the judgment in that way you can be sure that a controversial story lies behind it! The employee in this case was contracted to the municipality from October 2006 to September 2011 as its Municipal Manager. On 23 September 2009 the Chief Whip wrote to the council of the municipality requesting that it resolve to place the employee on paid leave pending an investigation into the causes of a cash crisis and other concerns at the municipality. After the Speaker consulted him the employee agreed to being placed on paid special leave on the understanding that it would be for a short period.

The special leave resolution did not enjoy a smooth passage. Some councillors opposed the resolution on procedural and substantive grounds.  Others protested that the motion was “a political plot” and that “political structures were interfering in the administration of the municipality” by removing the employee, “an efficient manager” and “a man of impeccable repute”. When the Speaker put the matter to a vote, the DA and the IFP refused to be party to the decision. Twenty-eight councillors left the meeting. The local newspaper reported it as a “storming out” and “walk out” of the council meeting. Thirty-one councillors remained to vote in favour of the resolution.

The municipality did not charge the employee for misconduct immediately. Instead, it put him on special leave but persisted in the position that the special leave was unrelated to charges of misconduct against him. The employee alleged that the special leave was unlawful because the municipality was abusing it as if it were a suspension pending discipline.

The employee approached the Labour Court seeking an order that the special leave was unlawful and that he should be reinstated at work.    

The court’s findings were as follows:

  • The special leave was unlawful because the employee’s contract read with the legislation and policy on special leave did not allow the municipality to impose leave on him.
  • The employee did not agree to being put on special leave for a long time.
  • The municipality’s stated purpose of the special leave, namely to conduct investigations, was not the true purpose.
  • Those responsible for the decision to put the employee on special leave had an ulterior motive for several reasons.
  • The ulterior motive was to discipline and probably dismiss the employee.

The decision of the municipality to place the employee on special leave was held to be unlawful and was set aside. The municipality was directed to accept the employee’s tender of services immediately and to pay costs. In an unusual step the court ordered the council to investigate and determine whether in terms of section 176 (2) of the Municipal Finance Management Act 56 of 2003 the costs ordered should be recovered from any political office bearers and officials.

Also interesting was the judge’s preference for a mediated outcome. The court utilised its powers under section 158(1)(d) of the LRA – a section seldom used – to request the CCMA to investigate and report to the court on the cause and nature of the conflict within the municipality and if the CCMA was unable to resolve the conflict, it must report to the court and include recommendations on how to resolve the conflict. Although the parties fell within the scope of a bargaining council, this section only allows the court to request the CCMA to intervene.

What does this case teach us?

This judgment is a call for procedural fairness and a warning to those employers who seek to keep an employee away from work for an extended period, even if it is on a paid basis.

The court had this to say (paragraph 95):

“Protracted leave or suspension on full pay pending investigations or disciplinary action is a prevalent practice, especially in publicly funded entities. This practice is a sign of weak, indecisive management that cannot diagnose problems and find solutions efficiently. These inefficiencies impact on both taxpayers and shareholders alike, and not on the private pockets of the management of public organisations; consequently, the incentive to finalise investigations and disciplinary procedures is weak.  This practice has to stop.”

Whilst the outcome of this case turned to a large extent on the specific facts in question – the manner in which special leave could be granted – the above extract from the judgement does send out a clear message to all employers, particularly those in the public sector.

Leave – annual, sick, maternity or family responsibility leave – is regulated by the BCEA. The basic principle is that an employee is entitled to certain leave and the employer has an obligation to grant that leave.  The employer, in s 20(10) of the BCEA, retains the right to decide when leave can be taken if there is no prior agreement on this. But nowhere in the BCEA is the idea that an employer can require an employee to take special leave, even if it is paid. Our law recognises suspension on full pay pending the bringing of disciplinary charges in certain situations, but it does not allow the employer to manipulate an employee out of her or his job by imposing special leave. Attempts to impose long leave on employees, even if on a paid basis, are likely to be viewed in the same light as an unfair suspension.

Fairness and the arrested employee

An employee was employed as a furnace operator in the mining sector, having commenced employment in August 1996. On 20 May 2006, the employee was arrested on suspicion of having committed an armed robbery.   He remained in custody and was absent from work for approximately 150 days. On 30 May 2006, the employee was dismissed on the grounds of incapacity, in that he was physically unable to tender his services. A letter advising him of his dismissal was delivered to the police station at which he was being held on 6 June 2006.

On 2 November 2006 a post-dismissal hearing was held by the employer, following the employee’s release from custody. It confirmed that the employee had advised the employer by way of a telephone call of his arrest on the day on which he was arrested. The following day the employee’s sister informed the employer of his arrest. The hearing found that the employer could not have been expected to put in place a temporary arrangement for such a period of time which would have allowed the employee’s position to be kept open for him. The position he held was an important one within the framework of the employer’s organisation. The criminal case against the employee was still pending at the time of the post-dismissal hearing. This was a second instance within a six month period that the employee had been arrested and had thus been absent from work. Accordingly, the dismissal of the employee was upheld at the post dismissal hearing.  

The employee then referred the matter to arbitration where it was found that the dismissal was substantively unfair because proper account had not been taken that the employee had no control over the circumstances and duration of his absence. Furthermore, on 30 May 2006, when the employer made his decision to dismiss the employee, no opportunity was given to the latter to present his case. Accordingly, the dismissal was also procedurally unfair.   For these reasons, the employer was ordered to reinstate the employee. 

The matter was appealed to the Labour Appeal Court in the case of Samancor Tubatse Ferrochrome v MEIBC & others (LAC JA 57/08, judgment 12 March 2010). What is significant about the judgment is that the imprisonment on the employee, causing him to be unable to work, was classified as incapacity. The court supported the view that incapacity may be permanent or temporary and may have either a partial or a complete impact on the employee’s ability to perform the job. The Code of Good Conduct: Dismissal conceives of incapacity as ill-health or injury but it can take other forms. Imprisonment and military call-up, for instance, incapacitate the employee from performing his obligations under the contract. The dismissal of an employee in pursuance of a closed shop is for incapacity; so is one that results from a legal prohibition on employment.

Having classified the matter as one of incapacity, the court went on to say that before dismissing an employee for incapacity caused through imprisonment, an employer needs to consider the reasons for the incapacity, the extent of the incapacity, whether it is permanent or temporary, and whether any alternatives to dismissal do exist.

In previous newsletters we have highlighted similar cases in order to clarify what constitutes procedural fairness in the case of an imprisoned employee. In this case the court held that merely providing the employee with a letter informing him in writing of the decision to dismiss him and the reasons for the dismissal while he was in prison, did not constitute a fair opportunity for him to present his case. When the matter came before the post-dismissal hearing, the same person who presided over the initial hearing again presided. But the decision to dismiss had already been made. Thus in the court’s view, the post dismissal hearing appeared to be nothing more than an expo facto rationalisation of the earlier decision.  In the circumstances, the court held that the employee was not accorded the standard of fairness which is required in a dismissal hearing. Procedural fairness was not complied with by the employer. This cost the employer a compensation order of six months remuneration.

What can we learn from this case about how an employer should deal with the imprisonment of an employee?

  • When an employee cannot work because s/he is imprisoned, this is a form of incapacity.
  • Fair dismissal for this kind of incapacity will depend on the reasons for the incapacity, the extent of the incapacity, whether it is permanent or temporary, and whether any alternatives to dismissal do exist.
  • Procedural fairness involves the employee being given a fair opportunity to put her/his case before any decision is taken to terminate the employment contract.

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Bruce Robertson
May 2010
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