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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 Facebook, privacy and the workplace,, in the light of three fairly recent CCMA arbitration awards dealing with the matter. We also look at three new cases: the first reports an unexpected ruling from the High Court on the restriction on legal representation at the CCMA. The second is a LAC decision about treating non-union employees differently to trade union members. The third is about age discrimination and what compensation is possible.
This public newsletter is a free edited version of the subscriber newsletter.
The recent decision in The Law Society of the Northern Provinces v Minister of Labour and others (NGHC 61197/11; judgment 11 Oct 2012) has come as a surprise. The High Court ruled that Rule 25(1)(c) of the Rules of the CCMA is inconsistent with the Constitution and invalid, because the limitation on legal representation at the CCMA is arbitrary. The court ordered the CCMA to change its Rule within 36 months.
The controversial rule provides that if the dispute being arbitrated is about the fairness of a dismissal for reasons relating to misconduct or incapacity, the parties are not entitled to be represented by a legal practitioner in the proceedings unless the commissioner and all the other parties consent, or the commissioner concludes that it is unreasonable to expect a party to deal with the dispute without legal representation, after considering-
- the nature of the questions of law raised by the dispute ;
- the complexity of the dispute ;
- the public interest; and
- the comparative ability of the opposing parties or their representatives to deal with the dispute.
But the judgment turns on this: the Promotion of Administrative Justice Act (PAJA) has a slightly different requirement for procedurally fair administrative action: legal representation can be allowed not only where the matter is complex but also where it is serious. The judge reasoned that dismissal is always serious for the employee and therefore the CCMA Rule needs to be amended to be brought into line with PAJA.
Our view is that this could lead to a shift in the fundamental conception of the CCMA, which is an informal, robust but usually reliable way to bring quick finality to a labour dispute. It is most often the employer who wants legal representation - the dismissed employee can often not afford it. We predict that hearings will now become more prolonged, defeating the intended emphasis on speed and informality. In terms of the judgment, the CCMA is given 3 years to amend its rules, so it does not have immediate effect. We would not be surprised if the CCMA within this period sought to have this High Court decision overturned on appeal.
Without consulting the recognised union, the employer decided to change the wage cycle for 166 employees (out of a total of 277) who did not belong to the bargaining unit in Durban that was represented by the recognised union. As an incentive it proposed to grant the non-bargaining unit employees a 4.5% across the board wage increase, subject to them accepting a change to their wage cycle from 1 July to 30 June of each year, which would make it the same as the cycle at the employer's other branches. The increase in remuneration was subject to the condition that for a one-year period, these employees could not become a member of the South African Freight & Dockworkers Union and thereby become part of the bargaining unit established in terms of the Relationship Agreement between the Company and the Union.
The Union alleged that this arrangement constituted anti-union discrimination, designed to undermine it. The Labour Court and the Labour Appeal Court (in Safcor Freight (Pty) Ltd t/a Safcor Panalpina v SAFDU (LAC DA17/10, Judgment 17 September 2012)) found that the impact of the employer's actions was to provide a strong inducement to non-union members not to exercise their right to join the union or for union members to resign. The LAC confirmed that the employer differentiated prejudicially between its employees on the basis of the rights they respectively chose to exercise in terms of the LRA to join or not join a trade union. It was no defence to argue, as the employer did, that the differentiation is based on bargaining unit membership, not union membership, when the applicable agreement defines the bargaining unit as synonymous with union membership.
In the strike context the courts have been clear: an employer cannot reward non-strikers or penalise employees on a protected strike (FAWU & others v Pets Products (Pty) Ltd (2000) 7 BLLR 781(LC) ; NUM v Namakwa Sands - a division of Anglo Operations Ltd (2008) 7 BLLR 675 (LC)). This case is a warning that in the bargaining context as well, employers must be extremely cautious about differentiating employees in a way that undermines collective bargaining.
The LRA provides that a dismissal on grounds of age is fair if an employee has reached 'the normal or agreed retirement age' (s 187(2)(b)). Most cases have turned on whether a specific age had been agreed between the parties or whether there was proof of a standard practice that had led to that age being regarded as the 'normal' retirement age.
In the recent case of Hibbert v ARB Electrical Wholesalers (Pty) Ltd (D775/10)  ZALCD 13 (27 September 2012), an employee had not agreed to retire when he turned 64. Rather, the employer had unilaterally decided to retire him then. In an attempt to establish the 'normal' retirement age the employer relied the Provident fund rules which specified a normal retirement age of 64 for all employees, with the possibility of early retirement from the age of 55 onwards with the employer's consent and retirement between 60 and 65 at the employer's election. The applicant however was one of the employees who had not joined the firm's Provident Fund.
The court was not persuaded that the employer had established a 'normal' retirement age that would have applied to the applicant. The court held that as the employer had not succeeded in proving a defence under s 187(2)(b) of the LRA, the applicant's dismissal on grounds of age was automatically unfair in terms of s 187(1)(f) of the LRA.
The significance of this case is not based on the facts but the matter of compensation. Discrimination is dealt with under both the LRA and the EEA. Does that mean that a person unfairly discriminated against can get a 'second bite'? No, said the court. An employee is not entitled to compensation under both the LRA and the EEA simply because the employer's conduct amounts to age discrimination warranting compensation under either Act.
But how do you calculate compensation in this case? The court said that just as the employer could not establish a normal retirement date applicable to the employee, the employee could also not establish what his due retirement date should be, other than by reference to his own financial planning which was premised on a retirement date at age 65. The court said that in the absence of a due retirement date, it is not possible to determine with any certainty actual damages arising from the employee's unilateral retirement by the employer. The judge said that accordingly he could not hold the employer liable for damages in this matter. This did not detract from the court's finding that his retirement in the absence of a normal retirement age was unfair discrimination. Taking into account the 64 year old employee's own expectation that he would retire at age 65, the court awarded him one year's remuneration as compensation.
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