Public Newsletter
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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 "An employer's response to the construction mafia: radical economic transformation or criminal racketeering?" We also discuss three new cases: The first case deals with how to interpret a collective agreement. The second case considers the validity of a clause in an employment contract which stipulates that any dispute must be referred to private arbitration rather than the CCMA. The third case, an arbitration award, looks at the fairness of a dismissal when the employee tested positive for dagga.
This public newsletter is a free edited version of the subscriber newsletter.
LEGISLATION UPDATE
Confusion over the Labour Laws Amendment Act
We have already reported that this Act - which has been passed by Parliament and provides for parental leave in a more gender neutral manner in the event of birth, adoption or surrogacy - has not yet been implemented. It provides for amendments to the BCEA and the Unemployment Insurance Act. It has recently been announced that sections 9 & 10 dealing with specific amendments to the Unemployment Insurance Act, came into effect on 1 April, but we still await the date of implementation of the main body of the Act dealing with parental leave. We are told this will only happen later this year.
Amendments to sections 13 and 24 of the Unemployment Insurance Act came into effect on 1 March by retrospective presidential proclamation. These amendments improve the benefit days accumulation rate, prevent benefits from being reduced in certain circumstances, and affect the number of days' maternity leave due to a contributor who has miscarried or delivered a still-born child.
RECENT CASES
Interpreting a collective agreement
The dispute in this case concerned the interpretation of a collective agreement providing for the forfeiture of a project bonus payable to employees, if they embarked upon unprotected strike action.
In terms of the collective agreement, it was agreed that employees would only be paid a project bonus if the employees did not embark upon unprotected strike action. Another clause provided: 'Rolling unprotected industrial action (where employees embarking upon unprotected industrial action, return to work only to go out on further unprotected industrial action as the result of the same event) will result in the individuals losing their project bonus in terms of this PLA.'
A clause in the agreement created specific exceptions where employees would not forfeit their project bonus: first, in the case of employees returning to work within the cooling off period; and second, where the unprotected strike action takes place as a result of provocation by the employer.
When this dispute was referred to the CCMA the commissioner determined that the clause in the collective agreement only contemplated the forfeiture of the project bonus in the month in which the employees embarked upon the unprotected strike, and not the entire project bonus for the year.
On review at the Labour Court in Civil and Power Generation Projects (Pty) Ltd v Commission for Conciliation, Mediation and Arbitration and Others (JR2473/16) [2019] ZALCJHB 58 (22 March 2019) it was held that when objectively interpreting these clauses, where employees embark upon unprotected strike action, they forfeit their entire project bonus for the year, even if it is only a single instance of striking. The only way to have avoided this was for employees to show that they returned to work in the cooling off period, that they were provoked into striking by the employer, and that this was not 'rolling' industrial action. The employees failed to establish any of these events.
The lesson of this case is more about how to interpret agreements than 'no-strike' bonuses. The LC found that the arbitrator had failed to properly apply principles relating to interpretation of agreements, and criticised the arbitrator for being influenced by the view that an unprotected strike can be seen as being simply part of employees' fundamental right to collective bargaining.
The LC confirmed the following principles when interpreting an agreement: Consideration must be given to the clear language used, applying ordinary rules of grammar and syntax. A particular provision should be interpreted in the light of the document as a whole, and its overall purpose. Where more than one meaning is possible, each possibility must be objectively weighed in the light of these factors, and a sensible meaning should be preferred to one that undermines the apparent purpose of the document. Effect must be given to every clause in the document and, if two clauses appear to be contradictory, the proper approach is to reconcile them so as to do justice to the intention of the document. It is not necessary to resort to other evidence, if the meaning of the document can be gathered from its contents.
Agreement to use private arbitration rather than CCMA
After the dismissal of a senior employee, he discovered that in terms of his employment contract, he was bound by the employer's terms of employment, which incorporated the employer's Employee Relations Handbook. The Employee Relations Handbook provided that dismissal disputes were to be dealt with via private arbitration.
The applicant did not want to go the route of private arbitration, and instead claimed his right to refer his dispute to the CCMA. The CCMA ruled that it did not have jurisdiction to hear the matter, and that the applicant could elect instead to refer it to private arbitration.
On review of the CCMA's jurisdiction ruling at the Labour Court in Naidoo v Liberty Holdings (JR558/16) [2019] ZALCJHB 56 (19 March 2019), the employee contended that he was never given a copy of the Employee Relations Handbook on commencement of employment with the employer; that he never agreed to dealing with disputes via private arbitration; and that never gave up his right to refer the matter to the CCMA. He claimed that private arbitration would mean automatic legal representation, with possible arbitration costs.
The matter turned on an interpretation of s 147(6) of the LRA which gives a commissioner a choice either to refer the dispute to private arbitration where that has been agreed, or to appoint a commissioner to resolve the dispute. The Labour Court held that the CCMA has no jurisdiction to hear the matter, and that if the employee wished to pursue an unfair dismissal dispute, such dispute must be dealt with by way of private arbitration as per the contract of employment read together with the Employee Relations Handbook.
We are surprised at this ruling because s 147(6) gives a choice to the commissioner. It says:
If at any stage after a dispute has been referred to the Commission, it becomes apparent that the dispute ought to have been resolved through private dispute resolution in terms of a private agreement between the parties to the dispute, the Commission may-In trying to make sense of the judgment, it may be that what this case is really saying is that once a commissioner has made the election in terms of s 147(6), the CCMA thereafter lacks the jurisdiction to hear the dispute.
- refer the dispute to the appropriate person or body for resolution through private dispute resolution procedures; or (our emphasis)
- appoint a commissioner to resolve the dispute in terms of this Act.
Testing positive for dagga taken out-of-work
Worklaw does not usually bring CCMA awards to the attention of subscribers, but because a recent award is the first we are aware of since the Constitutional Court's decision on the private use of dagga, we thought it was important to see how the CCMA is likely to interpret the judgment.
The three applicants were among several employees who were dismissed after testing positive for cannabis during a test conducted during working hours. The applicants claimed that they had not smoked the drug during working hours. The employer claimed that due to the highly dangerous operations in its factory, it had a zero tolerance approach to working under the influence of alcohol or drugs, of which the applicants were aware.
The commissioner in Mthembu and others / NCT Durban Wood Chips [2019] 4 BALR 369 CCMA noted that the Constitutional Court had just declared private use of cannabis legal. However, employers are still entitled to discipline employees who use cannabis or are under its influence during working hours. The employer's operations indicated that such a prohibition was reasonable and the applicants knew that they were not allowed to report for work while under the influence of cannabis.
The commissioner noted the dangerous nature of the employees' work and based his finding on this principle: The test for wilful disregard of safety rules is an objective 'reasonable man' test - what would a person possessing the skills and experience of the employees be expected to do, knowing the company's stance on substance abuse. The commissioner found that the employees' dismissal was therefore fair.
We have concerns about this award. It correctly states that although the Constitutional Court has declared private use of cannabis legal, employers are still entitled to discipline employees who use cannabis or are under its influence during working hours. But the commissioner in our view conflated testing positive for cannabis through a urine test with 'being under its influence'. The commissioner did not probe whether testing positive is the same as being 'under the influence'.
As we pointed out in our October 2018 Subscriber Newsletter on dagga, many employers apply a "zero tolerance" approach in the sense that if somebody tests positive for alcohol or drugs, they are not allowed to enter the premises. This is an area where further thinking may be required. Health and safety legislation largely focuses on employees being 'under the influence' of alcohol or drugs. Whilst alcohol tests generally measure relatively recent consumption of alcohol and accordingly arguably relate to possibly being 'under the influence', a positive urine test can result from dagga use days or weeks previously and may have little bearing on whether the employee is 'under the influence' or not.
We think an approach that bars all employees from the premises on a 'no pay' basis - and possibly results in disciplinary action - for a positive urine test, may well be challenged. It has been suggested that, as with alcohol, traffic authorities may in future have to define allowable dagga levels for driving.
ARTICLE: An employer's response to the construction mafia: radical economic transformation or criminal racketeering?
By Prof Alan Rycroft
What seemed to be a few exceptional cases in KZN has now become a nation-wide trend. The pattern is that the so-called "construction mafia" arrive at a building site, intimidate and harass builders, demand work for their members and up to 30% of the total contract share. The often violent nature of these incidents has resulted in construction companies being forced to delay work on affected projects, resulting in increased costs and making workers redundant for long periods.Prof Alan Rycroft, in his article, discusses an appropriate employer response to this worrying trend.
Read more (note - only available to Worklaw subscribers)
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Bruce Robertson
April 2019
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