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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 looks at 'Likely flashpoints for 2017'. We also discuss three new cases: the first case holds the parties to the form of the contract they chose at the beginning of their relationship, with significant consequences. The second case deals with a common problem - how to manage unauthorised absenteeism. The third case takes a hard line on non-disclosure of a criminal record at the time of applying for the job. We also provide a legislative update.
This public newsletter is a free edited version of the subscriber newsletter.
The importance of the form of a contract
There are often compelling reasons why parties opt for a working arrangement other than through an employment contract. The modern workplace is populated with a variety of identities: Independent contractors, consultants, employees of labour brokers, and so on. The choice of working arrangement may have important legal, tax and other financial consequences, and significantly may affect whether a person may be protected under labour legislation.
Unless the chosen label is an accurate description of the relationship, the CCMA and courts have recognised independent contractors as employees, where their depiction as independent contractors was for the purpose of stripping them of their employment rights under the LRA - for example see Shezi & another v Gees Shoes CC (2001) 22 ILJ 1707 (CCMA); MIBC v Mac-Rites Panel Beaters & Spray Painters (Pty) Ltd (2001) 22 ILJ 1077 (N). But where an employee asked the employer to describe the relationship as one of independent contractor for tax benefit purposes, it has been held that you cannot later claim to be an employee for the purposes of claiming relief under the LRA - see Callanan v Tee-Kee Borehole Casings (Pty) Ltd & another (1992) 13 ILJ 1544 (IC). Similarly, in the recent case of Vermooten v Department of Public Enterprises and Others (JA91/2015)  ZALAC 63 (14 December 2016), the LAC was reluctant to allow a consultant after many years of using that label, to claim the benefits of an employment relationship.
In this case the Department of Public Enterprises (DPE) advertised a post for Director Aviation. The employee applied for the post and, during the interview, stated that he could not accept the remuneration that was offered. Later the DPE offered him a contract as Specialist Aviation Consultant for a period of 12 months with effect from 9 October 2006. Further contracts followed until March 2011 when the DPE decided against renewing the contract.
The employee was dissatisfied and referred a dispute to the bargaining council concerning a unilateral variation of a contract / unfair dismissal. The DPE raised a point in limine that he was not an employee of the DPE; rather he was an independent contractor and therefore the bargaining council did not have jurisdiction to arbitrate the dispute. The arbitrator found in the employee's favour, but the DPE was successful in having the decision reviewed by the LC. The LC then took the LC judgment on appeal.
The LAC dismissed the appeal, finding that it was not permissible to allow one of the parties to change or contend that the legal relationship between them is something other than what was agreed. The LAC set this as the principle: Where parties in a relatively equal bargaining position choose to enter into a consultancy agreement and not a contract of employment, and the consultancy agreement is not a sham, then in the absence of any overriding policy considerations, neither a tribunal nor a court may ignore its terms.
This principle carefully excludes parties in unequal bargaining positions and contracts which are a sham. In such situations the CCMA and courts are likely to interrogate the true nature of the contract.
AWOL: Unauthorised absenteeism
A common problem facing employers is unauthorised absenteeism. This may differ from abscondment where the employee abandons employment. Frequently the absent employee has no intention of abandoning employment and sometimes may be prevented (eg because of imprisonment or illness) from returning to work.
We receive a number of queries through Worklaw's Helpline on how to be procedurally fair in these circumstances. Our advice usually refers to the leading case of Samancor Tubatse Ferrochrome v MEIBC & others (LAC JA 57/08, judgment 12 March 2010) where the imprisonment on the employee, causing him to be unable to work, was classified as incapacity. The LAC 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 recognises that it can take other forms. Imprisonment and military call-up, for instance, incapacitate the employee from performing his obligations under the contract.
Having classified the matter as one of incapacity, the LAC 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 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.
If the employee dismisses an absent employee, does fairness require an appeal when the employee returns to work? In Tubatse Chrome (Pty) Ltd v Metal and Engineering Industries Bargaining Council and Others (JR 2679/10)  ZALCJHB 16 (8 February 2013) the Labour Court held it is not unfair if an employer's code provides for termination at the end of an employee's extended period of unauthorised absence, provided she is given a fair opportunity to explain her absence if she returns to work.
Recently the LAC, in Pick 'n Pay Retailers (Pty) Ltd v South African Catering Commercial and Allied Workers Union obo Mzazi and Others (CA19/2015)  ZALAC 56 (25 November 2016), again had to decide the fairness of a dismissal for unauthorised leave.
The employee's evidence at arbitration was that he had been authorised to take leave from 27 December 2012. When the employee reminded his supervisor on 21 December 2012 that he was taking leave from 27 December, the employee was told that he could take leave in the first week of January, that he should complete the paperwork, and that he should ensure that someone was available to work in his place. The employee, who was the only person working in the stock room at the time, did not report for duty thereafter and was absent from work from 22 December 2012, until 4 February 2013, the same number of working days as the annual leave days due to him.
The employer sent three telegrams to the employee - but to an incorrect address and so the employee did not receive any of the three telegrams. On 15 January 2013 the disciplinary hearing was held in the absence of the employee, the charge being "absconding from your workplace since 22/12/12 without authorisation". The employee was dismissed with immediate effect. On his return to work on 4 February 2013, the employee was informed of his dismissal. Aggrieved with the decision to dismiss him, he referred an unfair dismissal dispute to the CCMA.
In the arbitration award, the commissioner rejected the employee's version, finding that he had taken leave without authorisation and that he had committed misconduct. The commissioner took account of the employee's key position, his lengthy period of unauthorised leave, the fact that it was taken at the busiest retail time of the year, and his failure to reach an agreement with his supervisor regarding leave in January or occasional leave. This led the commissioner to conclude that the misconduct was serious, had implications for the employer's operations and undermined the trust relationship. Although the commissioner found that the employee had no intention to abscond which "placed his conduct in a different light" to what was found at the disciplinary hearing, given his lengthy absence from work and his lack of contact with his employer, the employer "had no choice" but to assume that he was not returning to work. The dismissal of the employee was accordingly found to be substantively fair.
Turning to the procedural fairness of the dismissal, the commissioner found that the employer "should have dealt with the situation differently when the applicant eventually returned to work" and should have given him a hearing on his return. The fact that the employee did return to work, and reported for duty, meant that there was no intention to abscond (what he had initially been charged with). This placed his conduct in a different light. While the absence of the applicant was lengthy, the employee also had a long service history. The employee was entitled to the very basic principle of fairness to state his side of the matter, and to defend himself against allegations of misconduct. The employee was awarded two months' compensation for procedural unfairness.
On review the Labour Court found the award unreasonable and set it aside, substituting it with a finding that the employee's dismissal was procedurally and substantively unfair, and ordering retrospective reinstatement within 14 days.
On appeal the LAC upheld the Labour Court judgment, drawing a distinction between insubordination and dishonesty. The Court said that where an employee is away from work without authorisation, this constitutes a wilful disregard for the employer's rules, but this is not dishonesty. Where the absence does not cause proven loss or damage to the employer, dismissal may be unfair. In this case the LAC ordered reinstatement without retrospective effect and a written warning valid for 12 months for unauthorised absence from work.
The lesson of this case is that procedural fairness will usually require an appeal on the return of the absent employee to work, thereby giving the employee the chance to have his / her say. In assessing the substantive fairness of dismissal all the factors need to be take into account, including the employee's stated reasons for being absent and any loss caused by the unauthorised absence.
Non-disclosure of a criminal record
When the employee applied for employment with the appellant in 1996, he was asked in a written application for employment: "Have you ever been convicted of a criminal offence?" He stated that he had not and the employer employed him as a security guard. After fourteen years of service on 30 July 2010, the employee applied for promotion to the position of controller, and a criminal record check was then undertaken. It indicated that he had two previous criminal convictions: one for rape in 1982 for which he, being 17 years old at the time, received six lashes; and the second for assault with intent to do grievous bodily harm in 1991, for which he paid a fine of R200.
The employer, after a disciplinary hearing, dismissed the employee for 'misrepresentation and/or dishonesty concerning an application for employment and/or breach of PSIRA Regulations code of conduct'. Section 23(1)(d) of the Private Security Industry Regulation Act 56 of 2001 (PSIRA Act), (the operation of which post-dated the employee's employment), provides that a person may be registered as a security service provider provided he or she "was not found guilty of an offence specified in the Schedule within a period of 10 years immediately before the submission of the application to the Authority".
At the disciplinary hearing, the employee's defence was that he did not know that he had been convicted of a criminal offence as he had not gone to jail. Concerning his rape conviction he stated that: "I was 17 and did not understand the law. It was not rape. She was my girlfriend." He stated she had fabricated the rape claim. He stated further that the assault case related to an incident in which "(a)nother man who came from jail to visit a lady in my mother's house. When he grabbed this lady I defended her, and assaulted him. He laid a charge against me. I had to go to court. My brother got a lawyer to defend me. I was given a fine and my brother paid the fine."
At arbitration his dismissal was found to be substantively unfair and retrospective reinstatement was awarded. On review Labour Court found that while the employee had committed misconduct, the dismissal was unfair and agreed with the order of retrospective reinstatement.
On appeal the LAC, in G4S Secure Solutions (SA) (Pty) Ltd v Ruggiero N.O. and Others (CA2/2015)  ZALAC 55 (25 November 2016), overturned the LC decision and found the employee's dismissal was substantively fair, given the serious nature of the misconduct committed. The basis of the LAC decision was this: An employer is entitled to full disclosure of all relevant information when a decision is being made to employ a person as a security guard, given the trust implicit in the nature of that position. Dismissal is fair even where the misrepresentation is discovered after 14 years and a good service record.
We feel this decision is somewhat harsh. If one believes the employee's perception of the criminal charges against him long before he applied for employment and his desire to secure employment at that time, it does seem that insufficient consideration may have been given to the extent to which trust damaged by the non disclosure, may have been mitigated by trust earned over 14 subsequent years of good service. Having said that, we do recognise there have been other cases which have overturned appointments because of misrepresentation / non-disclosure many years before - see the following - NUMSA on behalf of Engelbrecht v Delta Motor Corporation (1998) 19 ILJ 1292 (CCMA); SALSTAFF/AIWU on behalf of Govender and SA Airways (2001) 22 ILJ 2366 (Arb); Hoch v Mustek Electronics (Pty) Ltd (2000) 21 ILJ 365 (LC)
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