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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 the meaning and effect of 'deeming' provisions in legislation - a hot topic at the moment due to the LRA amendments (passed but not yet published) 'deeming' labour broker and fixed term contract employees to be the indefinite employees of the employer under certain circumstances.

We also look at three new cases: The first looks at exactly what an employer must do if an arbitrator or court orders reinstatement. The second is a LAC case which looks at the weight an arbitrator should give to on-going dishonestly and a lack of remorse in deciding the sanction. The third case (which ties in with our article) is from the SCA and looks at the requirements for a 'deemed dismissal' clause to be effective.

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


Reinstatement into a restructured post?

Years after a dismissal, the Labour Court might order the employee to be reinstated 'on the same terms and conditions' as existed at the time of the dismissal. But what if things have moved on and someone else is employed in the post of the dismissed employee? What if there has been a restructuring and the post no longer exists?

These issues arose in Myers v The National Commissioner of the South African Police Service and others (ZALCCT 37/2013) 28 January 2014. This case arose as a consequence of the order of the SCA in 2012 to reinstate Lt-Col Ivan Myers into "the position he held before" his dismissal (see Myers v National Commissioner of the SAPS (425/2012) [2012] ZASCA 185 (29 November 2012)). The retrospective reinstatement followed a lengthy court battle since his dismissal in July 2007. But the national and provincial commissioners of the SAPS did not reinstate him into the position he held before his dismissal, as they said the position no longer existed.

After reinstatement by the SCA, the Provincial Commissioner of SAPS instructed Myers to report for duty at the Ravensmead police station as Visible Policing Commander at salary level 10 with the rank of Lieutenant-Colonel. Myers argued that the SAPS had not complied with the order of the SCA. He returned to court to seek an order holding the national and provincial commissioners of the SAPS in contempt of court.

In order to consider whether there was contempt of court by SAPS, the Labour Court asked the question whether SAPS had failed to comply with the order of the SCA; and, if so, whether the non-compliance is wilful and mala fide (in bad faith). But there was a prior question: how should the SCA order (to "reinstate" Myers into the position he held before his dismissal) be interpreted in the light of the subsequent restructuring of the dog unit?

The Constitutional Court in Equity Aviation (Pty) Ltd v CCMA & Ors (2008) 29 ILJ 2507 (CC) para [36] interpreted the word "reinstate" to mean that the employee must be put back into the same job or position that he or she occupied before the dismissal, on the same terms and conditions. Reinstatement is aimed at placing the employee in the position he or she would have been, but for the unfair dismissal.

Unlike an order to 're-employ' (in s 193 this means either in the work in which the employee was employed before the dismissal or in other reasonably suitable work), where reinstatement is ordered, there is no such discretion. In other words, the employee must be reinstated into the same position, and not re-employed in some other position.

The Labour Court found that SAPS could not give effect to the SCA's order by "placing" Myers in the position of Visible Policing commander at Ravensmead. Although that position may equate to "other reasonably suitable work", that is not what the SCA ordered.

The court got around this problem by asking what Myers's current position would have been had the SAPS not unfairly dismissed him. It held that there can be little doubt that, had Myers not been unfairly dismissed, he would have continued in the post of commander of the Cape Town Dog Unit at Maitland, albeit in the guise of the restructured unit. His post may have been upgraded but he would have remained the incumbent. In those circumstances, the SCA order must be interpreted to mean that he must be reinstated into the restructured post of commander of the Cape Town Dog Unit at Maitland at the current salary that that post attracts, coupled with retrospective back-pay.

But what about the contempt of court issue? The court concluded that the stance adopted by SAPS (to appoint Myers at Ravensmead) appeared to be a bona fide one, although it was not in compliance with the SCA order. This non-compliance was not wilful; SAPS did attempt to implement the order as it interpreted the order. Because the SAPS's non-compliance was not wilful or mala fide, it was not in contempt of court.

But the court took an extra step. Judge Steenkamp said it would not bring this long-running dispute to a satisfactory conclusion, if the Court was simply to dismiss the application to hold SAPS in contempt of court. Further guidance was needed. He concluded that it was in the interests of justice to order SAPS to comply with the order to reinstate Myers into the restructured post.

The lesson from this case is that appointing someone else into the post vacated by a dismissed employee, or restructuring to abolish that post, will not prevent a court from taking literally that reinstatement is into the exact position held at the time of dismissal. For this reason, parties should remember to place sufficient evidence before the court under section 193(2) if reinstatement is not a practical remedy to a finding of unfair dismissal. If the court is not persuaded that compensation would be appropriate, re-employment should be born in mind. It offers flexibility and can accommodate restructuring or other changed circumstances.

What weight should a lack of remorse and dishonesty be given as aggravating circumstances?

The CCTV footage used as evidence showed that an employee took a beer bottle from the employer's sample refrigerator and took a few sips. The employee then returned to work on the production line where he operated heavy machinery. When he was confronted with the CCTV footage, the employee came up with an elaborate and untruthful defence. He stated that the bottle contained carbonated water and not beer. Even at his internal disciplinary proceedings, an internal appeal hearing and at the arbitration itself, this remained his defence. This defence was, however, rejected by the Commissioner as untruthful. In effect, the employee was pronounced guilty of the charges.

Notwithstanding these findings, the Commissioner concluded that the misconduct was not serious enough to warrant dismissal. The Commissioner reasoned that (a) the breathalyzer test had measured o.oo% "which implies that he was fit to work and hence did not place the business at risk"; (b) the first charge (drinking on duty) was described by the Commissioner as a "misdemeanour" on the basis that the employee had only taken "a few sips from the bottle of beer;" (c) the second charge was referred to as "the unauthorized taking of beer". The dishonesty displayed by the employee's failure to own up was contrasted by his long service and his generally unblemished disciplinary record. That led to the Commissioner's finding that he deserved a sanction short of dismissal. The Commissioner ordered reinstatement without back pay.

SAB, which had dismissed because of a zero-tolerance to alcohol consumption at work, applied to the Labour Court to review and set aside the award (South African Breweries Ltd v Commission for Conciliation Mediation and Arbitration and Others (C 665/2011) [2012] ZALCCT 17 (24 May 2012)). This review application was unsuccessful primarily on the finding that the conclusion reached by the Commissioner was one that a reasonable decision-maker could have reached.

SAB was not willing to accept this and took the matter on to the Labour Appeal Court. In South African Breweries Ltd v Commission For Conciliation, Mediation And Arbitration and Others (CA13/2012) [2014] ZALAC 26 (30 May 2014) the question that arose was whether the Commissioner improperly disregarded certain factors in mitigation or in aggravation, particularly the employee's lack of remorse and his on-going dishonesty. This question was answered in the light of the test formulated in Sidumo that there is a "range of reasonable outcomes" in any matter.

The LAC noted that the Commissioner clearly accepted that there are many authorities that "deem" all acts of dishonesty to cause a breakdown in the continuation of the employment relationship. But he appreciated that each case had to be treated on its own merits and that not all cases involving dishonesty deserved the ultimate sanction of dismissal. The LAC found that the Commissioner correctly stated that it was his duty to holistically assess these factors given the context of the matter and in accordance with the trite principle that dismissal will not be lightly resorted to but is and remains reserved only for the most serious misconduct. One of the factors that influenced the Commissioner's finding was the degree of consumption and the question of whether the drinking of a few sips of beer rendered the employee intoxicated.

The appeal was dismissed with costs. For an employer trying to enforce a zero-tolerance approach to alcohol, and faced with an unremorseful and dishonest employee, this must have been an unhappy outcome. The lesson here is that the fairness of a dismissal depends on a variety of factors, and before taking that step an employer needs objectively to step back and weigh all factors. And clear evidence of the breakdown in trust must be led to substantiate the fairness of the dismissal, and failing that, the inappropriateness of reinstatement or re-employment as a remedy.

The SCA rules on a 'deemed dismissal'

Section 17 of the Public Service Act 103 of 1994 (the PSA) deems an employee to be dismissed if an employee takes on other employment. This kind of 'deemed dismissal' has been held by the courts to be a termination of the contract of employment by law and not termination by the employer - a kind of automatic termination which, because of the facts of the situation, happens without a decision by the employer and is therefore not a 'dismissal'.

In a recent case the SCA had to decide whether s 17(5)(a) of the PSA did not apply because the employer had failed to prove that the employee had absented himself from his official duties as contemplated by that section. The facts in Solidarity v The Public Health & Welfare Sectoral Bargaining Council (442/13) [2014] ZASCA 70 (28 May 2014) were as follows:

On 4 July 2007 the employee, who had been employed by the Department of Health: Free State for 17 years, was placed on what was described by the employer as a 'precautionary suspension' pending the finalisation of an investigation into allegations of misconduct against him. From 23 July 2007 and whilst under suspension, the employee, without having first obtained the permission of the employer, secured employment in Pretoria with a firm called Compu Africa, which was owned by one of his relatives. On 19 October 2007 the employee received a letter from the employer advising him that he was deemed to be discharged from the Public Service with effect from 23 July 2007 when he accepted alternative employment whilst still in service of the Department of Health.

The employee referred an unfair dismissal dispute to the bargaining council which held that it lacked jurisdiction because there had been no dismissal - only a termination by law. The LC and LAC agreed. The matter went on appeal to the SCA. The SCA confirmed that a 'deemed dismissal' in terms of s 17(5)(a)(i) of the PSA follows by operation of law. But that section only applies to an employee who 'absents himself or herself from his or her official duties without permission'.

When the case was heard by the LAC, the majority in the LAC accepted that the employee was absent from duty without permission when he accepted outside work. But the SCA said that this was incorrect. The employee was indeed absent from duty. But, having been suspended, he was absent at his employer's behest. And, not having been assigned alternative duties, for the duration of his suspension he had no duties. Logically therefore, he could thus not conceivably 'absent himself from his official duties'.

The SCA also held that the finding by the majority in the LAC that the employee had effectively resigned by assuming alternative employment was equally untenable. There was no evidence that the employee's temporary employment with Compu Africa was indeed incompatible with his obligations to the employer. The employee was under suspension when he commenced work with Compu Africa. Self-evidently, his suspension relieved him of his obligation to render his services to the employer. The employee's only obligation in return for his salary was to make himself available should his suspension be lifted. His suspension had not been lifted when he received the notice in terms of s 17(5) of the PSA. The court pointed out that an employee's entitlement to payment and an employer's obligation to pay arises not from the actual rendering by an employee of his services but from his making those services available to his employer.


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Bruce Robertson
June 2014
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