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 looks at 'The balancing act of being an employee representative and an employee', in the light of 2 recent LAC judgments that touched on this. We also discuss three new cases: The first case, a LAC judgment, considers again under what circumstances an employer can proceed with a disciplinary hearing in the absence of the employee. The second case is also a LAC judgment and looks at whether it is a demotion when a full-time union representative no longer serves in that capacity and is returned to the old grade. The third case discussed is the recent Constitutional Court's judgment on whether the Prescription Act applies to awards made by the CCMA.
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RECENT CASES
Disciplinary hearing in the absence of the employee
It is not an uncommon experience: an employee avoids a disciplinary hearing by claiming physical or emotional ill-health. For some time now our law has been settled. In 2007 the SCA ruled that, while an employee has a right to a fair pre-dismissal hearing, where the employee seeks to evade and avoid the hearing giving false or weak reasons, the employer does not commit a procedural irregularity if it continues with the hearing in the absence of the employee - see Old Mutual Life Assurance Co SA Ltd v Gumbi (211/2006) [2007] ZASCA 52; [2007] 4 All SA 866 (SCA); [2007] 8 BLLR 699 (SCA). Clearly it would be unfair for an employer to carry on the first time a doctor's certificate is presented, but if there was a pattern of avoiding the disciplinary hearing, the employer would not be unfair in completing the hearing in the absence of the employee.
In a recent case another sort of problem emerged: the employee denied receiving notification of the disciplinary hearing.The employee had been arrested at her workplace on allegations of corruption: it was alleged that she demanded and accepted payments from prospective or fixed term contract employees to secure their employment with her employer.
She was absent from work from then on. She alleged she was suspended but this was disputed by the employer. She was then notified that her services had been terminated by SARS after she failed to report for duty. Unsuccessful attempts had been made by HR to have letters hand delivered at her place of residence. The letters were eventually delivered via a speed service, and proof of these deliveries was furnished to SARS by the service provider. The letters called upon the employee to immediately report for duty or inform the employer of her whereabouts and the reasons for her absence from work. The employee claimed that she never received the letters.
The employee then launched an application in terms of the BCEA to the Labour Court to - (a) declare the decision to suspend and subsequently dismiss her to be unlawful; and (b) declare the failure by the employer to follow its disciplinary code and procedure, a breach of the terms of the employment contract between them.
The Labour Court dismissed the application on the grounds that the employee's case, properly construed, was a case of unfair dismissal as contemplated in the LRA and, as such, the Labour Court had no jurisdiction to entertain the dispute. As it was an unfair dismissal dispute it had to be referred to the CCMA for arbitration.
On appeal to the LAC (Mhlongo v South African Revenue Service (JA3/16) [2017] ZALAC 15 (16 February 2017)) it was held that her dismissal did not constitute a breach of her employment contract, even though it was completed in her absence, because the employer had complied with the contract of employment in trying to contact her to attend the hearing. The principle which emerges from this LAC judgment is this: An employer cannot be faulted for dismissing an employee in the absence of the employee, where the employer has used the agreed methods to communicate with the employee.
It is also worth taking note of what the LAC said about the employee's decision (or her lawyer's) to proceed under the BCEA for breach of contract, rather than under the LRA for unfair dismissal. The LAC found this decision 'totally mystifying' saying that if she had proceeded in terms of the LRA she would not only have been entitled to claim what she sought in these proceedings on the basis of an unfair dismissal, but would have been engaged in a process where the test is that of fairness and where the onus of proving the fairness of the dismissal is on the employer.
Disciplinary hearing in the absence of the employee
It is not an uncommon experience: an employee avoids a disciplinary hearing by claiming physical or emotional ill-health. For some time now our law has been settled. In 2007 the SCA ruled that, while an employee has a right to a fair pre-dismissal hearing, where the employee seeks to evade and avoid the hearing giving false or weak reasons, the employer does not commit a procedural irregularity if it continues with the hearing in the absence of the employee - see Old Mutual Life Assurance Co SA Ltd v Gumbi (211/2006) [2007] ZASCA 52; [2007] 4 All SA 866 (SCA); [2007] 8 BLLR 699 (SCA). Clearly it would be unfair for an employer to carry on the first time a doctor's certificate is presented, but if there was a pattern of avoiding the disciplinary hearing, the employer would not be unfair in completing the hearing in the absence of the employee.
In a recent case another sort of problem emerged: the employee denied receiving notification of the disciplinary hearing.The employee had been arrested at her workplace on allegations of corruption: it was alleged that she demanded and accepted payments from prospective or fixed term contract employees to secure their employment with her employer.
She was absent from work from then on. She alleged she was suspended but this was disputed by the employer. She was then notified that her services had been terminated by SARS after she failed to report for duty. Unsuccessful attempts had been made by HR to have letters hand delivered at her place of residence. The letters were eventually delivered via a speed service, and proof of these deliveries was furnished to SARS by the service provider. The letters called upon the employee to immediately report for duty or inform the employer of her whereabouts and the reasons for her absence from work. The employee claimed that she never received the letters.
The employee then launched an application in terms of the BCEA to the Labour Court to - (a) declare the decision to suspend and subsequently dismiss her to be unlawful; and (b) declare the failure by the employer to follow its disciplinary code and procedure, a breach of the terms of the employment contract between them.
The Labour Court dismissed the application on the grounds that the employee's case, properly construed, was a case of unfair dismissal as contemplated in the LRA and, as such, the Labour Court had no jurisdiction to entertain the dispute. As it was an unfair dismissal dispute it had to be referred to the CCMA for arbitration.
On appeal to the LAC (Mhlongo v South African Revenue Service (JA3/16) [2017] ZALAC 15 (16 February 2017)) it was held that her dismissal did not constitute a breach of her employment contract, even though it was completed in her absence, because the employer had complied with the contract of employment in trying to contact her to attend the hearing. The principle which emerges from this LAC judgment is this: An employer cannot be faulted for dismissing an employee in the absence of the employee, where the employer has used the agreed methods to communicate with the employee.
It is also worth taking note of what the LAC said about the employee's decision (or her lawyer's) to proceed under the BCEA for breach of contract, rather than under the LRA for unfair dismissal. The LAC found this decision 'totally mystifying' saying that if she had proceeded in terms of the LRA she would not only have been entitled to claim what she sought in these proceedings on the basis of an unfair dismissal, but would have been engaged in a process where the test is that of fairness and where the onus of proving the fairness of the dismissal is on the employer.
Is ceasing to be a full-time union representative a demotion?
'Demotion' is not defined in the LRA, but it is understood to include the reduction of responsibility, power or status, even though the salary level and other benefits may be retained. Here is a case which asks whether a change from being a union representative back to the position the employee had prior to being appointed as a representative, constituted a demotion.
While holding a remuneration level 6-9 post as a customer service agent, an employee was appointed as a Full Time Union Representative (FTUR) in terms of a recognition agreement. As a FTUR she was no longer required to fulfil the duties of a customer service agent. She was remunerated by SAA, in her capacity as FTUR, on remuneration level 13 and also received an allowance of R3 000 per month.
Her appointment as FTUR was governed by clause 5.2.6 of the recognition agreement, which read as follows:
The employee was dissatisfied with the situation and referred a unfair demotion dispute to the CCMA, claiming that SAA should have redeployed her into a level 13 post. The arbitrator found that the employee had been demoted by SAA and that the demotion was unfair. He ordered SAA to offer her a level 13 or equivalent or higher alternative position by 30 August 2014.
SAA launched an application in the Labour Court to review and set aside the award. The LC concluded that the matter turned upon the correct interpretation of clause 5.2.6.1 of the agreement. This clause required the employer to do no more than seek to place the employee in another position at the level or equivalent or higher than that which she occupied at the time of her appointment. The employee had no right to remain engaged at level 13 after her dismissal from office as a full-time union representative. Her placement in a post graded at the same level in which she was engaged prior to her appointment did not constitute a demotion; it was no more than a reversion to the status quo.
On appeal to the Labour Appeal Court, the court in Mhlekude v South African Airways (Soc) Ltd and Others (PA5/15) [2016] ZALAC 59; (2017) 38 ILJ 577 (LAC) (24 November 2016) agreed with the Labour Court. It held that where an employer redeploys a full time union representative to her/his previous position in compliance with a collective agreement, when that person ceases to be such a representative, this does not constitute a demotion.
Prescription and employment disputes
Prescription is a legal process to either acquire rights (acquisitive prescription, for example, of ownership rights by staying openly and peacefully for 30 years on land belonging to another) or lose rights (extinctive prescriptive, usually by not acting quickly enough to claim what is rightfully yours).
For some years there has been a debate in labour law as to whether the Prescription Act applies to 'debts' under the LRA. The situation which can arise is where an employee wins at the CCMA but does nothing for over 3 years to enforce the award for compensation and/or reinstatement. Has the right prescribed? A more cynical use of prescription has arisen where employers claim that because of the time taken to review a CCMA award, the rights to compensation and/or reinstatement have prescribed because 3 years have passed.
Certainty in the law in this area is much needed and so when the Constitutional Court gave its judgment in Mogaila v Coca Cola Fortune (Pty) Limited (CCT76/16) [2017] ZACC 6 (2 March 2017) we looked forward to clarity. Unfortunately, we were sadly disappointed. Let's look at the facts of the case to see what can be learned. (Keep your eye on the dates to watch the progress of this dispute).
On 26 November 2007, after a disciplinary enquiry had found her guilty of assault, an employee was dismissed. Aggrieved, she approached the CCMA and the Commissioner found the employee's dismissal procedurally fair but substantively unfair. The award ordered Coca Cola to reinstate her with effect from 2 June 2008 and to pay her six months' back pay of R27 899.40.
When she reported for work, she was informed by the HR department that Coca Cola intended taking the arbitration award on review. On 2 June 2008, the employee applied to have the arbitration award formally certified in terms of section 143(3) of the LRA, as a precursor to enforcing the award. On 9 June 2008, the employee was served with a copy of the review application. The Labour Court dismissed the review application. A petition to the Labour Appeal Court was dismissed on 2 October 2013.
After leave to appeal was refused, the employee's attorney informed her that she should report for duty on 4 November 2013. But on arriving at work, she was told that since the arbitration award constituted a "debt" for the purposes of the Prescription Act and she had failed to enforce it within three years after 29 April 2008, the award could no longer be implemented. It had prescribed.
In an application for direct access to the Constitutional Court, the employee sought an order that (a) the Prescription Act was not consistent with LRA; and (b) an order of reinstatement granted in her favour does not constitute a "debt" for the purposes of the Prescription Act. In addition, the employee sought an order directing Coca Cola to reinstate her to her previous employment position.
When she made this application, the Constitutional Court had already set down for hearing on 1 September 2016 the application of a similar case, Myathaza v Johannesburg Metropolitan Bus Services (SOC) Limited t/a Metrobus [2016] ZACC 49. By the time the employee's application was heard, the Myathaza judgment had been handed down, but sadly it consisted of three different judgments, none of which was a majority judgment.
The Constitutional Court in the Mogaila case, in trying to interpret and apply the Court's earlier Myathaza judgment which contained no majority decision, tried to find a way of reconciling (a) one judgment which said that the Prescription Act did not apply to the LRA (and therefore Mr Myathaza's arbitration award had not prescribed) and (b) one judgment which held that the Prescription Act was not inconsistent with the LRA, but complementary to it. But the second judgment also held that commencing proceedings before the CCMA interrupted the running of prescription in accordance with section 15(1) of the Prescription Act.
The Constitutional Court held that, on either approach, the employee was entitled to an order declaring that the arbitration award ordering her reinstatement had not prescribed. While the employee in the Mogaila case was successful, it was only because the Court could extract something from each of the two divergent judgments in the earlier case. We are left still wondering from these judgments if we can say with certainty that the Prescription Act applies to the LRA. This is a most unhelpful state of affairs - in our view we should be entitled to expect more certainty from our top court.
Interestingly, the recently amended section 145(9) of the LRA assumes that the Prescription Act does apply. The section says the following;
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'Demotion' is not defined in the LRA, but it is understood to include the reduction of responsibility, power or status, even though the salary level and other benefits may be retained. Here is a case which asks whether a change from being a union representative back to the position the employee had prior to being appointed as a representative, constituted a demotion.
While holding a remuneration level 6-9 post as a customer service agent, an employee was appointed as a Full Time Union Representative (FTUR) in terms of a recognition agreement. As a FTUR she was no longer required to fulfil the duties of a customer service agent. She was remunerated by SAA, in her capacity as FTUR, on remuneration level 13 and also received an allowance of R3 000 per month.
Her appointment as FTUR was governed by clause 5.2.6 of the recognition agreement, which read as follows:
'Upon the ending of the office term of the FTUR, or his removal from office:About three years later the union expelled her as a member. This had the immediate effect that she no longer served as the union's FTUR. SAA then redeployed her to the position she occupied prior to her becoming FTUR, namely a customer service agent at level 6-9. SAA, however, continued to remunerate her on the level 13, i.e. the salary that she had earned as a FTUR, but in accordance with clause 5.2.6.2 above, the allowance of R3 000 ceased.
5.2.6.1. Management shall, where practicable and possible, offer the same, or equivalent, or higher alternative employment to the FTUR.
5.2.6.2. The term of office and benefits of a FTUR shall automatically cease to exist when the FTUR is dismissed, or his or her services are terminated due to death, incapacity, resignation or according to the union's constitution.'
The employee was dissatisfied with the situation and referred a unfair demotion dispute to the CCMA, claiming that SAA should have redeployed her into a level 13 post. The arbitrator found that the employee had been demoted by SAA and that the demotion was unfair. He ordered SAA to offer her a level 13 or equivalent or higher alternative position by 30 August 2014.
SAA launched an application in the Labour Court to review and set aside the award. The LC concluded that the matter turned upon the correct interpretation of clause 5.2.6.1 of the agreement. This clause required the employer to do no more than seek to place the employee in another position at the level or equivalent or higher than that which she occupied at the time of her appointment. The employee had no right to remain engaged at level 13 after her dismissal from office as a full-time union representative. Her placement in a post graded at the same level in which she was engaged prior to her appointment did not constitute a demotion; it was no more than a reversion to the status quo.
On appeal to the Labour Appeal Court, the court in Mhlekude v South African Airways (Soc) Ltd and Others (PA5/15) [2016] ZALAC 59; (2017) 38 ILJ 577 (LAC) (24 November 2016) agreed with the Labour Court. It held that where an employer redeploys a full time union representative to her/his previous position in compliance with a collective agreement, when that person ceases to be such a representative, this does not constitute a demotion.
Prescription and employment disputes
Prescription is a legal process to either acquire rights (acquisitive prescription, for example, of ownership rights by staying openly and peacefully for 30 years on land belonging to another) or lose rights (extinctive prescriptive, usually by not acting quickly enough to claim what is rightfully yours).
For some years there has been a debate in labour law as to whether the Prescription Act applies to 'debts' under the LRA. The situation which can arise is where an employee wins at the CCMA but does nothing for over 3 years to enforce the award for compensation and/or reinstatement. Has the right prescribed? A more cynical use of prescription has arisen where employers claim that because of the time taken to review a CCMA award, the rights to compensation and/or reinstatement have prescribed because 3 years have passed.
Certainty in the law in this area is much needed and so when the Constitutional Court gave its judgment in Mogaila v Coca Cola Fortune (Pty) Limited (CCT76/16) [2017] ZACC 6 (2 March 2017) we looked forward to clarity. Unfortunately, we were sadly disappointed. Let's look at the facts of the case to see what can be learned. (Keep your eye on the dates to watch the progress of this dispute).
On 26 November 2007, after a disciplinary enquiry had found her guilty of assault, an employee was dismissed. Aggrieved, she approached the CCMA and the Commissioner found the employee's dismissal procedurally fair but substantively unfair. The award ordered Coca Cola to reinstate her with effect from 2 June 2008 and to pay her six months' back pay of R27 899.40.
When she reported for work, she was informed by the HR department that Coca Cola intended taking the arbitration award on review. On 2 June 2008, the employee applied to have the arbitration award formally certified in terms of section 143(3) of the LRA, as a precursor to enforcing the award. On 9 June 2008, the employee was served with a copy of the review application. The Labour Court dismissed the review application. A petition to the Labour Appeal Court was dismissed on 2 October 2013.
After leave to appeal was refused, the employee's attorney informed her that she should report for duty on 4 November 2013. But on arriving at work, she was told that since the arbitration award constituted a "debt" for the purposes of the Prescription Act and she had failed to enforce it within three years after 29 April 2008, the award could no longer be implemented. It had prescribed.
In an application for direct access to the Constitutional Court, the employee sought an order that (a) the Prescription Act was not consistent with LRA; and (b) an order of reinstatement granted in her favour does not constitute a "debt" for the purposes of the Prescription Act. In addition, the employee sought an order directing Coca Cola to reinstate her to her previous employment position.
When she made this application, the Constitutional Court had already set down for hearing on 1 September 2016 the application of a similar case, Myathaza v Johannesburg Metropolitan Bus Services (SOC) Limited t/a Metrobus [2016] ZACC 49. By the time the employee's application was heard, the Myathaza judgment had been handed down, but sadly it consisted of three different judgments, none of which was a majority judgment.
The Constitutional Court in the Mogaila case, in trying to interpret and apply the Court's earlier Myathaza judgment which contained no majority decision, tried to find a way of reconciling (a) one judgment which said that the Prescription Act did not apply to the LRA (and therefore Mr Myathaza's arbitration award had not prescribed) and (b) one judgment which held that the Prescription Act was not inconsistent with the LRA, but complementary to it. But the second judgment also held that commencing proceedings before the CCMA interrupted the running of prescription in accordance with section 15(1) of the Prescription Act.
The Constitutional Court held that, on either approach, the employee was entitled to an order declaring that the arbitration award ordering her reinstatement had not prescribed. While the employee in the Mogaila case was successful, it was only because the Court could extract something from each of the two divergent judgments in the earlier case. We are left still wondering from these judgments if we can say with certainty that the Prescription Act applies to the LRA. This is a most unhelpful state of affairs - in our view we should be entitled to expect more certainty from our top court.
Interestingly, the recently amended section 145(9) of the LRA assumes that the Prescription Act does apply. The section says the following;
'An application to set aside an arbitration award in terms of this section interrupts the running of prescription in terms of the Prescription Act, 1969 (Act No. 68 of 1969), in respect of that award.'As a result of the above amendment, it is for now perhaps safe to assume that the Prescription Act does apply to the LRA, although there is no certainty that the constitutionality of this section may not be challenged at some point.
INFORMATION ABOUT WORKLAW
Worklaw is a comprehensive labour law advice and information service, developed by some of South Africa`s most experienced labour arbitrators. Worklaw subscribers get free advice from experienced arbitrators via e-mail, can research the law and leading cases, are updated monthly on new cases, trends etc, and can use excellent training material, to name a few of these services. Subscribers are invited to an annual labour law workshop covering the key cases and trends from the past year.
Contact us for more information:
Telephone: 031-561 5004
Fax: 031- 561 6906
E-mail: help@worklaw.co.za
www.worklaw.co.za
Bruce Robertson
March 2017
Copyright: Worklaw
www.worklaw.co.za