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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 “ Court intervention in disciplinary processes”. We also look at two new cases: the first concerns the implications of non-attendance by the employer at a con-arb at the CCMA. The second is a case about procedural unfairness – when, if ever, can the employer dispense with a disciplinary hearing.
This public newsletter is a free edited version of the Worklaw subscriber newsletter.
Please note: The Minister of Labour increased the Earning Threshold contained in the Basic Conditions of Employment Act 75 of 1997 (the BCEA) on Friday, 13 May 2011, from R149 736 to R172 000 per year. The amendment is effective as from 1 July 2011.
Employees earning in excess of R172 000, are excluded from the operation of sections 9, 10, 11, 12, 14, 15, 16, 17(2) and 18(3) of the BCEA. These are effectively the sections regulating working time- eg limiting ordinary working hours, overtime, meal intervals, rest periods, Sunday work etc. 'Earnings' means an employee's regular annual remuneration before deductions. It excludes contributions made by the employer on the employee’s behalf. Subsistence and travel allowances, achievement awards and payment for overtime worked shall not be regarded as remuneration.
Non-attendance at a con-arb in the CCMA
The recent case of Pioneer Foods (Pty) Ltd t/a Sasko Milling & Bakery (Duens Bakery) v CCMA & others (LC Case no C 265/10, Date of judgment: 11 March 2011) asks this question: Does the commissioner in con-arb proceedings in terms of s 191(5A) of the Labour Relations Act have a discretion whether to adjourn the proceedings after conciliation and before the arbitration stage, if neither party has objected to con-arb?
In this case the employee was dismissed for misconduct; he had assaulted a subordinate and used abusive language towards her. The employee referred an unfair dismissal dispute to the CCMA. The CCMA enrolled the dispute for con-arb in terms of s 191(5A) of the LRA. The employee duly arrived for the con-arb process, represented by an official of FAWU. There was no appearance for the employer.
The Commissioner issued a certificate that the matter could not be resolved at conciliation. He then proceeded with the arbitration in the absence of the employer. He found that the dismissal was procedurally and substantively unfair. He ordered the employer to reinstate the employee retrospectively and to pay him back pay equivalent to 3 months' remuneration.
The employer took this decision on review, submitting that the Commissioner charged with presiding over a dismissal dispute in con-arb proceedings has no discretion to proceed with the arbitration in the absence of an employer that has not objected to the con-arb process. The employer submitted that even if the Commissioner does have the power to arbitrate in the absence of the employer, the Commissioner should exercise the discretion to do so in a reasonable manner and that this did not happen in the present case. The arbitrator should have postponed the dispute.
- The judge commented that he found it inexplicable why the employer did not use the simple procedure prescribed by the LRA in dealing with the award made in its absence, i.e. to apply to the CCMA to rescind the award in terms of section 144.
The outcome of this case seems perfectly clear, having regard to the Act and the CCMA rules. What may have created the confusion was a previous judgement in the case of De Swardt AJ in Inzuzu IT Consulting (Pty) Ltd v CCMA in which it was found, having regard to rule 17(4) of the CCMA rules, that when a party fails to appear at a con-arb, the commissioner may deal with the conciliation proceedings, but not the arbitration. The arbitration must be scheduled for a later date. In Pioneer Foods this approach was found to be clearly wrong.
The lesson of this case is a cautionary one: miss the CCMA con-arb at your peril.
Dispensing with a disciplinary hearing
The employee, J, was employed as a regional manager. Only three people worked in this regional office, namely J, his wife and Mrs S. It emerged that Mrs S had perpetrated fraud and theft; she had given the employer’s customers her banking details for the purposes of making payments, as opposed to the employer’s banking details. Upon further investigation, it transpired that the fraud had been conducted over a number of years and on a massive scale. It was also established that Mrs J had shared in the spoils by receiving payments amounting to not less than R300 000, 00 from Mrs S. Both Mrs S and Mrs J were subsequently convicted in criminal proceedings of fraud and theft. Both left the employ of the employer. J was dismissed on account of his gross neglect and dereliction of his duties as a senior manager. (It was never the employer’s case that J had participated in the fraud.)
The issue in Nitrophoska (Pty) Ltd v CCMA & others (LC Case: C109/2010; Date of judgment: 4 March 2011 was whether J’s dismissal was procedurally fair. Two days after the fraud was exposed, J met with his MD. J confirmed that his wife had been involved in the theft and fraud. He tendered to resign on the basis that he was the person with overall accountability. J acknowledged that there could be no trust relationship under these circumstances. The MD indicated that, before any decision was taken, all the facts should be unearthed through an investigation.
Two further meetings followed. At the last meeting J was informed that, in the employer’s view, a continued trust relationship was not possible. J requested the opportunity to consult with a labour advisor before responding, which he then did. With the assistance of his advisor, J addressed further submissions in writing in which he denied wrongdoing and disputed that the trust relationship was at an end. The employer responded in writing, informing J that the employer had considered his submissions but remained of the view that, as a result of his neglect of duty, the employment relationship could not continue.
The CCMA found that the dismissal of the employee was substantively fair but procedurally unfair. The employer was ordered to pay him compensation of R69 600, 00 (about 3 months’ salary). The employer then took the arbitrator’s decision on review to the Labour Court, challenging the commissioner’s finding on procedural unfairness and the compensation award.
In the Labour Court Judge Steenkamp confirmed the recent trend in cases, namely that when the Code of Good Practice: Dismissal refers to an opportunity that must be given by the employer to the employee to state a case in response to any allegations made against the employee, there does not need to be a formal enquiry. It means no more than that there should be dialogue and an opportunity for reflection before any decision is taken to dismiss. The court said that under the circumstances of this case, it is inconceivable that J was not aware of the allegations against him. He had an opportunity to state his case, albeit that formal disciplinary “charges” were never laid against him. The Labour Court reversed the decision of the CCMA.
This case is in line the trend established by other judgements in recognising a much less formal approach to the disciplinary process. It is important to recognise however, that employers are obliged to comply with their internal disciplinary procedures.
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