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 on 'Being an accomplice: an alternative to derivative misconduct?' and discusses a new judgment on this topic. We also discuss three other new judgments: The first case, a Constitutional Court judgment, investigates when a retrenchment is merger-specific or caused by other operational factors. The second case considers when an employee who makes a secret profit owes a fiduciary responsibility to the employer. The third case asks how a decision-maker decides which version of facts is true.
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RECENT CASES
When is a retrenchment merger-specific or caused by other factors?
In Coca-Cola Beverages Africa (Pty) Ltd v Competition Commission and Another (CCT 192/22) [2024] ZACC 3 (17 April 2024) the Constitutional Court had to decide if retrenchments were as a result of a merger or because of other operational factors.
The matter involved a dispute stemming from a merger approved by the Competition Tribunal in 2016, which created Coca-Cola Beverages South Africa (Pty) Ltd from four separate bottling companies. The merger was approved subject to conditions, which included prohibiting retrenchments in certain collective bargaining units "as a result of" the merger. Coca-Cola faced economic challenges after the mergers and initiated retrenchments, which led to FAWU filing a complaint about a breach of the merger conditions.
The Constitutional Court was required to consider an appeal against the judgment of the Competition Appeal Court, that had found Coca-Cola had breached the merger conditions by retrenching employees "as a result of" the merger.
Read more (Worklaw subscriber access only)
Fiduciary responsibility and making a secret profit.
RFS is a pension funds administrator that administered the funds of the National Pension Fund for Municipal Workers (NPFMW) and the National Fund for Municipal Workers (NFMW).
The dispute concerned payments which three employees received from the Funds over and above their usual remuneration during the 2015/2016 financial year. The employees contended that at the material times they were no longer in the employ of RFS but had been employed by the Funds. They were accordingly contractually entitled to the payments. RFS, on the other hand, contended that they had merely been seconded to the Funds and were performing the statutory function of a Principal Officer on its behalf. The payments were accordingly in breach of the employees' fiduciary duties or constituted secret profits which should be 'disgorged' (a legal term meaning that those funds should have been surrendered).
In RFS Administrator v Samons and Others (JA114/22) [2024] ZALAC 10 (11 April 2024) the LAC had to decide what defences an employee can raise if fiduciary duties have been breached.
Read more (Worklaw subscriber access only)
How should a decision-maker decide if evidence is true?
In Workforce Staffing (Pty) Ltd v Mjoli and Another (JA 32/23) [2024] ZALAC 9 (11 April 2024) the LAC outlined the process a decision-maker must use to balance two contradictory versions to arrive at the truth.
Workforce Staffing, a TES employer, claimed it had entered into separation agreements with redundant staff in terms of which their employment would be terminated by mutual consent and on the basis that the employer would seek to place them on other sites. The employer had not embarked on a retrenchment process. Employees testified that they had not been given notice or consulted in terms of section 189 of the LRA and that they sought a declaration that their dismissals were unfair. They denied signing separation agreements.
The Labour Court was required to determine whether the employees were permanent employees of Workforce Staffing, and whether they signed separation agreements and if so, whether section 189 was applicable. The LC found that the separation agreements were a fabrication and that the employees had been dismissed in circumstances where the employer had failed to comply with the provisions of section 189. The employees were thus entitled to be reinstated with retrospective effect, to be placed with another of the employer's clients.
On appeal to the Labour Appeal Court, the court said that the key issue was whether the employees had signed the separation agreements because if they had done so, there would be no dismissals and therefore no need to retrench. The LAC focused on the factors the LC had taken into account in making its credibility findings.
Read more (Worklaw subscriber access only)
ARTICLE: Being an accomplice - an alternative to derivative misconduct?
By Prof Alan Rycroft
'Derivative misconduct' is the term used to describe a kind of misconduct that arises when an employee has knowledge of wrongdoing by other employees but fails to disclose this knowledge to the employer. The reasoning is that in failing to make such a disclosure, the employee breaches the duty of faith owed to the employer and may be disciplined for such misconduct.Reliance on derivative misconduct has been restricted by stringent requirements imposed by the courts. The Constitutional Court in Numsa obo Nganezi and Others v Dunlop Mixing and Technical Services (Pty) Limited and Others (CCT202/18) [2019] ZACC 25 (28 June 2019) held that an employee's duty of disclosure on the basis of good faith can never be unilateral. The employee's duty to disclose must be accompanied by a reciprocal duty on the employer to protect the employee's individual rights. In the context of a strike, an employer's reciprocal duty of good faith would require, at the very least, that employees' safety should be guaranteed before expecting them to come forward and disclose information or exonerate themselves.
The practical reality is that employers can seldom guarantee the safety of an employee who gives evidence against co-employees. This has limited the effectiveness of a charge of derivative misconduct. But in another setting - without strike violence and the threat to an informer's safety - the recent judgment in Hollywood Sportsbrook Gauteng v Commission for Conciliation Mediation and Arbitration and Others (JR2519/21) [2024] ZALCJHB 146 (7 April 2024) has accepted that the criminal law concept of "the accomplice" can be used to discipline an employee with knowledge of misconduct by other employees who does not report the wrongdoing to the employer.
Read more (Worklaw subscriber access only)
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Bruce Robertson
May 2024
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