Public Newsletter
Worklaw is a subscription based labour law service developed by leading South African labour lawyers and arbitrators. Worklaw gives you all you need to manage labour law at the workplace. Go to www.worklaw.co.za
Worklaw subscribers receive a monthly newsletter containing commentary on the latest labour law cases and trends. This newsletter contains an article which looks at 'Representation at the CCMA' following a Labour Court order on 21 September that has opened the door to wider representation at the CCMA. We also look at three new cases: In the first case we look at a case where the court upheld a contractual right to severance pay even though there was no retrenchment. The second case tells a story of witchcraft in the workplace. The third case is a LAC judgment which interprets a typically legal phrase of "not reasonably practicable" in the context of reinstatement.
This public newsletter is a free edited version of the subscriber newsletter.
RECENT CASES
'Caveat subscriptor' - let the signer beware!
Seven years after embarking on a business venture a new contract of employment was signed. Unusually, the contract was drafted by the employee's brother. The employer testified that he had "paged through it" before he initialled each page and signed it in full; he disputed that he had read it properly. He said in his evidence that he had signed it "to his detriment". This employment contract contained an unusual clause with regard to severance pay, stating that in the event that the employee's employment was terminated for any reason other than that of gross dishonesty, the employee would be entitled to the payment of a severance package.
Severance pay is usually a form of compensation only when the employer terminates the contract for operational reasons. Because it is a 'no fault' dismissal, the severance pay is a recognition of past service and loyalty. But what if the contract is terminated by the employer for other reasons or even by the employee - eg a resignation? Could this employee claim severance pay after resigning?
The Labour Court in De Wet v World Luxury Hotel Awards (Pty) Ltd (C 763/15) [2016] ZALCCT 31 (1 September 2016) was asked to interpret this contract. The Court held that the contract allowed the employee to terminate employment and claim severance pay, even though the termination did not arise because of operational requirements. This was a shock to the employer who learned the hard way: a failure to carefully check the contract of employment meant that severance pay was due where it arose from a contractual right, distinct from statutory rights to severance pay arising from terminations for operational requirements.
While this case is fairly unusual, it is a warning that the term 'severance pay' can also be used to mean a payment on termination of employment which might not be a retrenchment. This kind of payment obligation may be found in a 'separation agreement' which applies on any termination of an unsuccessful employment relationship. This judgment confirms that courts will interpret the contract or agreement and will not refuse a contractual obligation just because the termination does not follow a retrenchment. The lesson from this judgment is to not sign a contract until you have carefully studied the contents!
Witchcraft and misconduct
An employee was dismissed for serious misconduct. It was alleged that he had used traditional medicine (muti) to intimidate and harass the employer's HR manager, N. The employee believed that his dismissal was unfair and referred a claim for unfair dismissal to the bargaining council. The matter was not resolved at conciliation and proceeded to arbitration.
At the arbitration in National Sugar Refining & Allied Industries Union on behalf of Mngomezulu and Tongaat Hulett Sugar Ltd (Darnall) (2016) 37 ILJ 2441 (BCA) the employer produced video footage from its CCTV cameras. The employee was shown to be the only person in the vicinity of N's car at the time when the black substance was placed on her vehicle, a substance N submitted was 'muti' designed to threaten and intimidate her. The employer led the evidence of a qualified sangoma who confirmed N's view that the substance was muti designed to harm her.
The arbitrator accepted that witchcraft and muti had far-reaching consequences for the black African community and that it could not be viewed through the eyes of a western society. The right to one's own cultural beliefs is constitutionally protected. The arbitrator commented that the act of witchcraft need not achieve its purpose in order to constitute misconduct, and the arbitrator accepted the employer's argument that the mere act of using muti to attempt to harm or intimidate a fellow employee constituted a serious act of misconduct. The evidence suggested that the employee had indeed committed that act of misconduct and given that he was already on a final written warning, the arbitrator was satisfied that dismissal was the appropriate sanction, and found it to be substantively fair.
The arbitrator based her decision on this principle: The act of witchcraft does not have to achieve its purpose for it to become an act of misconduct - only the perpetrator and the sangoma would know the exact effect desired. The mere use of muti or traditional preparations to intimidate, scare or threaten another person is sufficient to constitute misconduct. It amounts to serious intimidation and cannot be tolerated in the workplace.
'Not reasonably practicable'
In an arbitration the arbitrator found that dismissal was not an appropriate sanction and relied on s 193(2)(c) of the LRA to refuse re-instatement. This states as follows:
"The Labour Court or the arbitrator must require the employer to re-instate or re-employ the employee unless it is not reasonably practicable for the employer to re-instate or re-employ the employee".The arbitrator had relied on a short period of service and poor performance as reasons why re-instatement was not 'reasonably practicable' in the circumstances of this case.
The Labour Appeal Court in Xstrata South Africa (Pty) Ltd (Lydenburg Alloy Works) v Num Obo Masha and Others (JA 4/15) [2016] ZALAC 25 (14 June 2016), in upholding the decision of the Labour Court, gave meaning to the words 'not reasonably practicable' in s193(2)(c). The LAC held that the term "not reasonably practicable" in section 193(2)(c) does not equate with 'practical' but refers to the concept of 'feasibility'. Something is not feasible if it is 'beyond possibility'. The LAC agreed with the LC that on the facts of this case, there was no reasonable basis for denying the employee reinstatement. The arbitrator's award was accordingly overturned.
The implications of this judgment is that if an employer wants to resist reinstatement in terms of s193(2)(c), it will have to lead evidence that it is not feasible under the circumstances. Courts in the past have given a very wide application to the reinstatement requirements of the LRA. In Myers v The National Commissioner of the South African Police Service and others (ZALCCT 37/2013) 28 January 2014 the term "reinstate" was held to mean that the employee must be put back into the same position as before the dismissal, on the same terms and conditions, and irrespective of whether another employee now fills the post. 'Feasibility' (or the lack thereof) will likely mean something more than the post no longer exists or that another employee has been appointed to that post.
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Bruce Robertson
October 2016
Copyright: Worklaw
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