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SEPTEMBER 2015 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 discusses a recent LC judgment on the topic of 'Conflicting versions in the evidence: what are the consequences?' We also consider three new cases: The first case looks at what can be expected of a probationary employee. The second case looks at whether a retrenchment agreement can be extended to employees who are not members of the majority union. The third case looks at a contractual obligation to allow polygraph testing.

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

LATEST CASES

What can be expected of a probationary employee?


When the LRA was passed in 1995, the drafters of the Code of Good Practice: Dismissal very deliberately included a section on probationary employees which brought clarity to the role of probation. The purpose of probation as stated in item 8(1)(b) of the Code is to give the employer an opportunity to evaluate the employee's performance before confirming the appointment. Item 8(1)(c) goes on to provide that probation should not be used to deprive employees of the status of permanent employment. The period of probation should be determined in advance and be of reasonable duration.

Of relevance to the recent case of Rheinmetall Denel Munition (Pty) Ltd v National Bargaining Council for the Chemical Industry & others (2015) 36 ILJ 2117 (LC) is the Code's provision for assessment of a probationary employee. The Code requires that during the probationary period, the employee's performance should be assessed. An employer should give an employee reasonable evaluation, instruction, training, guidance or counselling. If the employer determines that the employee's performance is below standard, the employer should advise the employee of any aspects in which the employer considers the employee to be failing to meet the required performance standards. If the employer believes that the employee is incompetent, the employer should advise the employee of the respects in which the employee is not competent. If all of this still fails to resolve the problem, the Code provides that the employer may either extend the probationary period or dismiss the employee after allowing the employee or his representative to make representations.

Of particular relevance to any challenge to an employer's right to dismiss a probationary employee, is item 8(1)(j) that states as follows:

Any person making a decision about the fairness of a dismissal of an employee for poor work performance during or on expiry of the probationary period ought to accept reasons for dismissal that may be less compelling than would be the case in dismissals effected after the completion of the probationary period.

The above wording is clumsily drafted. But it effectively means that during probation, before the employee is really entrenched at the workplace, the employer has the right to dismiss for lesser reasons than would be the case after probation. This must then be recognised by any arbitration or court considering the matter.

Turning to the facts in Rheinmetall, the employee was appointed on a six-month probationary period as the personal assistant to the General Manager: Human Relations. Five months later she was dismissed before the probationary period had expired, for dishonesty, poor performance and failure or refusal to perform instructions.

The arbitrator who decided her unfair dismissal claim found her not guilty of dishonesty, despite the employee having pleaded guilty to this charge. He found she had pleaded guilty under "under the most stressful circumstances in an effort to defuse the situation". The arbitrator found further that, even though she was guilty of failing to perform regular and lawful instructions and poor work performance, the sanction of dismissal was too severe and ordered her reinstatement retrospective to the date of her dismissal with backpay. The arbitrator concluded that the approach of the employer had been to see if the employee could 'swim without sinking' and had not given her any prior formal warning for her dismissal. Consequently, he found that the sanction of dismissal was too harsh.

The Labour Court held that the arbitrator had used the incorrect approach in evaluating a probationary employee appointed to a responsible position. The LC also found that the arbitrator had not given weight to evidence of the employee's dishonesty. The LC reviewed and set aside the arbitrator's award, and found that the dismissal was fair. The Court held that when dealing with a person on probation in a responsible position like a professional assistant, where the person claims to have the necessary experience to do the job, it is not unreasonable for the employer simply to point out the perceived shortcomings of the probationer and to emphasise the importance of improving her performance if she wants to be permanently appointed. The Court found that the bargaining council arbitrator had failed to appreciate this, and appeared to believe that the employer had to treat such a probationer as someone who was still in training.

Extending a retrenchment agreement to non-parties

Section 23(1)(d) of the LRA has a provision with far-reaching consequences. It provides that a collective agreement binds employees who are not members of the registered trade union or trade unions party to the agreement if -

  1. the employees are identified in the agreement;
  2. the agreement expressly binds the employees; and
  3. that trade union or those trade unions have as their members the majority of employees employed by the employer in the work-place.


Does this provision include a collective agreement that is effectively a retrenchment agreement with the majority union? This was the issue in AUSA and Others v SAA Soc Ltd and Others (J1506/15) [2015] ZALCJHB 258 (17 August 2015). The case involved an application to interdict SAA from proceeding with a large-scale retrenchment exercise, pending compliance with a fair procedure.

SAA had entered into a collective agreement with NTM, UASA and SACCA (who jointly represent some 80% of employees in the SAA workplace) and SAA management employees (through their representatives). In terms of the agreement, the parties reached consensus on many issues - the existence of an economic rationale for the retrenchment; selection criteria; the termination date; severance pay; the timing of dismissals, and so on. Importantly, the retrenchment agreement reflected that it is extended to non-party employees in terms of section 23(1)(d).

The essential question in this matter was whether a retrenchment agreement concluded with unions representing the majority of employees in the workplace, and extended in terms of section 23(1)(d), serves to settle any dispute that non-union members and minority union members have about the retrenchment process. The Labour Court held that as a matter of legal principle, a retrenchment agreement can validly be extended to non-party employees in terms of section 23(1)(d). On the facts of this matter, it held that it was permissible to do so.

This case is a powerful reminder of the majoritarian principle. Even though there may be a perception that all employees must be consulted where dismissals based on operational requirements are anticipated, s 189 is clear. It says that when an employer contemplates dismissing one or more employees for reasons based on the employer's operational requirements, the employer must consult "any person whom the employer is required to consult in terms of a collective agreement". That 'person' is usually a majority trade union and in terms of a recognition agreement must be consulted in these circumstances. While the majoritarian principle may side-line minority interests, it remains the underlying theme of the LRA in many respects.

Is an agreement to allow polygraph testing binding?

The employer was involved in the manufacturing and personalizing of secure operating devices such as smart cards and sim cards. Standard Bank, one of the employer's biggest clients, sent a letter to the employer alleging that some cards and data had been removed from the employer's premises and as a result of which a loss amounting to R50 000 000 was suffered by Standard Bank. Due to the significance of the claim, the possible damage to the employer's reputation and relationship with Standard Bank, the employer decided to conduct an investigation into the Standard Bank's claim. As part of the investigation, the employer requested all its employees, including senior management, who had access to sensitive data, to undergo polygraph tests. A term of some of their contracts of employment allowed the employer to demand polygraph tests.

The union and its members indicated an unwillingness to participate in the polygraph test process despite several meetings and explanations by polygraph experts. A group of 189 employees signed a petition refusing to undergo a polygraph test. The employer then issued a letter to 28 individual employees whose employment contracts included the requirement for polygraph testing, noting that despite its attempts to consult them and their union on polygraph tests, they had failed to undergo the tests. When they did not submit themselves to be tested, they were charged for gross insubordination and a breach of the contract of employment, leading to a serious breach of trust. The chairperson of the disciplinary enquiry found the employees guilty of the charge of gross insubordination and found summary dismissal as the appropriate sanction.

Aggrieved by the findings, the employees referred a dispute of unfair dismissal to the CCMA. The commissioner held that whilst the employees were guilty of the alleged misconduct, their dismissal was substantively unfair and awarded compensation based on five months' remuneration. The commissioner based his decision on the view that the employer had presented no evidence to show whether the employees had a history or record of misconduct, that dismissal for misconduct should be for instances of such gravity that makes continued employment intolerable, and the fact that not all employees whose contracts provided for polygraph testing had been charged.

On review the Labour Court found, in essence, that the decision reached by the commissioner fell within a range of reasonableness and dismissed the employer's application for review and made no order as to costs.

On appeal to the LAC in Gemalto South Africa (Pty) Ltd v Ceppwawu obo Louw and Others (JA 54/14) [2015] ZALAC 36 (27 August 2015), it was also held that the commissioner's decision was not unreasonable. The employer's appeal was dismissed with costs by the LAC, which found that the employer's attempt to only target 23 employees out of the 189 who refused to undergo the tests was unfair - it was tantamount to making an example of the 23 employees for the others.

The LAC concluded that the dismissal of these employees had little to do with the purpose of the polygraph testing exercise, which was investigating the Standard Bank claim. By only subjecting 23 employees to the polygraph testing out of the many, it was highly unlikely they would uncover the "suspected syndicate". There was therefore no rational connection between the purpose of discipline and the alleged misconduct sought to be investigated.

This decision places greater store on who is identified for testing and on what basis that person is selected, than a contractual agreement to submit to polygraph testing at the discretion of the employer. Because of the invasive nature of polygraph testing, the effect of this LAC judgment is that there must be a justification why particular employees are requested to submit to the process, if all employees are not charged with the same offence.

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Bruce Robertson
September 2015
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