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 "Correcting a mistake in a contract: what can be done?" in which we highlight a case which endorsed an informal 'rectification' by the employer because its mistake was 'bona fide'. We also discuss three judgments: The first case, a Labour Appeal Court judgment, deals with when procedural unfairness impacts on substantive fairness. The second case considers the consequences of an unlawful instruction being given to an employee. The third case looks at the jurisdictional limitations on the CCMA in deciding disputes about monetary claims against the employer.
This public newsletter is a free edited version of the subscriber newsletter.
NEW LEGISLATION
Guidance note on mining industry diseases
The Chief Inspector of Mines has in terms of section 49 (6) of the Mine Health and Safety Act 29 of 1996) issued the Guidance Note to provide information for mining sector employers in developing programmes to prevent and manage non-communicable diseases and mental health disorders. 'NCDs', also known as chronic diseases, are diseases that are neither spread through infection nor other people, and tend to be of long duration and the result of a combination of genetic, physiological, environmental, behavioural and lifestyle factors. They may be modified through lifestyle interventions or behaviours. The main NCD groups in South Africa are cardiovascular diseases, endocrine and metabolic disorders, cancers and chronic respiratory diseases.
URGENT INTERDICT FAILS
Worklaw subscribers may be aware various parties have challenged the legislation implementing affirmative action targets in 18 economic sectors that were gazetted in April 2025 - see Employment Equity Sectoral Targets which were comprehensively covered in Worklaw's April 2025 subscriber newsflash. These challenges included an urgent High Court application by the National Employers' Association of SA (NEASA) and Sakeliga NPC, a non-profit organization representing mainly businesses, that attempted to interdict the implementation of the sectoral targets before the commencement of the September 2025 employment equity reporting period.
The interdict application was based broadly on 3 grounds: that the Labour Minister failed to publish the proposed draft notice, a lack of consultation about its contents, and the alleged arbitrariness of the numerical targets set. The High Court has now given judgment in this matter - see Neasa and Sakeliga NPC v Minsiter of Employment and Labour and Others (HC) case no 107022/2025 - and rejected the interdict application. Whilst a substantive review of the sectoral targets remains to be considered by the courts, the urgent interdict was considered an inappropriate remedy, as it cannot undo completed action (the Minister's statutory powers were exercised in April 2025 when the targets were published). The Court also said it did not have authority to suspend the lawful exercise of a statutory power by the Minister. The consultation requirements with stakeholders had been met when draft targets were gazetted in 2023 and 2024 with 30-day periods for comment allowed, and the sectoral targets were not arbitrary or discriminatory, being based on data from Statistics SA and advice from the Commission for Employment Equity (CEE).
The effect of this judgment is that, whilst other legal challenges to the sectoral targets still have to be determined, employers should currently proceed on the basis that the gazetted sectoral targets are binding and have to be complied with.
RECENT CASES
Procedural fairness impacting on substantive fairness
During 2020, the HeroTel Group announced that four of its entities, including its subsidiary Fusion Wireless trading as Sonic Telecoms ("Fusion"), would be undergoing a retrenchment exercise. The affected employees were employed by Fusion, a company that supplies wireless internet connectivity.
On 1 September 2020, Fusion issued its employees with a s 189(3) notice contemplating retrenchments. The rationale for retrenchment was described as being due to the financial position of Fusion - it was experiencing a worrying trend of a downturn in sales, an increase in churn (increase in the number of clients who ceased doing business with Fusion), and an increase in the number of customers who were choosing fibre over wireless. Adding to this, the national lockdown due to the COVID-19 pandemic, had impacted the business and its customers' ability to make payments on time. According to the notice, the business was not in as sound a financial position as it had been in the past, and it was unable to continue operating as it had.
The affected employees contested the rationale presented for possible retrenchments, submitting that the reason for retrenchments was due to a series of intercompany transactions between Fusion and the other entities within the HeroTel Group which resulted in the sell off of key revenue streams to HeroTel, negatively impacting the finances of Fusion.
The Labour Court found that the redirection of company money to the holding company, leading to the gradual transfer of the business and its eventual voluntary liquidation and s 197 transfer, supported the contention that the retrenchments were a fait accompli (ie a foregone conclusion). Further, the Court found that no evidence had been led that fair and objective selection criteria had been used, or that any alternatives to retrenchment had been considered. On that basis, the Court found that the dismissals were substantively unfair and ordered the retrospective reinstatement of the affected employees.
The case was then referred on appeal to the Labour Appeal Court in HeroTel (Pty) Ltd v Moses and Others (CA05/2024) [2025] ZALAC 42 (10 July 2025). The LAC considered whether a faulty procedure impacts on substantive fairness.
Read more (Worklaw subscriber access only)
When an employee obeys the supervisor's unlawful instruction
In Mbuyane v Dekker NO and Others (JR1173/2020) [2025] ZALCJHB 224 (18 June 2025) the Labour Court was asked to decide what options an employee has when given instructions which the employee knows are unlawful. If the employee complies, does this result in a breakdown of the trust relationship?
The employee, M, was performing the function of a treasury custodian together with N, who was his supervisor. They were responsible for receiving cash from a security company (SBV). The rule was that if the amount received was incorrect, the cash had to be returned to the security company. A balance sheet had to be completed which corresponded correctly with the amounts received from the security firm.
Coinage was received but when M weighed it, a shortage was discovered in one of the bags containing 20 and 10 cent coins. The arbitrator later found that M correctly notified N of the shortfall, who agreed on the shortfall and that the bag should be returned to SBV when it made the next cash delivery. However, N advised him that the amount that would be captured on the system would be recorded as the full amount that was originally ordered, which meant that the balance sheet would misrepresent the true position.
After an inspection the shortfall was discovered and charges against M were framed in the following way:
"Alleged dishonesty in that you knowingly submitted a false balance position from the end of 21st October 2019 to the 22nd October 2019 as discovered upon surprise check on the 23rd October 2019."M's defence was that he feared he would be acting insubordinately if he disobeyed N, that he had no formal training as a treasury custodian, and that he had discharged his obligations by reporting the shortfall to her. He and his supervisor, N, were both dismissed for dishonesty relating to the submission of a false balance position arising from the incident.
The CCMA arbitrator found M's dismissal was substantively and procedurally fair, and M took the matter on review to the Labour Court.
Read more (Worklaw subscriber access only)
The CCMA's jurisdiction in claims for outstanding pay
In Safeguard Chemicals t/a Maris Polymers South Africa v Frydas and Others (JR631/20) [2022] ZALCJHB 359 (20 October 2022) the Labour Court had to decide if there are limitations on arbitrators ordering an employer to pay outstanding amounts owing to an employee who earns above the BCEA earnings threshold, when hearing an unfair dismissal dispute involving that employee.
The employee who earned above the earnings threshold set under section 6(3) of the BCEA (currently set at R261 748 per annum), was dismissed for poor work performance and referred an unfair dismissal dispute to the CCMA. He sought compensation for his alleged unfair dismissal as well as payment for outstanding salaries, 13th cheque and 20% profit share.
The commissioner found the employee's dismissal to have been substantively and procedurally unfair and awarded him 5 months' compensation set at R250 000. In terms of section 74(2) of the BCEA, the commissioner also ordered the employer to pay the employee outstanding salaries of R240 200, a 13th cheque of R50 000 and profit share owing to the employee of R111 845. In total this amounted to R652 045.
Section 74(2) provides as follows:
"If an employee institutes proceedings for unfair dismissal, the Labour Court or the arbitrator hearing the matter may also determine any claim for an amount that is owing to that employee in terms of this Act or the National Minimum Wage Act, 2018The employer sought to review this award in the Labour Court.
Read more (Worklaw subscriber access only)
ARTICLE: Correcting a mistake in a contract: what can be done?
By Prof Alan Rycroft
In Worklaw's February 2025 newsletter our article was "Before you sign: 8 common mistakes with contracts". This month we focus on the period after the contract is signed, when one or both of the parties realize that there is a mistake in the contract.In the case of National Union of Metalworkers of South Africa and Another v Transalloys (Pty) Ltd (JS237/15) [2017] ZALCJHB 364 (21 September 2017) the Labour Court held that an adjustment / correction of a mistake does not constitute a breach of contract but rather an informal rectification.
In this case the employer placed an internal advertisement for three positions of laboratory analysts. In the advertisement the minimum requirements were recorded as well as the grade or level of the position as level 5C.
The employees applied for the advertised positions, they were shortlisted and interviewed, and they were successful. The level of the position and the salary attached to it were discussed with the employees during the interview and they were informed that the successful candidates would be employed and paid at salary level 5C.
Notwithstanding the above, in the offer of employment the terms and conditions of employment were set out and it was recorded that the employees would be appointed as lab analysts, level 5A of the 5 grade pay structure. The employees commenced employment as lab analysts and they were remunerated on the salary scale attached to level 5A. All the other lab analysts were remunerated at salary level 5C and there was no difference between the duties and responsibilities of the lab analysts employed and remunerated on level 5C and the employees who were remunerated on level 5A.
The HR manager met with the employees and he explained to them that there was a payment error in that they should be paid on level 5C and not level 5A, that the error would be corrected and that they would not be expected to pay back the money that was already paid to them in error. The employer also issued letters to the employees titled 'pay correction'. The employees' salary was reduced to level 5C. The employer did not recover the difference paid between level 5A and 5C for March and April 2014.
NUMSA on behalf of the employees filed a grievance and the nature of the grievance was recorded as a violation of the contractual agreement between the employer and the lab analysts in that their salaries were reduced and NUMSA demanded that the employer should adhere to the contractual agreement. The parties were unable to resolve the issue internally or at the bargaining council and the Applicants approached the Labour Court.
Read more (note - only available to Worklaw subscribers)
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Bruce Robertson
September 2025
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