CURRENT LABOUR LAW 2009

CURRENT LABOUR LAW 2009 HALTON CHEADLE PETER LE ROUX CLIVE THOMPSON

INDIVIDUAL EMPLOYMENT LAW PETER LE ROUX

HIGHLIGHTS • Latest decisions dealing with contract principles • Automatic expiry of fixed term contracts • Inconsistency • Suspensions • Transfers

CONTRACTUAL RIGHTS : THREE TYPES OF CLAIMS • “Ordinary” contractual claims – eg. a claim for a salary. • Contractual rights arising from the incorporation of employer policies and procedures incorporating principles of fairness. • "New" contractual rights derived from the Constitutional right to fair labour practices.

CONTRACTUAL RIGHTS : THREE QUESTIONS • Should the courts develop common law contract principles to reflect principles of fairness and the Constitutional right to fair labour practices? • Is there a concurrent jurisdiction to hear contractual claims arising from the contract of employment ie do the High Court and the Labour Court both have the jurisdiction to consider contractual claims or is this the sole preserve of the Labour Court? • Should contractual claims be permitted at all or at least not be permitted where they overlap with the statutory rights?

DEVELOPING COMMON LAW CONTRACT PRINCIPLES Should the courts develop common law contract principles to reflect principles of fairness and the Constitutional right to fair labour practices? Mogothle v Premier of the North West Province and Another [2009] 4 BLLR 331 (LC) – recognition of a contractual right not to be unfairly suspended.

DEVELOPING COMMON LAW CONTRACT PRINCIPLES (Cont …) "As controversial as the judgments in Gumbi, Boxer Superstores and Murray, supra, might be as a matter of law or policy, they unequivocally acknowledge a common law contractual obligation on an employer to act fairly in its dealings with employees. This obligation has both a substantive and a procedural dimension. In determining the nature and extent of the mutual obligation of fair dealing as between employer and employee, the court must be guided by the unfair dismissal and unfair labour practice jurisprudence developed over the years.

DEVELOPING COMMON LAW CONTRACT PRINCIPLES (Cont …) If any "dual stream" jurisprudence emerges as a consequence and if this represents an undesirable outcome from a policy perspective, that is a matter for the Legislature to resolve. Finally, if an employer acts in breach of its contractual obligation of fair dealing, the affected employee may seek to enforce a contractual remedy which may, by virtue of section 77(3) of the BCEA, be sought in this Court." (At paragraph 30)

DEVELOPING COMMON LAW CONTRACT PRINCIPLES (Cont …) Should the courts develop common law contract principles to reflect principles of fairness and the Constitutional right to fair labour practices? Mohlaka v Minister of Finance and Others [2009] 4 BLLR 348 (LC) – there should be no such development.

IS THERE A CONCURRENT CONTRACTUALJURISDICTION? Yes – there is such a jurisdiction. Makhanya v University of Zululand [2009] 8 BLLR 721 (LC), Transman (Pty) Ltd v Dick and Another [2009] 7 BLLR 629 (SCA), Mogothle v Premier of the North West Province and Another [2009] 4 BLLR 331 (LC), Tsika v Buffalo City Municipality [2009] 3 BLLR 272 (E) and Hendriks v Cape Peninsula University of Technology and Others(2009) 30 ILJ 1229 (C).

IS THERE A CONCURRENT CONTRACTUALJURISDICTION? No – there is not. Mohlaka v Minister of Finance and Others [2009] 4 BLLR 348 (LC and Nomzamo Cleaning Services Co-Operative v Appie and Others (2008) 29 ILJ 2168 (E).

IS THERE A CONCURRENT CONTRACTUALJURISDICTION? But see : Gcaba v Minister for Safety and Security and Others CCT64/08 [2009] ZACC 26 where it appears that the High Court’s contractual jurisdiction was confirmed.

SHOULD CONTRACTUAL CLAIMS EXIST AT ALL? • MEC for the Department of Health, Eastern Cape v Odendaal and Others [2009] 5 BLLR 470 (LC) • Mohlaka v Minister of Finance and Others [2009] 4 BLLR 348 (LC)

REMEDIES FOR BREACH OF CONTRACT • Specific Performance – in the case of an employee reinstatement. • Damages – limited to the wages payable until the expiry of a fixed term contract or wages payable for the period of notice. • See Adv Alec Freund SC “Contractual remedies for Dismissed Employees” Paper presented to the 2009 SASLAW Conference.

MEASURING DAMAGES FOR BREACH OF CONTRACT • SA Music Rights Organisation Ltd v Mphatsoe [2009] 7 BLLR 696 (LC) • Labournet Payment Solutions (Pty) Ltd v Vosloo (Unreported J1086/08 7/8/2009) • Jafta v Ezemvelo KZN Wildlife [2008] 10 BLLR 954 (LC)

DEFINTION OF EMPLOYEE • Louw v African National Congress (2009) 18 CCMM 1.1.1 – • municipal councillor not an employee of the political party he or she represents. Appointment governed by the Local Government: Municipal Structures Act, 117 0f 1998.

SITUATIONS WHERE THERE IS NO EXPLICIT DISMISSAL BY THE EMPLOYER Marneweck v SEESA SA Ltd [2009] 7 BLLR 669 (LC) "[31] I align myself with the view expressed by Van Niekerk AJ above and wish to add that the enquiry into whether or not there is a dismissal goes beyond investigating whether the employer used the word "dismissal" in terminating the employment relationship with the employee. In other words, it is not the label placed on the termination that determined whether or not there was a dismissal.

SITUATIONS WHERE THERE IS NO EXPLICIT DISMISSAL BY THE EMPLOYER [32] Thus, as a matter of principle, an employment contract can be regarded as terminated based on the objective construction of the employer’s conduct which unequivocally repudiates the contract." See also SA Post Office Ltd v Mampeule [2009] 8 BLLR 792 (LC) and Advancenet (Pty) Ltd v Kropf (2009)28 ILJ 1062 (LC)

TERMINATION OF EMPLOYMENTDURING PERIOD OF NOTICE IBSA obo Rabin v Old Mutual Life Assurance Co SA Ltd [2008] 12 BALR 1204 (CCMA) Hlela v Richards Bay Coal Terminal Co Ltd (2009) 30 ILJ 441 (CCMA)

AUTOMATIC TERMINATIONOF EMPLOYMENT SA Post Office Ltd v Mampeule [2009] 8 BLLR 792 (LC) "[28] I do not agree. In my view any act by the employer which results, directly or indirectly, in the termination of the employee's contract of employment constitutes a dismissal within the meaning of section 186(1)(a). That is why the LRA recognises the concept of constructive dismissal (section 186(1)(e) of the LRA). I do not want to be understood as saying what happened here constitutes a constructive dismissal. I am not saying that.

AUTOMATIC TERMINATIONOF EMPLOYMENT (Cont …) SA Post Office Ltd v Mampeule [2009] 8 BLLR 792 (LC) The point I make is that a dismissal does not come about only when the employer tells the employee "you are fired". Thus, when the Minister removed the respondent from the applicant's board of directors, thereby triggering an automatic and simultaneous termination of his contract of employment with the applicant, she effectively dismissed him. With that there can be no quarrel."

AUTOMATIC TERMINATIONOF EMPLOYMENT (Cont …) SA Post Office Ltd v Mampeule [2009] 8 BLLR 792 (LC) "[45] The effective cause of termination of the respondent's contract of employment was clearly the Minister's removal of him from the applicant's board of directors. The automatic termination clause is impermissible and cannot rightly be invoked to stave off the clear and unambiguous effect of the Minister's overt act.

AUTOMATIC TERMINATIONOF EMPLOYMENT (Cont …) SA Post Office Ltd v Mampeule [2009] 8 BLLR 792 (LC) "[46] In the result, the automatic termination provisions of article 8.3, which regulates the termination of the contract of employment and is thus incorporated by reference therein, are impermissible in their truncation of the provisions of chapter 8 of the LRA and, possibly even, the concomitant constitutional right to fair labour practices (cf Igby v Johnson Matthey Chemicals Ltd [1986] IRLR 215 (CA)).

AUTOMATIC TERMINATIONOF EMPLOYMENT (Cont …) SA Post Office Ltd v Mampeule [2009] 8 BLLR 792 (LC) Provisions of this sort, militating as they do against public policy by which statutory rights conferred on employees are for the benefit of all employees and not just an individual, are incapable of consensual validation between parties to a contract by way of waiver of the rights so conferred."

AUTOMATIC TERMINATION OF EMPLOYMENT IN THE CONTEXT OFLABOUR BROKERS Sindane v Prestige Cleaning Services (unreported JS 594/07 27/08/09)

SECTION 20 OF THE MINE HEALTH ANDSAFETY ACT Section 20(1) : An employee may appeal to the Medical Inspector against a decision that an employee is unfit to perform any particular category of work. Section 20(7) : An employee lodging an appeal may not be dismissed on any grounds relating to unfitness to perform work pending the outcome of the appeal.

AUTOMATICALLY UNFAIR DISMISSALS:SECTIONS 187(1) AND 187(1)(d) Seaward v Securicor SA (Pty) Ltd (JA 68/06 ) Dismissal because employee lodged a grievance and represented a fellow employee at a disciplinary enquiry – automatically unfair dismissal.

INCONSISTENCY OF TREATMENT SATAWU and Others v Ikhwezi Bus Service (Pty) Ltd [2008] 10 BLLR 995 (LC) • An employer is entitled to impose different penalties on different employees for the same act of misconduct provided that there is a fair and objective basis for doing so. • The nature and extent of prior disciplinary sanctions imposed can legitimately form the basis for differentiation in penalty. • However, prior warnings for individual misconduct cannot be taken into account when considering the appropriate sanction for collective misconduct.

INCONSISTENCY OF TREATMENT Southern Sun Hotel Interests (Pty) Ltd v CCMA and Others (Unreported JR 243/05 24 July 2009) • Two forms of inconsistency - historical and contemporaneous. • Inconsistency has a subjective and an objective element. • Subjective element - an inconsistency challenge will fail if the employer did not know of misconduct allegedly committed. • Objective element – there must be a comparator in the form of a “similarly circumstanced” employee. This is the most controversial component of the test.

INCONSISTENCY OF TREATMENT Southern Sun Hotel Interests (Pty) Ltd v CCMA and Others (Unreported JR 243/05 24 July 2009) • An inconsistency challenge will fail if the employer is able to differentiate between the relevant employees on the basis, inter alia, of difference in personal circumstances, the severity of the misconduct or on the basis of other material circumstances. • An employee cannot profit from a manifestly wrong decision in the name of inconsistency. • An employer is entitled to “reinstate” a particular rule relating to sanction in the event of an incorrect application of discipline.

PROVING FAIRNESS OF THE DISMISSAL EDCON Ltd v Pillemer NO (191/2008) [2009] ZASCA 135 • The employer must lead evidence to show that dismissal is justified. • The evidence should come from the employee’s manager.

UNFAIR LABOUR PRACTICES –SUSPENSIONS Mogothle v Premier of the North West Province and Another [2009] 4 BLLR 331 (LC) • The employer must have justifiable reasons to believe that, prima facie at least, the employee has engaged in serious misconduct. • That there is some objectively justifiable reason to deny employees access to the workplace based on the integrity of any pending investigation into misconduct or some other relevant factor that would place the investigation or the interests of affected parties in jeopardy.

UNFAIR LABOUR PRACTICES –SUSPENSIONS (Cont …) Mogothle v Premier of the North West Province and Another [2009] 4 BLLR 331 (LC) • The employee must be given an opportunity to state a case before the employer makes any decision to suspend an employee. See also Sappi Forests (Pty) Ltd v CCMA and Others [2009] 3 BLLR 254 (LC)

UNFAIR LABOUR PRACTICES –DEMOTIONS AND TRANSFERS Nxele v Chief Deputy Commissioner, Department of Correctional Services [2008] 12 BLLR 1179 (LAC) • A transfer can be an unfair labour practice when it constitutes a demotion. • Demotion can occur even if the employee's rank and remuneration are not affected. The status, prestige and responsibilities of the new post are also relevant.

UNFAIR LABOUR PRACTICES –DEMOTIONS AND TRANSFERS (Cont …) Nxele v Chief Deputy Commissioner, Department of Correctional Services [2008] 12 BLLR 1179 (LAC) "[89] The appellant also did not consent to such demotion. In terms of the common law, a demotion without the employee's consent is unlawful. In terms of the LRA, the demotion of an employee without his consent would be unfair. That means that the transfer of an employee which constitutes a demotion is not in accordance with the LRA and, therefore, is contrary to the provision of section 96(2) and (3) of CSA and, therefore, unlawful.

UNFAIR LABOUR PRACTICES –DEMOTIONS AND TRANSFERS (Cont …) Nxele v Chief Deputy Commissioner, Department of Correctional Services [2008] 12 BLLR 1179 (LAC) At any rate, to the extent that the CSA or the PSA may permit the demotion of an employee by his employer without his consent, it would be in conflict with the LRA, which does not allow that, and in terms of section 210 of the LRA, the LRA would prevail over the PSA or the CSA."

UNFAIR LABOUR PRACTICES –DEMOTIONS AND TRANSFERS (Cont …) Nxele v Chief Deputy Commissioner, Department of Correctional Services [2008] 12 BLLR 1179 (LAC) "[90] Furthermore, the decision to transfer the appellant to the position of Area Co-Ordinator: Corrections, Pollsmoor was made without the appellant being consulted first or being given an opportunity to be heard. That is fatal to the transfer and renders it invalid, void and of no legal effect."

CURRENT LABOUR LAW 2009