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SASLAW CAPE TOWN CHAPTER SEMINAR 11 APRIL 2012 Dispute resolution Unfair dismissals and unfair labour practices. Name of presenter: Alec Freund S.C. Based (with only minor adaptions) on a presentation to SASLAW Gauteng by Anton Myburgh S.C. Themes to the amendments.

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SASLAW CAPE TOWN

  • CHAPTER SEMINAR
  • 11 APRIL 2012
  • Dispute resolution
  • Unfair dismissals and unfair

labour practices

Name of presenter: Alec Freund S.C.

Based (with only minor adaptions) on a presentation to SASLAW Gauteng by Anton Myburgh S.C.

themes to the amendments
Themes to the amendments
  • Enhancing the effectiveness of the LC and CCMA
  • Rectifying anomalies and clarifying uncertainties that have arisen from the interpretation and application of various sections since 2002
dispute resolution amendments to 16 sections
DISPUTE RESOLUTION – AMENDMENTS TO 16 SECTIONS
  • 115: functions of the CCMA
  • 127: accreditation of BCs
  • 138: general provisions for arbitration proceedings
  • 143: enforcement of arbitration awards
  • 144: variation and rescission
  • 145: review of arbitration awards
  • 147: private arbitration override (section 147(6))
  • 150: CCMA conciliation in public interest
dispute resolution amendments to 16 sections1
DISPUTE RESOLUTION – AMENDMENTS TO 16 SECTIONS
  • 151: establishment and status of the LC
  • 154: LC judges’ tenure, etc
  • 157: jurisdiction of the LC
  • 158: powers of the LC
  • 159: Rules Board for the LC
  • 161: Representation before the LC
  • 168: Composition of the LAC
  • 170: LAC judges’ tenure, etc
dispute resolution ccma bcs
Dispute resolution: CCMA / BCs

Amendment of section 115 (functions of CCMA)

  • CCMA rules
    • review every 2 years
    • no longer responsible for ESC
    • power to make rules regulating or limiting representation
    • power to make rules regulating consequences of non-attendance

(cfPremier Gauteng v Ramabulana N.O. (2008) 29 ILJ 1099 (LAC) : Can Commissioner dismiss referral if employee fails to attend?)

  • Assist indigent employees to serve documents
  • Widening of powers to provide advice and training
dispute resolution ccma bcs1
Dispute resolution: CCMA / BCs

Amendment of section 127 (accreditation of BCs)

  • Accreditation to certify ballots
dispute resolution ccma bcs2
Dispute resolution: CCMA / BCs

Amendment of section 138 (general provisions: arbitration)

  • No longer necessary for CCMA to lodge original arbitration award with the LC
dispute resolution ccma bcs3
Dispute resolution: CCMA / BCs

Amendment of section 143 (enforcement of awards)

  • Award for payment of money which has been certified may be enforced as if it were an order of the LC ‘in respect of which a writ has been issued’
  • Award for reinstatement which has been certified may be enforced, ‘without further order’, by way of contempt proceedings in the LC
  • Enforcement of awards to pay money will occur in terms of the rules and tariffs applicable to the Magistrate’s Court
dispute resolution ccma bcs4
Dispute resolution: CCMA / BCs

Amendment of section 144 (variation and rescission)

  • Award or ruling can be rescinded by Commissioner if good cause is shown
dispute resolution ccma bcs5
Dispute resolution: CCMA / BCs

Amendment of section 145 (review of awards)

  • Applicant must apply for a hearing date within 6 months of delivery of application (failure is condonable)
  • Review will not suspend the operation of the award, unless security is furnished
    • 24 months’ remuneration where the award is for reinstatement
    • the equivalent of the amount of compensation awarded
  • Judgment must be handed down within 6 weeks
  • Review interrupts prescription
dispute resolution ccma bcs6
Dispute resolution: CCMA / BCs

Legislative intervention to address systemic failures

  • Shoprite Checkers v CCMA [2009] 7 BLLR 619 (SCA) (delivered in March 2009)
  • Equity Aviation Services v SATAWU [2012] 3 BLLR 245 (SCA)
dispute resolution ccma bcs7
Dispute resolution: CCMA / BCs

Amendment of section 147(6) (private arbitration override)

  • CCMA must elect to itself arbitrate
    • if the employee earns less than 4 times the prescribed BCEA threshold and is required to pay any part of the costs, or
    • if the arbitrator is not independent of the employer
dispute resolution ccma bcs8
Dispute resolution: CCMA / BCs

Amendment of section 150 (conciliation in public interest)

  • director may initiate conciliation at request of parties, or in the public interest
  • before appointing a commissioner, director must consult with the parties and secretary of BC
  • director may appoint commissioner who has already conciliated the dispute
  • to assist the appointed commissioner, director may appoint a representative of labour and business
  • CCMA’s intervention does not affect parties’ entitlement to strike or lock-out
dispute resolution lc
Dispute resolution: LC

Amendment of section 151 (establishment and status of LC)

  • Status equal to a ‘Division of the High Court’
  • Note: sections 153(2)(a), 154(7) and 160(2) should be amended accordingly
dispute resolution lc1
Dispute resolution: LC

Amendment of section 154 (LC judges’ tenure, etc)

  • A number of amendments providing for security of tenure of LC judges
  • These amendments are contained in a schedule to the Superior Courts Bill, 2011, but are being fast-tracked
dispute resolution lc2
Dispute resolution: LC

Amendment of section 157 (jurisdiction of LC)

  • Amendment excludes the jurisdiction of LC to adjudicate disputes that are required, not only by the LRA but by ‘any employment law’, to be determined by arbitration
dispute resolution lc3
Dispute resolution: LC

Amendment of section 158 (powers of LC)

  • LC empowered to order compliance with LRA or ‘any employment law’
  • Except in exceptional circumstances, LC may not review any decision or ruling made during conciliation or arbitration before issue in dispute has been finally determined (Avoid “jurisdictional” reviews?)
dispute resolution lc4
Dispute resolution: LC

Amendment of section 158 (continued)

  • LC’s assumption of jurisdiction under section 158(2): consent of parties no longer required (expediency is the sole criterion), and LC no longer sits as arbitrator
  • Judgments of LC to be handed down within 6 months
  • Note: no similar time-limit in respect of handing down of judgments of LAC
dispute resolution lc5
Dispute resolution: LC

Amendment of section 159 (Rules Board)

  • Minister of Labour instead of Justice to appoint members of Rules Board
  • JP must ensure that Rules Board meets at least once every 2 years to review rules
dispute resolution lc6
Dispute resolution: LC

Amendment of section 161 (representation before LC)

  • ‘Members’ of trade unions or employers’ organisations no longer have right of appearance
  • Save for legal practitioners, persons who have right of appearance (directors, office bearers, officials) may not charge for their services, unless permitted by LC
  • Overturns AHIEO v CCMA (unreported case No. J656/2011)
dispute resolution lac
Dispute resolution: LAC

Amendment of section 168 (composition of LAC)

  • LAC can now consist of HC and LC judges
  • The explanatory memorandum says that this is intended to ensure that LAC functions as a specialist institution
  • Note: in keeping with this amendment, section 153(2)(a) should be amended to provide that JP and DJP must be judges of the HC or LC, and section 169(2) should be amended to provide that judges of HC and LC may be appointed to serve as acting judges in LAC
dispute resolution lac1
Dispute resolution: LAC

Amendment of section 170 (LAC judges’ tenure, etc)

  • LAC judges may resign from that office
  • Provisions dealing with tenure and remuneration
unfair dismissals and unfair labour practices 7 amended sections
UNFAIR DISMISSALS AND UNFAIR LABOUR PRACTICES – 7 AMENDED SECTIONS
    • 186: meaning of dismissal
    • 187: automatically unfair dismissals
    • 188A: pre-dismissal arbitration
    • 188B: dismissal of employees earning above a threshold
    • 189A: large-scale retrenchments
    • 190: date of dismissal
  • 191: disputes about unfair dismissals and ULPs
unfair dismissal and ulp
Unfair dismissal and ULP

Amendment of section 186 (meaning of dismissal)

  • Various amendments to the effect that termination of employment (as opposed to termination of ‘a contract of’ employment) constitutes a dismissal
  • An employee engaged on a FTC is deemed to be dismissed if he reasonably expected employer to retain him on an ‘indefinite contract of employment’ but otherwise on the same or similar terms as the FTC, but the employer offered to retain the employee “on less favourable terms” or did not offer to retain the employee
  • Overturns LAC’s recent unreported decision on Geldenhuys v University of Pretoria
unfair dismissal and ulp1
Unfair dismissal and ULP

Amendment of section 187(1)(c) (auto unfair dismissal)

  • Currently a dismissal is automatically unfair if reason for dismissal is ‘to compel the employee to accept a demand in respect of any matter of mutual interest between employer and employee’
  • Amendment provides that a dismissal is automatically unfair if reason for dismissal is ‘a refusal by employees to accept a demand iro any matter of mutual interest between them and their employer’
unfair dismissal and ulp2
Unfair dismissal and ULP

Amendment of section 187(1)(c) (continued)

  • Explanatory memorandum

‘This section is amended to remove the anomaly arising from the interpretation of section 187(1)(c) in NUMSA v Fry’s Metals (2005) 26 ILJ 689 (SCA) which held that the section had been intended to remedy the so-called “lock-out” dismissal which was a feature of pre-1995 labour relations practice. The effect of this decision when read with decisions such as Chemical Workers Industrial Union & Others v Algorex (Pty) Ltd (2003) 26 ILJ 1917 (LAC) is to discourage employers from offering re-employment to employees who have been retrenched after refusing to accept changes in working conditions.’

unfair dismissal and ulp3
Unfair dismissal and ULP
  • ‘The amended provision seeks to give effect to the intention of the provision as enacted in 1995 which is to preclude the dismissal of employees where the reason for dismissal is their refusal to accept a demand by the employer over a matter of mutual interest. This is intended to protect the integrity of the process of collective bargaining under the LRA and is consistent with the purposes of the Act.’
  • Effect on retrenchments for refusal to agree to amended terms and conditions of employment?
  • Effect on lockout dismissals?
  • Applicable to an individual dismissal?
unfair dismissal and ulp4
Unfair dismissal and ULP

Amendment of section 188A (pre-dismissal arbitration)

  • Change of terminology from a pre-dismissal arbitration to ‘an enquiry’
  • Number of formal amendments to facilitate use of process, including that consent can now be given ‘in accordance with a collective agreement’
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Unfair dismissal and ULP

Amendment of section 188A (continued)

  • 2 amendments relating to protected disclosures
    • Despite sub-section (1) (which provides that parties must consent to the process), if an employee alleges that holding of a disciplinary / performance enquiry contravenes the PDA, employee or employer may require that enquiry be conducted in terms of this section
    • Holding of enquiry in terms of this section and suspension of employee pending outcome thereof do not constitute an occupational detriment as contemplated by the PDA
unfair dismissal and ulp6
Unfair dismissal and ULP

Amendment of section 188A (continued)

  • Explanatory memorandum

‘… the section is amended to avoid disputes where an employee claims that the holding of the enquiry into allegations of misconduct, and suspension pending such an enquiry, breaches the provisions of the PDA. By permitting either party to insist on an enquiry under this section the amended provision reduces the risk of collateral litigation, including HC litigation, which has been common in these circumstances.’

unfair dismissal and ulp7
Unfair dismissal and ULP

New section 188B (dismissal of employees earning above threshold)

  • Section applies to employees earning above prescribed threshold on dismissal
  • In determining threshold in consultation with NEDLAC, Minister must take into account ‘the extent to which employees, by reason of their earnings level, level of skill or position, have sufficient bargaining power to ensure that adequate provision may be made in their contracts of employment for protection against unfair dismissal’
unfair dismissal and ulp8
Unfair dismissal and ULP

New section 188B (continued)

  • Provided it is not automatically unfair, dismissal of employee to whom this section applies is deemed to be fair if employer gives employee prescribed notice or pays him in lieu thereof
  • Prescribed notice is 3 months or longer
  • In respect of contracts concluded before commencement date of this section, the section will take effect 2 years after commencement date
unfair dismissal and ulp9
Unfair dismissal and ULP

New section 188B (continued)

  • Explanatory memorandum
    • ‘At the heart of the change is the disproportionate cost, complexity, and impact on an employer’s operations of procedures to terminate the employment of high earning employees in circumstances where the reason for doing so may not fall clearly and neatly within the fair reasons for dismissal specified in section 188.’
unfair dismissal and ulp10
Unfair dismissal and ULP
  • High earning employees do not suffer from an inequality of bargaining power and are ‘generally able to influence to a material extent the terms on which they are engaged, and to make decisions about whether and on what terms to take up employment with a particular employer’
  • It is intended that the threshold will be in excess of R1-million per annum
  • Where high earning employees are dismissed summarily or on shorter notice than that prescribed, they will be entitled to exercise the remedies provided by LRA
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Unfair dismissal and ULP

New section 188B (continued)

  • JDG Trading v Brunsdon [2000] 1 BLLR 1 (LAC):

‘It is in the highest degree desirable that an employer should, in the interests of efficiency, be entitled to chose with as much freedom as is compatible with the honest exercise of a discretion, who it wants at or near the helm of its enterprise. Qualities like leadership, resolve, business acumen, judgment and effective administration are not readily provable in a court. A deficiency in such qualities is not readily provable either.’

    • Constitutionality of this amendment? (“Everyone has the right to fair labour practices”)
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Unfair dismissal and ULP

Amendment of section 189A (large-scale retrenchments)

  • A consulting party may not unreasonably refuse to extend period for consultation if such an extension is required to ensure meaningful consultation
  • Sub-section (19), which provides a statutory test for the substantive fairness of a large-scale retrenchment (including that the dismissal must be operationally justifiable on rational grounds), is deleted.
unfair dismissal and ulp13
Unfair dismissal and ULP

Amendment of section 189A (continued)

  • Explanatory memorandum

‘Specifying the test to be applied in section 189A retrenchments has led to uncertainty about whether and to what extent this should apply to cases of retrenchment where section 189 applies. The courts should retain their discretion to develop the jurisprudence in this area in the light of the circumstances and facts of each case and to articulate general principles applicable to all retrenchment cases.’

unfair dismissal and ulp14
Unfair dismissal and ULP

Amendment of section 190 (date of dismissal)

  • If employer terminates employee’s employment on notice, the date of dismissal is the date on which notice expires or, if an earlier date, date on which employee is paid all outstanding salary
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Unfair dismissal and ULP

Amendment of section 191 (disputes about unfair dismissals and ULPs)

  • Trigger to arbitration is date of issue of certificate, elapse of 30 days since referral ‘or any further period agreed between the parties’
  • CCMA’s jurisdiction over unfair retrenchments extended (at election of employee/s) to individual retrenchments and to employers who employ less than 10 employees