Transcript Document

CASE UPDATES
by Dr. Mohamed Alli Chicktay B.Proc LLB. LLM. Ph.D.
Senior Law Lecturer at the University of Witwatersrand
Mediator and Arbitrator
Case updates have been divided under the following headings
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Contract cases
Dismissal cases
Strikes
Transfer of business
Trade Union liability
Contract cases
Motor Industry Staff Association and Another v Silverton Spray painters
and Panel beaters (Pty) Ltd) ([2012] ZALAC 42
• Facts: During 2008, the employer started experiencing financial difficulties
and as a result initiated a promotional campaign. As part of the campaign,
the employee was instructed to physically go to the prospective clients to
promote the business of the company and to procure work.
• The employee blatantly refused to comply with this instruction.
• The employee maintained that the distribution of brochures company clients
did not form part of his job description and the instruction the employer
gave amounted to a unilateral amendment of the terms and conditions of
his employment.
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The Labour Appeal held that that employees do not have a vested right
to preserve their working obligations completely unchanged as from the
moment when they first begin work. It is only if changes are so dramatic
as to amount to an entirely different job that there is a right to refuse to
do the job in the required manner.
It not a material change to the terms and conditions of the employee's
core duties but simply a variation in his work practice.
The employee did not have a vested right to preserve his working
obligations completely unchanged as from the moment when he first
began to work."
Accordingly, the Labour Appeal Court dismissed the employee's
appeal.
Dismissal Cases
National Union of Mineworkers obo Selemela v Northam Platinum Ltd
[2013] ZALAC 10
• Facts: On 20 August 2005,Selemela was dismissed for insubordination.
• At the CCMA Selemela’s dismissal was found to be substantively unfair
The commissioner felt that the employees prior warning for
insubordination had expired and could not be taken into account.
• The LAC held that an employee’s written warnings, even after they
have lapsed, may be taken into account, in determining the fairness of
his or her dismissal especially where the employee concerned is found
to have a propensity to commit acts of misconduct at convenient
intervals falling outside the period of applicability of the written
warnings.
Eskom Holdings Limited v Fipza and another (LAC) Case no. JA 56/10
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Facts: The applicant worked for Eskom in 2006 but was dismissed for
misconduct when she had failed to return to Eskom timeously after her
sabbatical. She was informed in her termination letter that she would
be able to apply for other jobs at Eskom if the opportunity arose.
In 2008 she applied for another job at Eskom. She went for an interview
and thereafter offered a position. As a result she resigned from her
current position.
Shortly thereafter Eskom retracted the offer that it had given her.
Eskom stated that the applicant had lied to Eskom by not disclosing in
her CV or in her interview that she had previously been dismissed by
Eskom for Misconduct.
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The labour Appeal court stated that it is generally not a requirement
that a CV should provide reasons for leaving previous employment. It is
a document whereby a job seeker aims to market himself or herself
concisely and succinctly to potential or prospective employers.
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Recruitment forms also do not require one to provide reasons for
leaving ones previous employment unless one is specifically asked this
question in the form. Recruitment forms need to be filled incompletely,
accurately and truthfully.
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The court found in favour of the former employee and referred the
matter back to the CCMA for an appropriate remedy
The Law Society of the Northern Province v Minister of labour and
others (2012) 33 ILJ 2798 (GNP)
• FACTS: 25(1)(c) of the CCMA rules denies employees a right to legal
representation at arbitration proceedings where the reason for the
employees
dismissal relates to misconduct or incapacity. The
commissioner can however allow for legal representation if the
commissioner and all parties consent, it would be unreasonable not to
allow legal representation, the complexity of the dispute, public interest
and having regard to the comparative abilities of the parties.
• The Law Society questioned the constitutionality of r25(1)(c) arguing
that it violates their members constitutional right to participate in the
profession.
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The court found the rule to be unconstitutional for the following reasons;
– irrational
– costs
– Would lawyers obstruct the process.
The court thus found r25(1)(c) to be unconstitutional and gave
parliament 36 months to amend the rules.
Solidarity and Another v Public Health and Welfare Sectorial
Bargaining Council and Others (JA 71/10) [2013] ZALAC 2; [2013] 4
BLLR 362 (LAC);
• FACTS: Section 17(5)(a)(i) of the Public Service Act 103 of 1994
entails is that if an employee absents himself from official duties for a
period exceeding one month without having obtained permission from
his head of the department, he shall be deemed to have been
discharged from the Public Service on account of misconduct with
effect from the first day on which he began the absence.
• An employee who was suspended took employment elsewhere during
his suspension. As a result his contract was terminated. The employer
argued that the employee was not dismissed but his contract had been
terminated by operation of law in terms of section 17(5)
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The LAC stated that In this case the employee did not have the
permission of the head of the department when he assumed other
employment.
The employee’s conduct fell within the circumstances envisaged in s
17(5)(a)(i) and (ii) of the PSA.
Even though on suspension he remained an employee of the
department and was subject to its authority in terms of the contract of
employment.
The department was also contractually obliged to pay his remuneration
during the suspension period.
Accepting or assuming other employment amounts to being absent
from duty because the employee is now rendering his services to
another employer which is irreconcilable with his employment
Summary of principles
• One can take into account warnings that have expired especially
where the employee has a propensity to commit the same
offence.
• One does not need to state ones reasons for ones dismissal in
ones CV or in the application.
• 25(c) of the CCMA rules was declared unconstitutional and
Parliament was given 3 years to amend the law
• If one is suspended one is not allowed to take employment
elsewhere
Strikes
SATAWU & Others v Moloto NO & Another (2012) 33 ILJ 2549 (CC)
• Facts: SATAWU and Equity Aviation Services (Pty) Ltd (Equity
Aviation) entered into a recognition agreement in terms of which the
union was the recognised bargaining agent of all the workers employed
by Equity Aviation.
• When negotiations failed the matter was referred to conciliation.
• When conciliation failed the union sent the employer a strike notice
stating that:” “We intend to embark on strike action on 18 December
2003 at 08H00.
• Equity Aviation argued that this notice was sent only on behalf of
SATAWU members and that non member had failed to send a notice in
accordance with section 65 thus participating in an unprotected strike
justifying dismissal.
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Both the Supreme Court of appeal and the minority judgement in the
Constitutional Court found in favour of the employer.
They agreed with the employer that a purposive interpretation of the
provisions is necessary.
In order to serve any purpose at all, the notice must be issued by, or on
behalf of, the parties who intend to strike.
This approach promotes orderly collective bargaining as it enables the
employer to reasonably determine the extent of and properly prepare
for the looming strike.
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The majority in the Constitutional Court disagreed.
The language used by the Legislature expressly requires only notice of
the commencement of the strike to be given to the employer by
“anyone involved in the dispute”, and does not oblige every
participating employee to issue the notice to exercise the right to strike.
Interpreting the section to mean what it expressly says is less intrusive
of the right to strike;
To require more information than the time of its commencement in the
strike notice from employees, in order to strengthen the position of the
employer, would run counter to the underlying purpose of the right to
strike in our Constitution – to level the playing fields of economic and
social power already generally tilted in favour of employers.
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In this case the union, which represented the dismissed strikers in the
wage negotiations and attempted conciliation under section 64(1)(a)
before embarking on strike action, was competent also to give the
single notice
To hold otherwise would place a greater restriction on the right to strike
of non-unionised employees and minority union employees than on
majority union employees.
It is these employees, much more than those who are unionised or
represented by a majority union, who will feel the lash of a more
onerous requirement.
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The LAC judgment is in line with a number of other LAC
County Fair Foods v Hotel Liquor Catering Commercial and Allied
Workers Union and Others (2006) 27 ILJ 348 (LC).The notice need
not specify the precise time of the day when the strike will start.
Tiger Wheels Babelegi (Pty) Ltd t/a TSW International v National
Union of Metalworkers of SA and Others (1999) 20 ILJ 677
(LC).Employees are not obliged to commence striking at the time
indicated in the notice provided that it is within a reasonable time
thereafter.
Transportation Motor Spares v National Union of Metalworkers of
SA and Others (1999) 20 ILJ 690 (LC).If employees who have already
commenced striking temporarily suspend the strike, they need not
issue a fresh notice to strike or refer the dispute for conciliation again.
Ahlesa Blankets (pty) Ltd v South African Clothing and textile
Workers Union (SACTWU) Case No: CA 5/2010
• FACTS: Employees refused to work on a shift system and partook in an
unprotected strike. They were given a ultimatums, a hearing and were
ultimately dismissed.
• The court stated that when determining whether employees dismissal
for participating in an unprotected strike is substantively fair one must
have regard to item 6(1) of the code together with item 7(b). Item 6(1)
determines whether strike procedures were complied with and the
extent of non-compliance. It also looks at whether the strike was in
response to unjustified conduct by the employer.
• Item 7(b) requires a tribunal to consider a number of factors when
determining whether dismissal is an appropriate sanction.
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While the unprotected strikers had fallen foul of item 6(1) by failing to
comply with any strike procedures without provocation their dismissal
was not justified in terms of item 7(b). The short duration of the strike,
absence of violence during the strike action, and the fact that the
employees had a clean disciplinary record made the penalty of
dismissal unfair
South African Clothing Textile Workers Union (SACTWU) and Others
v Yarntex (Pty) Ltd t/a Bertrand Group (PA07/10) [2013]
• At 15h30, on 17 September 2008, strike action commenced at
Bertrand's premises. The employer provided the strikers with three
ultimatums, the unprotected strikers were reminded that they were on a
final written warning and that they had to return to work or be
dismissed. They were also asked to make representations. They failed
to make any representations and were dismissed.
• The labour appeal Court found their dismissal to be both substantively
and procedurally fair. Procedurally they were given a chance to make
representations and substantively they did not comply with strike
procedures and were on a final written warning.
FAWU obo M Kapesi And 31 Others v Premier Foods LTD Case no:
CA7/2010
• Facts: Employees partook in a violent strikes where a number of non
strikers were beaten. Instead of conducting disciplinary proceedings for
misconduct violent strikers were dismissed for operational reasons.
• The court held that the employer could choose to dismiss violent
strikers for operational reasons as oppose to misconduct.
• The court found that the employers selection criteria was unfair as it
could not be proven that the employees who were retrenched
committed violence during the strike. Many witnesses were either afraid
to testify or were missing.
• Principle: one can dismissed violent strikers for operational reasons but
tone needs sufficient proof when applying this as a selection criteria.
Summary of principles
• Section requires a notice to be given by anyone and not by all
the employees who intend to strike
• When determining the whether a dismissal of unprotected
strikers are substantively fair one must have regard to item 6(1)
and item 7(2) of the code.
• One can dismiss violent unprotected strikers for operational
reasons
Transfer of Business
Section 197: Outsourcing and franchise agreements
• Outsourcing is where a contractor puts out a service in exchange for a
fee. The outsourcing contract is usually for a fixed period of time. At
the end of the contract it goes out to tender once again
• In NEHAWU v UCT (2003) 24 ILJ 95 (CC) the Constitutional Court
stated that section 197 could apply to outsourcing.
• The Court said that "In deciding whether a business has been
transferred as a going concern, regard must be had to the substance
and not the form of the transaction.
• Relevant factors include
• whether assets were transferred , whether or not workers are taken
over by the new employer, whether customers are transferred and
whether the same business is being carried on by the new employer.”
Aviation Union of SA & another v SA Airways (Pty) Ltd & Others
[2012] 3 BLLR 211 (CC)
• When employees have already been transferred to a company who has
won the tender and the contract is terminated the question is whether
employees would be transferred back to the tendering company
(insourcing) or to the new company (2nd generation outsourcing)
• Facts: In 2000 LGM and SAA concluded an outsourcing agreement for
10 years with SAA having the option to renew it. The parties agreed
that LGM would provide the facilities management operations for a fee
and that all of SAA employees who worked in those departments would
be transferred to LGM. In June 2007 SAA terminated the agreement.
• Aviation Union sought an assurance from SAA that upon termination of
the outsourcing agreement LGM’s employees would be transferred
back to SAA. SAA disagreed.
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The Labour Court held that the section 197 does not apply to a second
generation outsourcing or subsequent outsourcing agreement because
the agreement does not involve a transfer by an “old employer” to a
“new employer” as required by section 197.
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The Labour Appeal Court rejected the literal meaning adopted by the
Labour Court and preferred an interpretation that would advance the
purpose of job protection.
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The majority judgment of the Supreme Court of Appeal agreed with the
Labour Court that the word “by” in s197 referred to transfers from the
old employer to the new employer The minority judgment held, there
must have been a transfer of services “from” LGM to SAA.
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The Constitutional Court stated that what matters during the factual
inquiry is the substance of the transaction as opposed to its form.
Substance to be inferred from the cancellation agreement
– LGM became obliged to sell all fixed assets back to SAA
– LGM to transfer or assign all third party contracts to SAA
– Both parties to surrender information pertaining to the scope of
work belonging to the other party .
– LGM would no longer be entitled to the lease SAA property.
– impossible for LGM to continue to conduct its business
Court thus concluded that there was a transfer of business.
PE Pack 4100 CC v Sanders and Others [2013] 4 BLLR 348 (LAC),
• A franchise agreement existed between Cell C and the respondents (as the
original franchisees). In April 2010 Cell C cancelled the franchise
agreements with the original franchisees and entered into a franchise
agreement in respect of the same store with the appellant.
• The first respondent, who was an employee of the original franchisees,
assumed that his employment contract would automatically be transferred
to the new franchisee.
• Cell C disagreed and asserted that it was not buying back the franchise but
had merely terminated the franchise as it was entitled to do.
• The Court a quo held that the takeover of the business by the new
franchisee did constitute a transfer of business as a going concern
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In considering whether section 197 applies in the case of franchise
agreements, the LAC stated that the nature of the business model is the
key to the resolution of the problem.
– Upon termination of the franchise agreement, the franchisor is free to
conclude a new franchise agreement with its preferred franchisee.
– The core assets and infrastructure and branding used in the business
are retained at all times by the franchisor.
– The franchisor controlled the business and owned the infrastructure,
The LAC thus found that typical franchise arrangements, such as the one in
question, do not trigger the transfer provisions of the LRA.
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Criticism: The majority judgment gives too much protection to
franchisors at the expense of employees. Employees who work at a
franchise are denied the application of section 197. The franchisor
would be allowed to terminate franchising agreements without providing
any protection to employees.
If one applies the principles from the UCT judgement there is a transfer
in this case. While the franchisee did not own the assets he did transfer
the use of the infrastructure back to cell C and thus to the franchisee.
Some of the staff were transferred to the new franchisee. All the
customers were transferred to the franchisee as they held cell c
contracts. The new franchisee continued the same business as the old
franchisee.
NUMSA Obo Ketlhoilwe & 44 Others v Abancedisi Labour Services
CC
• Facts: Kitsanker asked employees, who were provided by a labour
broker to sign a code regulating strike action, which they had refused to
do. As a result they were not allowed back into the premises.
• NUMSA took the labour broker to court alleging that they were unfairly
dismissed. The court held that the employees were not dismissed.
They were at liberty to sue the respondent for unfair labour practice
based on their apparent indefinite suspension or, alternatively, they
could resign and sue the respondent for constructive dismissal in terms
of section 186(1)(f) of the LRA.
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NB Principle: The court obiter accepted the principle stated in Nape v
INTCS Corporate Solutions (Pty) Ltd (2010) 31 ILJ 2120 (LC); [2010] 8
BLLR 852 (LC where the Labour Court stated that agreements, which
provided the client with the power to remove the employee from its
premises for any reason whatsoever, was against public policy and an
unlawful breach of the employee’s right to fair labour practices in terms
of the LRA. The Court held that the labour broker could resist the
client’s unlawful demand by undertaking the following:
– The labour broker is entitled to approach a court to compel the
client not to unfairly dismiss an employee.
– If the court were to reinstate an employee into the employ of the
labour broker, the labour broker may enforce such an order against
the client to give effect to the employee’s rights to fair labour
practices.
Relevant Principles:
• To determine whether there is a transfer of a business one must look at
substance over form. Were assets transferred (moveable and
immovable)
– Were employees transferred
– Were customers transferred
– Is the new employer doing the same business as the old employer
– Were third party contracts transferred.
– Were confidential information pertaining to the scope of work
transferred
Trade Union Liability
SA Transport & Allied Workers Union & Another v Garvas (2012) 33
ILJ 1593 (CC)
• Facts|: The South African Transport and Allied Workers Union
(SATAWU) had organised a gathering in Cape Town. During the
gathering, private property was damaged.
• Section 11 of the Gatherings Act states that a trade union will be liable
unless the damage was not reasonably foreseeable and that it took all
reasonable steps within his or its power to prevent the act or omission
in question.
• SATAWU challenged the constitutional validity of the law that imposed
liability on organisers. The Union contended that the defence allowed
by the law unjustifiably limits the right to freedom of assembly in section
17 the Constitution. It argued that one could not take reasonable steps
to prevent damage if the damage was not reasonably foreseeable.
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Justice Jafta of the Constitutional Court stated that t if one interprets
“and” to mean “or” this would avoid the absurd interpretation and by so
doing promote the right of freedom of assembly.
In a majority judgment, Mogoeng CJ held that the law aims to afford
victims effective recourse where a gathering becomes destructive and
results in injury, loss of property or life. The majority held that the
defence provided for by the law is viable and that the limitation on the
right to freedom of assembly in section 17 of the Constitution is
reasonable and justifiable, because it serves an important purpose and
reasonably balances the conflicting rights of organizers, potential
participants and often vulnerable and helpless victims of a gathering or
demonstration which degenerates into violence.
Ngcobo v FAWU [2012] 10 BLLR 1035 (HCKZN)
• Two employees were members of the Food and allied workers union
• Their employer dismissed them for operational reasons.
• They instructed FAWU to handle their unfair dismissal claims .
• FAWU failed to do so
• They instituted action in the High Court alleging that FAWU owed them
the money that Nestlé should have been ordered to pay them.
• Justice Swain decided that FAWU had agreed to assist them but failed
to do so and ordered FAWU to pay 12 months damages of R214,464
• This was upheld by the SCA
• Principle: A trade union could be held liable for breach of contract if it
fails to act on behalf of its members when it is required to do so.
Summary of principles
• A trade union would be liable for damage caused during protest
organised by the union if they fail to take reasonable steps to
prevent such damage.
• Where a trade union fails to act on its mandate it could held
accountable to its members