by Tony Healy | Apr 15, 2019 | Case Law
Just over a year ago the Concourt handed down judgment in the Assign Services (Pty) Ltd v Numsa and Others (case number CCT194/17) case. This judgment dealt with the question of who has an employment relationship with a labour broker employee, deployed at the client of a labour broker for in excess of three months. The Assign Concourt judgment concluded that the so-called “dual employment interpretation is the correct one” meaning that after three months, the client of the labour broker, referred to as a temporary employment service (TES) in the Labour Relations Act, is the only employer for the purpose of the Labour Relations Act, whilst the labour broker remains the employer for the purposes of the Basic Conditions of Employment Act.
A recent CCMA arbitration award (dated 22 March 2019) addressed aspects of the Concourt judgment in that the Applicants made application to be deemed indefinite employees of the client of the labour broker, at which they had been deployed for in excess of three months, and furthermore sought “to receive the same benefits as employees of the client” performing the same or similar work. It was not in dispute that the three applicants were employed by the labour broker, two of which were employed as fork lift drivers, and the third as an acceptance clerk. It was furthermore not disputed that the three labour broker employees had been deployed at their client for in excess of three months. Indeed, the client of the labour broker also conceded that it was the applicant’s employer for purposes of the Labour Relations Act.
This case dealt with section 198A (3)(b)(i) and (ii) as well as section 198A (5) of the Labour Relations Act. It was noteworthy in this case that it was undisputed that all forklift drivers deployed at the labour brokers premises, were employed by the labour broker, as the client did not employ any forklift drivers themselves directly. In motivating their claim for permanent employment with the client, their application to receive the same benefits as employees of the client’s employees performing the same or similar work, the applicants argued that even though the client did not employ any forklift drivers themselves, they were of the opinion that “the position of cargo controller is sufficiently similar to theirs and thereof the position of cargo controller ought to be regarded as the comparator”. In simple language, the forklift driver Applicants were of the view that even though the client did not employ forklift drivers per se, the position of forklift driver could be equated with that of a cargo controller, a position which did exist within the ranks of the client.
As far as the acceptance clerk applicant was concerned, “there was no evidence that (the employer) employs any acceptance clerks, and therefore no position of comparator was placed” before the Commission.
By virtue of the fact that the applicants had between 2 to 5 year’s service, in other words in excess of three months, it was apparent that the applicants did not perform a temporary service, and therefore the deeming provision in terms of section 198A (3)(b) of the Labour Relations Act, was applicable. Indeed, “all parties conceded to this”. This meant of course that the client was deemed to be the employer. The next thing to address was whether the position of forklift driver could be equated with that of a cargo controller, a position which did exist in the organogram of the client. The Commissioner held that “whilst some of the duties do seem to overlap, the evidence supports the conclusion that the two jobs are different in many respects. The job of cargo controller carries more responsibilities and additional tasks which the forklift drivers do not perform”. The award continued that “forklift drivers do not operate in the same full capacity of cargo controllers”. For this reason, it was held that “on an assessment of the evidence, I find that the two positions are not the same or sufficiently similar to warrant a conclusion that the applicant’s must be treated on the whole not less favorably than cargo controllers employed by the client”. For this reason, it was held therefore that section 198A (5) of the Labour Relations Act should not be invoked.
“In respect of the acceptance clerk, no comparator was placed before me. It was established as common cause that Swissport does not employ any other acceptance clerks. A deemed employee must be treated on the whole no less favorably than an employee of the client performing the same or similar work. In the circumstances as there were no comparators employed by the client, the Applicant’s cannot succeed in this claim”.
The award therefore reinforces the notion that when drawing a comparison between the work of a deployed labour broker worker, and that of an employee employed at the client, the obligation to treat deemed employees no less favorably that their purported counterparts employed by the client, only arises in circumstances where they are doing the same or similar work. Insofar as there is no comparator, or the work is not sufficiently the same or similar, the obligation to treat the placed labour broker employee (the deemed employee), no less favourably, is not required. This award reaffirms the notion that section 198A (3) of the Labour Relations Act, read together with the Assign Concourt judgment, reaffirms the notion that the deeming provision results in the client becoming the employer of the placed labour broker employee after three months of employment, for purposes of the Labour Relations Act only. For this reason, the award provided that “the Applicants are deemed to be employed on an indefinite basis in terms of section 198A (3)(b)(i) and (ii) of the LRA by Swissport SA (Pty) Ltd (the client) which is their employer for the purposes of the LRA”.
by Tony Healy | Apr 8, 2019 | Discipline & dismissal
So, what do you do when a client you are delivering goods to, using foreign drivers, informs you that they will no longer permit foreign nationals on their premises, and you have no alternative employment for them?
This was the scenario faced by the Labour Court in Francis Kanko & 2 others v Grindrod Fuelogic [Case number C602/14].
The facts of the case are pretty straight forward. The employer had three fuel tanker drivers in their employ, who were foreign nationals, employed to deliver fuel to an Eskom power station. At a point in time, Eskom informed the employer that it would, as a matter of national security, no longer allow foreign drivers on its sites. The services of the three foreign drivers were then terminated by the employer, and it was a matter of dispute as to how the employment relationship ended.
According to the employer, the three drivers were not dismissed per se, as they had agreed to be retrenched by signing voluntary retrenchment agreements. The drivers, on the other hand, contested this, arguing that they were, without prior warning, abruptly summonsed to a meeting with management. At this meeting, they were shown the Eskom correspondence prohibiting foreign nationals from entering its power stations, and informed that they therefore had no choice but to accept their retrenchment. The drivers submitted that they then signed the retrenchment agreements, drafted by the human resources department, under duress. None of them received any retrenchment pay.
More precisely, the drivers submitted that they had, according to the judgment “signed the agreement under duress and they were, in fact, dismissed without any consultation as contemplated by section 189 of the Labour Relations Act. The only reason for their dismissal was their nationality; hence, it was automatically unfair as envisaged by section 187(1)(f)” of the Labour Relations Act.
The drivers, although foreign nationals, had valid South African heavy duty licenses and work permits.
Let’s have a look at the evidence led.
The employer’s primary witness, the regional manager, testified that if the employer had refused to comply with the new rule from Eskom that no foreign drivers would henceforth be allowed to enter its premises, the employer would have lost the contract. He continued that the employer had no choice. He led no evidence that the employer had attempted to persuade Eskom otherwise.
The three drivers were called into a meeting individually, they each signed retrenchment agreements, without duress. Each meeting lasted for about thirty minutes, and the drivers were paid the balance of their salaries for the remainder of the month. He conceded that the drivers were not paid any severance pay.
The drivers testified, in essence, that they were, without prior notice, asked to attend a meeting with management, at which they were shown a copy of the e-mail from Eskom, after which the regional manager informed them that the employer had no choice but to retrench them as there were no vacancies. They were told to sign the retrenchment as there was no alternative.
The judgment posed the question “Did the employees in this case sign the agreements voluntarily, ie: without duress or coercion, unequivocal and with full knowledge of its terms and implications as a full and final settlement of all the issues?”
On this issue, the Court concluded that “On the facts and on the evidence before me, and on the probabilities, I am not persuaded that (the employer) has discharged that onus. All three drivers were called in out of the blue, with no prior warning and without the benefit of a notice that is required by law in section 189(3) of the LRA. They were presented with a fait accompli”.
All three drivers had consistently testified that the regional manager had insisted that, on leaving the meetings with signed agreements. The judgment in Corns v Adelkloof Drankwinkel cc t/a Cellars Drankwinkel (2002) 23 ILJ 2047 (LC) was quoted as being relevant in this case – “The main objective of that meeting was to procure the applicant’s signature on the agreement, and to circumvent the requirements of section 189 of the Act … In my view, an agreement obtained in such unfair circumstances amounts to a nullity”.
Having found that the three drivers had been dismissed, the question then became whether, or not, their dismissals were automatically unfair.
The Court held that “the only reason for the driver’s dismissals were their nationality” and that “there can be no doubt that nationality as a reason for dismissal is discriminatory” and the dismissals were therefore automatically unfair.
The Court ordered the retrospective reinstatement of the drivers.
by Tony Healy | Mar 29, 2019 | Discipline & dismissal
Make no mistake, a sizeable percentage of medical certificates, colloquially known as sick notes, presented to employers daily, are fraudulent.
Many employers will relate to the scourge of Monday and Friday “sick leave-itis”, which is a major contributor to sick leave typically being in excess of 15% on a daily basis. This is a significant labour cost for employers.
It has been estimated by Occupational Care South Africa that approximately 40% of all employees claiming sick leave, are not physically ill, and that South African businesses are losing as much as 17% of their payroll every year due to absenteeism. This punishes already cash-flow strapped employers unfairly.
In the Labour Court case of BP Southern Africa v The National Council for the Chemical Industry & others (Case number JR2000.12), the employee had been dismissed for unauthorised absence from work and the submission of fraudulent medical certificates to the company. After a period of absence from work, the employee reported for duty and presented three copies of medical certificates issued by three different practitioners.
The first medical certificate, covering the first few days of the employee’s absence from work, declared the employee unfit to perform his duties due to cystitis. The second period of absence was supported by a medical certificate from another medical practitioner, who booked the employee off work for migraines and depression. The third leg of period of absence was supported by a medical certificate from a third medical practitioner, who booked the employee off sick for bronchitis.
The Judgment noted that on presenting the three medical certificates from three different medical practitioners covering the period of absence “an Occupational Health Consultant for the company also testified that he had assessed the copies of medical certificates submitted by (the employee), and had thereafter contacted the practitioners that had issued them. Dr Matjekane’s rooms had no evidence of (the employee’s) attendance at all, whilst Dr Bikitsha became abusive when contacted. Dr Adam on the other hand indicated that (the employee) had problems with alcohol abuse. Dr Manjra had concluded that (the employee) had an alcohol problem and that HR should intervene. (The employee) was then referred to a Psychiatrist who after consultations on 7 February 2012, concluded that he was not mentally ill and was fit to resume work”.
At the CCMA arbitration hearing, the Commissioner held that “It was clear that the three medical certificates submitted by (the employee) did not reflect his true medical condition and the real reason for his absence between 9 and 20 January 2012, and accordingly his absence was unauthorised”, and that the employee “presented false medical certificates to BP well knowing that they were false and therefore did so with fraudulent intent, causing potential prejudice to BP”.
It was however apparent that the employee had an alcohol dependency problem.
The CCMA arbitration award held that, notwithstanding the identified fraudulent medical certificates “the sanction of dismissal was unfair as it gave BP an opportunity to get rid of (the employee) instead of following the more cumbersome route of rehabilitation”.
The employer sought to review this finding at the Labour Court.
The Labour Court held that “there is no hesitation in concluding that the Commissioner went on a frolic of his own, and completely misconstrued the nature of the enquiry before him based on the reason for the dismissal and evidence led in that regard. On his own, he had raised the issue whether the core of the dispute was not a matter of incapacity due to alcohol abuse and whether (the employee) should not undergo rehabilitation treatment for alcohol abuse. This was indeed irregular, in that, 25.5.1 It was never BP’s case nor that of (the employee) that the dismissal was related to alcohol abuse and incapacity, and that BP used the two charges that led to a dismissal as a smokescreen. Any such conclusions could only have been reached if pleaded by (the employee), and also if ultimately proven on the facts; 25.5.2 There was no evidence led by (the employee) that his alcohol problems had led to his alleged incapacity, or the reason for his absence, until probed and prompted by the Commissioner; 25.5.3 Only after being prompted by the Commissioner did (the employee) indicate that he was a heavy drinker, which revelation was not only opportunistic, but also evidence BP had not been aware of, or which it was afforded an opportunity to rebut; 25.5.4 There was evidence that (the employee) had been counselled before in regard to his absenteeism and bad attendance record; 25.5.5 The copies of fraudulent medical certificates submitted by (the employee), even if they were to be accepted, had not indicated that he had alcohol problems or was incapacitated, and the Commissioner had accepted that they were fraudulent.
25.5.6 (The employee) was not decisive as to whether he sought assistance or not in relation to his alleged alcohol abuse problems. On his version, he had not signed the consent forms to volunteer for rehabilitation, and even if it had dawned on him that he should have volunteered for rehabilitation, BP had already decided to take steps against him on the basis of his dishonest conduct; 25.5.7 The Commissioner ultimately during the course of the proceedings had realised that the details surrounding alcohol abuse and alleged incapacity were not placed before him, and he had nevertheless continued to make his ultimate findings on those issues.
25.5.8 Despite having concluded that copies of the medical certificates were fraudulent, and thus (the employee) was on unauthorised absence, the Commissioner nevertheless continued to conclude, and without any basis, that his absence was due to being incapacitated to do his work due to alcohol abuse”.
by Tony Healy | Mar 8, 2019 | Case Law
The recent Labour Appeal court judgment delivered on 26 February 2019, in Solidarity OBO Scholtz v Gijima Holdings (Pty) Ltd [Case number JA131/2017] dealt with the subject of employee loyalty incentive scheme agreements, whereby an employee agrees to remain in the employ of the employer in return for him or her being paid a retention bonus by the employer to do so.
In this case, the agreement was entitled Employment Loyalty Incentive Scheme Agreement (ELISA). It is not unusual for employers to enter into such agreements with employees from time to time, to ensure that they remain in the employ of the employer for a specified length of time. This typically ensures continuity of service by an employee, and amongst other things, gives the employer peace of mind that the employee will not leave them in the lurch by resigning before the completion of the period for which the retention bonus has been paid.
The facts of the case were, by and large, not in dispute. The ELISA entered into by the employer and the employee, incorporated a clause which read that “Where the beneficiary terminates its employ with the company after the effective date and before the expiry of the initial period of 12(twelve) months, (the “initial Period”), the beneficiary shall repay the full amount received by the beneficiary in terms of A.5.1 of annexure A”.
The Labour Appeal Court judgment noted in this regard that “Apparent from Clause 7 above is that a beneficiary of the scheme, having received a benefit in advance, before the commencement of the relevant retention cycle, would be required to remain in the employ of the respondent for a period of 12 months in respect of each retention bonus already paid.”
The judgment continued that retention bonus agreements of this nature were not a new phenomenon, and that, for example, they had been dealt with in Bonfiglioli SA (Pty) Ltd v Panaino (2015) 36 ILJ 947 (LAC), which noted that “A retention bonus, as the phrase suggests, is paid in order to retain the services of an employee for a specified period. Payment of the retention bonus is contingent upon the employee entering into an agreement with the employer to complete a specific period of service with the employer. The bonus can be paid after the expiration of the period, during the period or at the beginning of the period, depending on the agreement between the parties. The purpose of a retention bonus is, inter alia, to avoid instability caused by employees, especially senior employees, who would constantly search for greener pastures; to retain institutional memory and to promote a seamless continuity of operations.”
In another judgment, Renaissance BJM Securities (Pty) Ltd v Group (2016) 37 ILJ 646 (LAC), retention agreements were deemed to be akin to hand-cuffs – “Retention agreements are therefore hand-outs with handcuffs or cheques with chains. The employee is given money and in return, he/she must give up his/her freedom to leave the employ of the employer. It curtails the employee’s right to jump ship even when the ship is being steered straight in the direction of an iceberg.”
In this case, the employer notified the employee, and indeed other employees who had signed similar agreements, that the agreement would not be continued beyond its initial three-year term. The employee objected to this.
None the less, the employer paid the employee the third, and final, retention bonus for year three of the agreement. Approximately one month later, the employee tendered his resignation.
The employer deemed this to amount to a breach of the retention agreement, and dealt with this by deducting the Rand value of the bonus from the payments due to the employee on termination.
The Labour Court subsequently held that the employer was entitled to make this deduction, and the employee then sought to appeal this judgment at the Labour Appeal Court.
The Labour Appeal Court upheld the Labour Court judgment, finding that “Clause 7.1 of the ELISA makes it plain that where a beneficiary terminates his/her employ with the company, after the effective date and before the expiry of the retention period of 12 months, he/she shall repay the full amount received in terms of A.5.1 of the annexure A to the agreement.”
by Tony Healy | Feb 28, 2019 | Miscellaneous
Employees can be suspended from work in either of two ways. The two species of employee suspension are precautionary suspension and punitive suspension. Punitive suspension occurs when an employer offers an employee a period of suspension without pay, as an alternative to dismissal, when dismissal would ordinarily be the only logical sanction, but extraordinary mitigating factors suggest that the employee is deserving of an option to retain his or her employment.
Precautionary suspension is quite different. There are times when an employer, quite legitimately, is of the view that an investigation into suspected misconduct would benefit from the suspected offender not being at work. There are numerous reasons why an employer may come to such a conclusion. For example, the employer may have good reason to conclude that the employee in question may interfere with witnesses and evidence. It is also quite possible that the employer may not know for sure whether the employee is entirely trustworthy.
This is when the precautionary suspension option becomes available to employers. It must be borne in mind that an employee who is suspended as a precaution, must be fully paid whilst suspended, for the simple reason that they have, at that point in time, pending the outcome of an investigation, not been found guilty of any misconduct what so ever. In fact, they have not even been charged with misconduct at that time. In Sappi Forests (Pty) Ltd v CCMA & Others [2009] (LC), the Labour Court held that it was normally unlawful and unfair to suspend an employee without pay pending a disciplinary enquiry. The only time this would not be the case is when there is a collective agreement permitting unpaid precautionary suspension, or it is permitted in terms of legislation, as is the case in certain areas of the Public sector.
One occasion when an employer need not pay an employee during a period of precautionary suspension is when the disciplinary hearing must be postponed due to the employee failing to attend the disciplinary, without a valid reason for not doing so, whilst on precautionary suspension.
In the case of SAEWA obo members v Aberdare Cables [2007] (MEIBC) it was held that the employer does not have to pay an employee who is on precautionary suspension from the date he or she requested for postponement. The rationale for the decision was to avoid for situations where the employee may unreasonably delay the disciplinary hearing while earning the salary.
An employer decision to invoke its right to precautionary suspension, typically does so pending the outcome of an investigation into misconduct, and/or pending the outcome if a disciplinary hearing.
There are however certain simple steps to be followed when doing so. It has become well stablished in our law that procedural fairness requires employers to afford employees an opportunity to oppose their proposed precautionary suspension, prior to it being confirmed by the employer.
It has been widely held that the suspension of employees pending disciplinary action is permissible only when reasonable grounds exist for suspecting that the employee is guilty of serious misconduct and that employee’s presence may compromise preliminary enquiry, and after the employee has been given opportunity to make representations.
The importance of complying with a fair procedure was emphasised by the Labour Appeal Court in MEC for Education: North West Provincial Government v Errol Randal Gradwell (2012) (LAC). It held that an opportunity to make written representations to show why a precautionary suspension should not be implemented is sufficient compliance with the requirement of procedural fairness.
In the Labour Appeal court case of Member of the Executive Council for Education North West Province v Gradwell (2012) (LAC) held that “The right to a hearing prior to a precautionary suspension arises therefore not from the constitution PAYA or as an applied term of the contract of employment but is a right located within the provisions of the LRA the correlative of the duty on employers not to subject employees to unfair labour practises. That being the case the right is a statutory right for which statutory remedies have been provided together with statutory mechanisms for resolving disputes in regard to these rights.”
So in conclusion, in the Labour Court, case of POPCRU obo Masemola and others vs Minister of Correctional Services (2010), fairness requires the following before suspending an employee pending an investigation or disciplinary action (a) the employer has a justifiable reason to believe, prima facie at least, that the employee has engaged in serious misconduct, (b) there is some objectively justifiable reason to deny the employee access to the workplace based on the integrity of the pending investigation into the alleged misconduct or some other relevant factor that would place the investigation or the interests of the affects parties in jeopardy and (c) that the employee is given the opportunity to state a case before the employer makes a final decision to suspend the employee.
