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 20, 2019 | Case Law
The best place to start when considering workplace sexual harassment is the Labour Relation Act’s Code of Good Practice on the Handling of Sexual Harassment Cases, which was published as far back as 1998.
This Code addresses such critical aspects of sexual harassment as its definition, forms of sexual harassment, guiding principles, procedures to be followed in such cases, the allocation of additional sick leave in certain circumstances, and employer obligations to educate staff on this important subject.
To begin with, the Code defines sexual harassment as “unwanted conduct of a sexual nature. The unwanted nature of sexual harassment distinguishes it from behavior that is welcome and mutual”.
The Code goes on to state that “sexual attention becomes sexual harassment if – (a) the behavior is persisted in, although a single incident of harassment can constitute sexual harassment; and (b) the recipient has made it clear that the behavior is considered offensive, and/or (c) the perpetrator should have known that the behavior is regarded as unacceptable.”
The Code is especially informative in listing forms of sexual harassment, and how sexual harassment can be manifested. For example, sexual harassment includes “all unwanted physical contact, ranging from touching to sexual assault and rape. Unsurprisingly, this includes “a strip search by or in the presence of the opposite sex.
But it doesn’t end there. Further forms of sexual harassment include unwelcome innuendos; sexual suggestions and hints; sexual advances; comments with sexual overtones; sex-related jokes or insults or unwelcome graphic comments about a person’s body made in their presence or to them; unwelcome and inappropriate enquiries about a person’s sex life, and unwelcome whistling at a person or group of persons.
Non-verbal forms of sexual harassment listed in the Code include unwelcome gestures, indecent exposure, and the unwelcome display of sexually explicit pictures and objects. So-called ‘quid pro quo’ sexual harassment “occurs when an owner, employer, supervisor, member of management or co-employee undertakes or attempts to influence or influences the process of employment, promotion, training, discipline, dismissal, salary increments or other benefits of an employee or job applicant in exchange for sexual favours”.
The Code goes as far as to also state that employers should “issue a policy statement” which confirms the employer’s commitment to all employees right to be treated with dignity, the prohibition of sexual harassment, and the role played by grievance and disciplinary procedures in cases of sexual harassment. In practice, and our firm’s experience in this area, the drafting, and education of staff on, a comprehensive sexual harassment policy meets the requirements of the Code in discouraging sexual harassment and providing a channel to deal with such cases should they arise.
The definition of sexual harassment in the later amended Code in 2005 is that sexual harassment is “…unwelcome conduct of a sexual nature that violates the rights of an employee and constitutes a barrier to equity in the workplace, taking into account all of the following factors – (1) whether the harassment is on the prohibited grounds of sex and/or gender and/or sexual orientation; (2) whether the sexual conduct was unwelcome; (3) the nature and extent of the sexual conduct; and (4) the impact of the sexual conduct on the employee.’
The Labour Appeal Court judgment in Campbell Scientific Africa (Pty) Ltd v Simmers and Others held that “The treatment of harassment as a form of unfair discrimination in s 6(3) of the Employment Equity Act 55 of 1998 (EEA) recognises that such conduct poses a barrier to the achievement of substantive equality in the workplace”, continuing that ‘‘By its nature such harassment creates an offensive and very often intimidating work environment that undermines the dignity, privacy and integrity of the victim and creates a barrier to substantive equality in the workplace. It is for this reason that this court has characterised it as ‘the most heinous misconduct that plagues a workplace’.
In SA Broadcasting Corporation Ltd v Grogan NO and Another (2006) the Labour Court observed that sexual harassment by older men in positions of power has become a scourge in the workplace. In Gaga v Anglo Platinum Ltd and Others (2012), the Labour Court held that this Court noted similarly that rules against sexual harassment targets, amongst other things, reprehensible expressions of misplaced authority by superiors towards their subordinates.
by Tony Healy | Feb 5, 2019 | Case Law
The requirement that employers conduct pre-suspension hearings prior to confirming the precautionary suspension of an employee, has been debunked by the Constitutional Court judgement recently handed down on 19 February 2019, in Alan Long v South African Breweries (Pty) Ltd & others [Case number CCT61/180].
Up until now, our case law has obligated employers to afford employees an opportunity to be heard before their employer confirms their precautionary suspension, yet this judgement confirms that it is not necessary to do so. As a result, employers are now required to amend any in-house procedure or policy which includes a pre-suspension hearing, prior to precautionary suspension.
In this particular Constitutional Court case, the employee was making application for leave to appeal against a judgement in the Labour Court which, amongst other things, held that there is no requirement that an “employee be given an opportunity to make representations …. where a suspension is precautionary”.
On this particular issue, the employee, a District Manager in the employer’s Border Region) had been placed on precautionary suspension approximately three months prior to his disciplinary being held.
At arbitration, the arbitrator held that “there was a valid reason to suspend the applicant, but that the applicant had not been given an opportunity to make representations to show why he should not be suspended” and that this amounted to an unfair labour practice.
However, the Labour Court, on the other hand, subsequently held that “where a suspension is precautionary, there is no requirement that an employee be given an opportunity to make representations” continuing that on the contrary “the suspension must be linked to a pending investigation and serve to protect the integrity of that ongoing process. As such, the Labour Court concluded that the failure to conduct a pre-suspension hearing prior to confirming the precautionary suspension, did not amount to an unfair labour practice.
At the Constitutional Court, the employee submitted that “the Labour Court’s finding on pre-suspension hearings goes against existing case law. The Constitutional Court upheld the Labour Court’s position that pre-suspension hearings are not required when an employer is contemplating placing an employee on precautionary suspension. The judgement, on this point, held that “… the Labour Court’s finding that an employer is not required to give an employee an opportunity to make representations prior to a precautionary suspension, cannot be faulted. As the Labour Court correctly stated, the suspension imposed on the (employee) was a precautionary measure, not a disciplinary one … where the suspension is precautionary and not punitive, there is no requirement to afford the employee an opportunity to make representations.”
Emphasising the point, the judgement continued that “The Labour Court’s finding that the suspension was precautionary and did not materially prejudice the (employee), even if there was no opportunity to for pre-suspension representations, is sound”.
Precautionary suspension should not be confused with punitive suspension, which arises when an employer imposes a sanction of dismissal, with an alternative sanction of suspension without pay, with the employee’s agreement.
This judgement is quite a significant departure from a widespread, historical understanding that failure to afford an employee an opportunity to make representations, prior to being placed on precautionary suspension, did indeed amount to an unfair labour practice.
Now that it has been clarified by the Constitutional Court that this is not the case, employers are now in a position to impose precautionary suspension in a less encumbered fashion.
It should be remembered, however, precautionary suspension will none the less amount to an unfair labour practice if it is unpaid, or punitive in nature. It could even amount to an unfair labour practice if it for an unduly lengthy period of time.
by Tony Healy | Dec 12, 2018 | Case Law
To what extent is a job applicant obligated to reveal to a prospective employer, that they have a criminal record? Is a job applicant obligated to reveal to a prospective employer, that they have a criminal record? To what extent are employers able to fairly discriminate against job applicants with criminal records?
These are vexed questions which employers, and indeed employees, face on occasion.
To begin with, there is no doubt that employers should have recruitment and selection policies and procedures which clearly obligate job applicants to reveal all information pertinent to their application, and highlighting that any material omissions in a CV or application form, would place any subsequent employment with the company at risk.
Best practice in this regard would, for example, include the incorporation of a declaratory in the employer’s application form, that the job applicant has not omitted any information that would be material to the employer being in a position to make a rationale decision regarding the employability of the applicant, in full knowledge of the fact that the employer will have recourse, should material non-disclosure on the part of the applicant come to light.
This was precisely the issue addressed in the Cape Town Labour Appeal Court (“LAC”) judgment in G4S Secure Solutions SA (Pty) Ltd v Commissioner Anthony Ruggiero & others (Case Number CA2/2015).
The employee, a security guard, had been employed by the employer in 1996. At that time, he was asked in a written application form “have you ever been convicted of a criminal offence?”. The employee indicated that he had not, and he was subsequently employed by the employer.
However, fourteen years later, on 10 July 2010, the employee applied for an internal promotion, and after a criminal check had been conducted, it was established that the employee had two previous criminal convictions. One for rape when he was seventeen years old, for which he received six lashes, and another for assault with intent to do grievous bodily harm, for which he paid a fine of R200.00.
The employer responded to these revelations by issuing the employee a notice to attend a disciplinary hearing, alleging “misrepresentation and/or dishonesty concerning an application for employment and/or breach of PSIRA Regulations Code of Good Conduct”. The employer’s disciplinary code specified that an offence of “dishonesty concerning an application for employment … occurs where information provided in support of an application for employment is subsequently found to be false, and such information has a material effect on the employee/employer trust relationship”.
At the disciplinary hearing, the employee, inter alia, stated that he did not know that he had a criminal record as he had not gone to jail. The employee was found guilty, and dismissed.
The employee challenged the fairness of his dismissal at the CCMA, originally seeking reinstatement, and subsequently amending his remedy sought, to compensation. At the CCMA arbitration hearing, the Commissioner was “not convinced that the (employee) contravened the rule” or, as noted in the LAC judgment “that he had misrepresented himself in his 1996 application for employment given that he was not aware that he had a criminal record at the time”.
Importantly, the employee also argued that he could not be found guilty of a contravention of the PSIRA Code of Conduct, as it had only come into effect more than 10 years after his convictions.
The Commissioner continued that he found it plausible that the employee had not willfully misrepresented the facts. The Commissioner held that the dismissal of the employee was therefore substantively unfair, and held that the employee was to be reinstated, with two-months compensation.
At the subsequent Labour Court review, the Labour Court found it “difficult to understand how the arbitrator could reasonably have concluded the (employee) was unaware of the status of his criminal record and could have denied having any criminal conviction”. However, the Labour Court further held that whilst the employee had committed the misconduct, his dismissal was unfair, and ordered retrospective reinstatement.
The LAC held a different view on this case at the appeal. The LAC ordered that the appeal was successful, and that the dismissal of the employee was in fact substantively fair.
According to the LAC, “The employment relationship by its nature obliges an employee to act honestly, in good faith and to protect the interests of the employer. The high premium placed on honesty in the workplace has led our courts repeatedly to find that the presence of dishonesty makes the restoration of trust, which is at the core of the employment relationship, unlikely”.
The judgment continued that “A conviction of rape and assault is antithetical to employment in the position of a security guard given the nature of that position”.
Finally, the LAC noted that our courts have reiterated that whilst long service is ordinarily a compelling mitigating factor when contemplating a sanction, “there are certain acts of misconduct which are of such a serious nature that no length of service can save an employee who is guilty of them from dismissal … one such act of misconduct is gross dishonesty”.
by Tony Healy | Oct 8, 2018 | Case Law
There are times when employers seek to prove that an employee is guilty of misconduct. When in fact, there were no eye witnesses. Such cases, rather than relying on direct evidence, rely upon circumstantial evidence.
Section 192(2) of the Labour Relations Act provides that “if the existence of the dismissal (at arbitration) is established, the employer must prove that the dismissal was fair”. As such, in arbitration hearings, it is rebuttably presumed that a dismissal was unfair until the employer proves that it was fair. The burden of proof is that of proof on a balance of probabilities, rather than the greater burden of proof in criminal proceedings, which is proof beyond reasonable doubt.
The arbitration award in SASBO obo Richard Thabelo Sera & 1 other v SBV Services (Pty) Ltd [Case number NWRB536-15], reference was made to the judgment in Govan v Skidmore 1952 (1) SA 732in which the court held “that it was trite that in general, in finding facts and making inferences in a civil case, the court may go upon a mere preponderance of probability, even though in so doing it does not exclude every reasonable doubt, so that one may, by balancing probabilities select a conclusion which seems to be a more natural, or plausible conclusion from amongst severable conceivable ones, even though that may not be the only reasonable one”.
More recently, in the CCMA Arbitration Case in L. Naidoo v Lever Ponds, [Case number KN22081], it was noted that “When deciding on a balance of probabilities, the ultimate question remains whether contentions of the party bearing the onus are more probable than not ……….. what is being weighed in the “balance” is not quantities of evidence but the probabilities arising from that evidence and all the circumstances of the case ………… if the evidence is such that the tribunal can say ‘we think it more probable than not’, the burden is discharged, but if the probabilities are equal it is not”.
Circumstantial evidence is the opposite of ‘direct evidence’ (ie: the kind of evidence which comes from witnesses) and can therefore be described as ‘indirect evidence’ in that certain ‘assumptions’ are made. It is admissible under certain circumstances. Can only be used to support a substantial fact. The Chairperson of an enquiry should listen to circumstantial evidence first and then decide how much weight they are going to give it (in other words, how fair it would be to admit it either entirely or in part).”
When seeking to prove guilt utilising circumstantial evidence alone, the complainant relies upon proving facts which, when taken as a whole, lead to only one, reasonable, inference, namely that the employee is probably guilty.
The SASBO arbitration award further discussed the use and application of circumstantial evidence, when quoting Duncan Manufacturing v MEIBC & others (2010) ZALC “where the court held that in assessing circumstantial evidence the arbitrator should always consider the cumulative effect of all the items of the evidence before him or her in assessing the inference to be drawn from the facts. The commissioner should look at the totality of evidence and weigh it on a balance of probabilities”.
The Labour Court judgment in Distell Ltd V CCMA 7 others (Case number C343/2012), interestingly, and quite correctly, noted that “The use of circumstantial evidence is a powerful tool in proving the existence of an issue in dispute. Hoffmann & Zeffert note the distinction between direct evidence and circumstantial evidence. Direct evidence is provided by a witness who testifies directly on the issue in dispute. So, for instance, in a murder trial, a witness who testifies that he saw the accused stab the deceased with a knife, provides direct evidence as to the stabbing. On the other hand, a witness who testifies that he saw the accused emerge from a room in which the deceased was subsequently discovered, bearing a knife dripping with blood, provides only indirect or circumstantial evidence to support the fact that the accused had stabbed the deceased”, and continued that “circumstantial evidence is thus evidence of a fact from which an inference can be drawn as to the existence of a fact in dispute”. This of course relates to criminal matters.
The court in Smith v Arthurs 1976 (3) SA 378, when dealing with circumstantial evidence the court held, “All the relevant facts must necessary go into the melting pot and the essence must finally be extracted there from”.
Perhaps the final word should go to a landmark English case in which Lord Wright in Caswell v Powell Duffy Collieries Ltd [1939] 3 All ER 722 (HL) said “There can be no inference unless there are objective facts from which to infer other facts which it is sought to establish. In some cases, the other facts can be inferred with as much practical certainty as if they had actually been observed. In other, cases the inference does not go beyond reasonable probability. But is there are no positive proved facts from which the inference can be made, the method of inference fails and what is left is mere speculation or conjuncture.”
by Tony Healy | Oct 7, 2018 | Case Law
Collective guilt arises when an employer deems it appropriate/necessary to hold one or more individuals liable for the acts of others within a group. The doctrine of common purpose was originally sourced from the field of criminal law the essence of which, as defined in SACCAWU obo Madika & 4 others v Pep Stores [Case No.NP1848-01] is “that each member of the group is held individually liable for his or her own actions as a member of the group acting in furtherance of a common purpose”.
Grogan (2002) submits that in the event that employees “are found to have actively associated themselves with the result and shared the perpetrators ….. frame of mind …. the guilt of the perpetrator extends to them”.
A number of collective guilt cases were referred to the Industrial Court in the past, and similar cases have been adjudicated by both the CCMA and the Labour Court.
One such Industrial Court matter which drew much attention at the time, was NUM vs Amcoal Collieries Ltd t/a New Denmark Collieries (1989) 10 ILJ 733. In this matter, the court took a particularly dim view of the concept of collective guilt. The court disapproved of collective guilt in the strongest terms by stating in the judgement that:
“In passing, the court wishes to observe that the concept of collective guilt is wholly repugnant to our law. Any policy in terms of which all the employees of any group or persons must bear collective punishment for the wrongdoings of some of the members is unacceptable to this court.”
“It runs counter to the tenets of natural justice and is a violation of the well-known principle that the person is presumed to be innocent until proven guilty.” “There is a failure of justice even if a single innocent person is presumed to be guilty and made to suffer with the rest.”
Subsequent cases have however indicated that collective guilt is indeed a concept which cannot be rejected outright.
One such case was Saccawu and Pep Stores (CCMA Arbitration: Case No.EC3035) in which the employer dismissed the entire staff complement of it’s Lady Frere branch (which amounted to five employees) for poor work performance arising from stock losses.
In this case however, the stock losses experienced at the branch were, according to the commission “so glaring that it could not possibly have escaped the attention and knowledge of every member of the staff”.
The commissioner referred to the above Industrial Court case (NUM vs Amcoal), but nonetheless found the dismissal of the entire staff complement to have been fair in the circumstances. There is little doubt that all employees who omit to bring an act of misconduct, of which they are aware, to the attention of an employer, may themselves be liable for dismissal.
As noted in NUMSA obo Reginald Chuene & 5 others v Irene Village Fuel Station t/a BP Irene (MIPT16735), “in NSGAWU v Coin Security (1997) 1 BLLR 85 (IC), the court warned that the doctrine of common purpose is not to be used as an excuse for imposing collective punishment, or to be confused with the concept of collective guilt. Common purpose must still be proved. There must be evidence to show that all the applicants associated themselves with the conduct of the principal offenders.”
In SACCAWU obo 93 others v Massmart T/a Jumbo Cash & Carry (Pty) Ltd (GAJB29113-14), it was noted that “In Dunlop Mixing and Technical Services (Pty) Ltd and Others v National Union of Metalworkers of SA on behalf of Khanyile and Others, Gush J dealt with an instance where the bulk of the striking employees simply remained silent, with a defence being presented by individual employees who in turn simply denied and misconduct, breach of picketing rules or an interdict. The learned Judge held It is entirely reasonable for an employer to expect protected industrial action to be accompanied by orderly conduct by those employees who have embarked on the industrial action. This is particularly so in circumstances where the employer has not only entered into a picketing rules agreement with the representative trade union regulating the conduct of striking employees but has as a result of the conduct of the employees been forced to obtain an interdict restraining the striking employees from committing misconduct. That strikes are often visited with violence and misconduct does not justify such acts. Despite the fact that tension often runs high during industrial action the level of misconduct and violence and the duration thereof in this matter reinforces the necessity for employers to be able on to rely on the duty of good faith towards the employer and that the employee breaches that duty by remaining silent about knowledge possessed by the employee regarding the business interests of the employer being improperly undermined. This duty must extend to the opportunity to exonerate oneself.”
