Most Recent Publications

Large scale retrenchments: Independent facilitators as opposed to CCMA appointed facilitators? You decide

By Fiona Leppan, Director and Nicholas Gangiah, Candidate Attorney, Employment, Cliffe Dekker Hofmeyr

The purpose of s189A of the Labour Relations Act, No 66 of 1995 (LRA) is to regulate large scale retrenchments. In large scale retrenchments, an employer is obliged to consult with the appropriate consulting parties and engage in a meaningful joint consensus seeking process aimed at reaching agreement on a number of issues including measures to avoid, minimise and mitigate the adverse effects of the anticipated retrenchments, selection criteria and severance pay. This process seeks to enhance the effectiveness of consultation in large scale retrenchments by avoiding unnecessary disputes. Where facilitation is selected in accordance with s189A of the LRA, it follows that facilitation must take place at an early stage to ensure effective and fair process.

The primary role of a facilitator is to manage the consultation process. The duty to consult rests primarily on the employer and not the facilitator. The facilitator has certain obligations which are contained in the Facilitation Regulations, (2002) (the Regulations) that have been issued by the Minister of Labour in terms of s189A(6) of the LRA. This includes an obligation to hold at least four facilitation meetings, unless consensus is reached at an earlier point in the process.

In the case of Edcon v Steenkamp and Others (2015) 36 ILJ 1469 (LAC), the Labour Appeal Court held that one of the key innovations introduced by s189A of the LRA is that the consultation process can be conducted by an independent facilitator. Although this case went as far as the Constitutional Court this particular point was not challenged.

Section 189A(3) of the LRA provides that the CCMA must appoint a facilitator to assist the parties in two instances, firstly if the employer has requested facilitation in its s189(3) notice or, secondly if the consulting parties representing the majority of the employees who the employer contemplates dismissing have requested facilitation and notified the CCMA accordingly within fifteen (15) days of the issuing the s189(3) notice.

Section 189A(4) of the LRA allows the parties to agree to appoint an independent facilitator. In such cases, the facilitation should be conducted in terms of the Regulations.

The Edcon case recognised that the parties are not obliged to submit to facilitation and may opt not to do so. Facilitation will only be obligatory if the employer or the other consulting parties have requested it, or if there is an agreement to appoint a facilitator in terms of s189A(4) of the LRA.

The appointment of an independent facilitator has advantages, namely the parties can agree to the identity of the facilitator, who is a specialist in this field and would be best suited in the prevailing circumstances. The time frame for the consultation process can be expedited and becomes more flexible as there is no unnecessary delays or restrictions due the strain placed on the resources of the CCMA. It allows the parties to own the process and structure the timing of the facilitation meetings in order to achieve an expeditious and effective outcome.

For more information please contact Fiona Leppan at fiona.leppan@cdhlegal.com

Article published with the kind courtesy of Cliffe Dekker Hofmeyr www.cliffedekkerhofmeyr.com

Collective disciplinary inquiries – A new norm?

By Hugo Pienaar, Director, Nomlayo Mabhena, Candidate Attorney, Employment practice, Cliffe Dekker Hofmeyr

Derivative misconduct arises where employees possess information that would enable an employer to identify wrongdoers and those employees fail to come forward. Such conduct violates the trust upon which the employment relationship is founded.

This concept was confirmed in the case of Dunlop Mixing and Technical Services (Pty) Ltd and others v National Union of Metalworkers of South Africa (NUMSA)obo Nganezi and others [2016] 10 BLLR 1024 (LC), where the Labour Court held that an employee bound implicitly by a duty of good faith towards the employer breaches that duty by remaining silent about knowledge possessed by the employee regarding the business interests of the employer being improperly undermined. The court further held, that on general principle, a breach of the duty of good faith can justify dismissal.

In recent times, derivative misconduct has commonly been applied in the context of strikes where there is a breach of picketing rules and an employer wishes to take action against the employees who fail to report breaches by their fellow employees of the picketing rules. The question that then arises is, how an employer proceeds with an inquiry involving a large number of employees. It is impractical to hold, for example, thirty individual inquiries. As a result, employers generally elect to hold collective inquiries.

The rationale for collective disciplinary enquiries is based on two principles. Firstly, that employees have acted collectively and associated themselves with an act of misconduct and therefore, they are charged collectively. It is sufficient that a particular employee merely witnessed the unlawful conduct. For example, should a group of employees intimidate a fellow employee, at his place of residence, for disassociating from the strike action, an employee who is present during this unlawful act associates him/herself with the unlawful conduct. Secondly, if the employee witnesses the conduct but does not participate in the intimidation, and fails to disclose this information to the employer, he/she may in addition be charged in the collective inquiry, based on derivative misconduct.

These are the guidelines generally applied by employers when conducting a collective inquiry pursuant to a strike:

The provisions of the company’s Disciplinary Code and Procedure are followed in order to ensure procedural fairness. Such Codes are generally only a guideline and seldom provide for collective misconduct.
Prior to the strike, the employer considers whether the employees’ contracts of employment incorporate a condition of employment, that the employees have a duty to disclose the wrongdoing of fellow employees. Such provisions may also be found in disciplinary and other codes.
Prior to the strike or lock-out, the employer would ordinarily issue a general notice to alert employees to the rule regarding disclosure, as well as invite them to disclose any information, even on a continuous basis, however, with a cut-off date. The company’s hotline may also be utilised for such purpose. The notice would provide that a failure to do so may result in employees being charged on the basis of derivative misconduct.
Proper mechanisms are put in place to collect evidence and identify employees who engage in misconduct during strikes.
Witnesses are consulted with prior to charge sheets being drafted for each employee and employees are prosecuted where there is sufficient evidence to do so. Consistency in application of discipline is adhered to. Every charge in the charge sheet is supported by evidence which will allow for a finding on the basis of that charge.
Measures are taken to protect the identity of witnesses who have reason to fear for their lives as a result of giving evidence. This includes providing the means for witnesses to give evidence in camera, and where necessary to employ the use of a voice distorter. A proper foundation is laid before the Chairperson in order to call witnesses in camera. A formal application is made and the requirements as set out in the case of National Union of Mineworkers and Others v Deelkraal Gold Mining Co Ltd (2) (1994) 15 ILJ 1327 (IC) are complied with. These requirements were discussed in our Employment Alert dated 29 June 2015, entitled ‘Inspecting In-Camera Evidence – A Process for Dealing with Fearful Witnesses’.
An independent Chairperson is appointed to preside over the disciplinary proceedings so as to ensure impartiality and fairness. Often the independence of the Chairperson is later raised at arbitration.
Employers ensure that they are sensitive when communicating with witnesses in the presence of other employees so as not to disclose their identity.
Item 4(2) of Schedule 8 of the Labour Relations Act is complied with in respect of Shop Stewards who are being charged.
The disciplinary hearing is interpreted into the accused’s mother tongue. This right is not abused to delay the proceedings and to frustrate the right of the employer to prosecute misconduct at the workplace. When an employee testifies, the employer affords the employee the opportunity to testify in their mother-tongue and appoint an interpreter for the employee. However, there is no interpretation of all the evidence led, into for instance, five different languages of the employees. The language policy as well as the education levels of the employees are considered.
The employer does not allow for an appeal as this would require yet another chairperson, escalating the costs of the inquiry.
The proceedings are recorded as the parties sometimes wish to rely on the record at future proceedings.

For more information, contact Professor Hugo Pienaar at hugo.pienaar@cdhlegal.com

Article published with the kind courtesy of Cliffe Dekker Hofmeyr www.cliffedekkerhofmeyr.com

Government Closer to Invoking Employment Equity Act to Reverse Non-Compliance with Legislation

A total of 50 JSE Securities-listed companies including the JSE itself reviewed as part of the Director-General Reviews were found to be non-compliant with employment equity (EE) Act.

The Department of Labour Inspection and Enforcement Services (IES) branch is currently as part of its work plan; conducting Director-General Reviews to designated employers where 72 JSE listed companies operating in different sectors were identified as subject of reviews. The reviews started in July 2017.

The sorry picture was painted today (October 30) during a Departmental stakeholder briefing breakfast session held under the tagline - “We strive for transformation”. A total of 41 employers were issued with the Director-General Recommendations and given 60 days to comply with the recommendations. A total of nine employers are undergoing prosecution for failure to prepare Employment Equity Plans.

Areas of non-compliance include: lack of properly constituted consultative forums; employers preparing EE plans that are not informed by a proper audit and analysis; Assigned Senior EE Managers are junior staff who do not have the necessary authority or resources to execute their mandate as required by Section 24; Employment Equity Plans prepared do not comply with the requirements of legislation; Employment Equity Reports (EEA 2) as required by Section 21 are not informed by an EE Plan and submitted to the Director-General without proper consultation; there are no communication strategies in place to inform the employees of the EE Act and failure to keep records as required.

The Director-General Reviews is part of a legislative requirement in terms of Section 43-45 of the EEA. It empowers the Director-General to conduct reviews to determine the extent to which an employer is complying with this Act. The reviewed companies are in Finance and Business sector; Electricity, Gas (Chemical) and Water; Construction; Manufacturing; Retail & Motor Trade; Catering, and Accommodation Sector.

Labour Deputy Minister, iNkosi Phathekile Holomisa said a transformed labour market was one that was committed to the promotion of accessibility of top management positions to women, and one devoid of favouritism of one racial group over another.

Holomisa said that of the 50 companies interrogated it was sad that none was in compliance.

"This is, of course, totally unacceptable, is offensive, smirks of arrogance and constitutes a declaration of war on the Department in particular and on government in general. Such impunity cannot and will not go unchallenged," Holomisa cautioned.

The EE Act is currently a subject of discussion at Nedlac ahead of amendments to link doing business with government to compliance with EE legislation. The amendments also seek to strengthen powers of the inspectorate among others.

Department of Labour Chief Director Statutory & Advocacy Services, Advocate Fikiswa Mncanca said that EE implementation was not an event, but a process. Mncanca said employers continue reporting without EE plans, non-implementation of EE plans; appointment of EE managers wihout providing necessary support and authority, and a lack of transformation.

Commission for Employment Equity (CEE) Chairperson, Tabea Kabinde said EE stats tells the real story of Apartheid. Kabinde said despite the Commissions efforts last year through sector engagements to engage Chief Executives, these were not interested, instead chose to delegate junior employees to interact with the Commission.

Kabinde said the sector engagements turned into a lamenting exercise, and demonstrated a lack of will from company boards. She lamented the practise of gate-keeping which she said was preventing transformation.

She said the Commission welcomes the promulgation of EE legislation to link it to State contracts. Kabinde said the Commission also wants amendments to legislation to allow for the setting of sector targets. She said the CEE has commissioned a research on the impact of migrant labour in the labour market and was intent on its advocacy work.

The Commission for Employment Equity is a statutory body established in terms of section 28 of the Employment Equity Act. Its role is to advise the Labour Minister on any matter concerning the Act, including policy and matters pertaining to the implementation of the EE Act.

Media Statement: Department of Labour: 30 October 2017

Maternity leave is no longer for mom alone – but it’s still baby steps for now

By Nicholas Preston, Director, Sean Jamieson, Associate, Employment, Cliffe Dekker Hofmeyr

The provision of leave benefits has always been a highly debated topic. We previously wrote on the hallmark judgment of MIA v State Information Technology Agency (Pty) Ltd (D 312/2012) [2015] ZALCD 20 (SITA case) wherein a male employee in a Civil Union applied for maternity leave in anticipation of the birth of his surrogate child and on account of the fact that he would take the role of primary caregiver, which is ordinarily performed by the birthmother. The employer denied his request for maternity leave.

The dispute was referred to the Labour Court, which held that the right to maternity leave in terms of the Basic Conditions of Employment Act, No 75 of 1997 (BCEA) is an entitlement which is not solely linked to the welfare and health of the child’s mother, but is also connected to the child’s best interests. Accordingly, the Labour Court held that there is no reason why the employee, in the position that he was, should not be entitled to ‘maternity leave’ and equally there is no reason why such maternity leave should not be for the same duration as the maternity leave to which a natural mother of a child is entitled and during which time care is to be provided to a new born child.

While this judgment does not provide blanket protection to fathers in all parenting scenarios, the Labour Court illustrated that in appropriate circumstances, it may come to the assistance of primary caregivers who are not statutorily entitled to maternity leave.

In fact, the SITA judgment has paved the way to the development of the current Labour Laws Amendment Bill and its proposed amendments to the BCEA’s leave provisions.

On 20 October 2017, Parliament’s Portfolio Committee on Labour issued an invitation to the public for comments on the Bill and its proposed amendments. The purpose of the Bill is to, among other things, “provide for parental, adoption and commissioning parental leave to employees”, which leave benefits are currently not provided for in the BCEA.

The Bill proposes that an employee, who is an adoptive parent of a child who is below the age of two, be entitled to 10 consecutive weeks’ adoption leave from the date of the adoption order. In other instances, such as where the child is over two years old, the adoptive parent may be entitled to 10 consecutive days’ parental leave. This 10-day parental leave is also applicable to other non-birth giving parents upon the birth of their child, such as fathers and/or non-primary care giving spouses.

Currently, in terms of s27 of the BCEA, fathers are only entitled to take three consecutive days’ family responsibility leave when their child is born. The Bill’s proposed parental and adoptive leave benefits seek to increase this entitlement.

The SITA judgment clearly acknowledged that in its current form, the BCEA did not protect all categories of parents and more importantly, the child’s interests where he/she is not born to his/her biological mother who is entitled to four months maternity leave. In fact, the judgment held that “it is clear that in order to properly deal with matters such as this it is necessary to amend the legislation and in particular the Basic Conditions of Employment Act”.

It, therefore, appears that the Bill and Parliament’s Portfolio Committee on Labour’s call for comments seeks to codify the shortfalls that the SITA judgement identified.

While the proposals in this Bill are most certainly a positive step to enhancing the rights of adoptive and spousal partners, the Bill is still required to go through the remainder of the legislative approval process. Further updates to follow.

For more information contact Nicholas Preston at nicholas.preston@cdhlegal.com or Sean Jamieson at sean.jamieson@cdhlegal.com

Article published with the kind courtesy of Cliffe Dekker Hofmeyr www.cliffedekkerhofmeyr.com

When parties are in dispute over whether a strike is over

By Neil Coetzer, Partner, Employment Law, Benefits & Industrial Relations, Cowan-Harper Attorney

In the recent case of AMCU & Others v Australian Laboratory Services (Pty) Ltd (JS315/12, 1November 2017) the Labour Court was called upon to consider whether the dismissal of some 90 employees for their participation in an unprotected strike was fair. The Union (“AMCU”), had sought organisational rights at the employer’s workplace during 2011.

After AMCU referred a dispute to the CCMA, the Employer (“ALS”) agreed to commence negotiations with AMCU in respect of wages and other issues and sought to have this process concluded by early September 2011. This did not happen.

On 10 October 2011 AMCU referred a mutual interest dispute to the CCMA concerning negotiations over terms and conditions of employment.

At the conciliation, ALS contended that the parties had not deadlocked and accordingly there was no ‘dispute’ to be conciliated. ALS asked the conciliating commissioner to issue a jurisdictional ruling on this issue.

On 25 October 2011 the CCMA issued the certificate of outcome, but no jurisdictional ruling was issued along with it. On the same day AMCU issued its notice of intention to strike, while ALS responded with a letter advising AMCU that its strike was unprotected on the basis that no dispute existed.

The strike commenced on 28 October 2011. The strike was, regrettably, marred by acts of violence and intimidation. On 7 November 2011 ALS obtained an interim Order from the Labour Court halting the strike. On the same day, ALS made several attempts to serve a copy of the interim Order on the strikers and AMCU.

The strikers nevertheless failed or refused to comply with the Order.

ALS then issued an ultimatum requiring the strikers to return to work by 07h00 the following day, 8 November 2011. When the strikers did not comply with the ultimatum, ALS issued a second ultimatum at 08h15, requiring the strikers to return to work by 09h00. Attached to this ultimatum was a copy of the interim Order.

At this point AMCU’s President, who was present at the strike, advised the strikers to return to work in compliance with the interim Order of the Labour Court.

When the strikers attempted to enter the workplace at 08h50, ALS became sceptical of the strikers’ sudden change in approach, particularly in view of the violence and intimidation which had taken place, the inflammatory and threatening songs which had been sung and the fact that the strikers were wearing Union t-shirts.

ALS accordingly required the employees who wished to return to work to sign an undertaking in which they agreed to, inter alia, refrain from violence, comply with all company policies and lawful instructions and to render service in accordance with the required performance standards.

The undertaking was given to AMCU’s President, who indicated that the strikers would not sign anything. A flurry of correspondence was then exchanged between ALS and AMCU. ALS accused AMCU of refusing to comply with the interim Order and alleged that AMCU’s members were still on strike.

AMCU denied this, reiterating that its members had complied with the interim Order at 08h50 on 8 November 2011 and that ALS had engaged in an unprotected lock-out by refusing to allow the strikers to resume work.

At about 10h15 on 8 November 2011 ALS issued a third ultimatum requiring the strikers to present themselves for work.

In view of the undertaking which ALS required employees to sign, none of the strikers presented themselves for work and at 11h00 ALS posted a notice on the security booth advising strikers that they had been dismissed with immediate effect for failing to comply with the interim Order and the three ultimata issued by ALS.

ALS did not offer AMCU an opportunity to make representations prior to dismissing the strikers.

The Court considered item 6 of the Code of Good Practice: Dismissal and commented that there are additional factors outside of item 6 which need to be considered in determining the fairness of a dismissal. In particular, it is also important for the Court to consider the parties’ conduct in the context in which it took place.

The Court found that ALS did all that it reasonably could to bring the interim Order and the first ultimatum to the attention of the strikers.

It also accepted that ALS may have wanted some assurance from the strikers, in the form of an undertaking, in regard to their return to work. Unfortunately, the manner in which this unfolded was not ideal.

Essentially, AMCU and ALS had agreed that the strike should come to an end, but were unable to agree on how the strikers should return to work.

The Court was of the view that both parties could be blamed for failing to engage properly with each other, but that ALS should have paused to consider whether dismissal was the appropriate or only alternative in the circumstances.

The Court found that ALS took the decision to dismiss at a time when it knew that the strikers wished to return to work, but had refused to sign an undertaking.

It is important to note that the undertaking was additional requirement which was not part of either the interim Order or the ultimata issued by ALS.

At this point ALS should, at the very least, have given the strikers an opportunity to address the Company on why they refused to sign the undertaking before a decision on their dismissal was taken.

The Court also lamented the lack of open and constructive dialogue between the parties.

The Court found that the dismissal of the employees was both substantively and procedurally unfair. In regard to an appropriate remedy, the Court found that reinstatement was not practicable due to the fact that ALS was a ‘hollowed out version’ of what it was at the time of the dismissals, with its workforce having shrunk by some 70%.

In the circumstances the Court considered the conduct of the strikers, and particularly the violence and intimidation that was present, and awarded each employee eight months’ remuneration as compensation.

Strike law has become extremely technical and employers should not venture into that area without having taken legal advice well in advance.

At the earliest sign of a strike, employers should consult with their legal representatives to prepare strike contingency plans and consider ways in which the strike can be avoided, since a strike should be a weapon of last resort.

As part of that process, the employer must make a genuine, concerted effort to resolve disputes. Aggressive, inflexible or insensitive approaches to negotiations on matters of mutual interest often result in negativity, resentment and violence.

A misstep in collective bargaining and strike management strategy could have severe financial and other repercussions for employers.

For more information please contact Neil Coetzer at ncoetzer@chlegal.co.za or (011) 783 8711 / (011) 048 3000

Suspension without pay: Delays caused by employees will cost them

By Hugo Pienaar, Director, Prinoleen Naidoo, Associate, Employment practice, Cliffe Dekker Hofmeyr

Drawn-out, expensive suspensions are a creeping phenomenon. Whilst there is an onus on the employer to deal with labour disputes “expeditiously”, many employees charged with misconduct deliberately delay the process or attempt to postpone their fate by producing sick notes, claiming unavailability of their representative or changing representatives at the last minute.

Generally, a suspension pending a disciplinary enquiry is effected at the instance of an employer. As a consequence, the employer remains liable to pay a suspended employee at the normal rate. Delays in the process can end up bleeding the employer dry.

The question that then arises is in what circumstances an employee pending a disciplinary hearing may be suspended without pay. The answer to this question is important, because suspension must also be fair and the employee is entitled to challenge a suspension that he/she feels is unfair.

A suspension may amount to an unfair labour practice if not executed in accordance with the principles of fairness and in terms of the employer’s codes and procedures.

In the case of Msipho and Plasma Cut (2005) 26 ILJ 2276 (BCA), an employee was suspended on full pay pending a disciplinary enquiry into alleged misconduct. He was entitled to be represented by a union official. At the hearing his union official was not present. The employee requested and was granted a postponement to enable him to secure the attendance of a representative. The postponed hearing was held six weeks later. The employer failed to pay the employee during this period.

The employee referred an unfair labour practice dispute to the Centre for Dispute Resolution claiming that he was entitled to be paid whilst on suspension pending an enquiry.

The arbitrator noted that the employee was aware of the original date of the hearing and it was his responsibility to secure the attendance of his representative. He failed to discharge this responsibility and it was unfair to blame the employer for his failure. If a scheduled hearing was postponed at the instance of an employee, the employer might not be liable for remuneration from the date of postponement to the date of hearing. Otherwise, employees would find reason to delay disciplinary proceedings as this would always be at the employer’s cost.

The arbitrator therefore, ruled that the failure to pay the employee during the period of postponement was not an unfair labour practice.

Two years later, these sentiments were echoed by an arbitrator of the MEIBC in the matter of SAEWA obo Members and Aberdare Cables [2007] 2 BALR 106 (MEIBC).

In this case, the employee was suspended on full pay pending a disciplinary enquiry. The hearing was postponed at the request of the union and was ultimately held about two weeks after the scheduled date. The company agreed to the postponement with the proviso that the further period of suspension would be unpaid. The employee claimed that he was entitled to his pay during the full period of suspension.

The arbitrator noted that employees suspended pending disciplinary action are normally entitled to their full pay. However, to apply this principle to situations where suspension is extended at the request of the employee would be unfair to employers. The employee was accordingly not entitled to be paid for the additional period of suspension.

It appears that arbitrators have come to realise that delaying tactics by employees on full pay can result in an abuse of the disciplinary process and have sought to close the gap on this phenomenon. In the public service for example, government spends millions on salaries of suspended employees and there are increasing measures identified to address this problem.

It is quite clear that employers have failed to implement proper procedures to ensure the completion of disciplinary processes within reasonable timeframes, and therefore tacitly allow employees to be on suspension endlessly, with full pay.

It is important that the employers amend their disciplinary code or policies and procedures to allow for the remedy of suspension without pay in the case of undue delays in the disciplinary enquiry caused by an employee.

Medical certificates ought not to be accepted on face value. The employer should be guided by the Ethical and Professional Rules of the Medical and Dental Professions Board of the Health Professions Council of South Africa with respect to medical certificates and be guided by their own codes and practices in this regard.

For more information, contact Professor Hugo Pienaar at hugo.pienaar@cdhlegal.com or Prinoleen Naidoo at prinoleen.naidoo@cdhlegal.com

Article published with the kind courtesy of Cliffe Dekker Hofmeyr www.cliffedekkerhofmeyr.com

The National Minimum Wage Bill, 2017 and the Proposed Amendments to the Basic Conditions of Employment Act, 2017

By Jayson Kent, Senior Associate and Taryn York, Candidate Attorney, Employment Law, Benefits & Industrial Relations, Cowan-Harper Attorney

On Friday, 17 November 2017 the Department of Labour published the National Minimum Wage Bill, 2017 (“the NMW Bill”) and the Basic Conditions of Employment Amendment Bill (“the BCEA Bill”) for public comment, pertinent aspects of both are discussed below.

The National Minimum Wage Bill, 2017

The purpose of the NMW Bill is to advance social economic development and social justice by improving the wages of the lowest paid employees, by protecting employees from unreasonably low wages, by preserving the value of the national minimum wage and by promoting collective bargaining and supporting economic policy.

In order to achieve the aforementioned goals, the NMW Bill seeks to provide for a national minimum wage and establish a National Minimum Wage Commission (“the Commission”) which is intended to implement the provisions of the National Minimum Wage Act, 2017 (“the Act”).

The NMW Bill, in its current form, specifies a national minimum wage of R20,00 for each ordinary hour worked. The NMW Bill further specifies that farm workers, domestic workers and workers employed on an expanded public works programme should be paid a minimum wage of R18,00, R15,00 and R11,00 per hour, respectively. Workers who have concluded learnership agreements will also be entitled to allowances, depending on their qualifications, ranging from R301,01 to R1 755,84 per week.

The NMW Bill further prescribes that the payment of a national minimum wage takes precedence over any contrary provision in any contract, collective agreement or law, except a law amending the Act. The national minimum wage must also constitute a term of the employee’s contract except to the extent that the contract, collective agreement or law provides for a wage that is more favourable to the employee.

Furthermore, the national minimum wage is calculated as being the aforementioned amounts excluding any payment made to enable an employee to work including transport, equipment, food or accommodation allowance, any payment in kind, which includes board or accommodation, gratuities including bonuses, tips or gifts and any other prescribed category of payment.

If an employee is paid on a basis other than the number of hours worked, the employee may not be paid less than the minimum wage for the ordinary hours of work. Furthermore it would constitute an unfair labour practice where employers unilaterally alter hours of work or other conditions of employment when the national minimum wage is implemented.

However, the NMW Bill empowers the Minister, on application by an employer, to grant exemptions for payment of the national minimum wage in certain circumstances. The exemption granted must specify the period for which it is granted, which may not be longer than a year, it must specify the wage that the employer is required to pay its employees and any other relevant condition. This may offer some relief to small employers that are genuinely unable to pay employees wages in line with the prescribed minimum.

The NMW Bill also makes provision for the establishment of the Commission to review the national minimum wage and to make recommendations annually for the adjustment of the national minimum wage. The Commission may also investigate the impact of the national minimum wage on the economy, collective bargaining and income differentials.

The Act is to commence on 1 May 2018.

The Basic Conditions of Employment Amendment Bill, 2017

The purpose of the BCEA Bill is to introduce amendments to the Basic Conditions of Employment Act, 1997 (“the BCEA”) as a result of the proposed NMW Bill.

The BCEA Bill aims to, inter alia, empower labour inspectors to monitor and enforce the application of the proposed Act and the Unemployment Insurance Act, to repeal the provisions dealing with making sectoral determinations and to extend the jurisdiction of the Commission for Conciliation, Mediation and Arbitration (“the CCMA”) by making provision for enforcement procedures relating to underpayment in terms of, inter alia, the BCEA and the Act.

Proposed Amendments to the Functions of the Labour Inspector

The functions of the labour inspector will be extended to include the referral of disputes to the CCMA concerning non-compliance with, inter alia, the BCEA, the Act, the Unemployment Insurance Act and the Unemployment Insurance Contributions Act.

In order to enforce an employer’s compliance with the proposed Act, the amendments will permit the labour inspector to obtain a written undertaking from an employer to comply with the Act and where the employer has failed to do so, the amendments seek to authorise the Director-General to apply to the CCMA to make an employer’s undertaking an arbitration award.

The BCEA Bill also seeks to empower the labour inspector to issue compliance orders to cover an employer’s breach of the Act, the Unemployment Insurance Act and the Unemployment Insurance Contributions Act. Employers are however able to refer a dispute to the CCMA for determination, through arbitration, if they are served with a compliance order by the labour inspector.

Further Proposed Amendments to the BCEA

The BCEA Bill further seeks to enable employees earning below the threshold, R205 433.30 per annum, to refer disputes to the CCMA regarding an employer’s failure to pay wages or any amount owing to them in terms of the BCEA, the proposed Act, a collective agreement, contract or sectoral determination. It is anticipated that this amendment will provide for a cheaper, more expeditious method of resolving disputes, as the recourse to employees in such circumstances until now has been limited to approaching a Court. However employees earning above the threshold will still be able to bring claims in the Labour Court and any civil Court. It remains to be seen how the CCMA is able to cope with this increase to its already over-burdened caseload.

The BCEA Bill furthermore requires an employer who fails to pay an employee the national minimum wage to pay interest on any late payment calculated and for a fine to be imposed on employers for the non-compliance with the Act. The fine would entail an employer having to pay an employee an amount twice the value of the underpayment or twice the employee’s monthly wage, whichever is greater.

In light of the BCEA Bill’s proposed amendments it is clear that an obligation will be placed on employers to comply with the proposed Act, when implemented, by the proposed monitoring and enforcement of the application of the Act by labour inspectors in regard to obtaining written undertakings from employers and by serving employers with compliance orders, and is further illustrated by the imposition of fines for non-compliance with the Act.

In light of the NMW Bill seeking to advance economic development and social justice by improving the wages of the lowest paid workers and the proposed amendments to the BCEA, employers are encouraged to ensure that their employees’ remuneration is brought in line with the proposed Act in order to avoid being held liable for any potential fines or the payment of interest on any late payments to their employees in regard to their non-compliance. Furthermore, an employer’s compliance in that regard would ensure that they do not find themselves defending further disputes at the CCMA or the Labour Court.

For more information please contact Jayson Kent at JKent@chlegal.co.za or Taryn York at TYork@chlegal.co.za or (011) 783 8711 / (011) 048 3000

Where to for labour brokers - third option for constitutional court by “deeming” section 198A(3) unconstitutional

By Rod Harper, Head; Tanya Mulligan, Senior Associate and James Horn, Employment Law, Benefits & Industrial Relations, Cowan-Harper Attorney

Introduction

The purpose of this article is to discuss whether section 198A(3) of the Labour Relations Act 66 of 1995, as amended (“the LRA”), which deals with the controversial “deeming” provision in relation to the Clients of Labour Brokers, should be referred back to Parliament. The fundamental question is whether the Constitutional Court is being asked to intervene to an extent which is unreasonable in light of the poor quality of the drafting of section 198A(3) of the LRA and whether it would be better to simply remit the section back to Parliament for re-drafting.

Judicial Uncertainty

In the recent matter of Numsa v Assign Services (Pty) Ltd and Krost Shelving and Racking (Pty) Ltd[1] the Labour Appeal Court, in interpreting section 198A(3) of the LRA, denounced the dual or parallel employer interpretation in favour of a sole employer interpretation. The matter has been taken on appeal to the Constitutional Court and we understand that it will be heard in early 2018. The Judgment of the Constitutional Court will directly impact upon the TES industry and their respective Clients who may number in the thousands.

The effect of the LAC’s Judgment is that TES employees automatically ‘become’ the sole employees of the Client after being placed at a Client for a period in excess of three months (subject to certain exceptions). If the LAC’s Judgment is correct, the TES then falls out of the picture altogether.

Worryingly, the CCMA has also issued a directive obliging Commissioners to follow the LAC’s decision despite the pending appeal to the Constitutional Court. If the LAC’s decision is ultimately set aside by the Constitutional Court, the Labour Court will no doubt be inundated with review applications on this issue, not to mention the legal and other costs that will be incurred by employers should this transpire.

Inherent Ambiguity

At the heart of the issue regarding the correct interpretation of section 198A(3) of the LRA is the ambiguous and arbitrary manner in which section 198A as a whole was drafted. Based on the inelegant wording of the section, persuasive arguments can be made for either a sole employer or a dual employer construction. This could have been avoided had the drafters simply stated that TES employees would “become” the employees of the Client after a period of three months. Instead the drafters of the amendment stated that the Client is “deemed” to be employer for the “purposes of the LRA”. The LRA is also silent on the continued role of the TES, if any.

The use of the word deeming when drafting statutes often invites confusion because the word can have different meanings and on occasion, with respect, it indicates that the drafters have not given sufficient attention to the intention underlying the provision. In this regard, in commenting on the argument before the Labour Court on this issue, the writer Grogan stated as follows:-

“Both parties focused on the meaning of the word ‘deemed’, and both agreed that it has a meaning that isn’t easy to pin down. Both, naturally, sought to stretch that elastic word in their own favour. In its dictionary meaning, the verb ‘to deem’ means to ‘judge or account to be’, or to ‘regard as’. As an adjective, ‘deemed’ means ‘judgment, opinion or surmise’. To say that X is deemed to be Y is therefore something different from saying X is Y.”[2]

The vagueness of the section therefore places the Constitutional Court in the unenviable position where it is essentially left to guess the intention of the legislature, especially in the context where the consequences are potentially highly prejudicial for the TES industry.

Violation of the Rule of Law

It goes without saying that it is a fundamental aspect of the Rule of Law that statutes should be written in a clear and accessible manner in order to create legal certainty and transparency. The Constitutional Court has previously held that “… the legislature is under a duty to pass legislation that is reasonably clear and precise, enabling citizens and officials to understand what is expected of them”.[3]

In the international context, more certainty with regard to TES’ has been created through the Employment Agencies Convention which provides that all members to the Convention are required to allocate the respective responsibilities of both the TES and the Client. The Convention has not been ratified in South Africa and in any event section 198A(3) does not delineate the respective responsibilities contemplated by the Convention.

The explanatory memorandum that accompanied section 198A is also of little assistance in resolving the issue as it does not specifically address these issues other than stating that the Client should be “treated as” the employer.

The drafting of 198A(3) has therefore created deep seated uncertainty regarding who the employer is and what the obligations of the parties are following the expiry of the three month period. Given that ambiguity, any interpretation will necessarily involve a ‘reading in’ of provisions in order to render the provision intelligible.

As previously pointed out by the Constitutional Court: “[f]or [the Court] to attempt that textual surgery would entail it departing fundamentally from its assigned role under our Constitution. It is trite but true that our role is to review, rather than to re-draft, legislation”. [4]

Recommendation

Given the circumstances, it may be preferable for the Constitutional Court to simply refer section 198A(3) back to the legislature for re-drafting so that clarity can be provided by the legislature. In the absence of doing so, it appears that the Court will be left to essentially create a body of substantive law dealing with TES’. This is far from ideal and may have a range of unintended consequences including significant job losses.

Given the fact that proper legal debates have now taken place on this section, Parliament would have more clarity on the implications of the amendment and hence the actual intention could be dealt with more coherently.

For more information please contact Rod Harper at RHarper@chlegal.co.za, or Tanya Mulligan at TMulligan@chlegal.co.za or James Horn at JHorn@chlegal.co.za or (011) 783 8711 / (011) 048 3000

[1] (2017) 38 ILJ 1978 (LAC).

[2] Grogan, J ‘Let the “deemed” be damned – section 198A(3)(b) deconstructed’ (2015) Dec EL 4.

[3] Investigating Directorate: Serious Economic Offences and Others v Hyundai Motor Distributors (Pty) Ltd and Others in re Hyundai Motor Distributors (Pty) Ltd and Others v Smit NO and Others 2001 (1) SA 545.

[4]Case and Another v Minister of Safety and Security and Others, Curtis v Minister of Safety and Security and Others (CCT20/95, CCT21/95) [1996] ZACC 7.

The first stop is the CCMA

By Aadil Patel, Director, National Practice Head and Samantha Coetzer, Consultant, Employment, Cliffe Dekker Hofmeyr

In the unreported case of the South African Equity Union obo Van Wyk and 100 members v Lodestone confectionary (Pty) Ltd t/a Candy Tops (PS19/16), the Labour Court considered whether an unfair dismissal dispute was required to be referred to the CCMA before the Labour Court could determine the dispute in circumstances where, prior to the dismissal, the CCMA facilitated the parties engaged retrenchment consultations.

In the case, the union referred an unfair dismissal dispute to the Labour Court. The dismissals arose as a result of a large scale retrenchment. When the employer contemplated the dismissal it issued the trade union with the s189(3) notice, inviting it to consult. The employer also requested that the CCMA facilitate the consultations in terms of 189A (3) of the Labour Relations Act, No 66 of 1995.

The employer dismissed the employees for operational requirements after seven facilitated consultation meetings and the parties’ failure to reach consensus on issues.

After the dismissals, the union failed to refer the dismissal dispute to the CCMA for conciliation. It, instead, approached the Labour Court directly to determine the fairness of the employees’ dismissals for operational requirements.

The employer argued that the Labour Court did not have the jurisdiction to determine the dispute as the union was required to first refer the unfair dismissal dispute to the CCMA for conciliation before it approached the Labour Court. It argued that there was a requirement that the dispute must be referred to conciliation before the Labour Court can determine it.

The union argued that since the CCMA was involved in facilitating the retrenchment consultations it was not required to refer that dismissal dispute to the CCMA and that it could approach the Labour Court directly. The Labour Court disagreed.

The Labour Court highlighted the differences between the facilitation and conciliation processes and held that they are two different processes. It held that, “facilitation is held pre-dismissal with a view to avoid unfair retrenchment. Conciliations are held post dismissal in an attempt to resolve the unfair dismissal dispute”

It also held that, “The Constitutional Court confirmed that the referral of a dispute to the CCMA or bargaining council and the issuing of the certificate of the non-resolution of the dispute constitute the necessary jurisdictional fact for the Labour Court to have jurisdiction over unfair dismissal disputes which include unfair mass retrenchment disputes.”

The union was unsuccessful and the Labour Court held that it that it lacked jurisdiction to determine the dispute.

This case is important as it confirms that despite the CCMA facilitating parties engaged in retrenchment consultations, an unfair dismissal dispute must still be referred to CCMA or bargaining council before the Labour Court will determine the unfair dismissal dispute.

For more information please contact Aadil Patel at aadil.patel@cdhlegal.com or Samantha Coetzer at samantha.coetzer@cdhlegal.com

Article published with the kind courtesy of Cliffe Dekker Hofmeyr www.cliffedekkerhofmeyr.com

Relief for violent and ongoing strike action: What’s on the cards?

By Hugo Pienaar, Director, Sean Jamieson, Associate, Employment practice, Cliffe Dekker Hofmeyr

It is no secret that strike action in South Africa is frequently accompanied by violence, often with far-reaching effects for employers, non-striking employees and the public. Strike action also regularly continues for a protracted period of time, detracting from a focus on collective bargaining. But what relief is available to employers who are faced with such industrial action?

The Labour Relations Act, No 66 of 1995 (LRA) does not currently provide any direct means of obtaining relief for prolonged strike action. While employers may interdict protected strikes on account of violence, this often does not have the desired effect and the unlawful conduct simply continues.

An employer may, in theory, also approach the Labour Court to declare a protected strike to be unprotected where it is no longer conducive to collective bargaining, however this approach is yet to be successful and our courts appear hesitant to limit the constitutional right to strike for this purpose.

It’s not all doom and gloom, however, and there appears to be some potential light at the end of the tunnel in the form of proposed amendments to the LRA in order to introduce alternative avenues to obtain relief in the circumstances.

On 24 November 2017, parliament introduced the Labour Relations Amendment Bill (the Bill) comprising various proposed amendments to the LRA. One such proposed amendment is to introduce the establishment of an advisory arbitration panel (the panel), appointed by the director of the CCMA (the director).

In terms of the proposed amendments, the director may appoint the panel if a strike has become violent and/or lengthy. The director may appoint the panel of his own accord, on application by a party to the dispute, where the Minister of Labour instructs the director to do so, where the Labour Court makes an order in this regard or when agreement is reached between the parties to the dispute. The appointment of the panel is subject to certain further conditions that must be met.

Interestingly, the amendments also propose that the Labour Court may make an order requiring the director to appoint a panel where the court receives an application by any person or association of persons that will be materially affected by the strike action. This opens the door for a member or members of the public who are not party to the dispute to approach the Labour Court for relief where they are affected by the strike action.

What is important to consider when utilising this approach is that an arbitration must first take place before any potential relief in the form of an advisory award may ensue. This may be a lengthy process under circumstances where intervention is urgently required.

Should this amendment be passed in its current wording, it may constrain an employer’s ability to approach the Labour Court to declare a protected strike as unprotected. This is because the amendments provide an alternative avenue for employers to pursue in an attempt to resolve the dispute. Accordingly, it may be difficult for an employer to argue that the strike is no longer conducive to collective bargaining where it has not first pursued an advisory award in an attempt to resolve the dispute.

The significance of the proposed amendment, however, lies in the effect of an advisory award. Once the advisory award is received, the parties have seven days to accept or reject the award (this period can be extended by a maximum of five days). Should a party to a dispute fail to accept or reject the award within that period, the party is deemed to have accepted the award.

The award will therefore only be binding on a party if that party accepts the award or is deemed to have accepted the award and on condition that at least one other party to the dispute accepts the award. Therefore, in circumstances where there are more than two parties to a dispute (such as where there are two or more unions involved) the award would be binding on those parties who accept or are deemed to have accepted the award and provided that at least one other party accepts that the award is binding. Where the third party rejects the award, it appears that award will not bind that party.

The advisory award would include a report on the findings, recommendations for the resolution of the dispute, the motivation as to why the recommendations ought to be accepted and a statement that the parties have 7 days to accept or reject the award.

It seems unlikely that either the employer or the trade union, after receiving an advisory award which is not in its favour, would nonetheless consent to the award being binding. In such circumstances, the effect of the panel’s award may have no impact on resolving or facilitating the resolution of the dispute. However, where this process has been pursued and an advisory award has been issued declaring a strike to no longer be conducive to collective bargaining, this may potentially bolster the prospects of success in an application to declare a strike to be unprotected.

While these proposed amendments appear to be encouraging, they may present certain obstacles where parties seek to obtain urgent relief. The amendments are however still in the early stages of the legislative process and it may be some time before we see these amendments, in their current form or otherwise, adopted by the legislature. Updates to follow in due course.

For more information, contact Professor Hugo Pienaar at hugo.pienaar@cdhlegal.com or Sean Jamieson at sean.jamieson@cdhlegal.com

Article published with the kind courtesy of Cliffe Dekker Hofmeyr www.cliffedekkerhofmeyr.com

LRA Bill: Extension of bargaining council agreements to non-parties

By Fiona Leppan, Director and Bheki Nhlapho, Associate, Employment, Cliffe Dekker Hofmeyr

The LRA Bill seeks to amend s32 to provide a process and criteria for the extension of bargaining council agreements to non-parties by the Minister of Labour. We explore what is envisaged.

The Current Position

A bargaining council may request the Minister of Labour to extend a collective agreement concluded in a bargaining council to non-parties that fall within the scope of the bargaining council. Such non-parties must be identified in the request made to the Minister. Two requirements must be met for such a request to be valid:

one or more registered trade unions whose members constitute the majority of members of the unions that are party to the bargaining council have voted in favour of such extension at a meeting of that bargaining council; and
one or more registered employer organizations, whose members employ the majority of the employees employed by members of the employer organizations that are party to the bargaining council, have likewise voted in favour or such extension at that bargaining council meeting.

The Minister must also be satisfied that the following factors are met before exercising the power to extend:

the majority of all employees who, upon extension of the collective agreement, fall within its scope and are members of the trade unions party to the bargaining council;
the members of employer organizations that are parties to the bargaining council, upon the extension of the collective agreement, employ the majority of employees who fall within the scope of the collective agreement;
the bargaining council must make allowance for an effective exemption procedure so that non-parties can apply for exemptions from the provisions of the collective agreement and these exemptions must be dealt with swiftly (within 60 days); and must allow for an independent body to hear and decide appeals where such exemption is declined (within 30 days);
the provisions of the collective agreement must not discriminate against non-parties.

Despite the above, the Minister is given the power to extend a collective agreement if the parties to the bargaining council are not in the majority but are sufficiently representative. This power can be exercised where the Minister is concerned that a failure to extend could undermine collective bargaining at a sectoral level. When determining sufficient representivity, the Minister must consider a number of aspects such as:

the composition of the workforce in the sector;
the extent to which employees work for temporary employment services;
the number of employees on

fixed-term contracts, or engaged in other non-standard employment categories.

Court Challenges

In recent years there have been a number of cases where employers have challenged the validity of such Ministerial extensions, for example:

NEASA v Minister of Labour (2012)2 BLLR 198 (LC) where the issue was whether all the statutory requirements for an extension had been met by the Minister. The Labour Court ruled against NEASA in its urgent application for an interdict, but NEASA went on to succeed in subsequent review proceedings. Certain of those statutory requirements were not met and the Minister’s decision was set aside.
Valuline CC v Minister of Labour (2013)34ILJ 1404 (KZP) where the Minister failed to rely on objective evidence to test the level of representivity of the employer parties to the collective agreement that was sought to be extended.
Free Market Foundation v Minister of Labour & Others (2016)8 BLLR 805 (GP) where the High Court held that such extensions to non-parties were not unconstitutional but a request to extend constituted reviewable administrative action in appropriate circumstances.

The LRA Bill

The proposed LRA Bill seeks to make challenges of this nature more difficult to mount. The function to determine the levels of representivity would now shift from the Minister to the Registrar of Labour Relations. It will be up to the Registrar to provide sufficient proof of the levels of representativeness of the parties concerned. This will ultimately be determined by an accurate assessment of applicable membership figures.

With regard to funding agreements, such as the MEIBC training and education scheme and its collective agreement regulating collective bargaining levies, the Minister would be able to renew such collective agreements if a failure to do so might negatively impact sectoral collective bargaining. An agreement may be renewed for 12 months at the request of a party to the bargaining council where the underlying agreement has expired or where the parties have not concluded a replacement collective agreement within 90 days of its expiry. There are procedural steps to be followed as the Minister would be duty bound to publish such intention to renew in the Government Gazette calling for submissions to be made before a decision to renew is determined. Such a decision is susceptible to review in a court with competent jurisdiction.

Much turns on levels of representivity and the change of dynamics in union membership. Recently, the Casual Workers’ Advice Office (CWAO) has claimed that registered trade unions represent only 24% of South Africa’s workforce and that the trade union federations at NEDLAC represent far fewer employees than they did previously. The LRA Bill clearly has this in mind when trying to protect the objective of sectoral negotiations and orderly collective bargaining.

For more information please contact Fiona Leppan at fiona.leppan@cdhlegal.com or Bheki Nhlapho at bheki.nhlapho@cdhlegal.com

Article published with the kind courtesy of Cliffe Dekker Hofmeyr www.cliffedekkerhofmeyr.com

What is one month’s notice?

By Joy Walker, Candidate Attorney and Talita Laubscher, Partner, in the Employment and Benefits practice at Bowmans

The interpretation of a “month’s notice” in a termination clause and whether a qualifier, such as a “calendar month’s notice”, bears any significance, has been the subject of debate in our law for some time. In 2009, the court in SAMRO v Mphatsoe (SAMRO) considered whether this phrase meant:

any 30-day period, with the result that notice may be given on any day of the month and the notice period will then terminate in 30 days’ time; or
the beginning of any given month to the end of the same month, with the result that notice may be given on the first day of the month and will continue until the last day of the month. Accordingly, where notice is given on any day of the month, the notice period will only commence on the first day of the following month and will continue until the last day of that same month.

The context is critical

In SAMRO, Judge van Niekerk noted that the meaning of a “month’s notice” could not be determined in a vacuum, but had to be interpreted in the context of the entire employment contract.

In this case, the employee’s contract of employment provided that either party can terminate the contract on “one calendar month’s notice”. The employee gave notice of termination on 8 January 2008 and ceased working on 7 February 2008, the date on which he contended the calendar month’s notice period expired.

SAMRO held a different view. It argued that the contractual notice period meant that the employee’s notice period had to run from the first day of the month to the last day of the same month. The employee’s notice period accordingly only took effect on 1 February 2008 and ran to 29 February 2008. SAMRO argued that, in the circumstances, the employee was not permitted to cease working on 7 February 2008 but was required to work until 29 February 2008. By leaving his employment on 7 February 2008, SAMRO contended that the employee acted in breach of his employment contract.

In interpreting the meaning of “calendar month” as used in the termination clause, the Court considered the Interpretation Act and the Basic Conditions of Employment Act, which both define a “month” as a “calendar month”. Since these definitions are of limited assistance, the Court held that the term had to be interpreted by looking at the context of the agreement as a whole.

The termination clause clearly qualified the notice period with the word “calendar”. However, throughout the rest of the contract, the term “monthly” or “month” was used without the “calendar” qualifier. For example, remuneration was to be paid “monthly” and pension and medical aid contributions were to be deducted on a “monthly basis”. The Court therefore held that the use of the qualifier “calendar” in the termination clause was a significant indicator that the parties clearly intended a different meaning to be given to the term “calendar month” than to the term “month” as used elsewhere in the contract. In the context of the contract as a whole, the Court held that this distinctive meaning of “calendar month” indicated that notice would only be effective from the first of the month running to the end of the same month.

Blanket interpretations discouraged

It is important to note that this judgment does not mean that the term “calendar month” always bears this meaning. Judge van Niekerk was at pains to reject a blanket statutory-interpretation principle as to the meaning of “month” and “calendar month” in an employment contract.

Rather, Judge van Niekerk emphasised the importance of the context and background of the terms of the employment contract itself and the intention of the parties. It is therefore conceivable that in different circumstances, a “calendar month” may well mean notice taking effect on a particular day of the month and running to the corresponding day of the following month. Suffice to say, however, that if both “month” and “calendar month” are used in an employment contract, depending on the context in which they are used, they will probably not accord the same meaning, unless, of course, this is the intention of the parties. If so, this intention ought to be reflected in the contract.

Clarity always pays

When drafting employment contracts, it is important for parties to make their intentions as clear as possible by ascribing specific meaning to the words used. In the absence of such clarity, the courts will have to ascertain the intention of the parties by taking into account the nature and language of the contract. Parties who specifically intend that notice should run from the first of the month would be well advised to expressly provide for this in the employment contracts.

For further information please contact: Joy Walker at joy.walker@bowmanslaw.com or Talita Laubscher at talita.laubscher@bowmanslaw.com or contact Melody Makeka at +27 21 480 7898, M +27 74 101 9082 email melody.makeka@bowmanslaw.com

Talita Laubscher

Joy Walker

Asylum Seekers seek UIF?

By Michael Yeates, Director and Marissa van der Westhuizen, Candidate Attorney, Employment, Cliffe Dekker Hofmeyr

It is safe to say that bona fide Asylum Seekers in South Africa generally don’t have an easy life. Having to escape from one’s own country for fear of being persecuted has its challenges. In many instances, Asylum Seekers escape with little more than the clothes on their back. Those Asylum Seekers who are lucky can adjust to a new lifestyle and integrate into the economic active population of the host country.

South Africa acceded to the U.N. Convention Relating to the Status of Refugees and its 1967 protocol on January 12, 1996, and to the OAU Convention in 1995. The two conventions provide definitions of the term “refugee” and set out the principal rights of refugees in the host country, which in a number of respects are explicitly stated to be the same as those of nationals in that country.

However, Asylum Seekers are currently unable to access Unemployment Insurance Fund (UIF) benefits.

The apparent inability to claim is not a legislative prohibition, but rather because one needs to have a 13-digit South African identity number or passport number in order to successfully apply for UIF benefits. Currently, Asylum Seekers do not have ID numbers – they are simply issued with temporary s24 permits, which are usually renewed on a three or six-monthly basis. According to their permit conditions they are usually entitled to seek employment and to study.

It seems a bit anomalous that although Asylum Seekers despite making contributions to the UIF, are unable to claim. This raises a Constitutional issue – whether or not Asylum Seekers are entitled to social security in terms of s27(1) of the Constitution.

Both the Unemployment Insurance Act and the Unemployment Insurance Contributions Act clearly state that all workers are covered, with no reference to or qualification in terms of nationality. The legislation makes provision for the exclusion of foreigners who enter South Africa in terms of a contract for the purpose of carrying out a contract or service, if upon the termination of the contract, the employer is required to repatriate that person, or if that person is required to leave South Africa. However, there is no duty of repatriation vis-à-vis Asylum Seekers at the time of employing them.

In a recent unreported judgment, Saddiq v Department of Labour and Others (Case number: EQ 04/2017) wherein, the Applicant – an Asylum Seeker who has been in South African since June/July 2011, employed by the same employer for the last two and a half years – approached the court to enforce a claim for UIF benefits and damages flowing from the rejection of such claim.

The basis of his application was prejudice based on his status as Asylum Seeker, which consequently impaired his dignity. The practical cause of this prejudice is that, as a legally present, ex-employee Asylum Seeker, the Applicant did not have an ID or Passport, which is required to claim benefits from the UIF. Throughout his employment, UIF contributions were made by his employer on his behalf. But for his lack of the requisite documents, which he cannot obtain due to his status, the Applicant would have been entitled to claim from the UIF.

Upon submitting a claim for such benefits, the Respondent, the Department of Labour (DOL), informed the Applicant that it had no system to accept or pay asylum seekers, due to the requirement of a 13-digit ID number or valid passport number.

This results in a discrepancy in individuals who contribute to the fund and the consequent (in)availability of benefits to certain contributors who upon termination of employment otherwise, become eligible for such benefits. The alleged discrimination did not take place on one of the expressly mentioned prohibited grounds listed in the Promotion of Equality and Prevention of Unfair Discrimination Act (PEPUDA). Consequently, the Applicant had to prove that the prejudice he suffered is one which either, causes systematic disadvantage, undermines human dignity or adversely affects the equal enjoyment of a person’s rights and freedoms in a serious manner in terms of s13(2)(b) of PEPUDA.

After termination of his employment, the Applicant incurred a substantial amount of debt and had to sell his household assets to make ends meet after termination of his employment. The Applicant had no money to attend to his medical needs, which were aggravated due to stress arising from his unemployment and him not finding any protection or receiving any benefit from the fund, to weather the storm of unemployment despite his contributions.

Accordingly, the court found that the actions against the Applicant by the DOL were indeed unfair and discriminatory, which created systematic disadvantage to the Applicant.

PEPUDA provides the court with wide powers to make an appropriate order when unfair discrimination is established, including payment of damages in respect of proven and future financial loss, impairment of dignity/emotional and psychological suffering caused by discrimination. The court may also make an order restraining unfair discriminatory practices or directing that specific steps be taken to stop unfair discrimination.

Consequently, the court ordered the DOL to process the Applicant’s UIF benefits. Significantly, the court also ordered the DOL to correct their computer systems, which seems to be the practical cause of the preclusion, to allow any asylum seeker who contributed to the fund to be compensated fairly. The court ordered that general damages be paid to the Applicant. The question as to the Constitutionality of such exclusion was left open. It remains to be seen whether UIF benefits will now generally be available to asylum seekers consequent to this judgment.

For more information contact Michael Yeates at michael.yeates@cdhlegal.com

Article published with the kind courtesy of Cliffe Dekker Hofmeyr www.cliffedekkerhofmeyr.com

Mutual Separation Agreements are Valid and Binding- Constitutional Court

By Neil Coetzer, Partner and Manala Rabothata, Candidate Attorney, Cowan-Harper Attorneys

In Gbenga-Oluwatoye v Reckitt Benckiser South Africa (Pty) Limited and Another (2016) 37 ILJ 2723 (CC), the Constitutional Court (“the CC”) considered the validity of a mutual separation agreement and re-affirmed that such agreements are lawful, even if they waive an employee's right to seek judicial redress through the Commission for Conciliation, Mediation and Arbitration (“the CCMA”) and the Courts.

In this case, the employee was employed by Unilever in Dubai. In January 2013 he was approached by a recruitment agent with an opportunity to work in South Africa, which he declined one month later.

He then left Unilever and took up employment at Standard Chartered Bank also in Dubai. Shortly after commencing his employment at Standard Chartered Bank, he contacted the recruitment agent to inquire about the opportunity that was offered to him previously.

This opportunity was with Reckitt Benckiser.

After reconsidering the offer, an interview was arranged with Reckitt Benckiser. At the interview, and in his curriculum vitae, he stated that he was still employed by Unilever, when in truth he was employed by Standard Chartered Bank.

Based on this information, Reckitt Benckiser negotiated a remuneration package, which included a US$40 000 sign-on bonus, a housing allowance and an extended work permit.

The employee commenced employment as Reckitt Benckiser’s Regional Human Resources Director in July 2013.

However, in early 2014, when Reckitt Benckiser discovered that the employee was not in fact employed by Unilever at the time that he had represented, he was called to a disciplinary hearing and dismissed for his material misrepresentation.

The employee then requested a ‘softer exit’ and Reckitt Benckiser agreed.

The employee entered into a separation agreement with Reckitt Benckiser in full and final settlement of any claims that the parties may have against each other.

In the agreement, the employee acknowledged and accepted that the termination of his employment was without duress or undue influence, and that he had voluntarily and unconditionally waived his right to approach the CCMA and any other Court for relief.

Initially the employee applied directly to the CC, but the CC dismissed his application, holding that the matter was not in the public interest.

He then approached the Labour Court (“the LC”) on an urgent basis, arguing that he was coerced into signing the separation agreement against his will and was under duress, and that the terms of the agreement restricted his constitutional right to seek judicial address and was therefore against public policy and invalid from the outset.

However, the LC found that his claim of duress was not supported by the facts and that the separation agreement was a valid compromise since the circumstances were created by his own misrepresentation.

The LC dismissed his application.

The employee then took the matter on appeal to the Labour Appeal Court (“the LAC”), which held that the separation agreement should, in law, be treated in the same manner as any other agreement between an employer and employee.

The LAC went on to confirm that a contract is invalid when it is entered into under duress, where intimidation or improper pressure renders the employee’s consent not true, and therefore the burden of proving duress would rest on the applicant.

However, based on the evidence submitted, the LAC agreed with the LC’s decision and dismissed the application with costs.

The employee then appealed further to the CC. The issue before the CC was whether the full and final settlement limited his constitutional right to seek judicial redress in the CCMA and the Courts.

The CC found that there was no violation of his constitutional right of access to Courts because, as a senior manager the employee had a full understanding of the consequences of the agreed waiver and allowed him equal bargaining power.

In applying the seminal case of Barkhuizen v Napier 2007 (5) SA 323 (CC), the CC held that there was nothing to indicate that the employee had unequal bargaining power when taking into account his position and his level of knowledge and understanding of the contract.

The CC further held that when determining the lawfulness of the waiver, constitutional rights may be limited to the extent that such limitation is reasonable. Full and final settlement clauses, which provide for the finality of a dispute are commonplace and lawful and not contrary to public policy.

The CC concluded that the intentions of the parties were clear, since the employee agreed to part ways with his employer on final terms. The CC held that the agreement itself was unambiguous and that a valid compromise took precedence over any other contractual entitlement that the employee could have had.

The Court dismissed the application for leave to appeal with costs.

For more information please contact Neil Coetzer at ncoetzer@chlegal.co.za or Manala Rabothata at mrabothata@chlegal.co.za (011) 783 8711 / (011) 048 3000