Job security South African labour law

1 job security

1.1 common law
1.2 international labour organisation
1.3 labour relations act

1.3.1 unfair dismissal

1.3.1.1 termination of employment contract
1.3.1.2 failure renew fixed-term contract
1.3.1.3 dismissal reasons relating pregnancy
1.3.1.4 selective re-employment
1.3.1.5 constructive dismissal
1.3.1.6 transfer of employment contracts




1.4 automatically unfair dismissal

1.4.1 section 187 of lra
1.4.2 constitutes automatically unfair dismissal?
1.4.3 dismissals contrary section 5
1.4.4 strike dismissals
1.4.5 dismissal compel employee accept demand in mutual-interest dispute
1.4.6 insubordination
1.4.7 pregnancy dismissals

1.4.7.1 fair dismissal




1.5 discipline , dismissal misconduct

1.5.1 origin of employer’s right discipline
1.5.2 discipline , common law
1.5.3 code , employer’s right discipline
1.5.4 form , content of disciplinary codes of conduct

1.5.4.1 form
1.5.4.2 content


1.5.5 corrective or progressive discipline
1.5.6 substantive fairness of dismissal misconduct
1.5.7 contravention of rule employee

1.5.7.1 did rule exist?
1.5.7.2 there contravention of rule?
1.5.7.3 validity , reasonableness of rule
1.5.7.4 employee’s knowledge of rule
1.5.7.5 consistent application of rule


1.5.8 dismissal appropriate sanction

1.5.8.1 gravity of misconduct
1.5.8.2 circumstances of infringement
1.5.8.3 nature of employee’s job
1.5.8.4 employee’s circumstances
1.5.8.5 other employees dismissed same offence


1.5.9 procedural fairness of dismissal misconduct

1.5.9.1 elements of procedural fairness

1.5.9.1.1 investigation
1.5.9.1.2 notice of charge , investigation
1.5.9.1.3 reasonable time prepare response
1.5.9.1.4 employee entitled state case in response
1.5.9.1.5 employee entitled assistance
1.5.9.1.6 decision
1.5.9.1.7 communicating decision
1.5.9.1.8 employee informed of reason dismissal
1.5.9.1.9 appeal
1.5.9.1.10 dispensing pre-dismissal procedures






1.6 dismissal incapacity

1.6.1 poor work performance
1.6.2 employees on probation
1.6.3 poor-work-performance dismissals after probation
1.6.4 setting standards , assessment
1.6.5 senior managers
1.6.6 failure meet standards required regulatory body
1.6.7 assessment , evaluation employer
1.6.8 consultation process
1.6.9 dismissal last resort
1.6.10 incompatibility
1.6.11 ill health or injury

1.6.11.1 substantive , procedural fairness
1.6.11.2 disability




1.7 dismissal operational requirements

1.7.1 context
1.7.2 employer’s similar needs
1.7.3 changes employee’s terms , conditions of employment
1.7.4 incompatibility , related reasons
1.7.5 breakdown in trust relationship
1.7.6 substantive issues

1.7.6.1 real reasons , increases in profits
1.7.6.2 large-scale dismissals

1.7.6.2.1 economic, technological, structural or similar needs
1.7.6.2.2 operationally justifiable on rational grounds
1.7.6.2.3 proper consideration of alternatives
1.7.6.2.4 selection criteria fair , objective




1.7.7 courts changing views
1.7.8 procedural aspects

1.7.8.1 consultation process
1.7.8.2 consultation topics

1.7.8.2.1 measures avoid dismissals
1.7.8.2.2 measures minimize number of dismissals
1.7.8.2.3 measures change timing of dismissals
1.7.8.2.4 measures mitigate adverse effects of dismissals
1.7.8.2.5 criteria dismissal , severance pay


1.7.8.3 written disclosure of information
1.7.8.4 representations , consideration of representations
1.7.8.5 selection criteria

1.7.8.5.1 seniority
1.7.8.5.2 conduct
1.7.8.5.3 efficiency, ability, skills, capacity, experience, attitude work , productivity
1.7.8.5.4 attendance
1.7.8.5.5 bumping
1.7.8.5.6 retirement
1.7.8.5.7 volunteers


1.7.8.6 severance pay


1.7.9 large-scale dismissal big employer

1.7.9.1 facilitation option
1.7.9.2 non-facilitation option


1.7.10 resolution of disputes
1.7.11 dismissal of strikers


1.8 closures, mergers , sales of businesses

1.8.1 common law
1.8.2 lra

1.8.2.1 original s 197
1.8.2.2 new s 197

1.8.2.2.1 transfer
1.8.2.2.2 going concern
1.8.2.2.3 outsourcing
1.8.2.2.4 general rules
1.8.2.2.5 exceptions
1.8.2.2.6 insolvency

job security
common law

the common law afforded employee virtually no protection against unfair dismissal. before labour relations act (lra), long employer gave required period of notice, dismissal or probation acceptable. common law focused on lawfulness of employment contract itself; reason dismissal irrelevant. employer not required give employee explanation termination; nor there requirement dismissal fair.

this had effect of increasing bargaining power of employer, could, essentially, pleased, because of more powerful position. employer threaten dismiss employee if latter refused accept less favourable terms , conditions of employment. reason this, has been contended, that, prior 1980, area of law based on incorrect assumption there existed equal bargaining power between employer , employee.

international labour organisation

south africa has since subscribed international labour standards, in form of international labour organisation (ilo) instruments termination of employment convention, 1982, provides employer must have fair reason terminate employment contract, , reason dismissal must fall 1 of 3 broad categories:

misconduct relates behaviour of worker, involving fault on part, insubordination, assault, theft, dishonesty, frequent late-coming or intimidation of co-workers.

capacity relates worker s ability job. includes incompetence or incapability medical reasons (ill health or injury). viewed no-fault dismissal.

operational requirements relate not employee, rather business enterprise of employer. if employee dismissed on ground, no-fault dismissal. common form category takes dismissal based on economic needs of business, or on employer s need restructure organisation.

the convention states further employers must notify employees or representatives dismissal contemplated, , must provide relevant information them. employer obliged consult regarding measures minimise number of dismissals, , mitigate adverse effects of dismissal.

labour relations act

unfair dismissal governed labour relations act. have argued labour relations act undermines flexibility required free market exist. others have argued restrictive labour law promotes job security, loyalty , incorporation companies.

the labour relations act provides right not unfairly dismissed or subjected unfair labour practices.

unfair dismissal

only employees have right not unfairly dismissed; non-employees enjoy no such protection. labour relations act s approach unfair dismissal may summarised in following 3 questions:

the employee has onus establish there has in fact been dismissal. if discharged, onus shifts employer, prove fairness of dismissal.

dismissal describes termination of employment relationship employer, or without notice. can entail

that employee reasonably expected employer renew fixed-term contract of employment on same or similar terms, employer offered renew on less favourable terms, or did not renew @ all; or
that employer refused allow employee resume work after took maternity leave in terms of law or collective agreement, or in terms of contract of employment.

an employer has dismissed number of employees same or similar reasons, offers re-employ 1 or more of them, while refusing re-employ another, have dismissed latter.

the statutory definition recognises constituting dismissal circumstances in employee terminates employment relationship. known constructive dismissal.

where, example, employee terminates contract of employment, or without notice, because employer has made continued employment intolerable him, have been constructively dismissed.

an employee may regarded having been constructively dismissed if terminates contract of employment, or without notice, because new employer, after transfer of business going concern, provided him conditions or circumstances @ work substantially less favourable provided former employer.

termination of employment contract

section 186(1)(a) of labour relations act refers standard form of dismissal. either employee given notice of termination, or contract of employment terminated way of summary termination. note, again, employees may dismissed.

the requisite period of notice may expressly stated in contract itself, in terms of statute such basic conditions of employment act, or in terms of collective agreement. in terms of basic conditions of employment act,

one week s notice required in first 6 months of employment;
two weeks notice if employee has been employed more 6 months less year; and
four weeks notice if has been employed more year.

summary termination employer may justified if employee has committed serious or fundamental breach of material term of contract.

in csir v fijen, employee , employer had quarrelled during negotiations, employee declaring relationship finished, , employer interpreting resignation. employee subsequently denied having resigned; meant, argued, working relationship had become intolerable. court held that, in absence of clear , unambiguous intention quit, there not have been proper resignation. employer, therefore, mistaken in interpretation of words.

there indications, in ouwehand v hout bay fishing, employee retrenched. representations made him should find other work. stopped going work, therefore, on assumption had been dismissed. court, however, held had resigned, because onus on employee show has been dismissed. employee in case did not discharge onus.

when dismissal may effected question of practical importance. relates question regarding commencement of employment: commence when contract concluded, or rather when employee starts working? difficulty there may significant lapse of time between these 2 events.

the labour court held, in whitehead v woolworths, that, qualify employee, insufficient employee prove contract of employment had been concluded. conclusion of contract merely gives rise contractual claims; not confer status of employee or employer on parties purposes of labour relations act. in terms of definition, waglay aj found,

a person employee when such person works person. employee must therefore have rendered service services not [sic] of independent contractor. in addition working employee must receive or entitled receive remuneration. remuneration referred must correspondingly mean remuneration work done or tendered done.

two subsequent decisions of labour court, in jack v director-general, department of environmental affairs , wyeth sa v manqele, have taken different approach.

the rights , remedies of job applicant considered in jack, employer breached contract not allowing party commence work on agreed date. labour court, having examined question of whether or not there employment relationship between parties, decided that, once parties have reached agreement on essential terms of contract, binding , enforceable.

in wyeth, employer , employee had concluded written contract on 15 march providing employee commence work on 1 april. before work commenced, employer informed employee no longer prepared employ him. labour court held term employee in labour relations act encompasses person has concluded contract work, , such person enjoy protection against unfair dismissal. in line purposive interpretation of definition of employee.

the employment relationship wider employment contract. while contract of employment foundation of relationship, relationship may begin before employee commences working, , may endure time after contract has been terminated. ought noted that, although abscondment employee constitutes breach of contract, not bring contract end. when employer accepts employee s repudiation of contract may said there has been dismissal.

in cases, employment relationship terminated neither employer nor employee, operation of law. occurs, example, when employee s residence or work permit expires, , called automatic dismissal.

failure renew fixed-term contract

the employee must have reasonable expectation fixed-term contract renewed. bears onus of proving expectation of continued or permanent employment reasonable. test objective, inquiring whether or not reasonable person anticipate renewal in such circumstances.

in addition, employer must have created impression such expectation justified. following among ways in employer or representative may create such impression:

by past renewals of fixed term contracts;
by making representations employee contract renewed; and
by assuring employee contract renewed.

there must, then, form of prior promise or past practice. offer on less favourable terms subject reasonable-expectation test.

in sa rugby v ccma, coach of team indicated players had plans them. when came choosing side, however, of players not sent training, , therefore ineligible renewal of contracts. held coach s representations players such had reasonable expectation of renewal.

what reasonable expectation of permanent position? in dierks v unisa, employee had been employed means of series of fixed-term contracts. argued had been unfairly retrenched, , entitled permanent position. important draw distinction between employee s 2 expectations:

the court held section 186(1)(b) relates first expectation only, labour court later found, in mcinnes v technikon natal, decision in dierks had been incorrect. took view focus should on nature of expectation, , whether or not in circumstances expectation reasonable. in casu, employee genuinely believed doing same work before, difference being appointment in future permanent. in case, similar terms referred included reasonable expectation of permanent employment on similar terms.

the uncertainty continued auf der heyde v university of cape town, labour court accepted approach in dierks correct, , section 186(1)(b) did not include reasonable expectation of permanent employment. case, however, went on appeal, judge found unnecessary in circumstances decide issue.

dismissal reasons relating pregnancy

the basic conditions of employment act provides 4 months maternity leave, not require paid. possible, however, employee make claim in terms of unemployment insurance (uif) act. individual or collective agreements may provide paid maternity leave.

an important concession in basic conditions of employment act no employee may expected work first 6 weeks after birth of baby, midwife or medical practitioner may certify fit work if employee wishes so. employer s refusal allow employee return work after has been on maternity leave (paid or unpaid) fall within ambit of dismissal purposes of labour relations act. if employee not return work within period permitted, viewed abscondment, in case normal sanctions apply.

selective re-employment

in sense, in cases of selective re-employment, employment relationship continues after employment contract has been terminated. 3 elements essential:

constructive dismissal

the essential feature of constructive dismissal employee terminates employment contract. resignation not entirely voluntary, however, brought or necessitated actions or omissions of employer. these actions must intolerable. employee, in resigning, indicates have carried on work indefinitely had not intolerable situation been created.

in considering whether or not there has in fact been constructive dismissal, courts ask following questions:

did employee intend bring end employment relationship? here 1 must factual context. if employee signs resignation letter, such intention present. if employee have resigned anyway, without intolerable circumstances, may not claim circumstances decisive factor. time frame, too, important: if employee resigns months after isolated incident, case less credible if had done immediately. not automatically discredited, however; situation must viewed whole. subsequent conduct, accumulative effect intolerable, must considered.
was working relationship objectively intolerable no longer possible employee work there? must viewed in light of objective reasonable-person test. intolerable conduct conduct beyond norm. curse , swear in particular environment may acceptable, example, , therefore not in intolerable. misrepresentations made employer considered intolerable, withholding employee s salary or claiming deductions without prior written consent; so, too, making of threats, , abuse or violent behaviour, on part of employer. furthermore, if employee denied use of company car, when such required job, , contract provides one, count intolerable. on other hand, mere request employer keep costs low not intolerable; nor absence of immediate employment opportunities, or displeasure employer s management style.
did employer create intolerable situation? intolerable situation must linked conduct of employer.
is situation endure longer period of time? depends on circumstances of case.
was termination option available employee? must reasonable option, , employee must first have tried other possible dispute-resolution options: lodging grievance, example, , giving employer chance respond.

transfer of employment contracts

this relatively new form of statutory dismissal, added in terms of 2002 amendment lra. if business transferred, employees must transferred it, , employed on same or similar terms , conditions. failure on part of new employer constitutes dismissal.

automatically unfair dismissal

this area of law highly problematic. lra states dismissals automatically unfair; there no argument fairness. compensation payable employee has been dismissed reasons constitute automatic unfairness 24 months salary, depending on circumstances. normal, merely unfair dismissal, compensation twelve months salary.

section 187 of lra

section 187 of lra lists reasons employee may not dismissed under circumstances. such dismissals automatically unfair. once proved employee has been dismissed of these reasons, employer may not raise defence save provided in act. victims of automatically unfair dismissals invariably reinstated unless choose compensation instead.

section 187(1)(d) of particular importance. designates automatically unfair dismissals in response employee s taking action, or indicating intention take action, against employer exercising right conferred lra, or participating in proceedings in terms of lra. dismissal conduct regarding membership of trade union, or exercising rights conferred labour legislation, automatically unfair.

the rights referred found in section 5 of lra. include lawful trade-union participation, non-compliance unlawful order , disclosure of information.

in ceppwawu & v glass & aluminium, hostility employer in workplace led constructive dismissal. hostility closely related employee s work shop steward. court held employer had made employee s life unbearable due fact shop steward; dismissal therefore automatically unfair. court noted victims of automatically unfair dismissal invariably reinstated unless choose compensation instead.

what constitutes automatically unfair dismissal?

this factual dispute. whether facts give rise automatically unfair dismissal, or merely unfair dismissal, depends on circumstances of each case.

dismissals contrary section 5

section 5 confers on employees right freedom of association , right belong workplace forums. no employee may dismissed exercising these freedoms in way: example,

by participating in formation of union;
by joining union;
by participating in union s lawful activities or in election of officials; or
by standing election such position.

section 5 further prohibits prejudicing employees failing or refusing employer may not lawfully require of him.

no dismissal permitted disclosure of information employee lawfully entitled or required communicate other persons, or exercising right or participating in proceedings in terms of lra. mere fact employees exercising right under lra not mean, however, immunised against disciplinary action misconduct committed outside scope of duties.

strike dismissals

the lra distinguishes between protected , unprotected strikes. dismissal of employee participating in protected strike automatically unfair. participants in protected strikes, however, may dismissed misconduct (assault, example, or intimidation) during course of strike.

in cases difficult distinguish between dismissal striking , dismissal (by way of example) misconduct, true , proximate cause of dismissal must identified.

section 65(5) provides participation in strike not comply provisions of lra misconduct. may constitute fair reason dismissal, there specific procedures follow.

dismissal compel employee accept demand in mutual-interest dispute

in terms of section 187(1)(c), employers may not threaten employees disciplinary action if not comply demand: salary decrease, example. labour court has considered situations in employees threatened dismissal refusing accept unilateral amendments of terms , conditions of employment employers. in regard,

the first issue whether or not employer has right dismiss employees not prepared agree changes terms , conditions of employment; and, if so,
the second issue nature of relationship between right , employees right not dismissed purpose of being compelled agree demand in respect of matter of mutual interest.

employers may lock out employees (provided follow proper procedure) bargaining strategy. lock-out not constitute dismissal, employees still employed employer.

the difficulty employer may argue has right dismiss, operational reasons, employees not accept such demand. can factually difficult in such cases determine true reason dismissal.

section 187(1)(c) not prevent employers dismissing employees refuse accept demand if effect of dismissal save other workers retrenchment. nor form of automatically unfair dismissal preclude employer dismissing grossly insubordinate employee.

in afrox limited v sacwu & others, company had distribution system resulted in drivers working in excess of overtime permitted law. decided introduce system of staggered shifts overcome problem. employees, refusing work under new system, went on strike. subsequently dismissed operational reasons , deliveries branch had been striking outsourced. employees contended real reason why fired because on strike. court held that, although strike accelerated dismissal, workers did not comply basic conditions of employment act when went on strike; therefore, regardless of strike, dismissal on operational reasons upheld fair.

in fry s metal v numsa, court held dismissal of employees refuse accept demand not infringe section 187(c) if employer intends rid of workers permanently. in case, dismissal not in attempt force compliance; had gone far constitute operational reasons.

in cwiu v algorax (pty) ltd, algorax had not formally declared lock-out. court held, therefore, employer had infringed section 187(1)(c), because offered reinstate employees after dismissing them. had algorax formally declared lock-out, seem have kept employees out long did without having compensate them unfair dismissal.

insubordination

in retrenchment cases, difficult decide when employer entitled dismiss insubordination when employees refuse comply instructions. 1 must distinguish between refusal work , refusal work in specific way required employer. computer technician refusing fix computers refusing work, employee refusing use particular computer programme refusing work in specific way.

if employees contractually obliged perform work demanded of them, , employer s instructions reasonable, employees refusal amounts insubordination. not unfair dismiss employees refusing comply employers instructions perform work required contracts.

what if employee refuses carry out order not in accordance contract, how employer runs business? depend on facts: if instructions reasonable, such refusal amount insubordination.

in kroukam v sa airlink, kroukam airline pilot doubled shop steward. dismissed after deposing affidavit purposes of urgent application union have company s senior manager committed contempt of court. charged number of offences, including gross insubordination. company claimed had divulged content of off-the-record discussion in affidavit, , had refused submit health test required of pilots. labour court ruled not automatically unfair dismissal. on appeal, however, court held unanimously main or dominant reason kroukam s dismissal involvement in litigation against company. court held, accordingly, such dismissal indeed automatically unfair.

pregnancy dismissals

section 187(1)(e) 1 of number of statutory provisions aimed @ protecting women in employment. prior these types of provisions, woman left work have baby largely @ mercy of employer. under common law, absence treated reason termination of contract.

now, according eea , lra, dismissal unlawful if reason regarding pregnancy or discrimination on ground of pregnancy. employee has no duty inform employer pregnant; employer has no right ask , demand answer. accordingly, woman may not dismissed in circumstances merely because pregnant.

section 187(1)(e) renders impermissible dismissal of woman on maternity leave (now 4 months under new basic conditions of employment act).

nothing precludes employer dismissing pregnant employee operational requirements, provided court can persuaded there indeed valid economic or related reason.

in whitehead v woolworths, court held employer may have regard economic considerations, including woman s availability perform services, when considering whether employ pregnant applicant.

section 187(1)(e) embraces reason related pregnancy. therefore includes reasonable absences medical attention , changes in woman s physical configuration, may dispose employers fire employees engaged in types of work.

if main reason dismissal employee s pregnancy, employer may not rely on ancillary reason employee s alleged deceit in not disclosing condition. conversely, pregnant woman may not rely on pregnancy defence against conduct constitutes disciplinary offence.

mashava, in mashava v cuzen & woods attorneys, admitted candidate attorney @ firm. @ time of employment, pregnant. did not disclose this. firm accordingly dismissed her, court held automatically unfair. employer not rely on deceit regarding condition reason dismissal.

fair dismissal

fair dismissals composed of 2 golden threads: substantive fairness , procedural fairness. both must present in order dismissal fair , in accordance labour legislation. employees may dismissed misconduct, incapacity , operational reasons. each of these has own procedure, must followed.

any person considering whether or not reason dismissal fair, or whether or not dismissal effected in accordance fair procedure, must take account relevant code of practice issued in terms of act.

discipline , dismissal misconduct

dismissal severe penalty employer may impose against employee guilty of misconduct. in determining whether or not dismissal appropriate in circumstances of case, employer may have weigh number of factors come decision.

origin of employer’s right discipline

generally, employer has right maintain , enforce discipline in workplace. right has origin in common law implied term in contract of employment. inextricably linked employee’s duty obey lawful , reasonable instructions, , linked employer’s right give instructions. today employer’s right discipline regulated degree lra , code of practice: dismissal, annexed lra schedule 8 (the code).

discipline , common law

under common law, employer may summarily dismiss employee if latter’s misconduct serious, or dismiss employee merely giving required notice. occasionally, employer may prefer impose less severe penalty, employer’s action in imposing penalty may not amount breach of contract. suspension without pay or demotion, or ordering forfeiture of agreed bonus or part of wages, constitute breach of contract. employer may, however, suspend employee on full pay , give warnings.

the effectiveness of these penalties questionable. suspension on full pay, example, found have little deterrent effect. in practice, employer’s superior bargaining power, , right dismiss merely giving notice, meant employer convince employee agree penalty otherwise have amounted breach of contract.

the code , employer’s right discipline

the code of practice recognizes employer’s common-law right discipline employees requiring, in item 3(1), employers should adopt disciplinary rules establish standard of conduct required of employees.

if agreed disciplinary code exists in workplace, item 1(2) of code stipulates disciplinary action against employees must comply disciplinary code , procedure.

if, however, disciplinary code unilaterally introduced employer, or if no such code exists, regard must had code’s provisions. employer’s own code must measured against provisions of code; in absence of employer code, code constitute minimum guidelines discipline.

form , content of disciplinary codes of conduct
form

the code accepts form of employer’s disciplinary rules vary according size , nature of business, these rules must clear , made available employees there certainty employer expects them , sort of behavior not tolerated.

a disciplinary code may take form of collective agreement between employer , trade union or unions; may policy unilaterally imposed employer; or may incorporated terms , conditions of employment.

very recognition agreement, in terms of employer recognizes 1 or more trade unions collective bargaining agent of category of employees, include, annexure, agreed disciplinary code , procedure. in way, disciplinary code , procedure obtains status of collective agreement.

content

the code accepts content of disciplinary code vary according size , nature of employer’s business. rules of conduct may established , known unnecessary employer communicate them employees. employee breaches such rule cannot argue rule not appear in written disciplinary code. rule established need not communicated if employees know particular act or omission not tolerated if employer has in past disciplined employees committed particular act or omission.

rules may considered established virtue of common-law contract principles, breach of duty act in faith. examples of acts , omissions held constitute such breach include

theft;
assaulting employer, superior or co-employees;
insubordination;
failure obey reasonable , lawful order;
drunkenness, if affects employee’s work or persistent or results in prejudice;
absence without leave or repeated absence;
misappropriation of company property;
timekeeping or clock-card offences; and
unfair competition employer.

employer disciplinary codes contain disciplinary sanctions each type of disciplinary infraction , procedure followed.

in cases, industrial court has drawn distinction between theft , petty pilfering, , has required that, justify dismissal, offence @ issue should disclose thieving propensity on part of employee. in anglo american farms boschendal restaurant v komjwayo, however, distinction rejected. court held true test whether or not employee’s action had effect of rendering relationship of employer , employee intolerable. although has been more lenient in cases, ccma has followed strict approach in cases of theft , other forms of dishonesty.

due south africa’s apartheid past, racist abuse viewed in particularly serious light. in lebowa platinum mines v hill, employee dismissed calling employee bobbejaan (baboon). court held dismissal justified because court found term had racist connotation.

corrective or progressive discipline

in terms of common law, employer may either condone misconduct or elect act against employee. if misconduct of sufficiently serious nature, employer may decide cancel contract of employment , dismiss employee.

dismissal 1 of number of penalties employer may impose against guilty employee. examples of other penalties are

suspension without pay;
verbal , written warnings;
demotion; and
transfer.

the code emphasizes concept of corrective or progressive discipline. item 3(2) requires employer try correct employees’ behavior through system of graduated disciplinary measures such counselling , warnings. formal disciplinary procedures not have invoked every time rule broken. informal advice , correction best way deal minor violations of work discipline.

warnings may graded according degrees of severity, verbal warning first offence, first written warning, final written warning or suspension without pay or demotion, , dismissal, reserved repeated offences or serious misconduct. item 3(4) gives list of examples of serious misconduct may result in disciplinary enquiry , possible dismissal first occurrence. list includes

gross dishonesty;
wilful damage company property;
wilful endangering of safety of others;
physical assault on employer, fellow employee, client or customer; and
gross insubordination.

substantive fairness of dismissal misconduct

as stated before, section 188(1) of lra requires that, if misconduct reason dismissal, must fair reason. item 7 of code provides guidelines when misconduct constitute fair reason dismissal. following must considered:

whether or not employee contravened rule or standard regulating conduct in, or of relevance to, work-place; and,
if rule or standard contravened, whether or not

the rule valid or reasonable rule or standard;
the employee aware, or reasonably expected have been aware, of rule or standard;
the rule or standard has been consistently applied employer; and
dismissal appropriate sanction contravention of rule or standard.

the guidelines in item 7 substantively fair dismissal not hard , fast rules. employer’s non-compliance particular guideline not make dismissal unfair. question of whether or not non-compliance particular guideline permissible depends on circumstances.

contravention of rule employee

there 2 issues considered under heading. in first instance, must determined whether or not rule existed; in second, if rule existed, must determined whether or not employee contravened it.

did rule exist?

the formulation of disciplinary rules responsibility of employer. important source of these rules written disciplinary code or rules of conduct. if such written code or set of rules exists, must examined determine whether rule employee accused of having contravened contained in code. if disciplinary code not contain rule under consideration, may important indicator such rule not exist in particular workplace.

if particular rule employee accused of having contravened not included in written code, not mean employee’s dismissal unfair.

the particular rule may contained in

the employee’s written contract of employment;
a policy or personnel manual; or
notices placed on notice boards in workplace

legislation such occupational health , safety act may regulate conduct of employees. sections 14 , 15 impose number of duties on employees, such as

the duty take reasonable care health , safety of , of other persons may affected acts , omissions;
the duty carry out lawful order , obey health , safety rules , procedures laid down employer;
the duty report unsafe or unhealthy situation exists; and
the duty report have been involved in incident may affect health or has caused injury them.

another important source rules common law, includes, example, duty act in faith.

item 7(a) of code provides 1 may consider whether employee contravened rule regulating conduct in, or of relevance workplace. provision broad enough entitle employer proceed against employee has contravened rule after working hours, or outside premises of employer. circumstances possible limited, however, situations misconduct in way affects or otherwise relevant employer’s business.

was there contravention of rule?

once has been established rule exists, next issue addressed whether or not employee has contravened it. issue must determined on facts. if, example, employee charged unauthorised possession of company property, must proven in circumstances.

section 192(2) of lra states employer must prove dismissal fair; therefore employer must prove employee has contravened rule. neither lra nor code stipulates standard employer must prove employee’s contravention of rule, submitted employer must prove contravention on balance of probabilities.

the lra , code not stipulate on facts employer may rely prove contravention. industrial court has given conflicting opinions on whether employer restricted relying on facts available @ time of enquiry, or whether may rely on facts came light after dismissal. submitted commission conciliation, mediation , arbitration adopt second approach.

validity , reasonableness of rule

once clear rule existed , employee contravened it, attention must focused on rule itself. first aspect must determined whether rule valid or reasonable. factual question. rule valid or reasonable if lawful , can justified reference needs , circumstances of business. factors may determine whether or not rule justified include following:

the nature of employer’s business (for example, brewery prohibiting use of alcohol employers); and
the circumstances in business operates (for example, type of work employee does).

an important indicator of validity or reasonableness of rule inclusion in disciplinary code contained in collective agreement between employer , trade union. unlike rule employer unilaterally enforces, rule product of collective bargaining.

the reasonableness of rule may affected employer’s preparedness in past enforce it. if has not been enforced in past, may indication employer not regard rule reasonable. employer’s failure enforce rule not make rule permanently invalid, however. may regain validity if employer , unequivocally informs employees rule enforced in future.

the fundamental issue employer cannot act against employee if latter unaware employer regards breach of rule serious.

employee’s knowledge of rule

the employee must have known, or reasonably expected have been aware, of rule. rationale employee should penalised actions or omissions employee knew (at time) unacceptable. implied employee must have known transgression of rule may lead dismissal.

knowledge of rule may achieved through

its inclusion in written disciplinary code;
meetings workers;
written briefs;
notices on notice boars; or
induction programs new employees.

certain forms of misconduct may known in workplace notification unnecessary. case theft assault, intimidation, insolence , insubordination.

consistent application of rule

an employer must, far possible, treat employees in same way if have committed same or similar offences. employer must consistent, in other words, in meting out discipline.

two types of inconsistency may distinguished:

historical inconsistency, employer has in past not proceeded against employee contravening rule; and
contemporaneous inconsistency, employees breach same rule contemporaneously, or @ same time, not disciplined, or not in same way, or same extent.

inconsistency not unfair. employer can justify inconsistency through factors such employees’ different circumstances: length of service, example, or disciplinary records , personal circumstances.

in sa commercial catering & allied workers union v bonus building, court held that, if distinction drawn between different employees, distinction must motivated; otherwise give rise perception of bias.

the court in city of cape town v mashitho & others found that, if employer intends discipline employees misconduct has not disciplined them in past, proper course make known such discipline effected , reasons change.

dismissal appropriate sanction

whether or not dismissal appropriate sanction factual question. item 3(5)-(6) of code lists factors taken consideration. employer should consider, in addition gravity of misconduct, such factors employee’s circumstances (including length of service, previous disciplinary record , personal circumstances), nature of job , circumstances of infringement itself. employer should apply penalty of dismissal consistently way in has been applied same , other employees in past, , consistently between 2 or more employees participate in misconduct under consideration. these factors must considered , weighed decide whether dismissal justified or whether less severe sanction more appropriate.

it has been submitted that, if commissioner not consider dismissal appropriate sanction after considering these factors, penalty of dismissal stand if commissioner or judge satisfied reasonable employer have decided dismiss under circumstances.

in case of sidumo , v rustenburg platinum mines ltd , others [2007] 12 bllr 1097 (cc), however, security guard @ mine not abiding search procedures obliged employ workers @ mine. there video footage available proof not adequately searching workers. security guard dismissed on suspicion fraternising workers in order steal mines. ccma having held sanction harsh, case appealed labour court , labour appeal court. when case reached sca, court held employers have discretion dismiss. if employer acts reasonably, decision must upheld.

on appeal constitutional court, held commissioner hears appeal must decide afresh if decision fair or unfair; therefore, not appropriate reasonable employer. sca approach, therefore, found wrong. test reasonable commissioner have done in circumstances. court, then, not bound choice made reasonable employer. reasonable employer test no longer used.

gravity of misconduct

the more serious misconduct, greater likelihood dismissal appropriate penalty. seriousness of misconduct depends on number of considerations:

the nature of offence;
the circumstances surrounding commission of offence;
the nature of work performed employee;
the nature , size of employer’s workforce;
the position employer occupies in marketplace , profile in market;
the nature of work , services rendered employee;
the relationship between employee , victim; and
the effect of misconduct on workforce whole.

circumstances of infringement

a serious offence not automatically warrant employee’s dismissal. not knee-jerk response serious offences. there may circumstances have tempering effect, not on seriousness of offence such, on severity of penalty: example,

in case of theft, if object has been stolen of such trifling value dismissal may harsh penalty;
in case of assault, if employee provoked or acted in self-defense; and,
in case of refusing obey superior’s orders, if instructions unreasonable or illegal.

the nature of employee’s job

in case of brewery, employer justified in taking strict disciplinary approach regarding intoxication , use of alcohol during working hours. less strict approach intoxication may expected employer employees not deal directly public or not work dangerous machinery. this, however, not mean such employer may never dismiss employees intoxication; means greater measure of progressive discipline expected such employer.

employee’s circumstances

these include employee’s length of service, status within undertaking, previous disciplinary record , personal circumstances.

years of service count in employees favor. must noted, however, employer puts great deal of trust in employee long service; therefore, count against employee if breaches trust after many years of service.

the employer expect higher degree of responsible behavior supervisor or manager ordinary worker.

if there previous warning on employee’s personnel file, stating dismissed if same offence committed in future, dismissal may fair if occurs. warning not remain valid indefinitely. employer , trade union may agree on period warning remain valid, or employer’s code may stipulate this. in absence of such agreement or stipulation, default position warning remains valid 6 months, unless infraction particularly serious, in case may remain valid duration of employee’s service.

other personal circumstances may important include employee’s age, marital status , number of dependents.

other employees dismissed same offence

the employer must, far possible, treat employees same if have breached same rule or rules similar: there must consistency when meting out discipline.

procedural fairness of dismissal misconduct

section 188(1)(b) of lra requires dismissal misconduct must effected in accordance fair procedure, entails fair disciplinary enquiry. lra not regulate fair disciplinary enquiry. employer’s disciplinary code , procedure prescribes procedure followed , manner in hearing should conducted. code provides number of guidelines fair enquiry in item 4: not substitute disciplinary procedure merely template fairness of dismissal must judged.

normally, employer should conduct investigation determine whether there grounds dismissal. not need formal enquiry. employer should notify employee of allegations, using form , language employee can reasonably understand. employee should allowed opportunity state case in response allegations. employee should entitled reasonable amount of time prepare response, , assistance of trade union representative or fellow employee. after enquiry, employer should communicate decision taken, , preferably furnish employee written notification of decision.

discipline against trade union representative, or against employee office-bearer or official of trade union, should not instituted without first informing , consulting trade union. if employee dismissed, employee should given reason dismissal , reminded of rights refer matter council jurisdiction or commission, or dispute resolution procedures established in terms of collective agreement.

in exceptional circumstances, if employer cannot reasonably expected comply these guidelines, employer may dispense pre-dismissal procedures.

elements of procedural fairness
investigation

the purpose of investigation determine whether or not there grounds dismissal. investigation need not formal enquiry.

notice of charge , investigation

the employer must notify employee of allegations against him. employer must use form , language employee can reasonably understand. charge in writing , in language commonly used in workplace. notice of charge , of disciplinary enquiry given simultaneously , in same document

reasonable time prepare response

the question of reasonable time factual one. nature , complexity of charges relevant in ascertaining whether employee has had sufficient time. whether employee had assistance in preparing response relevant.

employee entitled state case in response

this core of procedural fairness in context of dismissal misconduct. employee may dispute facts on charges based, or may plead guilty charges argue dismissal not appropriate sanction.

employee entitled assistance

the employee entitled assistance of trade union representative or fellow employee during enquiry. trade union representative defined in section 213 of lra member of trade union elected represent employees in workplace (commonly called shop steward). fellow employee includes colleague, supervisor or director of company employee working, provided director employee.

the purpose of assistance is

to assist presentation of response charge; and
to ensure procedure followed during enquiry fair.

item 4(1) not provide assistance legal practitioner, such advocate or attorney, disciplinary codes provide legal representation under circumstances.

decision

the decision whether or not employee guilty of alleged misconduct, , sanction, responsibility of chairperson of disciplinary enquiry. disciplinary codes, however, provide chairperson may may recommendation senior management. latter must take final decision, differ chairperson’s recommendation.

an important question arises: can senior management overturn decision of chairperson or order second enquiry whether or not latter empowered code not merely make recommendation decide issue?

the court has indicated possible, subject limitations, , whether or not second disciplinary enquiry may opened depends on whether or not fair in circumstances.

the court has stipulated 2 cautionary remarks:

the important yardstick of fairness.

communicating decision

item 4(1) of code requires employer communicate decision taken, preferably in writing. both verdict , penalty must communicated.

employee informed of reason dismissal

item 4(3) of code requires that, if penalty dismissal, employee must given reason it, , must reminded of rights refer matter bargaining council jurisdiction, or ccma or dispute resolution procedure established in terms of collective agreement.

appeal

item 4 of code not make provision appeal higher level of management against outcome of disciplinary enquiry. if employee dissatisfied, must implement dispute-settling procedures provided lra. if, however, disciplinary code in workplace makes provision such appeal, employee entitled appeal in accordance code.

traditionally appeal entails re-hearing of entire matter, including evidence presented, , fresh consideration of appropriate sanction.

dispensing pre-dismissal procedures

item 4(4) stipulates employer may dispense disciplinary enquiry in exceptional circumstances if employer cannot reasonably expected comply requirement. 2 broad categories of exceptional circumstances are

waiver of right may assumed if

the employee’s conduct of such nature employer cannot expected hold enquiry;
the employee refuses attend enquiry; or
the employee fails attend enquiry because of decision on employee’s part not attend. non-attendance due illness not constitute waiver of right.

dismissal incapacity

incapacity 1 of internationally recognized grounds fair dismissal, provided fair reason exists dismissal , fair procedure has been followed.

section 188 of lra refers incapacity. not distinguish between poor work performance , ill health or injury. distinction is, however, drawn in code of practice: dismissal (the code). different sets of guidelines provided each: item 11 deals ill health or injury; item 9 deals poor work performance. according former prime minister, take long time mods find this.

while culpability or fault on part of employee essence of dismissal misconduct, dismissal incapacity no-fault dismissal. incapacity means that, unrelated intentional or negligent conduct or performance employee, employee not able meet standard of performance required employer. employee not capable of doing work.

this ground of dismissal ties in common law duty of employee perform competently , without negligence. difference between incapacity , misconduct in regard that

misconduct occurs employee breaches duty intentionally or negligently; whereas
incapacity occurs there no intention or negligence on part of employee, rather supervening impossibility of performance.

poor work performance

a dismissal poor work performance implies there must objective standard of performance against employee can measured, before employee may dismissed failing meet standard. accepted setting of performance standards within employer’s prerogative.

there various ways in employer may establish performance standards , appraise employee’s ability job satisfaction of employer. @ outset of relationship employer may decide put employee on period of probation. code distinguishes between employees dismissed during probationary period , dismissed after probation.

item 9 of code provides, guidelines in cases of dismissal arising poor work performance, person, in determining whether or not dismissal poor work performance unfair, should consider

whether or not employee failed meet performance standard; and,
if employee did not meet required performance standard, whether or not

the employee aware, or reasonably expected have been aware, of required performance standard;
the employee given fair opportunity meet required performance standard; and
dismissal appropriate sanction contravention of rule or standard.



employees on probation

item 8(1) of code sets out basic principles in respect of probationary employees:

an employer may require newly hired employee serve period of probation before appointment of employee confirmed.
the purpose of probation give employer opportunity evaluate employee’s performance before confirming appointment.
probation should not used purposes not contemplated code deprive employees of status of permanent employment. practice of dismissing employees complete probation periods, , replacing them newly hired employees, not consistent purpose of probation , constitutes unfair labour practice.
the period of probation should determined in advance. should of reasonable duration. length of probationary period should determined reference nature of job , time takes determine employee’s suitability continued employment.
during probationary period, employee’s performance should assessed. employer should give employee reasonable evaluation, instruction, training, guidance or counselling in order allow employee render satisfactory service.
if employer determines employee’s performance below standard, employer should advise employee of aspects in employer considers employee failing meet required performance standards. if employer believes employee incompetent, employer should advise employee of respects in employee not competent. employer may either extend probationary period or dismiss employee after complying subitems (g) or (h), case may be.
the period of probation may extended reason relates purpose of probation. period of extension should not disproportionate legitimate purpose employer seeks achieve.
an employer may decide dismiss employee or extend probationary period after employer has invited employee make representations , has considered representations made. trade union representative or fellow employee may make representations on behalf of employee.
if employer decides dismiss employee, or extend probationary period, employer should advise employee of or rights refer matter council having jurisdiction, or commission.
any person making decision fairness of dismissal of employee poor work performance during, or on expiry of probationary period, ought accept reasons dismissal may less compelling case in dismissals effected after completion of probationary period.

it must noted different jobs may take different lengths of time determine suitability. requirement in terms of length of probation of reasonableness.

if probationary employee not performing adequately, evaluation, instruction, training, guidance or counselling referred in code should focus on making possible probationary employee perform satisfaction of employer. if performance not standard, probationary employee should given opportunity improve requisite standard.

in sub items (f) (i) word should used, duty on employer less onerous if employee had been confirmed in permanent position. item 8(1)(g)-(h) makes clear there difference between dismissal during probation , after probation.

the amended item 8(1) emphasizes employee protected against unfair dismissal while serving probation. justification these amendments make dismissal of probationary employees easier in order encourage job creation , relieve employers of onerous procedures had comply before item amended.

poor-work-performance dismissals after probation

after probationary period has expired, employees have tenure or permanent status. procedures employer must follow justify dismissal poor work performance after probation found in item 8(2)-(4), provides that, after probation, employee should not dismissed unsatisfactory performance unless employer has

given employee appropriate evaluation, instruction, training, guidance or counselling; and,
after reasonable period of time improvement, employee continues perform unsatisfactorily.

the procedure leading dismissal should include investigation establish reasons unsatisfactory performance. employer should consider other ways, short of dismissal, remedy matter.

in process, employee should have right heard , assisted trade union representative or fellow employee.

incapacity dismissals made difficult, then, fact there considerable overlap between substantive , procedural fairness. not distinguishable.

setting standards , assessment

an employer entitled set standards requires employee meet. employer has prerogative decide whether or not standards have been met.

in a-b v sa brewaries, employee engaged planning , administrative manager charged poor work performance on 6 occasions , demoted position of project controller. arbitrator held employer entitled set standards requires employee meet. speaking, court should not intervene unless standards set grossly unreasonable.

the commissioner held employee had been given fair opportunity meet standards set employer , demotion not procedurally unfair. employer’s performance appraisal , review process had identified problem areas. employee had been given opportunity improve before demotion.

the commissioner stressed that, in cases, senior managers have duty appraise own performance , rectify poor performance themselves.

senior managers

the status of employee may play role in performance standards employee expected reach, , extent employee given opportunity improve performance. size of organisation factor consider when deciding degree of employer’s responsibility towards employees performance sub-standard.

senior managers may indeed have duty assess own performance standards. courts have long accepted senior employees not entitled opportunity improve. have been held have ability , duty monitor own work performance.

failure meet standards required regulatory body

a dismissal incapacity may justified if employee not have requisite qualifications or has not been accredited professional or statutory body.

assessment , evaluation employer

the courts have stressed need proper evaluation , assessment of employee before action taken. there must careful assessment , consultation, , opportunity improve.

the commission constellation, meditation , aggregation has accepted less strict standards should applied small businesses tasked evaluating employee poor work performance.

consultation process

it emphasised through fair process fair decisions reached. if dismissal procedurally unfair, courts have been reluctant reinstate employee, choosing rather award employee compensation.

dismissal last resort

no employee may dismissed poor work performance without first being made aware of standards required , being given opportunity improve. employer expected make reasonable accommodation employee , offer employee alternative employment in circumstances.

incompatibility

there great debate regarding whether or not employee’s incompatibility (his inability work harmoniously other employees or fit in corporate culture of undertaking or organisation) constituted incapacity or ground operational-requirements dismissal.

considering way lra structured, distinction has become vital. different pre-dismissal procedures must followed employer; disputes allegedly unfair dismissal follow different procedures.

commission conciliation, mediation , arbitration commissioners take view incompatibility constitutes incapacity , not operational requirements, debate continues.

there must still fair reason , fair procedure such dismissal. employer obliged assist employee causing disruptions in workplace relationship before dismissing him. if employee genuine misfit, appropriate warnings , counselling required.

it may happen call made dismissal of employee third party or co-workers. if happens, demand made must , sufficient, , must backed real , serious threat: example, employees making demand go on strike if employee in question not dismissed. employer must investigate alternatives , consult employee in question.

the requirement there must no possible alternative particularly true when racial or ethnic tension cause of incompatibility. test in such cases of necessity.

ill health or injury

the second type of incapacity dealt in code ill health or injury. addressed in item 10 , item 11.

the assessments referred in item 11 must done in order determine whether dismissal appropriate in circumstances. item 11 of code provides person determining whether dismissal arising ill health or injury unfair should consider

whether or not employee capable of performing work; and,
if employee incapable

the extent employee able perform work;
the extent employee’s work circumstances might adapted accommodate disability, or, not possible, extent employee’s duties might adapted; and
the availability of suitable alternative work.

once again dismissal must both substantively , procedurally fair.

substantive , procedural fairness

various aspects of substantive , procedural fairness illustrated in item 10.

incapacity on grounds of ill health or injury may temporary or permanent. if employee temporarily unable work in these circumstances, employer should investigate extent of incapacity or injury. if employee absent time unreasonably long in circumstances, employer should investigate possible alternatives short of dismissal.

when alternatives considered, relevant factors might include

the nature of job;
the period of absence;
the seriousness of illness or injury; and
the possibility of securing temporary replacement ill or injured employee.

in cases of permanent incapacity, employer should ascertain possibility of securing alternative employment or adapting duties or work circumstances of employee accommodate employee’s disability.

in process of investigation referred above, employee should allowed opportunity state case in response, , assisted trade union representative or fellow employee.

the degree of incapacity relevant fairness of dismissal. cause of incapacity may relevant. in case of kinds of incapacity, alcoholism or drug abuse, counselling , rehabilitation may appropriate steps employer consider.

particular consideration should given employees injured @ work or incapacitated work-related illness. courts have indicated duty on employer accommodate incapacity of employee more onerous in these circumstances.

item 10(1) highlights nature, degree , extent of incapacity, , steps employer should take accommodate employee. whether incapacity temporary or permanent important consideration.

item 10(2) sets out guidelines procedural fairness. there has been debate whether process entails formal hearing. long employee given fair opportunity indicate why should not dismissed, however, feature has been complied with.

the degree of incapacity plays role (see item 10(3)).

the employer’s duty accommodate emphasized, particular reference employees incapacitated due work-related injury or illness (see item 10(4)).

a related issue if of habitual absenteeism, employee absent work due illness or injury. appears approach of court vary according degree , nature of absenteeism. frequent , lengthy absences due ill health may justify termination @ point employer can no longer expected tolerate such absences.

disability

in many cases, terms incapacity , disability used interchangeably. incapacity may due accident causing loss of limb or slow onset of illness cancer or hiv/aids, or person may have been born physical or mental impairment others perceive disability.

the real issue in equity or anti-discrimination legislation protect rights of disabled people, particularly in area of employment, employers may perceive ‘disabled person’ unsuitable workplace.

although constitution , lra both have general equity provisions people disabilities, there no statutory definition in these acts. eea, however, defines people disabilities people have long-term or recurring physical or mental impairment substantially limits prospects of entry into, or advancement in, employment.

the americans disabilities act (arguably important international legislation in field) defines disabled person 1 has physical or mental impairment substantially limits major life activity, person has past record of such impairment, or person regarded other people having such impairment.

reasonable accommodation means modification or adjustment job or working environment enable person designated group have access or participate or advance in employment.

a dismissal based on disability may automatically unfair, giving employer no defense , judge no discretion—except dismissal may fair if reason based on inherent requirement of job.

the employer bear onus of proving dismissal disability based on inherent requirements of job , dismissal both substantively , procedurally fair.

dismissal operational requirements
context

an employer may find facing financial ruin (due unsound strategy, large clients or contracts having been lost, or factors in economy @ large). under pressure, employer may forced considering reducing wage bill restructuring organisation, may mean dismissing employees. in scenario, word retrenchment used.

section 188 of lra recognizes employer has operational requirements , needs, , that, in cases, these may fair , valid reason dismissal.

according section 213 of lra, operational requirements requirements based on economic, technological, structural or similar needs of employer.

there 4 categories of operational requirements. these categories clear reason dismissal not relate employee; due needs of employer, , therefore reason dismissal employer s.

an employer’s economic needs, example, include needs , requirements relating economic well-being of enterprise. 1 of common economic reasons dismissal financial difficulties (due to, example, downturn in economy or decrease in demand products).

technological needs refers introduction of new technology, such more advanced machinery, mechanization or computerization, leading redundancy of employees.

structural needs reason dismissal describes posts becoming redundant following restructuring of enterprise. follows merger or amalgamation.

employer’s similar needs

this broad category , must determined reference circumstances of case. there no clear , absolute dividing line between employer’s economic needs , similar needs, there considerable overlaps.

changes employee’s terms , conditions of employment

a business may have restructured or amalgamated enterprise, or mode of operation may have altered in order ensure survival or make more competitive.

these changes may lead employee s becoming redundant, changes of nature may lead employee s being offered new position, changes terms , conditions of employment.

if employee unreasonably refuses accept changes terms , conditions of employment, employee may dismissed operational requirements.

in wl ochse webb & pretorius v vermeulen, employee tomato salesman wl ochse (the employer) , paid basic salary , commission. earned more other employees, sale of tomatoes attracted higher commission sale of vegetables sold other employees. caused dissatisfaction among other workers, employer tried address proposing new remuneration system. salesman given 3 alternatives:

he proposed old system retained. when proposal rejected employer, resigned.

the court held employer had not acted unfairly, successful business requires contented employees. unhappiness can lead several problems, such labour unrest , drop in productivity. commercial rationale changes established employer.

dismissal compel employee accept changes terms , conditions of employment branded automatically unfair section 187(1)(c) of lra. primary motive dismissal must commercial rationale or operational reason in order dismissal fair.

the fundamental difference between operational requirement dismissal , automatically unfair dismissal employer’s reason dismissal. if employer dismisses employees because terms , conditions of employment must altered business continue being viable, employees may dismissed, no longer serve employer’s operational requirements.

in fry s metals v national union of metalworkers, court discussed difference between operational-requirement dismissal , automatically unfair dismissal:

in case of dismissal due operational requirements, purpose rid of employees not meet business requirements of employer, new employees meet business requirements can employed.
in case of automatically unfair dismissal, employer wants existing employees agree change of terms , conditions of employment, , has attitude that, if employees not agree changes, dismiss them.

a change in terms , conditions of employment need not result of changes regarding business. circumstances or attitude of employee change. have such serious economic repercussions employer latter deems vital change employee’s conditions of employment.

the nature of business may such special demands made on employees. may essential economic success of business, example, employees able , willing work overtime. employee’s inability or refusal jeopardise well-being of business; therefore dismissal fair.

incompatibility , related reasons

the courts have accepted employee actions negatively affect operation of business may dismissed. may occur actions of employee create disharmony among co-workers, when, example, antagonises co-workers continually making racist or sexist remarks.

in erasmus v bb bread, employees called dismissal of manager because of problematic attitude towards them, , having made derogatory remarks, particularly aimed @ black employees. industrial court (in terms of old lra) held dismissal valid , fair reason, employer entitled insist on reasonably harmonious interpersonal relationships between employees. if sound relationships appear impossible, employer may entitled remove employee scene.

in east rand proprietary mines v upusa, issue fairness of dismissal of number of zulu-speaking workers after violent clashes between them , workers belonging other ethnic groups. although court found dismissal had been unfair in circumstances, did acknowledge dismissal had roots in arbitrary ground, such ethnic origin, fair if employer prove dismissal option left ensure safety of targeted employees , continued well-being of business. court held employer may dismiss employees because cannot guarantee safety in light of ethnic hostilities, employer must able show had no other alternative.

breakdown in trust relationship

the relationship between employer , employee 1 of trust. entails confidence employee adhering common-law duty act in faith towards , in best interests of business.

if facts show duty breached, employee guilty of misconduct and, if sufficiently serious, may dismissed.

if employer unable prove such breach on balance of probabilities, employee may not dismissed misconduct, may dismissed operational reasons, such mistrust counter-productive operation of business.

in food & allied workers union v amalgamated beverage industries, industrial court accepted dismissal of number of employees on suspicion of assault had operational rationale it.

substantive issues
real reasons , increases in profits

before introduction of section 189a of lra in 2002, there no statutory definition of substantive fairness in case of operational-requirements dismissal. question factual one; employer must prove:

a dismissal operational reasons need not restricted cutting of costs , expenditure. profit, or increase in profit, or gaining advantage such more efficient enterprise, may acceptable reasons dismissal.

if employer can show profit made in accordance sound economic rationale, , follows fair process retrench employee, dismissal fair.

large-scale dismissals

section 189a of lra distinguishes between size of employers , size of dismissals when regulating substantive , procedural fairness of dismissal.

section 189a(1) distinguishes between small employer (less fifty employees) , big employer (more fifty employees).

in terms of s189a(1)(a) large-scale dismissal entail employer s dismissing

ten employees, if employer employs between fifty , 200 employees;
twenty employees, if employer employs between 200 , 300 employees;
thirty employees, if employer employs between 300-400 employees;
forty employees, if employer employs between 400-500 employees; and
fifty employees, if employer employs more 500.

in terms of s189a(1)(b), dismissal big employer of fewer prescribed minimum listed above still constitutes large-scale dismissal if number of employees dismissed, number of employees have been dismissed operational reasons in twelve months previously, exceeds number specified above.

this so-called rolling twelve-month period , must calculated backwards, starting date on employer gives notice in terms of section 189(3) of latest proposed dismissal operational reasons.

the purpose of twelve-month rolling period ensure employers not manipulate number of employees dismissed dismissal falls outside ambit of section 189a.

section 189a(19) of lra provides that, in dispute referred labour court concerning dismissal of number of employees in terms of subsection (1), court must find employee dismissed fair reason if

the dismissal give effect requirements based on employer’s economic, technological, structural or similar needs;
the dismissal operationally justifiable on rational grounds;
there proper consideration of alternatives; and
selection criteria fair , objective.

economic, technological, structural or similar needs

this requirement entails reason dismissal must operational requirements, defined in section 213. must real reason dismissal.

operationally justifiable on rational grounds

rational grounds grounds founded upon reason or logic. rationality test objective one, measuring acceptability of reasons dismissal against considered acceptable. not subjective test focussed on particular employer considered justifiable under circumstances.

proper consideration of alternatives

one of requirements procedurally fair dismissal consultations on measures avoid dismissals. inclusion makes procedural requirement requirement substantive fairness, , goes further requiring proper consideration.

proper consideration entails more merely considering alternatives. employer must apply mind , give defensible reasons dismissing such alternatives, , show dismissal last resort.

selection criteria fair , objective

one of requirements procedurally fair operational requirements dismissal parties must attempt reach consensus method used select employees dismissal. parties unable agree, criteria used must fair , objective. procedural requirement also, therefore, requirement substantive fairness.

courts changing views

in past, courts took view function of court not second-guess employer’s decision. not court ask whether best decision under circumstances; needed consider whether rational, commercial or operational decision.

now courts take closer view of employer’s business decisions.

in bmd knitting mills v sa clothing & textile workers union, court departed deferential approach , focused on fairness of reason both parties:

the starting point whether there commercial rationale decision. rather take such justification @ face value, court entitled examine whether particular decision has been taken in manner fair affected party, namely employees retrenched. extent court entitled enquire whether reasonable basis exists on decision, including proposed manner, dismiss operational requirements predicated. viewed accordingly, test becomes less deferential , court entitled examine content of reasons given employer, albeit enquiry not directed whether reason offered 1 have been chosen court. fairness, not correctness mandated test.

in chemical workers industrial union v algorax, court considered entitled scrutinize employer’s business reasoning , decision-making in considerable detail. reasoning given court should not hesitate deal issue requires no special expertise, skills or knowledge not have, requires common sense or logic.

the important implication of approach employer need convince court not has considered alternatives, has chosen option makes best business sense.

procedural aspects

there no clear dividing line between substantive , procedural fairness in dismissals operational reasons; issues overlap considerably.

consultation process

the consultation process @ heart of procedural fairness in case of dismissal operational requirements.

section 189(1) of lra provides that, when employer contemplates dismissing 1 or more employees reasons based on employer’s operational requirements, employer must consult

any person whom employer required consult in terms of collective agreement;
if there no such collective agreement,

a workplace forum, if such exists; and
any registered trade union members affected;


if there no workplace forum, registered trade union members affected; or
if there no such trade union, employees affected proposed dismissals or representatives nominated purpose.

in united national breweries v khanyeza, court held that, union recognized consulting party in collective agreement, entitled consult on behalf of employees, falling outside bargaining unit union recognised.

note consultation must take place when employer contemplates dismissal —when possibility of dismissal foreseen, final decision dismiss has not been reached. @ most, therefore, employer must have intention retrench.

item 3 of code further entrenches idea consultation must take place when dismissal contemplated.

this ensures employees afforded opportunity influence employer in final decision dismiss or not dismiss.

section 189 not prescribe period on consultation should extend, item 5 of code states circumstances of each case relevant determination of reasonable period.

item 6 further states more urgent need of employer respond factors giving rise contemplated dismissals, shorter consultation process be.

consultation entails parties must engage in meaningful joint consensus-seeking process , attempt reach consensus. means parties must embark on joint problem-solving exercise, striving consensus.

for process meaningful, employer must consult in faith , not go through motions. means employer cannot have made mind dismiss prior consultation, , must prepared keep open mind regard representations made.

the employees must engage properly, make representations , ensure representations founded , substantiated, , not merely prolong consultations.

should parties fail reach consensus, final decision remains of employer.

in nehawu v university of pretoria, labour appeal court held that, after restructuring had been exhaustively discussed steering committee, on stakeholders represented, university not required consult again on issues after formally giving notice in terms of section 189 of lra.

consultation topics

section 189(2) of lra provides employer , other consulting parties must engage in meaningful joint process, attempting reach consensus on

appropriate measures

to avoid dismissals;
to minimize number of dismissals;
to change timing of dismissals; and
to mitigate adverse effects of dismissals;


the method selecting employees dismissed; and
the severance pay dismissed employees.

measures avoid dismissals

there must proper consideration of alternatives. employer must apply mind proposals and, if applicable, give defendable reasons dismissing these alternatives , coming conclusion dismissal solution.

possible alternatives include following:

granting paid or unpaid leave;
reducing or eliminating overtime or work on sundays;
transferring employees other departments; and
training or retraining employees enable them take other positions in organisation.

the parties may consider spreading dismissals out on period of time allow natural attrition of numbers through retirements or resignations.

measures minimize number of dismissals

once dismissals have been agreed solution, number of dismissals must kept minimum. may mean

transferring employees other sections or departments;
asking volunteers means of offering voluntary severance package;
allowing natural attrition of numbers; or
training or retraining.

measures change timing of dismissals

while employer may prefer dismissals immediate, union may prefer them spread on period of time, or take place @ later stage.

measures mitigate adverse effects of dismissals

the employer may, example, assist employee in finding alternative work giving employee time without loss of pay search alternative work.

the employer may make office available in complete job applications , arrange interviews.

the employer may provide reference employee.

in sikhosana v sasol synthetic fuels, court noted lra contemplates hierarchy of consulting parties, each if applicable excluding successors. courts apply section 189(1) strictly. held that, although appropriate measures mitigate adverse effects of dismissals should taken, employers not required actively seek alternative work retrenched employees.

the employer may undertake give priority dismissed employee should vacancy arise.

criteria dismissal , severance pay

consensus must reached on criteria used select employees dismissed , amount of severance pay employee entitled to.

written disclosure of information

the employer must disclose relevant information in writing. verbal assurances, explanations , information employer not suffice; other party may demand employer put down in writing or provide documentation such financial reports.

according section 189(3) of lra, relevant information must disclosed. may include, inter alia,

the reasons proposed dismissals;
alternatives considered , reasons rejection thereof;
the number of employees affected;
the proposed method selecting employees dismiss;
the time when dismissals take effect;
severance pay proposed;
any assistance employer proposes offer;
the possibility of future re-employment of employees dismissed;
the number of employees employed employer; and
the number of employees employer has dismissed operational requirements in preceding twelve months.

relevance question of fact , entails information allow effective consultation.

the onus on employer prove information has refused disclose not relevant purposes sought.

privileged information, information may cause harm if disclosed , private personal information relating employee not required disclosed, if relevant.

representations , consideration of representations

section 189(5) of lra provides employer must allow other party opportunity make representations on matter on parties consulting. representations on issues regarding reasons dismissal, alternatives dismissal, measures minimise number of dismissals, timetable dismissal, assistance offered, severance pay, etc., therefore allowed.

representations disclosure of information , other matter relating proposed dismissals allowed: example, socio-economic effect mass dismissal have on local community.

the employer must engage representations , consider , respond them.

selection criteria

employees must selected dismissal in terms of selection criteria have either been agreed upon or fair , objective.

this means criterion should not arbitrary; must relevant, in relates conduct of employee, such length of service, ability, capacity , needs of business.

the following criteria commonly used:

seniority;
conduct;
efficiency, ability, skills, capacity, experience, attitude work , productivity;
attendance;
bumping;
retirement; and
volunteers.

seniority

this last in, first out or lifo principle. long-serving employees retained @ expense of shorter service in similar or less-skilled categories of work. method minimises use of subjective judgment decide shall retrenched. why favoured unions.

the code acknowledges lifo fair , objective criterion, provides should not operate undermine agreed affirmative-action programme.

exceptions may include retention of employees based on criteria (like special skills) fundamental successful operation of business.

conduct

this criterion fair , objective if based on objectively determined conduct, attendance records , previous warnings, , if employee @ times made aware employer found such conduct unacceptable.

efficiency, ability, skills, capacity, experience, attitude work , productivity

these criteria favored employers. regarded objective, provided not depend solely upon opinion of person making selection, can objectively tested.

furthermore, may used if employee knew employer considered them important.

attendance

this criterion allowed if can proved employee knew employer regarded absences work seriously.

bumping

if retrenchment affect 1 department in enterprise, practice retrench on lido basis , drain off remaining employees in department other departments.

retirement

employees have reached minimum retirement age may identified first population retrenchment. after these employees have been retrenched, lifo used. criterion applied in jobs require level of fitness , strength.

volunteers

parties may agree employer first ask volunteers before embarking on selection process.

severance pay

section 41 of commission conciliation, mediation , arbitration creates statutory duty employer pay severance workers dismissed operational reasons.

severance pay amount each completed year of continuous service.

section 84 of commission conciliation, mediation , arbitration suggests that, purposes of determining length of employee’s employment, previous employment employer must taken account if break between periods less 1 year.

the duty pay severance not absolute. if employee unreasonably refuses alternative position, loses right severance pay.

the question of whether or not refusal reasonable 1 of fact. item 11 of code states reasonableness determined consideration of reasonableness of offer of alternative employment , reasonableness of employee’s refusal. objective facts such remuneration, status , job security relevant.

if offered position amounts demotion, refusal not unreasonable.

large-scale dismissal big employer

section 189a introduces additional requirements procedurally fair dismissal in case of large-scale dismissal.

firstly section 189a affords either party right ask commission conciliation, mediation , arbitration appoint facilitator assist parties during consultations; secondly, section 189a introduces moratorium of sixty days, during employer may not dismiss.

facilitation option

only commission conciliation, mediation , arbitration may approached appoint facilitator.

the employer must make request when gives notice in terms of section 189(3) employee party contemplating large-scale dismissal.

the employee party (the union, example) representing majority of employees may ask facilitator. employee party must notify commission conciliation, mediation , arbitration within fifteen days of employer s notice of contemplated dismissal.

if neither party asks facilitator within above timeframes, may agree ask 1 appointed during consultation process.

if facilitator appointed, facilitation must conducted in terms of regulations made minister of labour conduct of such facilitation.

these regulations relate time period , variation of such time periods facilitation, powers , duties of facilitators, circumstances in commission conciliation, mediation , arbitration may charge fee appointing facilitator, , amount of fee.

an employer may not dismiss before sixty days have elapsed date on notice in terms of s189a(3) given.

non-facilitation option

if none of parties request facilitator, section 189a stipulates minimum period of thirty days, when notice in terms of section 189a(3) given, must have lapsed before dispute may referred ccma or other council.

resolution of disputes

disputes regarding procedural , substantive fairness of dismissals small employer, , small-scale dismissal big employer, referred labour court.

in large-scale dismissals, disputes procedural fairness must referred labour court within thirty days after notice of dismissal has been given employees.

in large-scale dismissals, there disputes substantive fairness, there 2 choices:

in case of dismissal operational reasons of single employee, employee may refer dispute substantive or procedural fairness either arbitration or labour court.

dismissal of strikers

in terms of section 67(5), employees engaged in protected strike may dismissed if

they guilty of misconduct during strike; or
operational requirements require such.

closures, mergers , sales of businesses

a unique problem in labour law fate of employees when business sold or closes. problem has close practical connection dismissals operational reasons, many businesses sold because unhealthy , require restructuring.

common law

in terms of common law, position of employees no employee forced continue contract of employment new employer; conversely, new employer had no obligation continue employ employee.

transfer of business therefore mean termination of existing employment contracts.

lra
original s 197

when lra came operation, section 197 endeavored address job security in cases of transfer of business in normal run of things , result of insolvency. section criticised creation of uncertainty , failing define concepts. section did not expressly state employees have right have contracts of employment transferred; courts had read section. did not address exact rights of employees in such situation.

new s 197

the rewritten section 197 attempts address situation in more calculated , extensive way. important difference ordinary transfers dealt separately insolvency transfers.

section 197 applies in cases of transfer of business.

section 197(1) defines business whole or part of business, trade, undertaking or service.

transfer defined transfer of business [...] going concern.

the right of employees have contracts transferred dependent, therefore, on business s transfer meeting exact wording of section 197.

transfer

the meaning of word wider mere sale. in schutte & others v powerplus performance, court held follows:

a business or part of business, may transferred in circumstances other sale. these may arise in case of merger, takeover or part of broader process of restructuring within company or group of companies. transfer can take place virtue of exchange of assets or donation [.... g]iven range of circumstances under transfer can take place, need agreed price or valuation may not arise. consideration may take other form. outsourcing in matter part of broader process of restructuring , must seen against backdrop of [old employer s] acquisition of 50% stake in [new employer].

going concern

once established there transfer, important question whether transfer of whole or part of business, trade, undertaking or service [...] going concern.

a distinction made between 3 ways of transferring business:

in respect of sale of shares, has been held distinction should made between transfer of business going concern , transfer of possession , control of business: result of sale of shares. sale of shares excluded ambit of section 197.

in respect of sale of assets, court in kgethe v lmk manufacturing held agreement sell portion of assets of business not transfer going concern. although judgment overturned on appeal, on basis court not entitled make finding true of agreement. therefore previous decision still tenuous authority proposition sale of assets not constitute transfer going concern.

in schutte v powerplus performance, however, court held that, irrespective of form agreement takes, court substance of agreement determine whether or not transferred going concern.

the following factors may taken account in finding there has been transfer of business contemplated in section 197. list not exhaustive:

a pre-existing relationship between buyer , seller;
a previous in-principle agreement sell part of business;
the wording of contract itself;
the fact buyer employed majority of employees;
use of same premises buyer; and
continuation of same activities without interruption.

in national education health & allied workers union v university of cape town, court held follows:

in deciding whether business has been transferred going concern, regard must had substance , not form of transaction. number of factors relevant [this question], such transfer or otherwise of assets both tangible , intangible, whether or not workers taken on new employer, whether customers transferred , whether or not same business being carried on new employer. must stressed list [...] not exhaustive , none of them decisive individually. must considered in overall assessment , therefore should not considered in isolation.

outsourcing

the question of whether or not outsourcing of services falls within ambit of section 197 has been subject scrutiny.

in samwu v rand airport management company, employer outsourced gardening , security services outside contractors, cheaper. court held gardening , security services fell within ambit of term service in section 197, , these services transferred 1 employer another. next question considered whether these services being transferred going concern. court referred decision in nehawu v university of cape town, , affirmed flexible approach must taken in finding objective answer question. on facts, court held agreement between ramc , other employer in respect of outsourced services amounted transfer of service within ambit of section 197. on evidence, however, court not decide whether agreement between 2 companies had been implemented, , therefore not decide whether contracts had been transferred ramc service provider.

this decision confirms, however, outsourcing exercise may constitute transfer of going concern envisaged in section 197. labour appeal court did not specify, however, factors taken account, not provide final answer question of whether or not outsourcing arrangements fall within section 197.

general rules

once established s197 applies, 1 must consider effect thereof. 4 consequences of such transfer listed in section 197(2). these principles have far-reaching implications new employer, may want restructure business , possibly retrench employees.

if new employer decides retrench employees, severance pay calculated on basis of service old , new employer determine years of service.

similarly, remuneration , benefits may linked years of service, may place financial burden on new employer.

section 197 may affect freedom of new employer apply selection criteria in cases of retrenchment. in keil v foodgro (a division of leisurenet), keil first employed macrib , foodgro, bought macrib going concern. keil employed in same position both employers. foodgro sought justify keil s selection retrenchment on basis had applied lifo, , keil s old contract substituted new 1 when foodgro bought business. court rejected argument on basis section 197 provides continuity of employment, foodgro should have taken keil s service macrib account. foodgro s selection dismissal therefore fundamentally flawed. keil awarded 9 months compensation.

the new employer expected pay sins of old employer. in numsa v success panelbeaters & service centre, employee unfairly dismissed old employer. employee challenged fairness of dismissal, labour court ordering employee reinstated. time, however, old employer had sold business going concern. court held, accordingly, new employer obliged take employee service.

there number of additional principles relating consequences of transfer.

should new employer not adhere obligations provide transferred employees @ least substantially same conditions or circumstances @ work, , should lead termination of contract employee, considered automatically unfair dismissal according sections 186 187 of lra.

exceptions

the general rule employees of old employer become employers of new employee, same terms , conditions of employment, , continuity of employment, subject number of exceptions.

section 197(3) provides new employer may provide terms , conditions of employment on whole not less favorable.

furthermore, consequences of transfer, envisaged in section 197(2), expressly subject agreement in terms of section 197(6). although employees may insist on contracts being transferred, right afforded same contractual rights must agreed upon.

regarding identity if parties, section 197(6)(a) states agreement must same bodies or persons whom employer has consult retrenchments. far employer concerned, either old or new employer may other party agreement.

any agreement interferes employees existing terms , conditions has involve employees in order valid.

in cases of retrenchment prior transfer, retrenchment substantively fair if retrenchment based on operational requirements of old employer , not of new employer.

an employee of old employer refuses adequate alternative employment new employer when faced retrenchment old employer not entitled severance pay.

only rights did accrue contractually employees prior transfer transferred. rights of employees existing @ time of transfer become obligations of new employer.

employees cannot use section 197 form of statutory bargaining insist on better terms , conditions of employment.

not benefits (especially pension benefits) provided employers. existing rights may transferred.

section 197 of lra allows transfer of employees 1 pension fund result of transfer of business if criteria in section 14 of pension funds act met.

insolvency

the term sequestration refers insolvency of individual. terms liquidation , winding-up refer insolvency of company, close corporation or other legal entity.

in past, approach has been contracts of employment between insolvent employer , employees terminate automatically. meant employees lost jobs. in respect of unpaid wages, became creditors of insolvent estate of employer. meant employer manipulate process of insolvency applying provisional liquidation rid of employees, , come kind of arrangement prospective buyer, or creditors, ensure survival or continuation of operations. employer ensure automatic termination of employment contracts without going out of business.

section 197a of lra addresses situation.

this section applies transfer of business. these terms have same meaning under section 197.

section 197a applies if old employer insolvent, or if scheme of arrangement or compromise creditors entered in order avoid winding-up or sequestration.

as general principle, effect of section 197a employees of old employer become employees of new employer; continuity of employment preserved.

these consequences subject agreement (between employees , new or old employer, or both) contrary.

other similarities between ordinary transfers , transfers in case of insolvency are:

the new employer complies obligations if takes on employees long terms , conditions of employment are, on whole, not less favourable.
subject agreement, new employer bound pre-existing arbitration awards , collective agreements.
provision made transfer of employees 1 pension fund consequence of transfer of business.
resignation of employee, faced substantially less favourable conditions , circumstances, regarded automatically unfair.

in transfers in normal course of business, however,

the rights , obligations of old employer , employees @ time of transfer remain; and
the new employer not inherit sins of old employer.

subsections 197(7) (9), regarding valuation , provision of accrued benefits, not apply transfers in cases of insolvency.