Most Recent Publications Sat, 21 Oct 2017 18:50:16 +0000 Joomla! - Open Source Content Management en-gb Collective disciplinary inquiries – A new norm?

Collective disciplinary inquiries – A new norm?

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


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


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


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


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


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

  1. The provisions of the company’s Disciplinary Code and Procedure are followed in order to ensure procedural fairness. Such Codes are generally only a guideline and seldom provide for collective misconduct.

  2. Prior to the strike, the employer considers whether the employees’ contracts of employment incorporate a condition of employment, that the employees have a duty to disclose the wrongdoing of fellow employees. Such provisions may also be found in disciplinary and other codes.

  3. Prior to the strike or lock-out, the employer would ordinarily issue a general notice to alert employees to the rule regarding disclosure, as well as invite them to disclose any information, even on a continuous basis, however, with a cut-off date. The company’s hotline may also be utilised for such purpose. The notice would provide that a failure to do so may result in employees being charged on the basis of derivative misconduct.

  4. Proper mechanisms are put in place to collect evidence and identify employees who engage in misconduct during strikes. 

  5. Witnesses are consulted with prior to charge sheets being drafted for each employee and employees are prosecuted where there is sufficient evidence to do so. Consistency in application of discipline is adhered to. Every charge in the charge sheet is supported by evidence which will allow for a finding on the basis of that charge. 

  6. Measures are taken to protect the identity of witnesses who have reason to fear for their lives as a result of giving evidence. This includes providing the means for witnesses to give evidence in camera, and where necessary to employ the use of a voice distorter. A proper foundation is laid before the Chairperson in order to call witnesses in camera. A formal application is made and the requirements as set out in the case of National Union of Mineworkers and Others v Deelkraal Gold Mining Co Ltd (2) (1994) 15 ILJ 1327 (IC) are complied with. These requirements were discussed in our Employment Alert dated 29 June 2015, entitled ‘Inspecting In-Camera Evidence – A Process for Dealing with Fearful Witnesses’.

  7. An independent Chairperson is appointed to preside over the disciplinary proceedings so as to ensure impartiality and fairness. Often the independence of the Chairperson is later raised at arbitration.

  8. Employers ensure that they are sensitive when communicating with witnesses in the presence of other employees so as not to disclose their identity. 

  9. Item 4(2) of Schedule 8 of the Labour Relations Act is complied with in respect of Shop Stewards who are being charged. 

  10. The disciplinary hearing is interpreted into the accused’s mother tongue. This right is not abused to delay the proceedings and to frustrate the right of the employer to prosecute misconduct at the workplace. When an employee testifies, the employer affords the employee the opportunity to testify in their mother-tongue and appoint an interpreter for the employee. However, there is no interpretation of all the evidence led, into for instance, five different languages of the employees. The language policy as well as the education levels of the employees are considered.

  11. The employer does not allow for an appeal as this would require yet another chairperson, escalating the costs of the inquiry.

  12. The proceedings are recorded as the parties sometimes wish to rely on the record at future proceedings.


For more information, contact Professor Hugo Pienaar at

Article published with the kind courtesy of Cliffe Dekker Hofmeyr







]]> (Fanie) Most Recent Publications Tue, 17 Oct 2017 06:39:18 +0000
Large scale retrenchments: Independent facilitators as opposed to CCMA appointed facilitators? You decide


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

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


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


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


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


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


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


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


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


For more information please contact Fiona Leppan at

Article published with the kind courtesy of Cliffe Dekker Hofmeyr







]]> (Fanie) Most Recent Publications Tue, 10 Oct 2017 06:13:03 +0000
You say demotion, I say dismissal


You say demotion, I say dismissal

By Jose Jorge, Director and Steven Adams, Associate, Employment, Cliffe Dekker Hofmeyr


The recent Constitutional Court case of South African Revenue Service v CCMA and Others (the Kruger case) dealt with whether an employer can change a chairperson’s sanction.


The findings of the Labour Appeal Court (LAC) in Moodley v The Department of National Treasury and Others [2017] 4 BLLR 337 (LAC) affirms the principles established by the Kruger case. 


In the Moodley matter, National Treasury employed the employee as director: facilities management. Her duties included procurement. The employee was charged with 11 counts of misconduct including non-compliance with procurement procedures, failure to disclose her interests and the receipt of a gift. 


The employee was found guilty of nine of the 11 charges. The chairperson, an independent advocate, imposed a sanction in respect of each charge – and then imposed an overall sanction in respect of all the charges. In respect of five of the nine charges against her, the chairperson imposed a sanction of dismissal.


Strangely, the chairperson’s overall sanction was “dismissal with an alternative of demotion”. This was a competent finding in terms of the department’s employee relations guideline. 


Not surprisingly, the employee elected demotion. 


Despite the employee’s election, the department informed her that she was dismissed with immediate effect. The employee then referred an unfair dismissal dispute to the bargaining council. No evidence was led at the bargaining council. An agreed bundle was handed in and the matter was argued before the arbitrator. The only issue was the fairness of the sanction. The employee contended that having made her election the department could not substitute the chairperson’s sanction with that of a dismissal. The arbitrator agreed and found that in terms of the Public Services Act the Department could not change the chairperson’s sanction to a harsher one. As a result, the dismissal was unfair. The arbitrator awarded reinstatement and stated that “[t]he sanction of demotion should stand.”


The department took the award on review to the Labour Court. The court found that the arbitrator misconceived the nature of the enquiry and arrived at a decision that fell outside the bounds of reasonableness. The court remitted the matter back for rehearing to the bargaining council to determine whether the dismissal was fair. 


The employee appealed to the LAC. The grounds of appeal raised by the employee included that the court had erred in finding that the arbitrator’s award was unreasonable and in finding that the department could change the chairperson’s sanction even though the sanction was not a recommendation. 


Referring to the Kruger case, the LAC agreed that an arbitrator is enjoined by law, namely s193(2) of the LRA to determine whether reinstatement is an appropriate remedy. In terms of s193(2) the LC or an arbitrator must reinstate or re-employ an employee where a dismissal is substantively unfair unless the employee does not want to be reinstated, the circumstances surrounding the dismissal are such that a continued employment relationship would be intolerable, or it is not reasonably practicable to do so. 


The LAC found that the arbitrator did not apply s193(2) of the LRA and he failed to consider the seriousness of the misconduct and the effect of the misconduct on the workplace. It held that “[t]he arbitrator’s failure to do so, in circumstances where she, or he, was legally obliged to do so, is justifiably criticised as being unreasonable and as a failure to apply his or her mind to the issues”


The LAC agreed with the LC, albeit for different reasons, that the arbitrator’s award was to be set aside and remitted to the bargaining council for rehearing.


Two lessons can be learned from this decision. Firstly, employers must carefully consider who they appoint as disciplinary enquiry chairpersons when outsourcing this function and secondly, an arbitrating commissioner is obliged by law to consider whether reinstatement is an appropriate remedy in the circumstances.


For more information contact Jose Jorge at or Steven Adams at

Article published with the kind courtesy of Cliffe Dekker Hofmeyr







]]> (Fanie) Most Recent Publications Tue, 03 Oct 2017 07:45:35 +0000
Whistleblowing amendments – what employers must know


Whistleblowing amendments – what employers must know

 By Judith Griessel, Griessel Consulting


On 2 August 2017, amendments to the Protected Disclosures Act of 2000 were published. The Amendment Act introduces several new provisions which broadens the application of the Act beyond the employer/employee relationship, and places further obligations on both whistleblowers and employers.



The Protected Disclosures Act (PDA) came into effect on 16 February 2001 and provides procedures and protection to whistleblowers in the private and public sector, who disclose information regarding unlawful or irregular conduct by their employers or fellow employees. It encourages a culture of good governance, accountability and transparency.


The protection extended to whistleblowers by the Act is however not unconditional, and not all disclosures are protected. There are specific requirements which must be met in order to enjoy protection and employees need to understand what qualifies as a protected disclosure and when they can claim that they have suffered an occupational detriment. Practical Guidelines have been published by the Minister on 31 August 2011 to further guide employers and employees in this regard.


The irregularities covered by the Protected Disclosures Act include the following:

  • criminal offences being committed or likely to be committed;

  • failure of any person to comply with certain legal obligations;

  • miscarriages of justice;

  • endangering of the health or safety of individuals;

  • damage to the environment; and

  • unfair discrimination.


The Act specifies different ways in which protected disclosures can be made: internally to the employer / organisation; and externally to lawyers and bodies like the Public Protector. There are also requirements such as that the whistleblower must act in good faith, not for personal gain, and must substantially believe that the information is true. If these parameters are not met, the disclosure may not be protected and the whistleblower may be subject to disciplinary- and/or legal action.


Enter the recent amendments to the PDA on 2 August 2017. Of particular importance for employers are two new administrative obligations created by the Amendment Act, namely that (1) employers must formulate and document internal whistleblowing procedures, and must bring this to the attention of all its employees; and (2) employers are required to respond in writing to a disclosure within 21 days and keep the employee/worker informed of steps being taken in relation to investigating the matter. More about this below.


The amendments in a nutshell

  • The Amendment Act introduces the new term “worker” in addition to “employee”. The definition of ‘worker’ includes individuals who currently or previously worked for the employer; also independent contractors, consultants, agents and those rendering services to a client whilst being employed by a temporary employment service (labour broker).

  • The PDA protects an employee (and now also a ‘worker’) who makes a protected disclosure against any occupational detriment by the employer because of making the disclosure. ‘Occupational detriment’ has always included discipline, dismissal, transfers, refusing promotions, bad references, not appointing the whistleblower to a position, threatening to do any of these, or any other adverse effect on their work security or employment. In terms of the Amendment Act, the employee or worker is now in addition also protected against -

  • any civil claim by the employer for breach of confidentiality, if they disclose (i) a criminal offence; or (ii) information which shows or tends to show that a substantial contravention of, or failure to comply with the law has occurred, is occurring or is likely to occur; and

  • any adverse effect in respect of the retentionor acquisition of contracts to perform work or render services.


So, for example, if a consultant or labour broker blows the whistle on (intended) criminal or illegal conduct of a client, it could potentially qualify for statutory protection against cancellation of its service contract by the client, or refusal to give them further work because of the disclosure.


  • As regards disclosures made to the employer itself, this is governed by section 6 of the Act. Section 6 requires that the disclosure must be made in good faith and must be in terms of a procedure laid down by the employer. As mentioned above, a new obligation is imposed on employers in terms of section 6(2)(a), i.e. that all employers must now -


(i) authorise appropriate internal procedures for receiving and dealing with information about improprieties; and


(ii) take reasonable steps to bring the internal procedures to the attention of every employee and worker.


Therefore, employers must ensure that they have measures and procedures in place to deal with employee disclosures and that these are communicated to their employees. Ideally this would be done by way of a company policy which is made available to all employees. Such a policy should indicate the types of irregular conduct which should be reported; stipulate the steps to be taken if a person wants to report it; and provide guidance on the specific information which should be provided in the disclosure. The employer should also provide training to their employees in this regard or make it part of educating employees in terms of the company’s ethics and its views on anti-corruption.


  • A further new provision introduced into the PDA by way of section 3B is the duty of the employer to inform an employee or worker of the steps taken once a disclosure has been made.

  • After receiving a protected disclosure, employers are required to - as soon as reasonably possible but within a period of 21 days after receiving the protected disclosure - decide whether to investigate the matter or refer the disclosure to another more appropriate person or body for investigation.

  • The employer must acknowledge receipt of the disclosure in writing and inform the employee or worker of its decision to investigate the matter or to refer it to another person or body. If the employer decides not to investigate, reasons for doing so must be provided. If it will be investigated, a time frame for the investigation should be indicated where possible.

  • If the employer cannot make a decision within this time period, it must inform the employee or worker in writing of this and thereafter regularly (not more than 2 month-intervals) advise the employee or worker that the decision is still pending – however the decision must be made and communicated within a period of six months after the protected disclosure has been made.

  • The outcome of any investigation must also be communicated to the whistleblower.

  • The employer need not comply with the above if the identity and contact details of the whistleblower is not known; or need not advise an employee or worker of its decision on whether or not to investigate the relevant matter if “it is necessary to avoid prejudice to the prevention, detection or investigation of a criminal offence”.

    • A new liability is created by insertion of section 3A, namely that an employer and its client are jointly and severally liable for those instances where the employer “under the express or implied authority or with the knowledge of a client” subjects an employee or worker to an occupational detriment.

    • If an employee or worker discloses information that a criminal offence has been/ is being / is likely to be committed, or which shows that a substantial contravention of, or failure to comply with the law has occurred / is occurring / is likely to occur, such an employee or worker will not be liable to any civil, criminal or disciplinary proceedings for making a disclosure which is “prohibited by any other law, oath, contract, practice or agreement requiring him or her to maintain confidentiality or otherwise restricting the disclosure of the information with respect to a matter”. However, this exclusion of liability does not extend to the civil or criminal liability of the employee or worker personally for his or her participation in the disclosed impropriety.

    • It is now also a criminal offence when an employee or worker intentionally discloses false information (or when they should reasonably have known that it was false) with the intention to cause harm, and the affected party does suffer harm. Imprisonment of up to 2 years or a fine can be imposed. Disclosures should therefore not be based on mere speculation - such allegations can also have serious consequences for the company and persons implicated in the allegations.



The changes introduced by the Amendment Act are important. The ambit of the PDA is now much broader and it is more important than ever for employers to focus some time and resources on this. A proper whistleblowing policy to augment the anti-fraud and corruption policies of the employer, is now a necessity and a legal requirement.


The aim of this legislation is to create workplaces that operate lawfully and ethically and employers are expected to create a culture within which employees are encouraged to blow the whistle on conduct that irregular, illegal, corrupt or unethical. This will however only happen if the leaders of the organisation pay more than lip service to this and ensure that they lead by example.


For more information, please contact Judith at







]]> (Fanie) Most Recent Publications Mon, 02 Oct 2017 05:02:26 +0000
I’ll take that back, thank you very much


I’ll take that back, thank you very much

By Gillian Lumb, Director, Anli Bezuidenhout, Senior Associate and Brynn Travill, Candidate Attorney, Cliffe Dekker Hofmeyr


In the matter of Sekhute and Others v Ekurhuleni Housing Company SOC (J1862/17) [2017] ZALCJHB 318, the employees challenged the lawfulness of the employer’s deduction from their remuneration of overpayments made to them in error.


The employees’ posts were regraded and they received commensurate increases in their remuneration. However, when paying the increases, the employer erroneously also added the increased contributions to the pension fund and medical aid scheme to the employees’ remuneration and paid this over to the employees. These amounts should have been deducted from their remuneration and paid over to the pension fund and medical aid on the employees’ behalf. This resulted in some of the employees enjoying an increase of almost 40% when they were only entitled to an increase of 18%. The employer informed the employees of the overpayments and requested that the employees complete a salary deduction form wherein they agreed to the deduction of the overpayments from their future remuneration over a period of time. The employees refused to agree to the deductions. When the employer proceeded to make the deductions the employees launched an urgent application to prevent the employer from making future deductions and reversing deductions already made. The employees alleged that the deductions were unlawful as they were contrary to clause 13.2 of the employer’s HR policy which states:


“No deduction, unless in the form of a legal instruction such as a collective agreement, court order or arbitration award, will be made from an employee’s salary without the authority of the employee...”


The Labour Court accepted that the employer had made a genuine overpayment in error. As a result, the employer could cease making the overpayment in future. The question which the court then had to determine was whether the employer was entitled to recover the overpayments by way of deduction from the employees’ remuneration, in the absence of employees’ consent to the deductions. The employer relied on s34(5) of the Basic Conditions of Employment Act, No 75 of 1997 (BCEA) as the basis for the deduction and the lawfulness thereof. 


The Labour Court considered s34 of the BCEA and held that s34(1) identifies two classes of deductions that can be made by an employer from an employee’s remuneration. The first is a deduction which may be made in respect of an acknowledged debt and which would require the employee’s consent in writing. The second is a deduction which does not require the employee’s written consent. The deduction may, for example, be authorised by law or a court order. The court then considered s34(5) of the BCEA which states:


(5) An employer may not require or permit an employee to:


(a) repay any remuneration except for overpayments resulting from an error in calculating the employee’s remuneration…”


The Labour Court found that the repayment of overpaid remuneration is a unique category of money that is lawfully recoverable by an employer from an employee. It held that s34(5) was intended to permit a deduction for amounts due to an employer and the employees’ consent is not required. The legislature’s intention with this section was to specifically authorise deductions for overpayment of remuneration. Insofar as the employer’s policy was concerned and the employees’ allegation that the policy prohibited the deduction given that it was not made in terms of a “legal instruction”, the court found that s34(5) is a provision of a law. In the circumstances, the policy did not prohibit the deduction. 


This judgment is of significant assistance to employers that have made overpayments to employees in error. In terms of s34(5) of the BCEA, the employer is permitted to deduct the overpayment from the employees’ remuneration, without the employees’ consent. 


For more information, please contact Gillian Lumb at or Anli Bezuidenhout at

Article published with the kind courtesy of Cliffe Dekker Hofmeyr







]]> (Fanie) Most Recent Publications Tue, 19 Sep 2017 06:12:45 +0000
Transfer of business: Out with the old and in with the new, does not necessarily mean the business has transferred to you


Transfer of business: Out with the old and in with the new, does not necessarily mean the business has transferred to you

By Faan Coetzee, Executive Consultant, Samantha Coetzer, Consultant, Cliffe Dekker Hofmeyr


In Imvula Quality Protection and Others v University of South Africa (J435/17) [2017] ZALCJHB 310 (31 August 2017), the Labour Court had to determine whether the termination of the contracts with two service providers and the decision to employ a majority of their employees triggered s197 of the Labour Relations Act, No 66 of 1995.


In this case, UNISA contracted with Imvula Quality Protection (Imvula) and Red Alert TSS (Pty) Ltd (Red Alert) (collectively referred to as the ‘two service providers’) to provide it with security services. In terms of the contracts, in exchange for the two service providers providing their own uniforms and equipment, placing security officers at UNISA campuses in Gauteng and managing the security services UNISA would pay them a monthly fee. 


UNISA, in accordance with the contracts, terminated the contracts with the two service providers. This occurred after it was faced with a demand to insource previously outsourced functions. Following the demand, UNISA agreed to partially insource the security function. UNISA offered employment to the majority, but not all, of the security staff employed by the two service providers on the contract. 


UNISA contemplated a ‘shared services’ business model in terms of which the security services staff would be employed by UNISA but the security services would be provided by a new outsourced service provider using the UNISA staff. The new service provider would be required to provide its own equipment and infrastructure particularly torches, guard tracking, uniforms and vehicles to UNISA. It was to also provide managers and supervisors that it employed to manage the security service. UNISA would only manage the human resources. 


The two service providers approached the Labour Court for an order declaring that all their employees working on the UNISA contracts be declared UNISA employees. They argued that s197 of the LRA was applicable to the termination of the contracts and UNISA’s subsequent offers of employment to their staff. They argued that providing security guards is a service, therefore, a business and the insourcing of the service resulted in the service’s continuation. UNISA argued that s197 did not apply and that there was no transfer of a business as a going concern despite its offers of employment to the staff.


If s197 is triggered a number of consequences follow by operation of law. For instance, the “new employer is automatically substituted in the place of the old employer in respect of all contracts of employment in existence immediately before the date of transfer” and “all the rights and obligations between the old employer and an employee at the time of the transfer continue in force as if they had been rights and obligations between the new employer and the employee”. If the two service providers succeeded with their argument that s197 applied, all of their employees on the UNISA contracts, and not only those selected by UNISA, would become UNISA employees. 


The Labour Court recognised the dual purpose of s197 and that on the one hand it is aimed at protecting employees against job losses while on the other hand it facilitates the sale of business as a going concern. The Labour Court held that although s197 is aimed at avoiding job losses, job losses do not necessarily trigger s197. 


It held that the section will be triggered when the following three requirements are simultaneously met : 


  1. A transfer - a ‘transfer’ is defined in s197(1) to mean “the transfer of a business by one employer (‘the old employer’) to another employer (‘the new employer’) as a going concern.

  2. A transfer of a business - a ‘business’ includes a service, and importantly, the Labour Court held that it is the business supplying the service that is capable of being transferred not the service itself.

  3. The business is transferred as a going concern -  whether there is a transfer as a going concern, the court held, is determined by a number of factors including whether the new employer takes over workers, whether assets (tangible and intangible) are transferred and whether the new employer carries on the same business. 


Dealing with the issue of changing service providers, the Labour Court held that “the termination of a service contract or the appointment of a new service provider does not in itself trigger the application of s197”. 


It referred to two situations “within the realm of outsourcing and insourcing” identified by the Constitutional Court. In one situation s197 applies whereas in another it does not. The distinction between the situations arises due to the definition of the term ‘business’ in s197. As already indicated, the term business includes a service, however, the Labour Court held that although the definition of ‘business’ does include a service, it is the business supplying the service that is capable of being transferred, not the service itself.


In the first situation identified by the Constitutional Court, the right to provide the services is forfeited by the outgoing service provider but its business is not transferred. The court held that “in this instance, the right to provide the outsourced service may transfer, but no business is transferred as a going concern.” In this situation, s197 is not applicable. In the second situation s197 applies, as in that situation when the service contract is terminated (either because the service is insourced or because there is a change in service providers) the business (and its infrastructure) supplying the service is transferred from the outgoing service provider back to the client or to the new service provider as a going concern.

The Labour Court held that the two service providers had failed to show that the termination of the contract fell within the second situation. It importantly held that the two service providers had not established that there was a transfer of a business, the second requirement already discussed above. It held that “[a]though it is not impossible for a transfer only of employees to constitute the transfer of a business for the purposes of s197, the requirement of the existence of a business must be met.” 


In this case, no assets and no infrastructure were transferred from the two service providers to UNISA. Other than the employees working on UNISA contracts, the two service providers retained all remaining components making up their own businesses and could offer security services to other clients. 


The Court did not follow the Labour Appeal Court (LAC) decision in Rand Airport where the employer outsourced its gardening and security services and the LAC held the transaction to constitute the transfer of a service in terms of s197. The Labour Court distinguished the LAC decision on the basis that the Constitutional Court has developed the law to hold that it is the business rendering the service that must transfer for s197 to apply.  


Section 197 was not applicable in this case and the Court dismissed the application with costs. 


For more information contact Faan Coetzee at or Samantha Coetzer at

Article published with the kind courtesy of Cliffe Dekker Hofmeyr







]]> (Fanie) Most Recent Publications Tue, 12 Sep 2017 04:27:22 +0000
Pregnancy was not the reason for different treatment


Pregnancy was not the reason for different treatment

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


Pregnant employees are protected in the workplace. For instance, s6 of the Employment Equity Act, No 55 of 1998 specifically provides that “[n]o person may unfairly discriminate, directly or indirectly, against an employee, in any employment policy or practice, on one or more grounds, including… pregnancy”.


In the case of Impala Platinum Ltd v Jonase & others (JR 698/15), two employees who had worked underground at an Impala Platinum mine referred a dispute to the CCMA alleging that they had been discriminated against because they were pregnant. They indicated that they wanted “to be treated fair like other pregnant employees.”


Their employer had a policy that where reasonably practicable, it would place pregnant women who worked underground on the surface in suitable alternative employment to prevent risk to their health and safety and the health and safety of their unborn children. 


In terms of the policy, a number of pregnant employees working underground were moved to the surface. However, only certain of those pregnant employees that were moved to the surface had the necessary skills to take up alternative employment in administrative posts. When the two pregnant employees were moved to the surface and when no suitable alternative employment could be found for them by the employer, they were told to take their four months’ paid maternity leave. 


The employees’ dispute was referred to arbitration. The commissioner found that the employees had been discriminated against and found that “the employer’s failure to find alternatives was unfair to the employees and that constitutes discrimination as the sole reason for the failure is the employees’ pregnancy...”  


The commissioner found that the employees had been treated differently to the other pregnant employees who took up alternative employment on the surface and that the employer was required to find alternative employment for the employees. The commissioner ordered the employer to compensate the employees for the unfair discrimination, to pay loss of salary and, despite no complaint by the employees about the fairness of the employer’s policy, the commissioner ordered the employer to amend its policy to accommodate pregnant women. 


The employer took the commissioner’s award on appeal to the Labour Court where the appeal was successful and the award set aside. 


The Labour Court considered the employees’ complaint. The complaint did not relate to the fairness of the employer’s policy. The employees claimed that they were treated differently from other pregnant employees. In essence, they compared themselves to other pregnant employees. 


The Court held that that their complaint of unfair discrimination “was negated by the comparator being other pregnant women”. Importantly, it held that the employees “were not treated differently because they were pregnant; they were treated differently from some other pregnant employees who were given alternative employment because they did not have the requisite skills.” It found that the employees had failed to prove discrimination on the ground of pregnancy. 


In the absence of suitable alternative positions at the employer, the court found there was no obligation on the employer to create positions for the two employees and it found that the employer had acted lawfully.  


As the employees had not complained about the fairness of the employer’s policy, the Labour Court held that it was not within the commissioner’s powers to order the employer to amend its policy. 


For more information please contact Aadil Patel at or Samantha Coetzer at

Article published with the kind courtesy of Cliffe Dekker Hofmeyr








]]> (Fanie) Most Recent Publications Wed, 06 Sep 2017 05:19:29 +0000
An Ideal EE Plan Should be an Inclusive, Consultative Process - Department Of Labour

An Ideal EE Plan Should be an Inclusive, Consultative Process - Department Of Labour


The development of an employment equity plan (EE) must be an inclusive process that involves consultation with all stakeholders in the workplace, said Department of Labour EE Directorate, Deputy Director Niresh Singh.


Singh said the plan should go a step further and be informed by an analysis of the workforce, analysis of policies, procedures and practice of an organisation. He said workplace activism was critical in the development of an inclusive EE plan. 


The Deputy Director was speaking at Velmore Hotel and Conference Centre, west of Pretoria, during the Department of Labour EE workshop that was tailored for national and provincial Departments. 


The workshop was one of four that will be hosted by the Department this week as it winds the national roadshows to advocate for employment equity compliance in the workplaces to be held in the Gauteng Province. 


The Department uses the workshops to create awareness on compliance with the Employment Equity Act, publicise and help prepare the employers with the requirements needed to be used when submitting their online 2017 EE reports to the department.


The workshops are held under the theme: “Real transformation makes business sense”.


Singh told the workshop that an EE plan implementation should have a start and an end date. He also implored that a communication plan was imperative for a collective buy- in. 


He emphasised that the development of the plan should consider amongst others the national and provincial economically active population ratios, have a duration, spell out objectives and be in line with EE legislative framework. 


"Employment equity must be used as a monitoring and evaluation tool to inform  future implementation strategies and the preparation of successive plans," Singh said. 


The agenda for the workshops focus on the following:

  • To publicise the Amended Code of Good Practice on the Preparation and Implementation of the EE plans,
  • To encourage employers to submit EE reports online,
  • To publicise the 17th CEE Annual Report and the 2016 EE Public Register, and
  • To present current CCMA cases on Employment Equity Act.


The national workshops started on 11 July 2017 in Kimberley. Workshops have since been held in Rustenburg, Nelspruit, Thohoyandou, Polokwane, Bloemfontein, Richards Bay, Durban, East London, Port Elizabeth, Cape Town and George.  


The workshops are targeting: human resources executives and practitioners; EE Forum members; assigned senior EE managers/transformation managers; academics and trade unions among others.


The Department will tomorrow (September 6) host an EE workshop in Ekurhuleni  at The Lakes Hotel & Conference Centre, 1 Country Lane Lakefield, Benoni for all stakeholders.


The last remaining Gauteng Province workshops are planned as follows:

  • Vaal (08 September) at Lord’s Signature Hotel, 53 Raymond Street – Risiville in Vereeniging for all stakeholders.
  • Ekurhuleni (08 September) at Emperors Palace, 64 Jones Road, Kempton Park targeting only municipalities.


Meanwhile, the EE Online and Manual reporting season opened on 01 September 2017. The manual reporting closes on 01 October 2017, and the online reporting season closes in January 2018. 


Media Release: Department of Labour: 05 September 2017



]]> (andre) Most Recent Publications Tue, 05 Sep 2017 11:36:41 +0000
Intra-trade union conflicts: Can employers assist in resolving intra-union disputes?


Intra-trade union conflicts: Can employers assist in resolving intra-union disputes?

By Mohsina Chenia, Executive Consultant and Reece May, Candidate Attorney, Employment, Cliffe Dekker Hofmeyr


As a general rule, the Labour Relations Act, No 66 of 1995 (LRA), cannot be used by employers as a tool to quell strife internally within trade unions. There are, however, circumstances where an employer may, as an external party, have an interest in these internal conflicts, especially where this hampers bargaining between the employer and employees or if this results in its employees being effectively unrepresented.


The Labour Court in City of Johannesburg v SA Municipal Workers Union & Others (2017) 38 ILJ 1342 (LAC) dealt with a situation where a trade union, the South African Municipal Workers Union (SAMWU), had elected provincial office-bearers for the Kwa-Zulu Natal province. This election, however, did not comply with the requirements for a valid election, as no provincial executive committee meetings were called as required by SAMWU’s Constitution. The national office-bearers continued to “disband” the newly appointed provincial members. Following the “disbandment”, another meeting was called on a provincial level to appoint new union leadership for the province.


The “disbanded” members did not recognise their removal claiming they were not properly disbanded. These members continued to perform functions as duly elected provincial office bearers. SAMWU continued to suspend these members and some were even expelled.


Two factions of leadership began to form with both factions denying the authority and validity of the other faction. Both factions claimed to be elected in terms of SAMWU’s Constitution and both continued to elect new national office bearers to represent each faction. This divide resulted in the City of Johannesburg, as an employer of employees represented by SAMWU, seeking a declaratory order to determine which faction is duly authorised to deal with the employer on a day to day basis.


The court had to consider whether the employer had locus standi to bring such a matter before the court. The court referred to the case of SA Airways SOC Ltd & Another v National Transport Movement & Others (2016) 37 ILJ 2128 (LC), which proclaimed that ordinarily an applicant in such instances would not have locus standi to bring such an application to interfere with the internal affairs of a trade union. 


Likewise, in this case the court found that even an applicant with the best intentions could not result in the applicant acquiring locus standi. The employer was also warned that in such instances it should not prefer one faction to the other and should not confront the court for an order declaring that the selected faction is duly authorised to act. The court ultimately pronounced that the applicant will not have locus standi in this instance and would not have been able to decide the matter, but for the parties agreeing to it. The parties managed to reach an agreement that both factions would present evidence before the court to justify their authority to act on behalf of SAMWU. This agreement allowed for the matter to proceed to court.


In analysing the implications of failing to comply with the trade union’s Constitution, the court referred to SA Transport & Allied Workers Union v Zondo (2015) 36 ILJ 2348 (LC), which averred that the union’s Constitution is a contract entered into by mutual agreement to which all members subscribe and is not subservient to any resolutions adopted by bodies of the trade union. Any adopted resolution which is in conflict with the provisions of the Constitution are ultra vires and of no force and effect. It held that any purported meeting or resolution passed by the disbanded members will be of no force and effect as the disbanded members were themselves not appointed in terms of the Constitution, thus all subsequent actions and resolutions passed by them would be null and void and of no effect. Consequently, the court made a declaratory order declaring the faction of the newly elected union members to be the lawful and duly authorised members.


What is clear from this case is that even when an employer is impacted negatively, in having to deal with different factions of the same trade union, in its bargaining relationship, it will have no legal recourse through the mechanisms of the LRA to stabilise the relationship and ensure its employees receive effective representation. It is the trade union itself who should initiate legal proceedings to resolve any internal disputes.


Employers, despite having an interest in the effective running of the trade union, should tread carefully not to enter litigation where it, as a third party, does not have locus standi.


For more information please contact Mohsina Chenia at

Article published with the kind courtesy of Cliffe Dekker Hofmeyr







]]> (Fanie) Most Recent Publications Tue, 05 Sep 2017 07:22:19 +0000
Incapacity or Operational Requirements?


Incapacity or Operational Requirements?

 By Tessa Kassel; Vice Chairperson; General, Domestic & Professional Employers Organisation (GDPEO)


A dismissal may be determined to be fair if it relates to the employee’s conduct, incapacity, or the employer’s operational requirements.


However, what happens when the reason for the employee’s dismissal falls “between the cracks” in that it could relate to either the employee’s capacity to perform the job, or it may relate to the employer’s operational requirements? 


What is the appropriate route to follow?


What this article will attempt to show is that not only employers get the correct classification for a dismissal wrong; but CCMA Commissioners have on occasion too.


Employers may be faced with a situation where an employee becomes “unfit” to perform his or her duties.


There may be a certain minimum standard present that an employee must attain to render a proper service to the employer.


For example, a courier company driver must possess a valid driver’s license. What happens when an employee can no longer perform the duties assigned to him because he does not possess the necessary minimum requirements to perform his job?


What happens should our courier driver lose his driver’s license because of reckless and negligent driving?


Does one retrench this employee, or is this a case of incapacity? What is evident is that the employee can no longer perform his job because he does not have a certain qualification, skill or minimum legal standard required by law to perform his job.  


There are 2 judgments that illustrate the difficulty with this question.


Firstly, in the case of Armaments Corporation of South Africa (SOC) Ltd (ARMSCOR) v CCMA and Others (JR1961/13; JR1510/13, handed down in January 2016 it was held the Commissioner had failed to consider certain material facts and submissions placed before him and accordingly committed a material irregularity when he rejected ARMSCOR’s submissions that the employee had become incapacitated by operation of law, and therefore it had become necessary to terminate his services.


Mr Joubert (the employee) had had his contract with ARMSCOR terminated by operation of law after he failed to obtain the necessary security clearance in terms of section 37 of the Defence Act, a requirement to work at his level. Section 37(2) of the Defence Act, which would have been applicable to Joubert provides: 


‘A member or employees contemplated in subsection 1(a) may not be enrolled, appointed or promoted, receive a commission or be retained as a member or employee, unless such member or employee has been issued with the appropriate or provisional grade of security clearance by the Intelligence Division.’


On 18 December 2012, ARMSCOR addressed a letter of termination to Mr Joubert. After citing the provisions of section 37(2) of the Defence Act and ARMSCOR’s related policies, ARMSCOR informed Joubert that:


“You are hereby informed that you have been refused all grades of security clearance. Consequently your contract of employment is terminated with immediate effect.”


Joubert, after being dismissed referred a matter to the CCMA. The Commissioner was tasked to determine the real legal basis for the dismissal and whether it was substantively and procedurally unfair. ARMSCOR contended at the arbitration that, Joubert was dismissed fairly for the purposes of the LRA, and his dismissal was a dismissal for incapacity.  Joubert’s dismissal it was argued was fair in that it was dictated by section 37(2) of the Defence Act and ARMSCOR’s corresponding policies.


ARMSCOR referred the Commissioner to case law when it argued that incapacity can arise from any condition that prevents an employee from performing his work (my emphasis) and that an employer may legitimately dismiss an employee incapable of performing his obligations arising from the employment contract. Joubert’s employment was terminated because it had resulted from a legal provision.


Martin Brassey referred to incapacity when he said in Samancor Tubatse Ferrochrome v MEIBC & others [2010] 8 BLLR 824 (LAC)


“Incapacity may be permanent or temporary and may have either a partial or a complete impact on the employee’s ability to perform the job. The Code of Good Practice: Dismissal conceives of incapacity as ill-health or injury but it can take other forms. Imprisonment…, for instance incapacitates the employee from performing his obligations under the contract. The dismissal of an employee in pursuance of a closed shop is for incapacity; so is one that results from a legal prohibition on employment.”


A consideration of the above facts – which the Commissioner did not take into account – demonstrates that the Commissioner’s finding of substantive unfairness was not a reasonable decision.


The effect was that a failure to consider these factors caused an unreasonable outcome.


What transpired eventually was that the Judge (Whitcher) found the dismissal was substantively fair.


Effectively, the reason for the dismissal related to one of incapacity. However the dismissal was procedurally unfair in that Joubert was not afforded the opportunity to state his case at an incapacity investigation. His services were summarily terminated when the employer issued him with the letter referred to above.


What is evidenced by the abovementioned case is that although there may be a valid reason to terminate the services of an employee as a result of their incapacity, one must still follow a fair procedure as dictated by the LRA in Schedule 8. Due to their failure to institute any pre-dismissal procedure, ARMSCOR was order to pay eight (8) months compensation to Joubert!


However, Joubert had worked for ARMSCOR for 31 years. Had ARMSCOR followed the retrenchment route, it would have had to pay him for those years of service as a result.


An argument many employees may use at the CCMA is that the question may revolve around the fact that the employer in certain circumstances may utilise incapacity procedures to terminate an employees’ service in order to escape the liability associated with dismissals as a result of retrenchment.


The second case pertinent to this discussion is a recently handed down judgement.


First National Bank, A Division of First Rand Bank Ltd V CCMA and Others (as yet an unreported judgment, case no 1476/2016, delivered on 10 July 2017.)


In this case, an employee at the bank was appointed to the poition of Sales Consultant during 2011.


To perform the required tasks associated with the position, the employee needed to be an accredited Financial and Intermediary Services ("FAIS") representative as defined under the Financial Advisory and Intermediary Services Act, 2002 ("FAIS Act").


In order to operate at the required level as of a FAIS representative, the employee was required to comply with the prescribed "fit and proper requirements" for FAIS representatives. In order to be deemed “fit and proper” the employee would be expected to successfully pass the regulatory examinations set by the Registrar of the Financial Services Board ("FSB").


If the employee did not succeed in passing these exams he would not be be able to comply with the minimum standard under the FAIS Act.


This in turn would mean that FNB could not lawfully employ the employee to render financial advice as a Sales Consultant and he would in turn not be able to sell FNB's products.


The employee attempted the regulatory exams 15 times during 2004 and 2015.


The employer provided the necessary training, guidance and support necessary to enable the employee to pass the required exams.


Eventually, FNB was unable to accommodate the employee in an alternative position which it offered to him during December 2015. 


The employee was then invited to an incapacity enquiry.


The presiding officer made a finding that the employee lacked the necessary legal qualification to render a “fit and proper” service to advise clients on FNB products.  


FNB then terminated the employee’s service as a result of incapacity.


The employee referred a matter to the CCMA.


During the arbitration the Commissioner found that incapacity under the LRA only includes incapacity on the grounds of ill health or injury.


The Commissioner refused to accept that the employee had been dismissed as a result of a 'legal incapacity' to perform his duties.


Rather, the Commissioner found the  that dismissal was based on FNB's operational requirements.


The award was that FNB had not dismissed the employee substantively nor procedurally fairly.


FNB reviewed the decsion. FNB argued the Commissioner had made an two errors when he said: "a dismissal, resulting from a legally imposed requirement for the job and thus supervening impossibility to perform, cannot be construed as an issue of incapacity"; and, second, that "the dismissal ought to have been for operational requirements".


The Labour Court referred to the following: "it seems appropriate that the line between operational requirements and incapacity should be drawn where the employer determines or acknowledges the need to restructure its business and not where the employer cannot employ an employee because of a statutory provision prohibiting such employment".  


"In the event of incapacity, the focus is on the qualities of the employee. In the event of operational requirements, the focus is on the employer and its decisions relating to its business"


Essentially the Court found the reason for the dismissal related to the employees’ incapability rather than the employer’s need to restructure its business. Failure to meet the minimum legal requirements to render the service by the employee meant that it had become impossible as an operation of law.


As a result the Commissioner had made an error when he found the dismissal was based upon FNB's operational requirements as opposed to the employees’ incapacity.


Although this decision is one that employer’s may now embrace, it is however still evident that an employer must follow a fair procedure as determined by the LRA.


Employers must satisfy the requirement for fairness as determined by Schedule 8.


A Commissioner will ask at arbitration, is the employee’s incapacity the real reason for the dismissal?  


Commissioners will need to determine the substantive fairness of the dismissal.


The question will centre around the following: has the employer possibly disguised the real reason for the dismissal as one of incapacity rather than one due to operational requirements in order to escape certain legal obligations?


The employee in this case had been employed by FNB for 20 years. A significant retrenchment package would have been necessary to terminate his services had the real reason for the dismissal been due to a restructure at FNB.


Advice to employers: do not be tempted to cloak a dismissal in incapacity terms when it is clearly one of retrenchment or misconduct.


The true reason for the dismissal must relate to either the conductor capacity of an employee, or the result of a need to restructure a business because of financial, technical or similar needs; and a fair procedure must be instituted.


For more information please contact Tessa Kassel at or 011-615 1644 or visit









]]> (Fanie) Most Recent Publications Mon, 04 Sep 2017 12:02:31 +0000