Most Recent Publications http://www.labourguide.co.za/most-recent Thu, 30 Mar 2017 16:23:13 +0000 Joomla! - Open Source Content Management en-gb Will that clause protect you? Think again! http://www.labourguide.co.za/most-recent/2445-will-that-clause-protect-you-think-again http://www.labourguide.co.za/most-recent/2445-will-that-clause-protect-you-think-again

Will that clause protect you? Think again!

By Mohsina Chenia, Executive Consultant and Piet Joubert, Employment, Cliffe Dekker Hofmeyr

 

Employers often rely on contracts of employment as being a watertight basis for taking what it perceives to be lawful action against employees. This may not always be the case.

 

In the case of EWN v Pharmaco Distribution (Pty) Ltd (2016) 377 ILJ 449 (LC) the employee suffering from bipolar disorder refused to undergo medical testing despite her contract of employment containing a clause which provided that she had to undergo medical testing whenever the employer deemed it to be necessary. The employer ultimately dismissed the employee for disobeying this instruction and the court found that her dismissal was automatically unfair.

 

In this case, senior management of the employer became aware of the employee’s bipolar condition after she disclosed her bipolar status to the employer during disciplinary proceedings. The employer then required her to undergo medical testing to determine whether or not she was fit to perform her tasks as a result of her bipolar status. The employee refused to undergo medical testing and was later charged for a ‘particularly serious and/or repeated wilful refusal to carry out lawful instructions or perform duties’. The instruction she failed to perform, and which ultimately led to her dismissal, was to present herself to a psychiatrist, for a medical examination. The employee claimed that the instruction was unlawful while the employer contended that the instruction was reasonable and lawful in terms of her contract of employment.

 

A clause in the employee’s contract provided:

‘The employee will, whenever the company deems necessary, undergo a specialist medical examination at the expense of the company, by a medical practitioner nominated and appointed by the company. The employee gives his/her irrevocable consent to any such medical practitioner making the results and record of any medical examination available to the company and to discuss same with such medical practitioner. The above shall include and apply to psychological evaluations.’

 

The main issues the court had to decide on were whether the provision was enforceable; and whether her dismissal for failing to submit to a medical examination was automatically unfair in terms of s187(1)(f) of the Labour Relations Act (LRA) 66 of 1995.

 

In its decision, the court found that the clause in the employee’s contract of employment was in breach of the provisions of s7 of the Employment Equity Act (EEA) 55 of 1998 and found that the clause was of no legal force or effect.

 

Section 7(1) of the EEA prohibits the medical testing of an employee and aims to prevent unfair discrimination on the grounds of an employee’s medical condition. Subsection (a) and (b) however provides that medical testing will be permitted when legislation permits or requires medical testing or when the testing of an employee can be justified in the light of medical facts, employment conditions, social policy, the fair distribution of employee benefits or the inherent requirements of the job.

 

The court held that the section provides no exception based on the consent of the employee in an employment contract and that medical testing will only be permitted in the circumstances set out in paragraphs (a) and (b) which ultimately did not find application in this case. The court also found that the instruction to undergo psychiatric testing on account of the employee’s bipolar condition amounted to unfair discrimination in terms of s6 of the EEA. The dismissal of the employee for refusing to undergo a psychiatric evaluation to determine her fitness to work was found to be an automatically unfair dismissal in terms of s187(1)(f) of the LRA.

 

Employers are advised to note that where an employee’s contract of employment contains clauses pertaining to the consent by the employee to undergo medical testing, that those clauses will not necessarily protect the employer. It is important for employers to bear in mind that medical testing will only be permitted in the circumstances as set out in subparagraphs (a) and (b) of s7 of the EEA as exceptions.

 

For more information please contact Mohsina Chenia at mohsina.chenia@dlacdh.com

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

 

 

 

 

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smclaassen@labourguide.co.za (Fanie) Most Recent Publications Tue, 28 Mar 2017 04:21:22 +0000
Notice to all Employers Registered with the Compensation Fund http://www.labourguide.co.za/most-recent/2444-notice-to-all-employers-registered-with-the-compensation-fund http://www.labourguide.co.za/most-recent/2444-notice-to-all-employers-registered-with-the-compensation-fund

Notice to all Employers Registered with the Compensation Fund

The Department of Labour announced that the deadline for the 2016 Return of Earnings submission has been extended and will be open from 01 April until 31 May 2017.

The department emphasized that the responsibility rests with the employer to ensure that Return of Earnings is submitted.

They further stated that if an employer fails to furnish a return on or before 31 May 2017, director – General may raise an assessment based on earnings or for more information go to your nearest labour centre or provincial office or email cfcallcentre@labour.gov.za

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andre@labourguide.co.za (andre) Most Recent Publications Mon, 27 Mar 2017 10:25:25 +0000
Effective Management of Grievances in the Workplace http://www.labourguide.co.za/most-recent/2442-effective-management-of-grievances-in-the-workplace http://www.labourguide.co.za/most-recent/2442-effective-management-of-grievances-in-the-workplace

Effective Management of Grievances in the Workplace

By Magate Phala

 

Section 23 (1) of the 1996 Constitution of the Republic of South Africa read together with sections 185 and 186(2) of the Labour Relations Act, 66 of 1995 provides that everyone has the right to fair labour practices.

 

A grievance may be defined as any feeling of discontent, unfairness or injustice which an employee may have in respect of his work conditions, against his manager or supervisor, including a fellow worker and which is brought to the attention of Management.

 

Grievances may be categorised in two forms, i.e. a grievance of right and a grievance interest.

 

A grievance of right occurs when an employee claims that the employer has not given him what he is entitled to (by legislation, collective agreements, conditions of service, employment contract, established practice, etc.) or an employer has not respected or has infringed a right which he has.

 

A grievance of interest occurs when an employee has no entitlement to a particular claim in law against the employer but feels that he is entitled to it or has been unfairly treated.

 

Although the Labour Relations Act contains no definition of the word “unfair”, Professor John Grogan in his book entitled “Employment Rights” second edition (Juta, 2014) at pages 114-115, adequately summed up the hallmarks of “Unfair Conduct” as follows:

 

  • where one person or group of people is favoured over another on the basis of irrelevant criteria;

  • where people are treated arbitrarily – i.e. not in accordance with established rules;

  • where people are treated irrationally – i.e. on the basis of unproven or untested views and suppositions;

  • where people are penalised or denied an advantage without being able to state their case.

 

The purpose of a grievance procedure is aimed at promoting sound labour relations in the workplace, i.e. consistency, transparency and fairness in the handling of workplace problems and complaints.

 

The grievance procedure is also intended to empower employees with the opportunity and procedure to be able to raise issues of dissatisfaction with the employer.

 

General principles to consider when handling grievances according to Bandix, 1996:350 are:

 

  • Employees should be entitled to bring their grievance to the attention of management even if it is done in stages.

  • The employee should be allowed representation by a colleague or union representative.

  • Management at various levels must consider the grievance carefully and make genuine attempts to resolve the grievance.

  • The grievance will not be resolved until the employee indicates such.

  • Time limits should be established for each of the steps within the procedure.

  • Should the grievance remain unresolved, the employee has the right to declare a dispute.

  • Grievances should generally be managed by line Management, however, other staff, for example, the Human Resources Manager, may act in an advisory capacity.

 

In the Public Sector, the grievance process is regulated by PSCBC Resolution No. 14 of 2002 which provides as follows:

 

  • The employer must ensure that the grievance is dealt with in a fair, impartial and unbiased manner and that the principles of natural justice are observed.

  • An employee must not be victimised or prejudiced directly or indirectly as a result of lodging a grievance. See also a Court decision in Mackay v ABSA and another (2000) 21 ILJ 2054 (LC).

  • A grievance must be lodged in writing with an employee designated to facilitate the grievance resolution in the department within 90 days from the date in which the employee became aware of the official act or omission which adversely affected him/her.

  • An employee may be assisted by a fellow employee or a representative or official from a recognised trade union.

  • The employer must deal with the grievance within 30 days unless parties mutually agree in writing to extend the timeframe.

  • The designated employee must liaise with the relevant structures of authority of the department which has the requisite authority to resolve the grievance.

  • The aggrieved employee must be duly informed by the designated employee about the status and progress made towards the resolution of the grievance.

  • If the employer fails to respond to a grievance within the stipulated period, the employee may lodge the grievance with the Commission, PSCBC or the relevant Bargaining Council.

 

A grievance process should not be used as a parallel mechanism to appeal or review complaints or feeling of injustices which arise out of a disciplinary process. If the employee is unhappy about the outcome of a disciplinary process, the employee concerned may internally appeal against such outcome (short of dismissal) and if the appeal is unsuccessful then declare an Unfair Labour Practice dispute directly with the CCMA or relevant Bargaining Council.

 

The objectives of the grievance procedure may be summed up as follows:

 

  • To create an opportunity for the employee to communicate with management.

  • To ensure that complaints are effectively dealt with by management.

  • To prevent disputes from arising in the workplace.

  • To render disciplinary proceeding more acceptable since employees also have the means of objecting to management performance.

  • To create awareness of employee problems or problem areas, which management needs to address.

 

Written by Magate Phala, who specialises in Labour Law and writes in his private capacity. For more information, kindly contact Magate Phala at magatephala@gmail.com

 

 

 

 

 

 

 

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smclaassen@labourguide.co.za (Fanie) Most Recent Publications Mon, 27 Mar 2017 04:13:18 +0000
At last, the managed service provider (MSP) model gains traction http://www.labourguide.co.za/most-recent/2433-at-last-the-managed-service-provider-msp-model-gains-traction http://www.labourguide.co.za/most-recent/2433-at-last-the-managed-service-provider-msp-model-gains-traction

At last, the managed service provider (MSP) model gains traction

By Fiona Leppan, Director, Employment, Cliffe Dekker Hofmeyr

 

The issue

In a recent arbitration award (the Award) in K Sefole & 102 Others v Bidvest TMS and Nampak Glass, the CCMA Senior Commissioner found that the relationship between Bidvest and Nampak did not amount to a temporary employment service (TES) for the purposes of s198A of the Labour Relations Act (LRA). The Applicants are employed by Bidvest but claimed that the service provided by Bidvest to Nampak was not a temporary one as it had exceeded a duration of three months. They earned under the Ministerial earnings threshold and asserted that they should be treated as the “deemed” employees of Nampak and employed by it on an indefinite basis by it.

 

This dispute was first entertained, incorrectly so, by the National Bargaining Council for the Chemical Industry (NBCCI) which had no jurisdiction over Bidvest. The NBCCI found that the relationship between Bidvest and Nampak was a TES. An urgent application before the Labour Court sought to suspend the operation of the NBCCI decision pending a review to set it aside. The urgent relief was granted and the matter, by agreement between the parties, was referred to the CCMA for a Senior Commissioner to determine the dispute afresh.

 

The Facts

Bidvest provided a specialised warehousing service to Nampak in terms of a detailed service level agreement (SLA) which had been concluded between them. The core business of Nampak Glass is the manufacture of glass products. Once these products are ready to be released for despatch, Bidvest’s employees are responsible for palletizing and packaging the products ready for distribution to Nampak’s customers.

 

In a decision of the Labour Court, which was confirmed on appeal by the Labour Appeal Court (LAC), Bidvest commenced its operations at Nampak and took over the warehousing functions from Unitrans. A dispute arose about whether that transfer amounted to an s197 transfer of part of Unitrans’ business to Bidvest as a going concern. Both the Labour Court and LAC determined that the events triggered an s197 transfer.

 

The Labour Court found that:

“… the warehousing service provided by (Bidvest) to Nampak constituted an economic entity … or … an organised grouping of resources … .”

 

The Labour Appeal Court found that:

“… the service that was provided was that of warehousing. … The warehouse operation services constituted a discreet business … .” (the facts demonstrate) … “that the service … constitutes a business sufficiently demarcated to justify the conclusion that when this business was taken over (by Bidvest) … there was a transfer of a business as a going concern.”

 

The Applicants, in the face of this binding precedent, claimed that a TES relationship existed because:

  • Nampak staff sometimes gave direct instructions to them.

  • The details of how Bidvest conducts its business at Nampak’s warehouse is contractually stipulated in the SLA and the standard operating procedures (SOPs) compiled, so they claimed, by Nampak with the result that Bidvest’s service was controlled directly by Nampak.

  • They use the forklift trucks leased by Nampak.

  • They make use of Nampak’s JDE software system which is an enterprise resource planning tool aimed at successful inventory control and invoicing.

 

The Evidence

The Applicants claimed that all those factors demonstrated that they were an integral part of Nampak’s operations which smacked of a TES arrangement, but the evidence led indicated differently:

  • Nampak’s staff rarely gave instructions to any of the Applicants as Bidvest had its own supervisory team at the warehouse to direct and control the carrying out of the Applicant’s duties. None of the Applicants who testified stated or even suggested that they did not report directly to Bidvest’s warehouse manager and its team of supervisors on a daily basis. There was unrefuted evidence that Nampak’s supervisor only gave direct instructions to an Applicant if it was to avert a health and safety hazard.

  • Bidvest made use of its own administrative, financial reporting, payroll, disciplinary processes, induction training and it managed the Applicants.

  • The SOPs were not drawn up by Nampak. Although the Applicants asserted that the SOPs carried Nampak’s logo’s, it was Bidvest’s warehouse manager who personally drafted and prepared them. Those Applicants who testified conceded that they were handed the SOPs and were required to sign for them by Bidvest.

  • The Applicants argued that because the SLA indicates what “must” be done to satisfy Nampak’s requirements, this amounted to instructions issued by Nampak to them. However, in the evidence, none of the Applicants had even seen the SLA.

 

The Findings

The Commissioner correctly found that the SLA was not a sham as there was no evidence led suggesting the contrary. The Commissioner found, in line with recent LAC decision in Enforce Security Group v Fikile & Others (unreported: DA/24/15), that on the facts the SLA was based on “proper economic and commercial considerations”. The Commissioner reasoned that that is so because “Nampak had outsourced part of its operation to warehousing specialists” rather than attempting those functions itself.

 

Conclusion

The Commissioner found that no TES relationship was in existence and s198A had no application on the facts presented. There is room in our law for the recognition of a genuine outsource of services to an MSP, and this does not invoke the protections afforded to those eligible employees contemplated by the LRA.

 

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

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

 

 

 

 

 

 

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smclaassen@labourguide.co.za (Fanie) Most Recent Publications Tue, 14 Mar 2017 04:55:19 +0000
How far can the remedy of Reinstatement be stretched? http://www.labourguide.co.za/most-recent/2431-how-far-can-the-remedy-of-reinstatement-be-stretched http://www.labourguide.co.za/most-recent/2431-how-far-can-the-remedy-of-reinstatement-be-stretched

How far can the remedy of Reinstatement be stretched?

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

 

In Mashaba v South African Football Association (J122/17) [2017] ZALCJHB 53 (21 February 2017) the Labour Court dealt with an interesting application brought by the former head coach of the Senior Men’s National South African Football Team, ‘Shakes’ Mashaba. Mashaba had applied to the Labour Court for an Order preventing SAFA from appointing his replacement until his unfair dismissal dispute had been resolved by the CCMA. 

 

Mashaba was dismissed by the South African Football Association (“SAFA”) during December 2016. He subsequently referred an unfair dismissal dispute to the CCMA and the dispute was due to be arbitrated in March 2017. He alleged in his affidavits before the Labour Court that he had ‘good prospects’ of winning the arbitration at the CCMA. The reason for his application to the Labour Court was his concern that even if he was successful at the CCMA it was unlikely that he would be entitled to reinstatement if SAFA had already replaced him with another head coach.

 

Mashaba contended that the matter was urgent as he believed that the appointment of a new head coach was imminent and that it was likely to occur before the CCMA arbitration process was concluded. The Court agreed that the matter was urgent and dealt with the application on that basis.

 

The Court found that the Labour Relations Act 66 of 1995, as amended (“the LRA”) provides for reinstatement as the primary remedy for unfair dismissal. Reinstatement must be ordered unless one of the reasons set out in section 193(2)(a), (b), (c) or (d) are present. One of those reasons, set out in section 193(2)(c), is that reinstatement is ‘not reasonably practicable’. Mashaba believed that if another head coach was appointed, SAFA would argue that his reinstatement was not reasonably practicable and that he would then be denied the remedy of reinstatement.

 

The Court found however that SAFA would not be absolved from having to reinstate Mashaba merely because doing so could present a problem. The Court found that the term ‘not reasonably practicable’ does not mean ‘inconvenient’ or ‘impractical’. Referring to the Labour Appeal Court judgment of Xstrata South Africa (Pty) Ltd (Lydenburg Alloy Works) v NUM obo Masha and Others (2016) 37 ILJ 2313 (LAC), the Court found that the term ‘not reasonably practicable’ referred to the feasibility of reinstatement. Reinstatement must therefore be shown to be not ‘reasonably possible in the sense that it may be potentially futile’.

 

The Court found that an employer could not thwart an employee’s bid for reinstatement by simply replacing him with another employee. This was something that an employer had to consider before replacing an employee who challenges their dismissal and an employer must be prepared to sort out the mess that it finds itself in should this scenario arise. Consequently, the Court found that even if SAFA did appoint a new head coach before the CCMA arbitration was concluded, the appointment of the new head coach would not be able to protect it against an Order of reinstatement by the CCMA. The Court therefore found that Mashaba would not be deprived of his right to reinstatement. In any event, the Court found that it had no power to prevent parties from entering into employment contracts and so SAFA was free to appoint the new head coach.

 

Importantly, the Court found that Mashaba’s right to reinstatement did not translate into a right to keep his former position vacant merely on the assumption that he would be reinstated by the CCMA. The Court found that if it were to grant Mashaba’s application it would effectively be second-guessing the outcome of the CCMA arbitration, which was not appropriate.

 

The Court accordingly dismissed Mashaba’s application.

 

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

Article published with the kind courtesy of Cowan-Harper Attorneys www.cowanharper.co.za

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andre@labourguide.co.za (andre) Most Recent Publications Mon, 06 Mar 2017 06:13:56 +0000
A new dawn for industrial action in South Africa http://www.labourguide.co.za/most-recent/2427-a-new-dawn-for-industrial-action-in-south-africa http://www.labourguide.co.za/most-recent/2427-a-new-dawn-for-industrial-action-in-south-africa

A new dawn for industrial action in South Africa

by Aadil Patel, Director, Thabang Rapuleng, Director and Andile Khumalo, Employment Law, Cliffe Dekker Hofmeyr

 

Rampant strike violence has necessitated that social partners develop some sort of guideline in order to deal with collective bargaining and industrial action. Employers and employees alike try to rely on our courts to regulate strikes and collective bargaining to no avail. Court orders were sometimes ignored.

 

Having regard to the above, an Accord on Collective Bargaining and Industrial Action (Accord) was published simultaneously with the National Minimum Wage agreement. Clause 7 of the Accord states as follows:

 

“All parties to this Accord commit:

 

  1. In the case of violence, intimidation, and the threat of harm to person or property associated with industrial action, to build capacity; expedite processes and assign sufficient and senior staff to the resolution of issues.”

 

The Accord is thus an undertaking by all relevant role players to desist from violence, intimidation and the like. The Accord requires the South African Police Service to act in a manner where they are able to quell the violence. Consequently, the South African Police Service would have to empower and staff their ranks so as to assist in monitoring and quelling violence that may erupt during industrial action. Private security industries too will have to upskill themselves so as to implement the code of good practice (code) in a manner which enhances the objectives of the code. A new dawn has thus arisen in South Africa where all parties understand that violence and intimidation do not resolve issues. This is particularly important having regard to the most recent settlement between the National Union of Mineworkers (NUM) and Good Hope Construction where NUM was required to pay an amount of R1.5 million to an employer for damages caused during industrial action.

 

For more information please contact Aadil Patel at aadil.patel@cdhlegal.com or Thabang Rapuleng at thabang.rapuleng@cdhlegal.com

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

 

 

 

 

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smclaassen@labourguide.co.za (Fanie) Most Recent Publications Tue, 28 Feb 2017 04:34:56 +0000
Compensation for Occupational Injuries and Diseases Act and Regulations Amendments http://www.labourguide.co.za/most-recent/2422-compensation-for-occupational-injuries-and-diseases-act-and-regulations-amendments http://www.labourguide.co.za/most-recent/2422-compensation-for-occupational-injuries-and-diseases-act-and-regulations-amendments

Compensation for Occupational Injuries and Diseases Act and Regulations Amendments

 

Amendment: Rules, Forms and Particulars which shall be furnished R.177 of 2017

The Compensation Commissioner has repealed, under Section 6A(b) of the Compensation for Occupational Injuries and Diseases Act, 1993 (Act 130 of 1993, as Amended) item 3 of his prescription as published under notice No. 444 in Government Gazette No. 39928 of 15 April 2016 and replaced it with a new prescription.

 

Return of Earnings [Section 82 (1)]

3. "The Return of Earnings shall be on Form W.As. 8 [Annexure A] with the particulars required therein, as the case maybe ", and this form will not be posted to registered employers and is obtainable from.

 

Click here to download Form W.As. 8 [Annexure A].

 

For more information please contact Tinus Boshoff at tinus@labourguide.co.za

 

 

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smclaassen@labourguide.co.za (Fanie) Most Recent Publications Wed, 22 Feb 2017 05:31:01 +0000
The Labour Appeal Court: Sexual harrassment in the spotlight http://www.labourguide.co.za/most-recent/2421-the-labour-appeal-court-sexual-harrassment-in-the-spotlight http://www.labourguide.co.za/most-recent/2421-the-labour-appeal-court-sexual-harrassment-in-the-spotlight

The Labour Appeal Court: Sexual harrassment in the spotlight

By Aadil Patel, Director, National Practice Head and Samantha Bonato, Associate Designate, Employment, Cliffe Dekker Hofmeyr

 

In the case of MEC for Education (North West Provincial Government) v M (JA37/2012) [2017] ZALAC 13 (3 February 2017), a school principal was disciplined for sexually harassing a fellow teacher on two separate occasions. A disciplinary hearing was held and he was dismissed by the Department of Education in the North West Province (MEC).

 

The principal referred a dispute to the Education Labour Relations Council, which ultimately found that his dismissal was fair. He took this decision on review to the Labour Court. The Labour Court found that the matter was settled because the parties (the principal and the fellow teacher) recorded that the allegations of sexual harassment or assault were discussed between them and amicably resolved. The principal was thus reinstated.

 

The MEC appealed the decision of the Labour Court and at the Labour Appeal Court, Judge Savage held that there was no settlement of the complaint. Furthermore, even if there was a settlement between the principal and the victim, the MEC was still entitled to take disciplinary action against an employee for misconduct in the context of the employment relationship.

 

In the case of Campbell Scientific Africa (Pty) Limited v Simmers and others [2015] JOL 34906 (LAC), it was held that an employer is entitled to discipline an employee for misconduct which was both related to and impacted on the employment relationship. In this instance, an employee had acted inappropriately in sexually harassing a colleague employed by another company. Although this had taken place outside of the workplace and outside of working hours, the seriousness of his misconduct made a future employment relationship impossible. The Labour Appeal Court therefore found that his dismissal was fair.

 

The Labour Appeal Court is understandably taking a much harder stance on sexual harassment. Where appropriate, employers must take firm action against employees for misconduct, irrespective of what the employee and the aggrieved party may agree among themselves. The settlement or resolution of the matter between the parties themselves does not preclude the employer from enforcing disciplinary measures against employees who commit acts of misconduct. This is true even where misconduct has occurred outside of the workplace and working hours. Workplace rules regulate the standard of conduct required within the context of the employment relationship and these standards must be upheld.

 

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

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

 

 

 

 

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smclaassen@labourguide.co.za (Fanie) Most Recent Publications Tue, 21 Feb 2017 04:36:21 +0000
Conciliation – Arbitration [Con/Arb]: - ‘A Hybrid Process’ http://www.labourguide.co.za/most-recent/2419-conciliation-arbitration-con-arb-a-hybrid-process http://www.labourguide.co.za/most-recent/2419-conciliation-arbitration-con-arb-a-hybrid-process

Conciliation – Arbitration [Con/Arb]: - ‘A Hybrid Process’

By Johann Scheepers

 

PREMIER FOODS (PTY) LTD (NELSPRUIT) v COMMISSION FOR CONCILIATION, MEDIATION AND ARBITRATION and GLEN CORMACK N.O. and MAROPENG STEWARD LEKOKOTLA (case no: JR 2103 / 12) (8 November 2016), before Snyman, AJ.

 

“The LRA permits councils and the CCMA to arbitrate disputes immediately if conciliation fails. The process of ‘con-arb’ collapses the normal two-phase process of conciliation meeting, followed by arbitration on a later date. This expedited procedure has potential dangers. For one, the same commissioner must necessarily act as both conciliator and arbitrator, meaning that, when acting in the latter capacity, he or she may have been privy to compromising information received when acting in the former capacity. This may render the process subject to review.”

 

[See Dr John Grogan, ‘Labour Litigation and Dispute Resolution’ Juta, 2014 ed. at 158].

 

Background

This matter concerns an application by the applicant [the employer] to review and set aside an arbitration award by the second respondent, Commissioner G Cormack, [the commissioner] in terms of which the third respondent’s dismissal [the employee] by the applicant [the employer] was held to be substantively unfair; and the third respondent [the employee] was afforded the relief of reinstatement retrospective to date of dismissal. The application [the review] was brought in terms of Section 145 of the Labour Relations Act (‘the LRA’). 

 

The review was brought by the employer based on grounds of misconduct committed by the commissioner during the con/arb proceedings. As a consequence of the misconduct, the employer alleged that it was deprived of a fair hearing.

 

In this matter with con/arb proceedings, the issue of the employee’s dismissal was first conciliated. The parties made opening statements where after conciliation proceedings failed.

 

When the proceedings resumed, on record, the employer made an application for the recusal of the commissioner. This recusal application was founded on statements the commissioner had made to the applicant’s representative in the course of the settlement discussions in conciliation about the evidence in the case and the applicant’s prospects of success.

 

The employer contended that these statements made by the commissioner indicated that the commissioner had already made up his mind in the matter, against the employer. 

 

In the review application, the employer has contended that the commissioner had been inextricably involved in a discussion of the evidence the conciliation, and following that he told the employer that continuing with the arbitration would result in them losing.

 

It was clear from the transcript that the employer had barely started motivating its recusal application when the commissioner intervened, saying: ‘I’m going to interrupt you, I’m not going to recuse myself, I don’t believe you have any grounds to ask me to recuse myself…’   

 

The employer was thus not allowed by the commissioner to bring a recusal application, and it followed that the employee was never required to answer such.

 

In his arbitration award, the commissioner did not deal with the recusal application. The commissioner did make mention that he dealt with certain aspects of the case in the conciliation but had not formed an ‘opinion’ as to whether this was the crux of the charges.

 

The commissioner held that a recusal would lead to a postponement and delay in resolving the dispute, which would be prejudicial to the employee. However, the commissioner recorded that ‘the arbitration then continued by agreement’, as part of the reasoning why he did not recuse himself. 

 

The transcript of the proceedings showed that the employer never agreed to continue with the proceedings. The employer had just commenced with bringing the application for recusal when the commissioner ‘simply shut it down’.

 

The employee was not even called on to answer the submissions and claim any prejudice that may result to him if the recusal was upheld. The employer was in fact given no choice by the commissioner other than commencing the arbitration by calling its first witness.

 

The Labour Court Judgment

Click here to download the Labour Court Judgment

The Court first addressed the test for review where the issue in contention was misconduct on the part of the commissioner. For the purpose of this summary, it was deemed unnecessary to restate in detail the judgments considered and referred to by the Court.

 

Suffice it to refer briefly to some of the case law referred to in the judgment. In the judgment of Sidumo and Another v Rustenburg Platinum Mines Ltd and Others, (2007) 28 ILJ 2405 (CC), Navsa AJ held that in light of the constitutional requirement (in s 33 (1) of the Constitution) everyone has the right to administrative action that is lawful, reasonable and procedurally fair, and said that ‘the reasonableness standard should now suffuse s145 of the LRA’.

 

The example was made that if an arbitrator commits misconduct in the course of conducting the arbitration, it does not matter whether the outcome arrived at is reasonable, as the misconduct it vitiates the proceedings, resulting in the award being set aside.

 

The dictum in Naraindath v Commission for Conciliation, Mediation and Arbitration and Others’ (2000) 21 ILJ 1151 (LC) at para 27 was held to be relevant, where the Court said:

 

“…A failure to conduct arbitration proceedings in a fair manner, where that has the effect that one of the parties does not receive a fair hearing of their case, will almost inevitably mean either that the commissioner has committed misconduct in relation to his or her duties as an arbitrator or that the commissioner has committed a gross irregularity in the conduct of the arbitration proceedings. Against the above principles and test, the conduct of the second respondent, as complained of by the applicant, must be considered.”

 

The Court found that it was entirely inappropriate for the commissioner to derail the recusal application in the manner that he did. He simply did not allow the employer to properly argue and motivate the application. ‘He said, without hearing the argument that he was going to interrupt the applicant and that there were no grounds for his recusal.’

 

Then, and in the award, the commissioner dealt with the recusal issue and simply stated that he refused recusal because he did not yet decide whether the evidence he discussed with the applicant would be the ‘crux’ of the charges.

Furthermore, that recusal would result in a postponement that will prejudice the employee. The problem, however, was that because the commissioner simply cut the recusal application short before it even started, the employee never argued against the application and thus never claimed such prejudice.

 

The Court then referred to the locus classicus [leading authority], on the positive law as to recusal applications namely President of the Republic of SA and Others v SA Rugby Football Union and Others 1999 (4) SA 147 (CC) at para 48 the Court said:

 

“The question is whether a reasonable, objective and informed person would on the correct facts reasonably apprehend that the judge has not or will not bring an impartial mind to bear on the adjudication of the case, that is a mind open to persuasion by the evidence and the submissions of counsel. The reasonableness of the apprehension must be assessed in the light of the oath of office taken by the judges to administer justice without fear or favour; and their ability to carry out that oath by reason of their training and experience. It must be assumed that they can disabuse their minds of any irrelevant personal beliefs or predispositions. They must take into account the fact that they have a duty to sit in any case in which they are not obliged to recuse themselves. At the same time, it must never be forgotten that an impartial judge is a fundamental prerequisite for a fair trial and a judicial officer should not hesitate to recuse herself or himself if there are  reasonable grounds on the part of a litigant for apprehending that the judicial officer, for whatever reasons, was not or will not be impartial.” 

 

The court found that considering the above test for recusal, it was clear that the commissioner never came close to deciding the issue of his recusal based on the principles referred to above.

 

In fact, the commissioner did not even allow the issue to be properly ventilated, which in itself can be seen to add to the existence of the requisite apprehension to justify recusal.

 

The Court found further that for a judicial officer deciding a matter in the course of CCMA dispute resolution proceedings, to say from the very outset of the matter to a litigating party that they would lose, and then in effect prevent the issue from being ventilated when the arbitration starts, would surely satisfy the double-requirement of reasonableness to justify recusal.

 

Of critical importance was the fact that the commissioner recorded in the award that the employer agreed to continue with the arbitration despite the recusal application when the record shows this is simply not true. [Emphasis added].

 

The record showed that the commissioner in effect bullied the employer into proceeding with the matter by calling its first witness without further ado. These factors, considered with the undisputed statements made by the employer in the founding affidavit convinced the Court that it was likely that the commissioner did say to the applicant that it would lose if it proceeded with the arbitration, which the commissioner then decided was the case at the end of proceedings.

 

It was accepted by the Court that in con/arb proceedings there would be a conciliation component and that in conciliation proceedings parties may very well discuss, in the presence of or together with the commissioner, the merits of the matter. [Underlining added].

 

This is done in the context of what has been called ‘reality testing’ which has been held to be a proper component of conciliation. Reality testing entails the commissioner testing through questioning, what informs the underlying positions adopted by the respective parties, so that the parties understand what their respective disputes in fact are, and then, what the legal consequences would be if these disputes are not amicably resolved. The objective of this approach is thus to educate and inform the parties.

 

As was stated in Anglo Platinum Ltd v Commission for Conciliation, Mediation and Arbitration and Others (2009) 30 ILJ 2396 (LC) at para 32:

 

‘The process also assists the parties to conceptually understand and appreciate the assumptions that informed their respective positions and which may have also informed their stances as they go into the negotiation process. Those assumptions may be misplaced and undermine the underlying interest insofar as the resolution of the dispute is concerned. The underlying interests whom parties may fail to address may well be critical to both the resolution of the dispute…’

 

The process of reality testing cannot include the commissioner becoming involved in discussing the evidence with the parties to the extent of the commissioner giving his or her views as to what the outcome would be if that evidence is presented in the arbitration proceedings.

 

Further, the commissioner should especially refrain from giving his or her views on the possible evaluation or determination of that evidence. To illustrate the point in its simplest form - the commissioner should refrain from telling a party that it would win or lose, but the commissioner can explain to a party what consequences the party would face if it loses without saying whether this would happen.   

 

“Even if a commissioner is invited to a party to give advice, such an invitation should be resisted. A commissioner has to be even-handed in dealing with the parties. If she gives advice to one party, she would have to do likewise for the other party. That would create conflicts of interest for the commissioner. A commissioner who puts herself in such a situation would have great difficulty in acting with honesty, integrity and impartiality. Ethically, it is, therefore, untenable.

 

Giving advice is also counterproductive to the objectives of conciliation. A party who is advised that she has a good case is unlikely to settle. One who is advised that he has a bad case is likely to capitulate, as happened in this case.” [Court quoted Kasipersad v Commission for Conciliation, Mediation and Arbitration and Others (2003) 24 ILJ 178 (LC)].

 

The Court held further that it was not appropriate for the commissioner to have expressed any sentiments to the employer as to the prospects of success of its case, before arbitration even starts, and then continue with the arbitration and deciding the matter.

 

By so conducting himself, the commissioner put himself in a position where his impartiality and integrity could clearly properly be called into question. Worse still and when the employer did call it into question, by asking for recusal of the commissioner, it was in effect admonished by the commissioner who prevented the employer from even properly raising its concerns.

 

The Court then accentuated that the authorities referred to supra related to conciliation proceedings as a “stand-alone process”.

 

The Court alerted that the con-arb proceedings should be distinguished from the “stand-alone” conciliation proceedings in that the con-arb proceedings have an intrinsic further and significantly important dimension calls for an even more cautionary approach to be entrenched and alive ‘in the mind’ of the commissioner when engaging in the parties with the intention to procure a settlement. [My interpretation].

 

In the case of “stand-alone” conciliation, a certificate of non-resolution would be issued and whereafter the Applicant would then proceed to arbitration only to be held at a later date before another commissioner.

 

Although not mentioned by the Court in the judgment, section 136(2) of the LRA makes provision for the possibility that the same commissioner who attempted to resolve the “stand-alone dispute or conciliation” could be appointed as the Arbitrator thereof.

 

Also of importance is that section 136(3) of the LRA stipulates the process to be followed in the event that a party wished to object to the arbitration, to be conducted by the commissioner who attempted to resolve the dispute through conciliation.

 

The said party may do so by filing an objection in that regard with the Commission within 7 days after the date on which the commissioner’s certificate was issued, and must satisfy the Commission that a copy of the objection was been served on all the other parties to the dispute.

 

Suffice it to say that in terms of the provisions of section 136(4) of the LRA when the Commission receives an objection it must appoint another commissioner to resolve the dispute by arbitration.

 

It should, however, be mention that it seldom happens in the normal course of events that the same commissioner who presided over the “stand-alone conciliation process” would be appointed as the Arbitrator of the dispute, however, such eventuality is possible in terms of the aforesaid provisions of the LRA.

 

In the Premier Foods judgment at [34], the Court pronounced upon the role and the limitations thereof as to the commissioner’s involvement in discussing the merits of the matter in conciliation and emphasised that any such discussions if at all should be as minimal as possible.

 

The Court envisaged three scenarios where the Presiding Commissioner during con-arb proceedings should desist from the following conduct as is set out hereunder:

 

  1. To express any view as to whether anyone of the respective parties’ case has merit;

  2. Should not dispense any advice to the parties as to their respective cases;

  3. The Presiding Commissioner about to arbitrate the matter should be alive to the fact that the conciliation proceedings are fresh in the mind of the parties when arbitration proceeds immediately the follow conciliation process;

  4. That under the circumstances supra the perception of impartiality would be strong in mind of a party where the commissioner became unduly involved in the merits in conciliation and expressed views on that party’s prospects of success, immediately during the conciliation part of the con-arb proceedings.

 

Of importance was that the Court indicated that is alive as to the dynamics of the process of conciliation-arbitration which may lead to “an active involvement” so to speak in the conciliation process. However, the Court found that the commissioner should then “not shy away from this”.

 

The commissioner should be free to do what any other conciliating commissioner may lawfully and reasonably do, to try and facilitate the settlement.

 

‘But if this belief of a settlement being achievable is not realised, and the matter is not resolved, that commissioner should then rather recuse himself or herself from later arbitration and simply postpone the matter to be set down before another Arbitrator’.

 

It was deemed appropriate to quote from the Premier Foods judgment at [35] as stipulated hereunder:

 

“Expedition is not the be all and end all of all CCMA dispute resolution process, especially if a settlement is viable and given a proper chance to succeed with the appropriate intervention. I am concerned that expeditions of an over-emphasized CCMA dispute resolution process to the expense of all else”.

 

The Court identified that the commissioner in the case of con-arb proceedings was faced with one of two possible choices where as regards the conciliation component of the con-arbitration, namely:

 

  1. The first choice, minimal involvement in the conciliation process, and the parties “more or less conciliating on their own” and when no settlement is reached, the commissioner then conducts the arbitration; and

  2. The second choice is an active engagement by the commissioner with the parties in the settlement discussions, to the extent permitted by law and the process envisaged or approved by the Court.

  3. This process would include applying “reality testing” and other measures to persuade parties to reach an agreement.

 

The Court then reiterated that if a settlement was not reached, then the commissioner should rather postpone the matter to be heard by another Arbitrator.

 

The Court then revisited the conduct by the Presiding Commissioner in the matter before it and reiterated that the commissioner dispensed advice to the employer and told it what he considered its prospects of success to be (being that the employer would lose).

 

This the Court held as being “simply not appropriate, entirely irregular behaviour and constitutes misconduct on the part of the Commissioner”.

 

It was found that the Presiding Commissioner could remedy the situation when confronted with the recusal application. The commissioner should have been alive to the concerns of the employer in the manner which he conducted and involved himself in the conciliation proceedings.

 

The Court found purely from a perspective of conducting himself effectively and responsibly the commissioner should have recused himself, once this concern was raised.

 

The Court criticized the conduct by the commissioner in that he overemphasized the requirement of expeditious dispute resolution “above all else” to the extent of even not allowing the employer to properly raise the concern, found that by doing so the commissioner committed misconduct in conducting the arbitration proceedings, and this vitiated the entire proceedings rendering it a nullity.

 

[See: Sasol Infrachem v Sefafe & Others (2015) 36 ILJ 655 (LAC) at par 54]where the Court said:

“To summarise, in cases where it was held that the Presiding Officer ought to have recused himself or herself at the outset, but failed to do so, the entire proceedings before the Arbitrator or Presiding Officer are a nullity…”

 

It was stated at [41] as regards the supervisory duty of the Labour Court over the arbitration functions of the CCMA the Court reiterated its powers. ‘It is important that irregular practices of CCMA Commissioners be highlighted, with the view that the CCMA should consider policy measures to remedy or discourage the same’.

 

The purpose should be to ensure that conciliation-arbitration proceedings conducted under the auspices of the CCMA are not only lawful, reasonable and procedurally fair but must be seen to be so.

 

Conclusion

In conclusion, the Court found that the events occurred during the conciliation part of the conciliation-arbitration proceedings and the manner in which the commissioner became involved in the conciliation and the views he expressed, deprived the employer of a lawful, reasonable and procedurally fair hearing in the arbitration that followed.

 

The situation was exacerbated by the manner in which the commissioner virtually arbitrarily disposed of the concerns raised by the employer in the form of a recusal application, and then recording in his award that the arbitration proceeded by agreement, which was never the case.

 

This all constituted misconduct by the Commissioner as Arbitrator as contemplated by section 145(2)(a)(i) of the LRA.

 

The effect of the aforesaid misconduct was that the arbitration award itself had to be vitiated and fell to be set aside.

 

The Court held that it would be appropriate that the matter is conducted again before the CCMA, de novo, before another commissioner.

 

Therefore, the matter should be remitted to the CCMA for arbitration de novo before another commissioner.

 

Finally, in the light that the matter was unopposed, and accordingly no issue of costs arose.

 

For more information please contact publications@labourguide.co.za  

 

The views and opinions expressed by the writer hereof are not necessarily that of the Commission for Conciliation, Mediation, and Arbitration and constitute that of the writer in his personal capacity

 

Copyright:

 

Copyright reserved by the writer; as well as the SA Labour Guide. No part of this article/ guide may be reproduced, without prior written permission of the author and the CEO of SA Labour Guide.

 

The content of this article is intended to be general in substance and nature; to provide commentary on contemporary issues and where appropriate constitutes a general guide to the subject matter. Specialist advice should be sought about the reader’s specific circumstances.

 

The commentary expressed herein is that of the writer and not that of SA Labour Guide or any professional organisation or entity with which the writer may be associated with.

 

 

 

 

 

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andre@labourguide.co.za (andre) Most Recent Publications Sun, 19 Feb 2017 14:16:57 +0000
The devil is in the detail: National Minimum Wage http://www.labourguide.co.za/most-recent/2415-the-devil-is-in-the-detail-national-minimum-wage http://www.labourguide.co.za/most-recent/2415-the-devil-is-in-the-detail-national-minimum-wage

The devil is in the detail: National Minimum Wage

By Aadil Patel, Director, National Practice Head and Kirsten Caddy, Senior Associate, Employment, Cliffe Dekker Hofmeyr

 

Deputy President Cyril Ramaphosa last week announced that representatives of government, business, the community sector and two of the three labour federations represented at The National Economic Development and Labour Council (Nedlac) have concluded an agreement on the introduction of a National Minimum Wage (NMW).

 

The emphasis of the agreement was that the level of the NMW will be R20.00 per hour. However, a number of other important factors have also been dealt with in the agreement and require further consideration. When implementing the NMW, these factors must be taken into account:

 

Firstly, the NMW is subject to annual adjustment. The following factors will be taken into account when determining the amount by which the NMW must be increased – the cost of living and minimum living levels, the alleviation of poverty, wage differentials and inequality, conditions of employment, the health, safety and welfare of workers, employment levels, inflation, GDP growth, productivity, collective bargaining, the aspirational target and the impact of a NMW adjustment on employment. It is, therefore, important that employers consider making the requisite representations to the NMW Commission on an annual basis, regarding any proposed adjustments to the NMW.

 

Secondly, Small, Medium and Micro Enterprises (SMMEs) and start-up business are not exempt from the implementation of the NMW. However, they will be able to apply for an exemption under certain circumstances.

 

Thirdly, when the NMW is introduced, domestic workers will be paid 75% of the NMW and agricultural workers will be paid 90% of the NMW. It is envisaged that these sectors will be brought up to 100% of The NMW level within two years, pending research by the NMW Committee on this timeframe.

 

Finally, sectoral determinations, collective agreements, bargaining council greements and individual contracts of employment must comply with the NMW Act, still to be promulgated.

 

Having regard to the above, it is imperative that the cost of the NMW is taken into account when employers are planning their staffing requirements.

 

For more information please contact Aadil Patel at aadil.patel@cdhlegal.com or Kirsten Caddy at kirsten.caddy@cdhlegal.com

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

 

 

 

 

 

 

 

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smclaassen@labourguide.co.za (Fanie) Most Recent Publications Tue, 14 Feb 2017 04:23:20 +0000