by Ivan Israelstam | Jul 13, 2020 | Jobs
BY Ivan Israelstam, Chief Executive of Labour Law Management Consulting. He may be contacted on 011 888 7944 or 082 852 2973 or on e-mail address: [email protected].
It is often very difficult for employers to provide, at the CCMA and bargaining councils, sufficient proof that the employee is guilty of the misconduct for which he was fired. This difficulty is worsened by the fact that it is the employer who has the full onus of proving that a dismissal was fair.
For this reason, when employers are able to catch employees breaking rules on camera, they feel greatly relieved. They believe that, for example, catching an employee stealing on video is guaranteed to win them the case at the CCMA or Bargaining council. This is not so for many reasons.
Videotaped evidence has been accepted as valid by CCMA arbitrators and other tribunals but, just as often it has been rejected. This is because certain circumstances can render video evidence unreliable or unacceptable. In the old case of S vs Baleka (January 2005, Contemporary Labour Law Vol.14 No.6, 57) the judge outlined the value of videotaped evidence as follows:
- It does not suffer from fading memory as may the testimony of human witnesses
- It provides a more accurate and clear picture than a human being
- The camera retains not only the words but also the non-verbal communications of those on camera.
In Afrox Ltd vs Laka & Others (1999, 20 ILJ 1732 the Labour Court found that the arbitrator’s decision to disallow video footage was grossly irregular as the evidence that the employer wanted to use was relevant to the case at hand.
However, in the case of Moloko vs Commissioner Diale & Others (2004 25 ILJ 1067) the arbitrator accepted into evidence video footage of an alleged assault by the employee. The Labour Court however, on review, decided that the video evidence was inadmissible as it was of very bad quality and could not be relied upon.
In SATAWU obo Assagai vs Autopax (2002, 2 BALR 17) the employee was trapped on video carrying out a dishonest transaction. The employee argued that the videotape evidence should be disallowed because he was unaware that he was being taped.
However, the arbitrator found that the taped interaction was not a confidential one and therefore did not fall under the prohibition of the Interception and Monitoring Prohibition Act of 1992 (IMP Act) which, in any case did not apply strongly in civil cases.
However, This Act was replaced by one called the RIC Act in 2005. While this act has much stiffer restrictions it still does not outright make video recordings illegal. In NUMSA obo Mbeki & others vs Shatterprufe (Pty) Ltd (2009 1 BALR 9) the employees were dismissed for stealing copper cable.
A video tape showed the accused employees leaving the premises 8.07 in the morning. A witness, Mr Mali, testified via video tape evidence, that the accused employees had left the premises with the cable later than this. The arbitrator declined to allow the video evidence because Mr Mali was not present at the arbitration hearing and this rendered his evidence hearsay.
Also, his evidence contradicted the evidence on the video tape of the departure of the accused employee. It is clear that, if the circumstances are right, the CCMA and other tribunals may well accept the admissibility of videotaped evidence at disciplinary and arbitration hearings. Some of the circumstances that may persuade arbitrators to accept video evidence include:
- The videotape must be clear. This means that visuals and audio must be sharp
- The video must be authenticated. In addition to the tape being clear it must be shown not to have been tampered with in any way. It must also be proved that the visuals and audio accurately reflected the incident in question and not some other incident
- The evidence provided by the videotape must not be hearsay and must not be contradicted by other evidence
- The video should not be part of an illegal entrapment exercise.
Many employers, by the nature of their enterprises, are extremely vulnerable to losses due to employee misconduct. Such employers include, amongst others, security firms, casinos, retailers, financial institutions, jewellers and goods transporters. While videotaped evidence can be extremely useful to such employers as means of catching perpetrators this advantage will only apply where the employer knows how to ensure that all the requirements for validating the video evidence are adhered to.
This requires a full understanding of the laws of evidence and of privacy as well as substantial expertise in applying the law. Such understanding and expertise should be provided by labour law experts.
To buy our e-book WALKING THE NEW LABOUR LAW TIGHTROPE please contact Ivan via [email protected] or 011 888 7944.
by Ivan Israelstam | Jul 7, 2020 | Jobs
BY Ivan Israelstam, Chief Executive of Labour Law Management Consulting. He may be contacted on 011 888 7944 or 082 852 2973 or on e-mail address: [email protected].
The current international and South African crisis is causing a large number of companies to experience severe financial difficulties. Customer orders are waning, budgets are being cut, profits are dwindling, cash flows are tightening and it is becoming increasingly difficult to pay creditors and staff salaries.
In addition to our Corona related economic downturn crime is having a serious detrimental effect on the finances of employers. Theft of company stock and equipment costs employers many millions in losses every year. Local and international companies are reluctant to risk labour intensive investment in a country where theft related-losses are so high and where violent crime is out of control.
This lack of investment retards our economy. The combination of the international economic situation and rampant crime in South Africa has resulted in a huge number of job losses and in the failure of new jobs being created. With so many people losing their jobs the spending power of consumers has been drastically reduced.
This has resulted in less business for companies whose financial circumstances have therefore worsened and will result in further job cuts. It is this type of vicious circle that can take an economy in recession into a full blown and long term depression. In addition to the micro reason that retrenchment can cause severe hardship for the individual retrenchee, the bigger danger of retrenchments lies in the disaster that the above mentioned vicious circle can cause for the economy as a whole and for each and every business individually.
Thus, while tight financial circumstances quickly give rise to the temptation to retrench as quickly as possible, employers need to appreciate the harm that they can do to their longer term survival by implementing retrenchments willy nilly. The above does not mean that retrenchments must never be contemplated. There are circumstances where job cuts must be implemented. However, there are several reasons that employers should not retrench unless such job cuts are truly unavoidable. These reasons include:
- The retrenched employee and his/her family is likely to suffer as a result of the retrenchment
- Last-in-first-out is the most common criterion for choosing the employees to be retrenched. This can result in the employer losing employees with valuable skills which can in turn do harm to the quality of products and services and hinder the acquisition of new business
- As explained above, the knock-on economic effect of retrenchments could well result in future losses for the employer
- Labour law does not allow employers to retrench employees unless such retrenchment cannot be avoided. That is, the law of retrenchment in South Africa is focused strongly on preserving employment and makes it clear that a retrenchment is a no-fault dismissal. The law therefore requires the employer to turn over every stone in an effort to find alternatives to retrenchment.
The Courts have become very intolerant of employers that fail to go the extra mile to make sure that there are no alternatives to retrenchment before cutting jobs. In the case of Oosthuizen vs Telkom SA Ltd (2007, 11 BLLR 1013) the employee was retrenched after his job became redundant. He applied for 22 vacant posts and was short-listed for some of them but was successful with none. The Labour Appeal Court found his retrenchment unfair because:
- The employer failed to consult with the employee on ways of avoiding retrenchment and the criteria for choosing potential retrenches
- The employer failed to bring evidence to the Court to explain why Oosthuizen had not been offered one of the jobs for which he had been short-listed
- Oosthuizen had 22 years’ of service and should not, according to the Court, have had to vie for the vacant posts with employees who had shorter service.
In Woolworths (Pty) Ltd v South Africa Commercial, Catering and Allied Workers Union and others [2017] 12 BLLR 1217 (LAC) 144 employees were retrenched. as the employer had failed properly to consider alternatives to retrenchment the Court ordered the employer to pay each of the retrenchees 12 months’ remuneration.
The law, together with the economic reasons discussed earlier, stresses the requirement for employers to make every effort to find ways of avoiding retrenchments. While not every type of alternative to retrenchment is viable in every case the following are a few examples of alternatives that employers can consider:- Seeking new ways of increasing revenue, reduction of unnecessary expenses, curtailment of wastage, agreed pay cuts, working of short time, temporary layoffs, job sharing and freezes on recruitment.
Often, employers are too close to the problem to see the solution and panic can result in over-hasty and unnecessary retrenchment. It therefore important for employers to consult reputable labour relations experts before embarking on retrenchments.
To buy our e-book WALKING THE NEW LABOUR LAW TIGHTROPE please contact Ivan via [email protected] or 011 888 7944.
by Ivan Israelstam | Jun 29, 2020 | Jobs
BY Ivan Israelstam, Chief Executive of Labour Law Management Consulting. He may be contacted on 011 888 7944 or 082 852 2973 or on e-mail address: [email protected].
Until the 2002 amendments to the Labour Relations Act (LRA) were introduced the CCMA and bargaining councils had no jurisdisction to decide retrenchment matters once conciliation failed to resolve the dispute. However, the amendments gave jurisdiction to the CCMA and bargaining councils to arbitrate retrenchments where:
- Only one employee had been retrenched; and
- That employee elected to refer the matter to arbitration.
However, the section of the LRA extending this jurisdiction to arbitrators did not mention what the parameters of the arbitrator’s jurisdiction were. This has led to a strange decision made by the Labour Court. In the case of Rand Water vs Bracks NO and others (2007, JOL 20091) the Court decided that a CCMA arbitrator did not have jurisdiction to determine the procedural aspects of a retrenchment matter. The basis for this interpretation of the LRA is most unclear and, should the legislators have intended this restriction, it is most likely (if not certain) that they would have stated it specifically. This is because an employee would need to be aware that he/she would have to sacrifice the right to relief for unfair retrenchment procedure should he she choose to refer the dispute to arbitration instead of to the Labour Court.
In the case of Scheme Data Services (Pty) Ltd vs Myhill NO & others (4 BLLR 381) the CCMA had found that the employee’s retrenchment was both substantively and procedurally unfair. The employer took this decision on review to the Labour Court and, citing the Rand Water decision described above, claimed that the CCMA had no jurisdiction to decide on the procedural aspects of the case. However, the Labour Court judge disagreed with the Rand Water decision made in 2007 and decided that the LRA does not remove the CCMA jurisdiction to hear the procedural aspects of a case involving retrenchment of only one employee.
The Court went on to say that procedural aspects of retrenchment disputes are not necessarily more complex than substantive aspects and that the power of the arbitrator to determine the procedural aspects should not be curtailed for reasons that arbitrators are not able to determine complex matters. To an extent, it is understandable that the Court in the Rand Water matter may have made its contentious decision in order to relieve CCMA arbitrators of the duty to decide on what it considered to be an aspect of law too complex for arbitrators to handle. I say this because, in order to be an arbitrator, one does not need to have a law degree or to be registered as an attorney or advocate.
However, I concur with the judge in the Scheme Data Services case where he says that the courts do not have the latitude to read into statutes provisions that are not there in order to make law. Should the legislators have wished to relieve arbitrators of duties beyond their abilities and if they had believed that retrenchment matters fell into this category, they would not have introduced this amendment in 2002.
Another aspect of the review in the Scheme Data Services case reported above was the rationality of the CCMA arbitrator’s finding that the employer had unfairly failed to consult with the employee on an alternative position. In this case the employer acknowledged that it had not consulted on this issue but alleged that the employee had waived her right to such consultation. The Court found that a person cannot waive a right of which she is unaware. The employee might have accepted an alternative position had it been offered to her and the CCMA arbitrator was correct to have pointed this out. The Court therefore turned down the review application and ordered the employer to pay the legal costs of the employee.
The outcome of the Scheme Data Services case should act as a reminder to employers that:
- Retrenchment law very strongly protects the employee’s right to employment and it does so because being unemployed can well prove disastrous to the employee and his/her dependants.
- The CCMA, bargaining councils and Labour Court will only consider accepting a retrenchment if the retrenchment could not be avoided, if the decision to retrench the employee is based on a fair criterion and if the employee has been given a proper opportunity to consult on ways of avoiding the retrenchment. While other factors also come into play the above three factors are at the very heart of the law protecting employees from unfair retrenchment.
- Employers have the legal duty to prove that a retrenchment is fair in every way. This means, in part, that the employer cannot just go through the motions of retrenching; it must take the lead in ensuring that the employee gets the opportunity to consult properly. In my experience employers who go this route properly and sincerely end up at the CCMA much less often than those who fail to consult.
- Employers cannot afford to implement retrenchments without the assistance of a reputable expert in labour law who has solid experience in managing retrenchment matters.
To attend our 8 May 2009 seminar on RETRENCHMENT AND HOW TO WIN AT THE CCMA please contact Ronni at [email protected] or on 084 521 7492 or 011 782 3066.
by Ivan Israelstam | Jun 22, 2020 | Jobs
BY Ivan Israelstam, Chief Executive of Labour Law Management Consulting. He may be contacted on 011 888 7944 or 082 852 2973 or on e-mail address: [email protected].
Not all discrimination is unfair. Giving company cars and other perks to managers but not to lower level employees is discriminatory but it is not necessarily unfair discrimination. This is because the discrimination is not arbitrary. There is a legitimate reason for favouring managers in this way, namely that such perks are necessary to retain management services by giving them market related packages.
Hiring a black person instead of a white applicant as part of a proper and established affirmative action (AA) policy and in order to satisfy an existing and realistic AA target is also fair discrimination. Having separate toilets for men and women is discriminatory but is not unfair discrimination because it has the practical effect of preventing dangers such as sexual harassment.
But where discrimination does not have a legitimate, practical and logical purpose it will be found to be unfair. Both South Africa’s constitution and the Labour Relations Act (LRA) prohibit such unfair discrimination on a very wide variety of grounds. These include, amongst others, race, gender, age, illness, family responsibility, gender, sex, belief and ethnicity.
Ethnicity discrimination is an issue that has raised its head frequently in South Africa in recent years under the label of xenophobia. This is due to the arrival of many thousands of Zimbabweans and people from other southern African countries. While discrimination on the grounds of ethnicity is unfair not all allegations of such unfairness are valid.
In the case of Chizunza vs MTN (Pty) Ltd & others (2008, 10 BLLR 940) Chizunza was dismissed for claiming repayment for expenditure for a business lunch that had allegedly never taken place. However, Chizunza alleged that he had been dismissed because he was a Zimbabwean. The Court rejected this claim because the employer proved that the chairperson of the disciplinary hearing was unaware of Chizunza’s nationality and that it employed several Zimbabweans who had no complaints of unfair discrimination.
While not all allegations of unfair discrimination are successful in court those that are successful tend to result in such harsh decisions that they can cripple the employer. In the case of Mutale vs Lorcom Twenty-two cc (2009, 3 BLLR 217) the employee complained that she was being paid less than her white colleagues and that discriminatory remarks had been made about her. She was later dismissed on the grounds that she had failed to obey instructions. The Court found that:
- None of the allegations of insubordination warranted dismissal
- The employer had been unable to prove that the employee had truly been dismissed due to failure to obey instructions
- The real reasons for her dismissal were the employee’s complaints made to the employer of unfair discrimination
- The employee’s complaints of unfair discrimination were valid and the employer was guilty of having discriminated against the employee even before she was dismissed
- The employer was also guilty of dismissing the employee for reasons related to unfair discrimination.
As a result the Court ordered the employer to pay the employee twenty months’ remuneration for the unfair dismissal and a further twenty-four months’ remuneration for the unfair discrimination. That is, the employer was ‘punished’ not only for the automatically unfair dismissal but also for its discriminatory mistreatment of its employee leading up to the dismissal. It appears that, in effect, the Court believed that the charge of failing to obey instructions was largely a pretext of the employer used to get rid of a black person who was standing up for her constitutional and labour law rights. As a result the employer was ordered to pay the employee forty-four months’ compensation.
This case contrasts starkly with that of Chizunza discussed earlier in this article. In both cases the employer was able to show that there had been some grounds for accusing the employee of misconduct. However, the important difference between these two cases is that the employer in the Chizunza case brought evidence to show that it had not been discriminatory. This shows that employers:
- must never make decisions or take actions for reasons of race
- must, when they are faced with unfair discrimination charges, prepare and present the strongest possible evidence showing that there was no discrimination.
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by Ivan Israelstam | Jun 15, 2020 | Jobs
BY Ivan Israelstam, Chief Executive of Labour Law Management Consulting. He may be contacted on 011 888 7944 or 082 852 2973 or on e-mail address: [email protected].
Due mainly to the lockdown the closure of SA businesses is an all too frequent occurrence. Perhaps the worst of the negative effects of such closures is the wholesale loss of the jobs of the employees of the business. Sometimes the struggling company is taken over instead of being forced to go into liquidation. The advantage of such a takeover is that it can avoid the loss of jobs caused by a liquidation.
Surprisingly, the Labour Relations Act (LRA) strongly discourages takeovers (albeit unintentionally) by prohibiting dismissals for reasons related to a takeover as a going concern. Thus, would-be rescue deals are scuppered by the fact that partial retrenchments, resulting from the rationalisation necessitated by takeovers, are prohibited.
Where employees are illegally retrenched for reasons related to takeovers it is often difficult to establish whether it is the old entity that is at fault or whether the new entity should be taken to task in court. This is because the date of the takeover is often unclear. If the employee was retrenched before the takeover he/she should logically take the old entity to court, but what happens if the old entity does not have the assets necessary to pay the compensation ordered by the court? Section 197(2)(c) effectively allows the employee to sue the new employer even if it was the old employer who retrenched the employee unfairly.
If the retrenchment takes place after the transfer, only the new employer can be sued. However, establishing the date of the transfer for purposes of labour law can be tricky. Is the takeover date:
- The date on which the new entity began running the business? OR
- The date on which the buyer and seller signed the contract? OR
- The date that the buyer and seller designated in the contract as the date on which the sale took effect or would take effect?
This key question arose in the case of Business Design Software (Pty) Ltd & Another vs Van der Velde (CLL Vol. 18, March 2009). The employee was a general manager of Business Design Software (BDS) when it was bought by a company called AST Group. Two years later AST Group decided to sell its BDS division to the MD of BDS, Mr P Smulders. A few days after this decision was made, Smulders brought his brother into the business at senior level. Smulders then decided that Van der Velde was no longer needed in the business.
A month later Van der Velde was retrenched after turning down an offer of a post of administration manager. Three days after the retrenchment AST signed the agreement of sale of BDS with a company called WGN, the entity through which Smulders bought BDS. Although the sale agreement was signed on 3 April 2003 the agreement stated that the sale took retrospective effect on 1 January 2003. Van der Velde took the retrenchment to the Labour Court on the grounds that he had been automatically unfairly dismissed for a reason related to the takeover of a going concern. He cited section 187(1)(g) of the LRA that prohibits such a dismissal. The Labour Court decided that:
- For purposes of labour law, the sale neither took place as at the April date on which the parties signed the sale agreement nor at the January date stipulated in the contract.
- Instead, the Court decided that the takeover had taken effect on 27 February 2003 when Smulders began operating the business.
- The dismissal had taken place in March, after Smulders had taken over the business, and BDS, under its new ownership, was the employer at the time of the retrenchment.
- The retrenchment was an automatically unfair dismissal as the dismissal decision stemmed from the takeover of the business. BDS took this decision to the Labour Appeal Court but that Court upheld the findings of the Labour Court.
This case reinforces the crucial principles that employers:
- need to be cautious about buying or otherwise taking over a business or part of a business as a going concern
- need to be even more cautious about dismissing any employee for any reason related to such a takeover even if the reason for the dismissal is only indirectly related to the takeover
- should neither enter into takeovers nor dismiss any employees before obtaining advice from a reputable labour law expert.
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