Skip to content

South Africa: Employment case law update – key takeaways

22 April 2024
– 20 Minute Read

DOWNLOAD ARTICLE

Overview

  • On Thursday, 18 April 2024, we hosted a webinar on the latest cases impacting the employment law landscape in South Africa.
  • Citations of the cases discussed, together with key takeaways, are covered in this article.

On Thursday, 18 April 2024, we hosted a webinar on the latest cases impacting the employment law landscape in South Africa.  Please click here to access a recording. Citations and mini-summaries of the cases discussed, together with key takeaways, are set out below.

Reinstatement order

  • Mathebula v General Public Service Sectoral Bargaining Council and Others (JA16/18) [2024] ZALAC 4 (7 February 2024)

Appeal against decision not to order reinstatement – employee dismissed for gross negligence – Commissioner in arbitration finding dismissal both procedurally and substantively fair – Labour Court on review finding dismissal substantively unfair but declined to order reinstatement and ordered compensation equivalent to six months’ pay – decision in refusing reinstatement based on statement that his dismissal was a conspiracy by the employer to get rid of him – appeal upheld – reinstatement ordered on basis that the conspiracy statement was not tested in evidence and the employer presented no evidence as to why reinstatement was in the circumstances inappropriate.

Key takeaway:  The test for determining whether the remedy of reinstatement is appropriate is an objective one and involves an exercise of discretion. Reinstatement is the primary remedy in a case of unfair dismissal unless one of the circumstances specified in section 193(2) of the Labour Relations Act 66 of 1995 (LRA) exists. One of these is that the circumstances surrounding the dismissal are such that a continued employment relationship would be intolerable. The bar of intolerability is a high one and the onus is on the employer to provide weighty reasons, accompanied by tangible evidence, to show intolerability. It is accordingly important to lead such evidence at the arbitration hearing. Where an employer fails to lead evidence in this regard, a reviewing court will not be able to determine objectively whether any of the requirements of section 193(2) are met.

The judgment is available here

Section 197 transfer of a business as a going concern

  • Africa Online Operations (Mauritius) Limited v Scanlon and Others (CA01/2023) [2024] ZALAC 2 (31 January 2024)

Appeal – whether there was a transfer of management services business as going concern to appellant from ECHO International Management Services (Pty) Ltd (EIMS) after latter was placed in liquidation – Court a quo declared that the employment of the first to fourteenth respondents had been so transferred in terms of s 197A(2) of the LRA to appellant – appellant continued to provide shared services to group companies that were previously provided by EIMS – appellant contracted with the third party service provider to retain use of SOLID platform used to provide the support services – key EIMS personnel engaged by appellant to perform the same activities as they had done as employees of EIMS – to find for appellant would effectively be to place form over manifest substance of transaction – latter was designed to effect transfer of going undertaking but in circumstances where it would subvert purposes of s 197 and protection that it provides to employees – appeal dismissed.

Key takeaway: Section 197A of the LRA applies where there is a transfer of a business in circumstances where the old employer is insolvent, or if a scheme of arrangement or compromise is being entered into to avoid winding up for reasons of insolvency. In determining whether a transfer of a business has taken place, a court will consider substance over form. Accordingly, for a transfer of a business to take place, the insolvent business does not necessarily need to be sold. A transfer within the meaning of the section can take place, even in the absence of any formal transaction or contractual arrangement, where the business in question retains its identity. Whether this happens is a matter of fact that must be determined objectively. In this case, the key obligations of the business in liquidation were assumed by the appellant, the appellant continued to perform substantially the same shared services to the same customers (namely other group entities), the appellant used the same IT platform for the express purpose of ensuring business continuity and the appellant contracted the services of the key personnel to perform the same activities as they had for the entity in liquidation. On this basis, a transfer of a business had occurred.

The judgment is available here.

Unfair discrimination/ automatically unfair dismissal 

  • Lebelo and Others v City of Johannesburg Metropolitian Municipality (J2055/2014) [2024] ZALCJHB 23 (22 January 2024)

Unfair discrimination – conversion of fixed-term contracts to permanent employment –employees subject to ‘sunset clause’ which meant they would not receive a salary increase until their remuneration fell within salary band applicable to colleagues who held similar positions and were historically employed on permanent basis – alleged unfair discrimination in terms of s 6 of Employment Equity Act 55 of 1998 (EEA) on grounds of prior status as fixed term employees – distinction between differentiation and discrimination – applicants failed to prove implementation of ‘sunset clause’ amounts to discrimination – application dismissed.

Key takeaways: (1) Prior status as a fixed-term employee is not an arbitrary ground of discrimination. If the ground for alleged unfair discrimination is not one of the grounds listed in section 6(1) of the EEA, then the applicant must prove the specific ground and that it affects the employee’s human dignity in a comparably serious manner as would differentiation on a listed ground. A ground that affects someone’s dignity is an immutable human characteristic that is a quality or attribute that belongs to a person and is inherently part of the person. Being employed on a fixed-term contract is not such a characteristic. (2) Differentiation in pay based on a ‘sunset clause’ (i.e. a clause in an agreement that limits salary increases of employees whose basic salaries exceed the salary band for their positions until such time that their salaries fit into the applicable salary band), will be considered rational where it is aimed at ensuring equality among employees performing the same or similar functions, by equalising salaries over time. Such differentiation will not amount to unfair discrimination where it is applied equally to all employees in that group and is not based on a listed ground or any immutable human characteristic or attribute.   

The judgment is available here.

  • O’Connor v LexisNexis (Pty) Ltd (P18/24) [2024] ZALCPE 11 (11 April 2024)

Urgent application – automatically unfair, alternatively unfair dismissal – repudiation of employment contract – unfair discrimination based on arbitrary ground – offer of employment to applicant conditional on, inter alia, criminal checks being clear – offer retracted because of criminal history – urgency granted for unfair discrimination and specific performance claim – claim for specific performance must fail because respondent was entitled to invoke resolutive condition – no repudiation – criminal history not relevant to inherent requirement of job – respondent’s decision to deny applicant the job on sole basis of criminal history constitutes unfair discrimination within meaning of EEA – practice and procedure – failure to initial every page of affidavit does not invalidate affidavit – respondent ordered to employ applicant, within 10 court days of date of judgment, in the position he applied for on the terms and conditions set out in the employment contract concluded between the parties.

Key takeaways: (1) A claim of unfair discrimination in terms of section 6 of the EEA may, in principle, be brought on an urgent basis at the Labour Court if the circumstances justify an urgent order. (2) Where an offer of employment contains a resolutive condition, the employer is entitled to invoke that condition, and retraction of the offer in such circumstances will not constitute a repudiation of the contract in terms of contract law. Where the condition requires a ‘clear’ criminal record, a previous conviction expunged under the Criminal Procedure Act would be less than ‘clear’, as it would not be deemed to have never taken place for purposes of contract law. A clear criminal check would mean someone without any criminal history at all. (3) Criminal history can be an arbitrary ground of discrimination, as it is an inherent attribute that is intimately connected to how the individual is perceived by society and has the potential to impair the fundamental dignity of the person as a human being. An employer will only be able to defend an unfair discrimination claim in these circumstances where it is able to show that it is an inherent requirement of the particular job to be able to demonstrate a clear criminal check. Put differently, the employer must show that the applicant’s criminal history will affect their ability to do their job.

The judgment is available here

  • Mara v Tems Meat Wholesalers (JS 25/2021) [2024] ZALCJHB 6 (19 January 2024)

Automatically unfair dismissal – applicant claiming unfair discrimination when respondent dismissed him because of his age – respondent denying any dismissal and averring that applicant voluntarily entered into early retirement agreement – applicant accepted conditions of agreement to be in full and final settlement of all claims that he may have against respondent – applicant failed to prove existence of duress or coercion – agreement binding – application dismissed.

Key takeaways: (1) A mutual separation agreement concluded between an employer and employee in which disputes or claims are settled is generally enforceable unless it can be shown, inter alia, that the contract was invalid ab initio, contrary to public policy or unlawful. (2) In order to set aside a contract on the basis that it is invalid ab initio by reason of it being signed under duress or as a result of coercion, a party must prove actual violence or reasonable fear of harm caused by ‘considerable evil’ to the party concerned or their family. The burden of proving the existence of duress rests on the party raising it, and it is a high burden. In this case, the fact that the applicant was told that there was no time for them to take the agreement home for their children’s advice, and was shown where to sign, did not show actual violence or reasonable fear caused by considerable evil. Further, they only raised concerns about the agreement when they were unhappy with the payment amount from the provident fund and did not mention being coerced to sign the agreement in their referral of the dispute to the bargaining council; the first time the argument was raised was at the Labour Court.  Duress was accordingly not proven, and the agreement was binding.

The judgment is available here.

Unfair dismissal

  • SACTWU obo Members v Fyvie G N.O and Others (D258/2020) [2024] ZALCD 9 (5 March 2024)

Unfair dismissal – respondents retrenched 15 employees employed on a vegetable farm pursuant to a s 189A LRA process – applicants claimed unfairness on basis that the respondents failed to apply LIFO, and particularly the practice of ‘bumping’ to retrench shorter-serving employees on the macadamia nut farm and replace them with long serving vegetable farm workers – macadamia farming more complex, with sophisticated systems, and required longer training and higher degrees of judgement from workers – respondents argued that the applicants employed on the vegetable farm did not have the skills required of those employed on the employer’s macadamia nut farm and therefore LIFO / bumping would not suit its operational interests – held that the training requirements of employees from the vegetable farm would be onerous, and bumping as a proposal from SACTWU, to avoid the retrenchment of their members was unreasonable – dismissals fair – application dismissed.

Key takeaway: Bumping, as part of the ‘last-in-first-out’ (LIFO) principle, is a valid practice to reward long-standing employees, to be considered as selection criteria in a retrenchment process. However, bumping cannot be applied in circumstances where those employees do not have the skills of the shorter-serving employees needed to fill their roles, and where it would be unduly burdensome on the employer to train and upskill the employees.

The judgment is available here.

  • Brauns and Others v Wilkes N.O and Others (JA 47/22) [2024] ZALAC 1 (18 January 2024)

Appeal – appellants dismissed for dishonesty – evidence – Commissioner accepting evidence based on a confession which had been reduced to writing by a magistrate – principles governing admission of evidence based on a confession restated – contention that the confession was invalid because it was made before the first appellant had all the details regarding the charges rejected – in arriving at the decision the Commissioner took into account the totality of the evidence including that in the confession – appeal dismissed.

Key takeaways: (1) In a disciplinary matter, an employer who relies on a confession by an employee, has the onus to prove that the confession was made and that it is valid. A confession is valid only if the employer can show that it is (i) freely and voluntarily made without undue influence, coercion, or intimation from the employer or any other person; and (ii) clear and unambiguous and that the employee understood the consequences of the confession. (2) A confession will not be rendered invalid where it is made before the employee has information relating to the disciplinary charges. The charges are often informed by the confession itself.  (3) Whether a confession may be rendered invalid based on fear of criminal prosecution depends on the circumstances of each case. A confession in these circumstances may be considered involuntary or influenced by a promise or threat and therefore, inadmissible, or unreliable. But this will not be the case where confession is made willingly and corroborated. (4) While a valid confession by an employee to acts of misconduct can be considered by an employer, the confession cannot, on its own, justify an employee’s dismissal. An employer is still required to follow a fair procedure and show that dismissal is an appropriate sanction in the circumstances of the case.

The judgment is available here.

  • Maruleng Local Municipality v Commission for Conciliation, Mediation and Arbitration and Others (JR1926-21) [2024] ZALCJHB 81 (20 February 2024)

Review – dismissal – misconduct – signing cession agreements without authority – employee lacks authority to sign unless delegated by municipal manager – dismissal found substantively and procedurally unfair by CCMA – authority challenge – double jeopardy challenge – inconsistency challenge – finding of procedural unfairness set aside – order of reinstatement and backpay set aside – arbitration award substituted with finding that dismissal is procedurally fair but substantively unfair – not reasonably practicable to award reinstatement where fixed term contract’s termination date had passed – employer to pay employee maximum compensation of 12 months’ remuneration.

Key takeaways(1) The ‘double jeopardy’ principle (which prohibits an employer from punishing an employee twice for the same offence) will not apply in circumstances where a reprimand is given to an employee following an act of misconduct, which is later followed by a disciplinary hearing. The reprimand does not ordinarily constitute a species of disciplinary sanction, but rather an ‘off the cuff’ signal of disapproval. (2) In a review application, if an arbitration award can reasonably be sustained from relevant evidence before the commissioner, which may not have been considered or given the weight it should have by that commissioner, and the outcome of the award would have remained the same (assuming the consideration of that evidence), then the Court may not set aside the award on review.

The judgment is available here

Termination of a fixed term contract

  • Saldanha Bay Municipality v South African Local Government Bargaining Council and Others (C302/2020) [2024] ZALCCT 9 (31 January 2024)

Review of arbitration award finding dismissal unfair – failure to renew fixed term contract on same or similar terms – initial 12-month contract renewed twice, followed by multiple one-month contracts owing to auditor general report indicating an irregularity in the previous 12-month appointments – post subsequently advertised for 12-month fixed term appointment at significant lower salary scale – expectation of renewal of 12-month contract – expectation genuine and objectively justifiable – deemed dismissal proven – no fair reason for dismissal provided – dismissal unfair – review application reinstated and dismissed, except insofar as relief is concerned – ambiguity in relief must be eliminated to cure irreconcilable pronouncements on relief due – relief varied owing to impossibility of giving effect to reinstatement on fixed term contract which has since expired – substituted with order of one year’s remuneration as compensation.

Key takeaway: In terms of section 186(1)(b)(i) of the LRA, reliance by an employer on the expiry of a fixed-term contract may be deemed to be a dismissal where the employee reasonably expected the employer to renew the fixed-term contract on the same or similar terms, but the employer offered to renew it on less favourable terms or did not renew it. Ordinarily, the expectation is that the renewal will occur on the expiry date of the fixed-term contract. However, there may be cases where the time when the employee justifiably anticipates that their expectation of renewal will be realised might not coincide with the expiry date of the contract in question. In such cases, the employee may still rely on section 186(1)(b)(i), provided that the employee can justify why the reasonable expectation of renewal only fully materialised at a later date. In this case, after two renewals of his 12-month contract, the employee accepted a month-to-month contract not because he had abandoned any expectation of a renewal of the 12-month contract, but as a temporary measure during which the technicalities of how he and his fellow strategic advisors could be re-appointed would be resolved by the Municipality. He retained the expectation that once the appointment process was determined, he would be re-appointed for at least another 12-month period, and the Municipality’s failure to so appoint him on the same or similar terms when his last monthly contract ended was deemed to be a dismissal.    

The judgment is available here.

Temporary employment services

  • Vuyiseka Mzukwa v Commission for Conciliation Mediation and Arbitration and Others (C276/2020) [2024] ZALCCT 4 (25 January 2024)

Review of arbitration award in which fourth respondent service provider was found not to be a temporary employment service (TES) – nature of relationship – employee provided to National Prosecuting Authority (NPA) by service provider to work as switchboard operator – not remunerated as full-time employee of NPA – considered an employee of service provider – employee claimed to be deemed to be a permanent employee of NPA in terms of s 198A of LRA and sought equivalent compensation – substance over form – factors to determine whether service provider is a TES considered – placed employees fully integrated into workplace of NPA and subject to overall control of NPA – commissioner misconstrued applicable test and nature of agreement – findings incorrect – award reviewed and set aside – employee deemed to be employee of NPA and ordered that she be compensated retrospectively in an amount equivalent to the difference between the remuneration and benefits that the NPA paid its switchboard operators and the remuneration she was paid by the service provider over this period.

Key takeaway: In order to determine whether an entity is operating as a temporary employment service (TES), one must examine the substance and true nature of the relationship between the client and the workers and assess whether the services provided fall within the definition of section 198 of the LRA. This section defines a TES as any person who, for reward, procures for, or provides to, a client other persons (i) who perform work for the client and (ii) who are remunerated by the TES. It does not matter what the parties call the relationship or the contract – substance takes precedence over form. Relevant factors to consider as part of the assessment include: (i) the degree of control exercised by the client over the employees; (ii) whether the employees are integrated into the workplace and organisation of the client; (iii) the manner in which the employees performed work; and (iv) the provision of tools and work equipment.  In this case, although the service agreement provided that the service provider was to deal with labour disputes, it required the employee to follow the NPA’s policies and procedures, she was subject to security vetting undertaken by the NPA, was required to seek management approval prior to making international calls, and a project manager for the NPA was appointed to give ad hoc instructions. This amounted to overall control by the NPA of the employee. The employee was also inherently integrated into the NPA organisation. On this basis, the service provider was found to be a TES.

The judgment is available here.

Unfair labour practice

  • Department of Higher Education and Training v Commissioner Smiza and Others (JA53/2022) [2024] ZALAC 5 (22 February 2024)

Appeal – at arbitration, employee contended that he had been treated unfairly by appellant in not being shortlisted for vacant post although another less qualified and experienced employee (Mr Serai) was shortlisted and interviewed for promotion – arbitrator found that, in not shortlisting and interviewing employee, appellant had committed unfair labour practice – Labour Court dismissed review application on basis that arbitrator’s decision was reasonable – evidence before arbitrator did not show that appellant had committed unfair act or omission or engaged in unfair conduct – neither shortlisting process nor decision not to interview employee was unfair – no dispute that selection committee was entitled to impose additional criterion to limit number of applicants – nothing irrational or unfair in additional criterion imposed – employee lacked requisite years of experience in terms of additional criterion – even if Mr Serai lacked requisite experience and was incorrectly shortlisted, he was not appointed to post and fact of his erroneous shortlisting is not sufficient to prove unfairness – appeal upheld.

Key takeaways: (1) To succeed in an unfair labour practice claim related to promotion, an employee will usually be required to prove that they were not given a fair opportunity to compete for a post. (2) In making recruitment decisions, an employer is required to act lawfully and adhere to the objective standards of fairness and the criteria that it has set for promotion, including its own policies (although in the evaluation of the suitability of a candidate, a justifiable element of subjectivity or discretion is reserved for the employer). It will not be unfair to add additional selection criteria in the shortlisting process in order to limit the number of applications that are considered for a position if this is provided for in an employer’s internal policies and procedures and the additional criteria that are added are rational and fair. (3) Where another candidate has been erroneously shortlisted, but is ultimately not promoted to the post, the fact of such erroneous shortlisting should not be sufficient to prove unfairness on the part of the employer.   

The judgment is available here

Strikes

  • Worldwide Staffing (Pty) Ltd v Metal and Engineering Industries Bargaining Council and Others (JR1367-23) [2024] ZALCJHB 67 (12 February 2024)

Review – protected strike – secondary strike by TES employees – picketing rules prohibited participants from displaying placards, posters, banners or similar items containing, inter alia, words or pictures defamatory of any director, agent or employee of applicant or its client – TES employees (one of which was a marshal) dismissed for associating with group carrying offensive placards and picketing outside the designated area in violation of picketing rules – arbitrator finding dismissals substantively unfair – to escape complicity, employees had to actively distance themselves from the primary misconduct committed by others, which they did not – arbitrator misconstrued the nature of the enquiry – dismissal a sensible operational response to risk management – dismissals fair – award reviewed and set aside.

Key takeaways: (1) An employee’s common law obligations of promoting the employer’s interests and refraining from misconduct encompass a specific duty to disassociate from misconduct perpetrated by others. (2) In the context of strike action, a protected picket is meant to be an extension of collective bargaining; not a licence to intimidate or tarnish an employer’s reputation. Picketing rules are agreed in the interests of both the employer and employees, and it would make a mockery of those rules if the court were to allow employees willingly to ignore them. Accordingly, the court takes a firm stance when it comes to strike violence or violations of picketing rules. Where employees are dismissed for violating picketing rules, such dismissals may be justified as being a sensible operational response to risk management, as it sends an unequivocal message to other employees that individual misconduct in a collective setting will not be tolerated. 

The judgment is available here