We take pleasure in presenting the April 2012 issue of Juta's Annual Labour Law Seminar Update, authored by Barney Jordaan and John Grogan.
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Mr Gaga was dismissed from his post as Anglo Platinum’s Group HR manager for sexual harassment of his personal assistant for about two years until her resignation. The PA had only disclosed her boss’s amorous conduct when asked during her 'exit interview' whether she had been harassed by Gaga. After being shown a copy of the company’s sexual harassment policy, the PA told her interviewer that Gaga had started making sexual propositions to her within months of her appointment, and that his advances had become increasingly direct and crude.
When confronted, Gaga blew hot and cold. In one breath, he denied that any of these incidents had occurred; in the next, he claimed that the complainant had responded positively to his overtures. During the arbitration, the manager who had conducted the exit interview said she had asked the complainant if she had been harassed because Gaga had previously been charged with sexual harassment, but had wriggled off the hook then because the acts of which the other woman had complained had been found to be consensual. Gaga’s objection to that evidence was upheld by the arbitrator, who ruled it inadmissible. Without making any express finding on the veracity of Gaga’s denial that he had made advances to the complainant, the commissioner found that Anglo Platinum had failed to prove that Gaga was guilty of sexual harassment because his conduct had not been shown to have been unwelcome to the complainant, let alone offensive. Gaga was reinstated with five months’ back pay.
On review, the Labour Court found that the award was not one a reasonable commissioner would have made, set aside the award and substituted for it a ruling that the dismissal was substantively and procedurally fair. On appeal in Gaga v Anglo Platinum Ltd & others (2012) 33 ILJ 329 (LAC)) the court found Gaga’s bare denial that he had propositioned the complainant unconvincing. The complainant could have had no conceivable motive to fabricate her evidence, which was entirely at odds with the commissioner’s conclusion that she had in fact enjoyed Gaga’s attention and found it ‘flattering’. In any case, the commissioner had adopted far too strict a test for sexual harassment. Even if the complainant was not offended, Gaga’s repeated and persistent conduct was entirely inappropriate for a senior manager responsible for ‘people development’. Furthermore, the company’s sexual harassment policy did not require that complainants be offended by sexual motivated conduct; it was enough that they found them unwelcome.
All this was irrespective of Gaga’s position in the company. The LAC added that superiors who abuse their authority by foisting themselves on subordinates are the lowest form of sex pest. It is no excuse if the subordinate reacts ambivalently, or is even flattered.
Finally, the LAC held that the fact that the complainant had not laid a complaint until her exit interview was not a ground for exonerating Gaga either. Her evidence as a whole suggested that before that she had not known how to deal with the situation, and had found it difficult to reconcile her dignity with her duty to show respect to her superior. Gaga’s persistent predatory behaviour had rendered the employment relationship intolerable. The Labour Court was accordingly correct when it declared the dismissal fair. Gaga’s appeal failed.
Finally we have clarity about the nature of the amendments to the LRA and BCEA. Although the Bills will be open for public comment, the fact that they represent consensus between the social partners at NEDLAC and that the department of Labour is already conducting information sessions across the country, suggest that only minor tweaks rather than large scale changes will be considered.
The amendments to the LRA are extensive, covering further limitations the right to strike; restriction of an employer’s ability to enforce changes to terms and conditions of employment; changes to the CCMA’s jurisdiction and Labour Court review procedures; and, probably most importantly, restrictions on the use of non-standard forms of employment.
In future articles some of the most important changes touched on below will be discussed in greater detail. What follows is a broad overview only. Organisational rights: while the BCEA Amendment Bill permits the Minister of Labour to determine thresholds for s 12 and 13 rights for unions in sectors covered by a Sectoral Determination, s 21 of the LRA will be amended to allow a commissioner to award full organisational rights to trade unions that do not enjoy majority representation in a workplace but is the ‘most representative’ union in the workplace. The ability of employers and majority trade unions to set thresholds for entry into the workplace by less representative unions is also restricted: an arbitrator may award organisational rights to unions that do not meet the agreed threshold, provided it would be fair to do so and the union/s concerned represent a ‘significant interest’ or a ‘substantial numbers’ of employees in the workplace. In deciding whether or not to grant any organisational rights, the arbitrator must consider ‘the composition of the workforce’, including the fact that there are non-standard employees (temporary employees, labour brokers, etc) in the workplace. Finally, trade unions representing employees of a labour broker will in future be able to exercise organisational rights at the premises of the broker and its clients.
Limiting the right to strike: several new limitations are laced on the right to strike. Key among these is the requirement – included in the 1956 Act but excluded from the 1995 Act – that a strike will be unprotected if a ballot of members had not been held or if a majority of members had not voted in favour of the strike. (While this provision also applies to lock outs by employer organisations, the primary aim is to limit strikes that do not enjoy majority member support, ‘as violence or intimidation are more likely to occur under these circumstances’, according to the explanatory memorandum to the Bill.)
Another restriction relates to the types of dispute over which industrial action is permissible. The only so-called rights disputes that at present cannot be the subject-matter of a strike are rights disputes involving LRA rights, e.g. unfair dismissal, unfair labour practices, breaches of collective agreements, etc. An amendment to s 65(1)(c) now prohibits strikes now not only prohibits industrial action over rights disputes under the LRA, but also ‘any other employment law’. Previously strikes were permissible over such rights disputes as health and safety, breach of contract, non-compliance with the BCEA and discrimination.
The right to picket is at once limited and extended: a ‘material’ breach of picketing rules (whether agreed or determined by the CCMA) will open those guilty of the breach (which may be individual union members or perhaps even the union itself) to civil action for damages. Picketing rules can now also in certain circumstances be extended to parties not directly involved in the employment relationship, e.g. owners of shopping malls and other landlords. Non-compliance with picketing rules can further lead to a suspension of the strike or picket by the Labour Court.
As far as essential service are concerned, a raft of new provisions are aimed at making the Essential Services Committee (ESC) more effective in regulating industrial action in such services. Given the fact that relatively few employers and trade unions in essential services have established maintenance and minimum services agreements, the amendments provide that the ESC may determine such services. The right of ‘public officials exercising authority in the name of the state’, i.e. customs officials, judicial officers and those responsible for the administration of justice generally, will henceforth also be limited.
Finally, although it does not affect the right to strike or lock-out, the CCMA’s powers to intervene to conciliate a dispute where it is in the public interest to do so have been strengthened.
Enforcement of awards: it will now be much easier for employees who have received a compensation award to enforce such an award. Instead of a writ having to be issued by the Labour Court before it can be enforced, an award may be presented directly to the deputy sheriff for execution if payment has not been made. Other awards that require the performance of an act other than the payment of money, e.g. an order of reinstatement, can be presented directly to the Labour Court for an order of contempt without the award first having to be made an order of court.
Review proceedings speeded up: at present a review application does not suspend the operation of an arbitration award. This means that employers often have to bring separate applications to the court to stay the execution of an award pending an application for review of the award. A new provision now provides that if the employer provides security the award is suspended. Where the order is one of reinstatement or re-employment, security equivalent to 24 months’ remuneration must be provided; if it is for compensation, the amount awarded must be provided as security. The applicant must then apply for a date for the hearing of the review application within 6 weeks of bringing the application. The court must also issue its judgment within 6 weeks of the last date of the hearing. (Another section, also aimed at speeding up decision-making, provides that judgments of the court, other than those given on review, must be handed down within 6 months of the last day of a hearing).
Private dispute resolution arrangements: if an employee earns less than the to-be-prescribed threshold, or if the third party appointed to resolve the dispute is not independent of the employer, the CCMA may hear a dispute despite the fact that the parties have agreed to refer disputes between them to private mediation or arbitration instead of the CCMA.
Appearance by labour consultants: The CCMA’s power to make rules regarding representation at conciliation and arbitration now includes the power to place regulate or limit rights of appearance. This is clearly aimed at restricting the ability of labour consultants who operate under the guise of trade unions or employer organisations to appear at the CCMA. Another potential blow to them lies in a new provision which states that a person representing a party in Labour Court proceedings as a director or employee of the party; or as an office-bearer or official of that party's registered trade union or registered employers' organisation, may not charge a fee for their appearance, or receive ‘a financial benefit’.
Limiting the ability to retrench to implement workplace change: a subtle yet fundamental change is introduced by an amendment to s 187(1)(c). Currently, an employer wanting to implement changes to agreed terms and conditions of employment and who is unable to reach consensus with employees or their trade union may choose between locking them out until they agree, or embarking on a retrenchment exercise in terms of s 189. The courts have in the past made it clear that the purpose of the section was to prohibit so-called dismissal lock-outs and not to prevent the retrenchment of employees provided the requirements of s 189 have been complied with. The section now prohibits any dismissal because of ‘a refusal by employees to accept a demand in respect of any matter of mutual interest between them and their employer’. Employers will now be compelled to negotiate until there is agreement, or resort to a lock-out to obtain consensus. Retrenchments where there is a genuine operational reason for it not connected to the employees’ refusal to accede to a demand are not affected.
High earning employees excluded from unfair dismissal protection: employees earning above a yet-to-be-determined threshold (the memorandum to the Bill proposes one of R1m) will be denied access to the CCMA to complain of unfair dismissal, provided the employer has given the employee at least 3 months’ written notice or such longer notice period as might be provided for in a contract of employment. If such an employee is dismissed summarily, i.e. without notice, or on a shorter notice that prescribed or provided for, the right to approach the CCMA remains available. High-earning employees also retain the right to complain of an automatically unfair dismissal in terms of s 187. These provisions will take effect in respect of existing employees two years after the amendments have come into effect. The net effect of this is that employers will find it much easier to terminate the services of senior employees especially where the reason for termination is difficult to fit into the existing categories but involves issues of incompatibility, lack of initiative and leadership, or simply a desire to bring in ‘fresh blood’. The thinking behind this provision is that higher earners are in a better bargaining position to protect themselves against unfair dismissal by negotiating appropriate protection.
Disciplinary enquiries by arbitrators: the so-called ‘pre-dismissal arbitration’ is now termed ‘enquiry by arbitrator’. A number of changes have been introduced to encourage the use of this mechanism: it may now be provided for not only in a contract of employment but also a collective agreement; the arbitrator has all the powers of a commissioner; and the effect of the ruling by the arbitrator is the same as any arbitration award (which avoids duplication of proceedings).
Extension of CCMA jurisdiction in retrenchment disputes: the CCMA will be able to hear retrenchment disputes where the employer concerned employees less than 10 employees.
New protection for non-standard employees: undoubtedly the most anticipated changes concern so-called non-standard employees, i.e. temporary employees, part-timers and employees of temporary employment services. First, over-ruling a recent decision of the LAC in University of Pretoria v CCMA, s 186 is amended to provide that not only a reasonable expectation of renewal of a fixed-term contract but also an expectation of permanency. It is not clear what type of relief can be claimed in the latter instance. Second, the provisions of s 198 dealing with temporary employment services (TES or ‘labour brokers’) have undergone major amendments. The net effect is to bring the mechanism of a TES back to its original purpose, which has always been to provide a means through which employers could satisfy genuine short-term employment needs. Unfortunately, many employers have used the mechanism to employ persons on something approaching a permanent basis without those persons enjoying the benefits of permanent employment or adequate protection against rights abuses. Changes include the following:
Third, a new s 198A brings about new protections for employees earning below a yet-to-be determined threshold, including the following:
Overall, the amendments are aimed at promoting the achievement of the original objects of the LRA, i.e. ensuring orderly collective bargaining and peaceful industrial action and ensuring that the employment rights provided for in the Constitution are extended to all employees, particularly vulnerable ones. As far as the latter is concerned, while some of the provisions, especially those relating to non-standard employment, will impact significantly on companies’ employment strategies, the amendments also provide opportunity for creative options as far as contracting with senior employees is concerned. As far as collective bargaining is concerned, the new provisions regarding industrial action are to be welcomed. However, the lowering of the requirements for obtaining organisational rights where there is no majority union also means that the amendments want to promote collective bargaining even further: in future employers will not be able to refuse to grant such rights on the basis of a lack of representation; nor will it make much sense in those circumstances to refuse to bargain if a union has obtained all organisational rights provided for in the Act. It also needs to be kept in mind that the determination of a union’s representation will also no longer be limited to a company’s own employees but will include non-standard employees as well, including those employed via a TES.
The proposed amendments to the BCEA and LRA will bring about sweeping changes to a number of areas of labour law. In this contribution we highlight some of the key changes that are in the offing. Future contributions will focus more extensively on those amendments which we believe will have the greatest practical impact on employers.
Payment for employment prohibited: employers may not require employees to pay them in order to be given employment or specific work. Employers may also not require employees to purchase services, goods or products supplied by the employer or someone nominated by the employer, except if (a) there is an agreement requiring the employee to belong to a scheme that involves the purchase of goods, services or products; (b) from which the employee receives a financial benefit (e.g. medical aid or retirement fund); (c) the price of the goods, services or products is fair and reasonable; and (d) the purchase is not prohibited by another statute.
Prohibition of child labour: a ‘child’ is defined in the existing Act as someone under the age of 18 years of age. The amendments prohibit all work by children under the age of 15, irrespective of the capacity in which they might be required to work, i.e. as employees, independent contractors.
Sectoral Determinations (SD’s): the Minister is given extensive new powers with regard to SD’s. These include the power to –
Enforcement of BCEA: the amendments seek to expedite the process for enforcing compliance with the BCEA’s provisions, while still permitting employers who are allegedly in default an opportunity to make representations. It will no longer be compulsory for inspectors from the Department of Labour to obtain a written undertaking to comply from a defaulting employer before issuing a compliance order – it now becomes a discretionary step. If such an undertaking has been asked for and given, but not complied with, it won’t be necessary for the inspector to first issue a compliance order before approaching the Labour Court to enforce compliance: the inspector may approach the court directly. The same applies where, in the absence of a written undertaking having been requested, a compliance order has been issued but not complied with. Any representations that an employer wishes to make will now be decided by the court and no longer the Director-General of the department.
Monies owed under the BCEA claimable in unfair dismissal proceedings: currently employees who claim for unfair dismissal but who are also owed monies i.t.o. the BCEA (e.g. remuneration, leave pay, etc.) must specifically claim such monies when referring their unfair dismissal claim to conciliation. An amended s 74(2) now provides that such monies may be claimed as part of the unfair dismissal proceedings if it has not prescribed. Once the arbitrator of the court as determined the matter, no compliance order or any other proceedings may be brought in respect of that claim.
Employers who do not comply with the provisions of the BCEA or a Sectoral Determination will no longer be able to delay or escape enforcement proceedings as the path from inspection to enforcement has been shortened considerably. While this is to be welcomed, there is a concern over the capacity of the Labour Court to deal with an ever-increasing work load.
The major change, in our view, involves the Minister’s new powers with regard to Sectoral Determinations: they may now be issued generally to apply to all employers and employees irrespective of the fact that they do not operate in a discreet industry or service. In addition, such determinations may prescribe both minimum remuneration and minimum increases in remuneration. The 'floor' of rights for collective bargaining purposes is thereby lifted – unions, who may now also gain certain organisational rights that they would not otherwise have had – are likely to use the minimum rates and increases as a (minimum) threshold for their wage demands. Finally, the restriction on the use of temporary, part-time and labour sub-contracting in the LRA now has its equivalent in the amendment that allows the Minister by way of a SD to restrict or prohibit such work.
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