Angloplats are right to sue AMCU

Angloplats are right to sue AMCU

Almost a month ago, it was announced that Anglo American Platinum was taking the unprecedented step of suing a trade union (AMCU) for a minimum of R591 million damages for costs associated with protection services overtime, lost production due to non-strikers being prevented from going to work, and damage to property.  The case was filed in the Pretoria High Court.

Much has been said and written about this initiative.

Firstly, Amplats is clearly not suing AMCU for the initiation of a protected strike; it is roundly understood that AMCU has met the pre-requisite provisions of the Labour Relations Act, entitling AMCU to proceed on such a protected strike in support of its wage demands.

On the contrary, Amplats has deemed it necessary, and indeed prudent, to seek damages from AMCU for the costs incurred associated with protection services overtime expenses, lost production due to non-strikers being prevented from going to work, and damage to property.

Amplats is perfectly entitled in law to lodge such a claim.

In so doing, it has been surmised in certain quarters, this is merely a bargaining tactic being adopted by Amplats; I think not.  An initiative of this nature is of such significance that it is unlikely to have been adopted as a simple negotiating ploy.  Besides, Amplats in all likelihood, does not need to resort to a measure of this nature to gain an advantage in the bargaining arena.

Amplats need only continue to reject AMCU wage demands and make compromises as it deems fit, to meet its own bargaining objectives.

My sense is that this initiative on the part of Amplats is a simple, and entirely justified, move to seek legitimate damages for offences allegedly committed by AMCU members, which infringe on the rights of employers, and indeed citizens in general, to the extent that genuine losses are incurred in the course of offences being committed.

Trade unions have, for too long, been immune to the damages inflicted by their members during industrial action.

To draw a comparison, if a passer-by damages one’s motor vehicle or throws a brick through our front window, we may turn a blind eye on the first, or even second, occasion, but when it occurs day in and day out, one has every right to say enough is enough.

Will damages incurred be difficult to prove? Probably.  But that doesn’t, and shouldn’t, mean that one need simply “suck it up”.

It’s high time that trade unions fall in line with civilized norms, and ensure that members behave within the bounds of the law.

Picketing rules are frequently ignored, strike marshals are frequently absent or incompetent, strikers committing acts of strike-related misconduct are seldom, if ever, disciplined by unions.

In fact, by and large, striking workers are very often a lawless and thuggish mob.

History tells us that union officials cannot always be relied upon to exercise control over their members during strike activity, and resort to brazen denial of any wrongdoing on cue.


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A trap or entrapment?

A trap or entrapment?

Our firm is frequently asked by clients, whether it is permissible to ‘lay a trap’ for staff suspected of, for example, dishonesty.

Let’s for example, use the example of an employer suspecting that a receiving clerk is a member of a syndicate, which includes the driver of a supplier.  In this case, as is indeed unfortunately, quite a common practice, the driver of the supplier and the receiving clerk of the customer, agree that the clerk will sign receipt of a quantity of goods which is higher than the quantity actually delivered; the driver then sells the undelivered goods, and shares the proceeds with the clerk.

This is but one of the many scams performed by syndicates every day, which include willing participant employees in companies across the country.

The crisp question is this; when does a trap placed by an employer become unlawful entrapment?

Entrapment is a somewhat controversial subject, with most decided cases being found in the sphere of criminal law.  Key labour judgments do however exist which cast light on the manner in which entrapment cases are to be dealt with in the realm of dismissal law.

The distinction between the approach to entrapment adopted in criminal (lawfulness) and labour (fairness) cases is important.

The Labour Court Judgment in Cape Town City Council v SAMWU & 2 others [C367/98] is considered to have been a landmark Judgment in workplace entrapment cases.

The Judgment refers to the Oxford Dictionary of Law (4th Edition, 1997) as defining ‘entrapment’ to mean “deliberately trapping a person into committing a crime in order to secure their prosecution”.  Perhaps most significantly, this points to, in employment terms, an employee being lured into committing an act of misconduct, thereby introducing the concept of ‘inducement’.

Section 252A of the Criminal Procedure Act specifically addresses “traps and undercover operations and the admissibility of evidence so obtained”.  The principle factors, paraphrased, are (1) entrapment evidence is admissible if it does not go beyond providing an opportunity to commit misconduct, (2) when considering whether the employer’ conduct goes beyond providing an opportunity to commit misconduct, the prevalence of the misconduct and its seriousness, the availability of other techniques of detection, the degree of persistence and degree of deceit or trickery, will be factors considered.

Further factors which will be assessed are whether, or not, the employer’s conduct included threats, implied or expressed, during the ‘entrapment’ process, and whether there were grounds for reasonable suspicion prior to the trap being set.

In this Judgment, the Court held that “guidelines and parameters no less rigid or strict than those set out in section 252A of the CPA should be applied in the context of the employment relationship”.

This is a rare comparison being drawn between disciplinary procedures and the CPA.

It’s telling that the Judgment does open the door for traps to be set by employers, in specific instances; the Judgment continues “I would be reluctant if not unlikely to hold that a system of trapping (obviously properly constrained) may never be fair in the employment context”.


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An alleged breakdown in trust must be proved

An alleged breakdown in trust must be proved

Accidents with employees at the wheel of company vehicles do arise from time to time.  However, in the Labour Appeal Court case of Edcon Ltd  v  Pillemer, the CCMA & 1 other (DA4/06), the court had to deal with a circumstance in which an employee’s son had an accident in a company vehicle.  The primary issue in question however, was the burden placed on employers to prove an alleged breakdown in trust which warrants dismissal.

It was common cause that the employee knew that within twenty four hours of an accident, she was required to (1) report an accident to the police, (2) obtain a case number, (3) report the accident to her employer and the insurance company and (4) complete and sign an accident claim form.  Furthermore, the employee was aware of the fact that in the event of an accident in her company vehicle, no repairs could be undertaken on the vehicle without the approval of the insurance company.

The employee’s husband repaired the vehicle in his panel beating workshop at his own cost.  The employee did not report the accident, and initiated the repairs by her husband in the erroneous understanding that her son was not covered by the insurance policy, when in fact he was.

The employer got wind of the accident some six months later.  The employee initially denied any knowledge of the accident when confronted by the employer, but subsequently confirmed it to be true.  The employee had seventeen years service and was two years away from retirement.

The employee was charged with impacting on the trust relationship by not reporting the accident; she pleaded guilty and was found guilty, after which she was dismissed.

The employee successfully challenged the fairness of her dismissal at the CCMA which found the dismissal to have been substantively unfair as the employer had led no evidence that the employment relationship had broken down.  The Labour Court dismissed the employers review of this award.

The Court was required to apply its mind to the employee’s contention that the sanction of dismissal, especially in light of her prevailing mitigating circumstances.  It was further argued that there had been inconsistency in the application of the sanction in relation to similar offences in the past.  The primary enquiry in the Appeal was however whether the Labour Court was wrong not to interfere with the award of the commissioner (ie: to vary the sanction).

The LAC judgment concluded that the employer had not proved the alleged irreparable breakdown in trust, not attached sufficient importance to the employee’s unblemished seventeen year record and imminent retirement.

The appeal was dismissed.

This case highlights the need for employers to substantiate an alleged irreparable breakdown in trust when raising trust as a factor justifying dismissal, or any other such severe sanction, is argued in aggravation.

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10 requirements for a fair dismissal

10 requirements for a fair dismissal

Approximately 50% of all arbitrated alleged unfair dismissal cases resulting in it being held that the dismissals were indeed unfair, thereby begging the question – what blocks must be ticked to render a dismissal fair?

The ten requirements for a fair dismissal are:

1. Does the employer having sufficient proof of misconduct?  Simply put, an employer is required to be able to prove that the employee is ‘probably’ guilty of the alleged misconduct.

2. The employer must prove the employee can be held blameworthy for, and committed, the act/omission.  Employers frequently overlook the fact that it is not merely the alleged act or omission that must be proved.  In order for misconduct to be proved, it must be proved that the alleged act or omission occurred, and that the employee can rightfully be held blameworthy for the act or omission alleged.  For example, an employee can never be held blameworthy (or guilty) for having contravened a company policy if it cannot be proved that the employee had knowledge of that policy.

3. Are witnesses available and agreeable to testifying, and is other evidence available?  An employee can only be found guilty on that proved at the hearing; this may or may not correlate with what the employer knows to be true.  Documentary evidence should be handed to the employee prior to the hearing for their perusal.

4. The allegation(s) must be furnished to the employee clearly.  The misconduct allegation(s) must be communicated to the employee in a form and language that the employee can reasonable understand.

5. Reasonable prior notice of the hearing.  The employee must be afforded reasonable time to prepare for a disciplinary hearing. In practice, no less than 2 working days notice is considered reasonable.

6. Employees have a right to an interpreter and representation.  The employer must afford the employee the right to an interpreter when they deem this necessary, and the right to an internal representative.

7. Right to submit a defence and cross-examine.  All employees have the right to reply to the allegation(s), and challenge employer evidence, normally by way of cross-examination.

8. Mitigating factors. Employees found guilty have the right to submit factors in mitigation, prior to a sanction being imposed, and the right to have these submissions carefully considered by the chairperson.

9. Appropriate sanction.  Sanctions must be appropriate. Put differently, the punishment must fit the crime, taking “the totality of circumstances” into consideration.  The Labour Court occasionally refers to this aspect of sanction selection by imploring employers not to select a sanction which makes the court “whistle”.

10. Reason for dismissal & the right to refer to the CCMA or a Bargaining Council.  Employees should be provided with the reasons for their dismissal, and informed of their right to refer then dismissal to the CCMA or a Bargaining Council with jurisdiction, within 30 days of the dismissal.

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The vagaries of hospitality industry labour relations

The vagaries of hospitality industry labour relations

The hospitality industry is one of the fastest growing sectors in the South African economy.  Most of the excess hotel room capacity built in anticipation of the 2010 soccer World Cup has since been absorbed by an impressive growth in tourism, fueled in large part by international visitors.

It’s a sector which employs approximately 700 000 employees, and contributes almost 10% to GDP.

Prospects for the sector remain very positive, after foreign visitor numbers and room revenue per night both increased by in excess of 12% in 2016, in comparison to 2015.

It is an industry further enhanced by the Federated Hospitality Association of South Africa (FEDHASA) which, since its establishment in 1949, continues to be an active representative of hotels, guest houses, restaurants and caterers.  So much so, that FEDHASA is recognised by government as the official trade association for the industry. The Tourism Business Council of SA also plays a significant role in lobbying on behalf of the hospitality industry, within the context of its tourism brief.

Last month, Deputy Tourism Minister Elizabeth Thabethe noted that South Africa has 118 869 graded rooms spread across approximately 5 354 establishments in the hospitality sector, adding that South African tourism is “poised for growth”.

It is, however, also an industry with all the ingredients for challenging labour relations.  There are a number of reasons for this.  To begin with, it’s labour intensive. On the positive side, being labour intensive, it has the capacity to be a significant source of job creation and employment; this is especially significant if one has regard for the fact that the real unemployment rate is in the region of 35%.  However, on the flip side, not all job opportunities in the industry are full-time permanent positions.

Outside of peak seasons, it is well-nigh impossible for the industry to forecast, for example, room-occupancy, banqueting and conferencing bookings.  It is precisely for this reason that the industry needs job flexibility, and seeks to achieve this by adopting various categories of employment, such as permanent, scheduled and ‘casual’ staff, a model which trade unions typically object to.

However, there are additional employment factors which exacerbate hospitality industry labour relations, such as shift and night work, both of which invariably complicate all sectors which operate such continuous-shift systems.

Whilst the industry is labour intensive, many of the job opportunities are entry-level jobs, with associated entry-level wages.  It was for this reason that Government promulgated Wage Determination 14 ten years ago, to make provision, amongst other things, for minimum wages in the industry.

Various such Wage Determinations have been promulgated in recent years relating specifically to industry sectors which are considered to employ vulnerable employees.  These other sectors, such as retail and security services, tend to have similar employment characteristics to the hospitality industry, namely many entry-level jobs, and shift work.  It is interesting to note that the most recent Wage Determination minimum wage, effective from 1 July 2017, is only fractionally higher than the R3 500.00 per month national minimum wage to be introduced in April 2018.

A further factor increasing the complexity of hospitality industry labour relations is the proliferation of trade unions in the sector.  Whilst SACCAWU, and to a lesser extent, HOTELLICA are the dominant trade unions in the sector, our firm has identified a further twenty trade unions also operating in the sector throughout the country.  This can, and occasionally does, lead to union rivalry, when identifying majority representation, within single and multiple-bargaining units within each establishment, becomes contested.

Collective Bargaining agenda items in the hospitality sector, by and large mirror the hot-button agenda items in other sectors.  These include the quantum of annual wage increases, improved benefits such as employer pension and provident fund contributions, as well as travel and night shift allowances.

There is however one collective bargaining agenda item which is more common in the hospitality sector than all other industry sectors.  This relates specifically to how employees are rewarded for the premium wages associated with overtime, Sunday and Public Holiday work.  For example, the normal overtime rate of pay is 1.5 times the normal rate of pay.  The employer is obligated to pay the employee their full wage for the normal time portion of the overtime hours worked.

However, Sectoral Determination 14, as does the Basic Conditions of Employment Act, makes provision for employers to reach an agreement with employees that the premium for the overtime hours worked (ie: an additional 0.5 hours for each overtime hour worked) may be addressed by crediting the employee with additional leave for this additional premium due, rather than pay the employee cash.

This is a common practice in the hospitality industry for good reason.  Given the increasingly inflexible labour market, and ongoing increased regulation in employment models, hospitality industry employers have an opportunity to make some provision for employment flexibility by, in essence, banking the days accumulated by employees in lieu of pay for overtime, Sunday and Public Holiday work, and granting employees this time off work during quiet periods.

By and large, employers reach agreements to proceed on this basis in the employment contracts which employees sign on commencing employment.

Finally, the hospitality industry, at least in the experience of our firm, has the highest incidence of employee theft-related cases than any other industry, when contrasted with other categories of misconduct.  Furthermore, our experience is that theft-related misconduct is frequently the single biggest specie of misconduct spawning dismissals in the sector.  This obligates the sector to, on an ongoing basis, invest in costly and time-consuming security vigilance and labour disputes.