The non-disclosure of an adverse relationship with a prior employer is not grounds for dismissal

It’s not surprising that job applicants will typically be reluctant to reveal acrimonious termination of employment with a previous employer.  This is as common as the all too common patterns of CV embellishment seen daily.  So how much is a job applicant required to reveal about how they left their previous employer, in a subsequent job application process?  Also, is the non-disclosure of an adverse relationship with a prior employer amount to misconduct, and if so, dismissible misconduct.

The extent to which a job applicant is obligated to disclose facts during the recruitment process were prescribed by the Labour Court in Galesitoe v CCMA & others [2017] 7 BLLR 690 (LC), where the court had the following to say on the subject – “Accordingly, it is not unreasonable to ensure that a person applying for the senior level of post in question would have realised that the nature of his relationship with his former employer was a material consideration for his prospective new employer and could affect his employment prospects. That would have given rise to the obligation to disclose having regard to the principle enunciated in ABSA v Fouche which the LAC and the LC followed in the Fipaza case”.

In a more recent judgment in Intercape Ferreira Mainliner (Pty) Ltd v Rory Mark McWade & others – (Labour Court: Case number JR158/170 delivered on 13 September 2019, the court pronounced on this issue by holding that -“outside the category of deliberate false representations of fact, a prospective employee may nonetheless be required to disclose information not specifically requested, if that information is material to the decision to employ: or where (as in the present instance) a question is asked, that a less than honest and complete answer might form the basis for a dismissal when the truth is ultimately discovered.”

The question of whether, or not, the nature of a job applicant’s relationship with a former employer must be disclosed to a prospective new employer, was once more addressed in a much more recent Labour Court judgment (8 May 2020) in Maye R. Makhafola v National Bargaining Council for the Road Freight and Logistics Industry & 2 others (Case number J2673/16).

The employee had resigned from her previous employer after she had been found not guilty at a disciplinary hearing.  She was especially aggrieved by the disciplinary hearing process, and subsequently resigned and lodged a constructive dismissal claim against the previous employer.  Prior to being issued the disciplinary notice, she had received a job offer from another employer.  What appears to have been somewhat relevant in this case is the fact that her previous employer was a client of her prospective new employer.

The employee did not disclose her disciplinary hearing or pending constructive dismissal case against her previous employer, with her new employer, until she had commenced employment with her new employer.

The applicant did however inform her new employer of the constructive dismissal claim pending against her old employer, and the disciplinary hearing at which she was found not guilty.

Her new employer “did not respond favourably to this and instituted disciplinary action against the Applicant which led to her dismissal”.  The new employer charged the applicant with (1) “Failure to disclose information relevant to your employment with Imperial in that you have known of the adverse relationship that you have with Aveng Trident Steel at the time of our appointment with Imperial and that you failed to disclose your adverse relationship with Aveng Trident Steel, the latter which prevented you to fulfil your contractual employment obligation as a Project Manager pertaining to the Aveng Trident Steel contract” and (2) “adverse relationship with Aveng Trident Steel in that you have an adverse relationship with Aveng Trident Steel, the latter which prevents you to fulfil your employment obligations as a Project Manager pertaining to the Aveng Trident Steel contract.” She was found guilty and dismissed. The applicant challenged the fairness of her dismissal at the CCMA, which held that the dismissal was “for a valid and fair reason. The failure by the Applicant to disclose an adverse relationship that she had with the Client (Trident Steel) [7] damaged the trust component that is corollary to an employment relationship”.The Labour Court held that “it cannot in my view be said that the so-called non-disclosure of the adverse relationship amounted to any form of misrepresentation on the Applicant’s part, nor constituted misconduct which became a dismissible offence”.  In yet another related judgment, the Labour Court in Galesitoe v CCMA and Others [2017] 7 BLLR 690 (LC) held “Accordingly it is not unreasonable to ensure that a person applying for the senior level of post in question would have realised that the nature of his relationship with his former employer was a material consideration for his prospective new employer and could affect his employment prospects. This would give rise to an obligation to disclose…”.  The Labour Court continued that the failure to disclose must pertain to material information, “at least in the sense that the prospective employer would have conducted its own enquiry into the relevant facts and determined eligibility or sustainability for employment as a consequence”.

First Quantum Minerals Limited

First Quantum Minerals Limited

Tony Healy & Associates is our go to labour consultants.  I recommend them for their pragmatic and value for money solutions to labour issues.

Eurita Swarts

HR Manager, First Quantum Minerals Limited

Covid-19 and the Workplace: The Story So Far

Covid-19 and the Workplace: The Story So Far

It’s hard to find the words to adequately describe the impact that Covid-19 has had on our lives, as well as its likely impact for the foreseeable future. Workplaces are undergoing their own revolution, as new, novel and unprecedented challenges build.

The well-intended UIF TERS benefits have, by and large, been successful, notwithstanding a glut of administrative glitches flowing from an overburdened Department of Employment and Labour.  Workplace health and safety has been catapulted, front and centre, into the headlights of employers, who face a myriad of new challenges.  Workplace modelling is also now centre stage.  Social distancing works in some workplaces, but less so in others.

Our national client base is diverse, and we have observed how Covid-19 has impacted all sectors, with some experiencing brutal consequences.

Our hospitality industry clients have, perhaps, been hardest hit.  Hospitality was the first sector to be badly affected, and will be the last and slowest to recover, especially that segment of the sector with large foreign, international guest exposure.  As things stands, many hotels have been closed for almost two months, and may not reopen-open until October 2020.  Some European based airlines only expect to reach 80% of pre-Covid capacity by 2023.

Most readers will have had first-hand experience of the devastating impact of Covid-19 on jobs.  We have two specific observations on this.  Firstly, many of our clients are retrenching due to the severe economic impact Covid-19 is having on the viability of their businesses.  A second observation, which few anticipated, is that some employers less prejudiced by Covid-19, are none the less retrenching, as they have come to realise that, as staff are gradually returning to work, they are in fact overstaffed, and can get by without all employees returning.

Most employers elect to offer staff voluntary retrenchment packages, before implementing section 189, or 189A, of the Labour Relations Act. Perhaps, unsurprisingly, our clients who have done so have had a higher number of voluntary retrenchment applications, than would otherwise have been expected.  This can largely be attributed to two things.  Firstly, as time goes by, households are finding it increasingly difficult to manage their cash-flow, as many are on reduced income.  For this reason, they are choosing to ‘cash-in’ on the enhanced severance payments associated with voluntary retrenchments, to stabilise their household cash-flow.  Secondly, retrenchment volunteers often apply as they fear subsequent unilateral retrenchment process, with a less attractive severance pay formula.

Retrenchments processes can be initiated, as long as there are adequate measures taken to ensure that the required consultation process can take place.

The CCMA opened its offices yesterday, since closing in late March 2020. Time will tell how they adapt. In fairness, the CCMA has an unenviable task. The significant case backlog, occasioned by the national shutdown, will not be erased quickly.

We represent clients at the CCMA throughout the country.  The smaller CCMA offices such as Sabi (Mpumalanga) can probably adapt more quickly than the ever-busy Johannesburg office.

With the move to lockdown level 3 on 1 June 2020, most sectors will reopen.  We anticipate numerous challenges. Employers are advised, in addition to ensuring compliance with sanitisation and social distancing measures, to have each returning employee complete, and sign, a return to work Covid-19 preparedeness induction documentation, to confirm that the induction has been completed, and that the employee fully understands their responsibilities in the newly configured workplace.

Labour Relations – The First Hundred Days After Lockdown

Labour Relations – The First Hundred Days After Lockdown

Yip, these are historical times. As things stand, the lockdown will be uplifted from 1 May 2020, maybe. As has been the case in our sector of labour relations consulting to employers across the country, and indeed many others, the hitherto lesser known benefits of working remotely, have been revealed to our own consultancy, and our clients alike. But more of that in future articles.

For now, the world of work has, like the rest of society worldwide, received a body blow of the like we have never seen before, and are hopefully unlikely to see again any time soon. The Covid-19 pandemic has already pole-axed thousands of jobs, and is likely to continue to do so, in our estimation, until at least the second quarter of 2021.

During the lockdown, our firm’s interaction with clients has, in the main, been dominated by the UIF TERS benefit application process, and retrenchments, not to mention putting the final touches to the launch of our first online training workshop “Managing discipline & dismissal at the workplace” (watch this space …).

But what can we expect the labour relations environment to look like during the first hundred days after the national lockdown? We think that the hot topics in that first hundred days are already quite apparent.

First and foremost is the health and safety of staff. Employers have a duty and statutory obligation to protect staff in the face of Covid-19. This will require a thorough audit of all health and safety practices, procedures and personal protective equipment.

Next, the CCMA and Bargaining Councils, together with the labour courts, have a massive backlog to deal with. Our guestimate is that the CCMA alone will have a backlog of approximately 20 000 cases, of which approximately 16 000 will be unfair dismissal cases. Tag that onto an already burdensome 850, or so, cases being referred to the CCMA daily across the country, and you can immediately begin to fathom the challenge ahead. Of course, there will be far fewer misconduct, and even incapacity, related dismissals, and therefore related disputes, referred during the lockdown period, but the raft of retrenchments during the lockdown period may more than compensate for the lesser number of misconduct and incapacity disputes during the same period. Time will tell. Regardless, the cases set-down for the lockdown period will also add to the backlog. The CCMA will no doubt be aware of this and already planning its contingencies.

Perhaps the most dominant feature of the labour relations environment during the first hundred days post-lockdown, will be inevitable widespread retrenchments and short-time. There will no doubt have been a number of employers who have retrenched, or started retrenchment consultations, during the lockdown, relying on section 189, or 189A of the Labour Relations Act. We have advised our clients not to do so however, in the understanding that when all is said and done, and regardless of the availability of rock-star technology enabling virtual face-to-face communication, many employees don’t have access to such technology, and besides, whether we like it or not, there are question marks over the ethics of retrenching employees remotely. Some employers, on the other hand, may have been faced with no other option, given their financial plight. None the less, we have encouraged our clients not to be the test case on this issue.

That said, the upliftment of the lockdown will present employers with the opportunity to initiate section 189 and 189A Labour Relations Act processes. The socio-economic impact of doing so is obvious. Yet many employers will literally have no other option, if they wish to keep their doors open. Let’s not forget, many companies won’t be reopening. A huge number that do, in some sectors more than others, will be retrenching, and/or placing staff on short-time. Employer labour consultancies like ours have already been briefed by clients on the commencement of statutory retrenchment procedures the very second the lockdown is uplifted.

Finally, expect turmoil in the public sector with the tightening of Treasury’s belt, especially in light of the impact of Covid-19 of the fiscus.

There you have it, our take on the labour relations landscape in the first hundred days after lockdown.

Musings of a labour relations consultant during the Covid-19 disaster

The Covid-19 developments have taken our breath away.

My personal Covid-19 period memory bank takes me back to a flight back to South Africa from Frankfurt in mid-January 2020, when most of us were pretty oblivious to the impending drama that was about to unfold.  I’d missed my flight and had to spend twenty-four hours at Frankfurt airport before catching a flight home the following evening.  Up to this day, I ponder the level of risk I was unknowingly exposed to at the airport, for a relatively prolonged period of time.

On 15 March 2020, the President declared Covid-19 a national disaster in terms of the National Disaster Act (57 of 2002).  Later that day, a Sunday, a client of ours sent me a WhatsApp message, asking us for advice on how to deal with a national “mandatory shutdown” of the retail industry.  This is a national retailer, operating across the globe.  To be honest, this surprised me – “mandatory shutdown”?  This was reflected in my reply to him – “No indication of retail closures, if so, will be a combination of annual leave and negotiated unpaid closures”.  At the time, the prospect of a national lockdown was, apparently, highly improbable.

Within a mere eight days of receiving that client WhatsApp message, the President announced a twenty-one-day national lockdown, commencing at midnight on Thursday, 26 March 2020, a bold and decisive measure to limit the spread of Covid-19.

On 26 March 2020, the Minister of Employment Gazetted the Directive relating to the establishment of the Covid-19 Temporary Employee/Employer Relief Scheme (“TERS”).  By now, ‘TERS’ has become a colloquialism which was largely unheard of, a mere two weeks ago.  Yet it is set to be the difference between food on the table and starvation, for thousands of South Africans over the coming weeks.

Quite simply, TERS is a scheme to fund income short-falls during the national lockdown, to be paid from the National Disaster Fund.  Time will tell how efficient this well-intended scheme will work.  Predictably, our firm has been inundated with enquiries and request for assistance in the TERS application process from employers across the country.

Since then, to date, South Africa’s Covid-19 infection and death rates, whilst alarming in their own right, have not mirrored the awful infection and death rates experienced elsewhere.  We have also experienced the real economy in apparent free-fall, and this has bludgeoned jobs.  In the USA, for example, approximately 10 million applications for unemployment benefits were received in the last two weeks of March 2020 alone.

South Africa, and the rest of the world, has followed suit, with some predicting that our already outrageously high unemployment rate will climb at least another ten percent, or higher, within weeks.

To be honest, as a labour relations consultancy firm, at any one time, we are typically partnering clients in the implementation of retrenchments.  This should come as no surprise if one stops and thinks about the parlous state of our economy in recent years.

The impact of Covid-19 has, however, pretty much overnight, impacted job security on a massive scale, not experience in our lifetime, or perhaps at any time in history.  Many employers are clamouring to retrench staff any which way possible.  Some industries have clearly been more affected than others.

The hospitality industry has fallen off a cliff.  Hotels, bars and restaurants have closed. Many won’t reopen.  Most of our hotel clients have closed down for three months, irrespective of whether, or not, the lockdown period lasts that long.  They realise that hotel bookings are not going to be normalised for many months to come, regardless of how long the lockdown continues, or how long it takes for Covid-19 infections and deaths to be brought under control. Most anticipate a long, and slow, resumption in hotel and guest confidence levels, crucial to enable the hospitality industry to get out of the red.

Employers are in a conundrum in deciding how to navigate the unchartered waters of needing to reduce all costs, especially payroll, when in lockdown mode.  It will take a very brave employer indeed, to attempt to commence a retrenchment procedure, as provided for in the Labour Relations Act; the national lockdown prevents an employer from complying with the letter and spirit of consultation required in the Act.

That is why many employers have decided to offer staff voluntary retrenchment during the lockdown.  In most other circumstances, most employees would not consider the prospect of voluntary retrenchment enticing, and yet in the current circumstances, many employees are indeed applying for voluntary retrenchment to access funds to see them through the next few months. Employees applying for voluntary retrenchment understand that they would otherwise qualify for UIF TERS benefits, but only up to a maximum of 60% of their salary, if they are lower paid workers.

The world of work is going to be a wild ride for quite some time to come.

No severance pay is payable if employee declines reasonable alternative employment

No severance pay is payable if employee declines reasonable alternative employment

It may sound unfair, or unreasonable, but employers are not obliged to pay employees who are retrenched, severance pay, if they refuse to accept an offer of alternative employment with their current employer or another employer, when being retrenched.  This is specifically provided for in sections 41(2), and 41(4) of the Basic Conditions of Employment Act.

Employees are, in law, entitled to a minimum of one week’s severance pay for each completed year of continuous service with the same employer, when retrenched.   However, the employer is not obliged to pay severance pay if an employee unreasonably refuses to accept an offer of alternative employment.

In 2014, the Cape Town Labour Court, in Argent Steel (Pty) Ltd t/a Gamid George v Tracey Ann Lancaster & 3 others (case number C541/2014) made reference to the landmark judgment in “Astrapak Manufacturing Holdings (Pty) Ltd t/a East Rand Plastics (2014) 35 ILJ 140 (LAC), with particular reference to Irvin and Johnson Ltd v CCMA (2006) 27 ILJ 935 (LAC), reasonableness of a refusal to accept an offer of alternative employment should be assessed within the context of the following factors and principles where (a) an employer arranged alternative employment for an employee and the employee rejected the alternative employment for no sound reason, but simply in order to take the severance pay, that payment should not be paid to such employee; (b)the purpose of these provisions was to discourage employees from unreasonably rejecting offers of alternative employment arranged by their employers simply because they might prefer cash in their pockets in the form of severance pay; (c) if an employer offers an increased amount or, at the very least, the same amount, viewed within the context of the specific conditions of employment that cannot on any reasonable basis be taken as more onerous than that which existed prior to the retrenchment exercise, and if an employee refuses to accept such an offer, that refusal is then unreasonable;

(d) the purpose of the BCEA, would be subverted, where a Court finds that, notwithstanding an equivalent offer, at the very least, an employer would be compelled to pay severance packages; (e) if there is a reasonable and similar position offered at a similar salary, then the refusal to accept same will negate the necessity to pay a severance payment to that employee; (f) thus, the refusal must be justifiable and reasonable in order to lay claim to the severance payment, and there would no necessity to pay any severance payment if in fact the offer of alternative employment was fair and reasonable in all the circumstances, inclusive of a transfer from one region to another; (g) similarly, a refusal to accept an offer of alternative employment in circumstances where the employer still need the skills and expertise of the affected employees, and the latter insists that they be offered the same positions or positions at the same or higher level, is unreasonable”, so held in Pretorius v Rustenburg Local Municipality and Others (2008) 29 ILJ 1113 (LAC).

It makes sense that an employer should not be compelled to pay an employee severance pay in circumstances in which the employee is offer alternative employment which would not materially prejudice them.   For example, if an employee whose position has been made redundant, is offered alternative employment which does not actually, or materially, impact on his or her remuneration, working hours and status, which they decline to accept, the employer is not obligated to pay the employee being retrenched, severance pay.

When all is said, and done, every case needs to be assessed on its merits; no two cases are the same.  It also follows that if an employee reasonably refuses an offer of alternative employment with the employer, or another employer, because the working hours are longer, their remuneration is less, or the position would require them to relocate, the employer would be obligated in law to pay the employee severance pay no less than one week’s remuneration for each year of continuous employment.

Not every case of assault should be met with dismissal

Assault is an understandably emotionally charged, category of assault, which more often than not, justifies dismissal.  It need not however always warrant dismissal.

In the arbitration award in SACCAWU obo A. Carolus v Freshmark (Pty) Ltd [Case number 16835-18], it was noted that “There is no doubt that the rule against assault is an important one. An employer is obliged to provide its employees with a safe working environment and an assault by one employee on another (whether a permanent employee or contracted worker) causes a breach of this duty. For this reason, the Code of Good Practice: Dismissal (Schedule 8 to the Labour Relations Act 66 of 1995) lists assault as one of the valid grounds for dismissal for a first offence, with no requirement for prior warnings”.

In Bombela Operating Company (Pty) Ltd and Jackson Mthukwane, NO & others JR 1922/13 the Labour Court held that an “assault takes a variety of forms, and the legal requirements are the intentional and unlawful application of physical force, however slight, to the body of the complainant, or the threat that such force will be applied. In this case, there was such application of physical force. By its very nature, assault is a serious form of misconduct. This however does not imply that every case of assault should be met with dismissal, in that it acknowledges that defenses such as provocation may negate the unlawfulness of that conduct “. In this case, the Court concluded that the order of reinstatement should have been accompanied by some form of sanction, and upheld the reinstatement of the employee, ordering that he be issued a final warning, rather than being dismissed.

In a recent arbitration award (21 January 2020) the CCMA upheld the notion that whilst assault is clearly a form of gross misconduct, it will now always warrant dismissal.  The arbitration award in Petheni Andrews Mhlabeni v Rainbow Chicken Farms (Pty) Ltd [Case number NWRB2867-19], the employee, a machine operator, had been dismissed for assault.

One of the employee’s colleagues had grabbed him by the lapel of his coat, after which he then struck him in response.  As noted in the judgment, “The footage clearly shows (the colleague) grabbed (the employee’s) coat. (The employee) retaliated by striking (his colleague) with both hands on either side of his head. Both then disengaged. Had (the employee) then struck (his colleague) I would have no hesitation in agreeing with the Respondent that dismissal was the appropriate penalty. However, I am required to find whether the sanction of dismissal was fair in these circumstances”.

That said, John Grogan in his book, Dismissal Juta & Co. Ltd Second Edition 2014 states that, “assault is generally accepted as a valid ground to dismiss the assailant? The legal requirements for the offence are the intentional and unlawful application of physical force, however slight, to the body of the complainant, or threat that such force will be applied. In the employment context, factors that should be considered before imposing a sanction on an employee for a proven assault include the circumstances in which the assault took place, the degree of force used or the gravity of the threat, the relationship between the employee and the complainant, and the effect of the assault on the interpersonal relations and the business of the employer.”

Like pretty much all misconduct cases, each individual assault case needs to be assessed on its own merits.  No two cases are the same; they may be at face value, but on closer scrutiny, each case has its own unique set of circumstances.

Dismissal for assault was also considered too harsh in the MEIBC arbitration award in NUMSA obo A. Ntlabezi v Betafence SA (Pty) Ltd [Case number MEWC 10814] in which it was held that “on a balance of probabilities that Ntlabezi is guilty of a minor assault after extreme provocation from Swartz. However, such provocation was not taken into account by the employer and a sanction short of dismissal should have been applied”.

Professional advice should be sought if in doubt as to the seriousness of such cases.

Trade unions must operate within their registered scope

Trade unions must operate within their registered scope

Section 96 of the Labour Relations Act outlines the steps to be followed when a trade union or employer’s organisation wishes to register with the Department of Labour.  This process is relatively straightforward and includes the completion of a prescribed form, the submission of, for example, the trade union’s Constitution, and “any other information that may assist the registrar to determine whether or not the trade union or employer’s organisation meets the requirements for registration”.  Once registered, there are various ongoing requirements to remain registered, including the keeping of accounting records and the conducting of annual audits.  In addition, unions have a duty to keep certain records, including a list of all its members, the minutes of meetings as well as ballot papers, for a period of three years from the date of every ballot.

Provision is made in Section 101 of the Labour Relations Act for the changing of a trade union’s Constitution or its name.  This again is a relatively simple process, and   may include circumstances in which the trade union wishes to change or replace its Constitution.

One of the key components of any trade union’s Constitution is a description of its scope.  A trade union’s scope describes, in simple terms, the industries in which the trade union seeks to operate, and this is typically listed in an annexure to a trade unions constitution.  It follows that when a trade union drafts a Constitution that specifies the industries and sectors in which its scope of operations is to operate, it is obligated to limit its activities to those specific sectors and industries, and not stray into other, non-specified sectors.

One would expect a trade union, and indeed and employer’s organisation for that matter, to stay in its lane when it comes to conducting its day to day activities in the industries and sectors which it identifies as its jurisdiction, in its Constitution.  For example, trade union registered to be active in the hairdressing industry should not seek to represent members in the mining industry.

The fact of the matter is however, that quite frequently, trade unions operate in industries and sectors outside the list of industries and sectors listed as their scope in their Constitution.

This very issue was addressed in a Labour Appeal Court judgment handed down in mid-2019 in the case of Lufil Packaging (Isithebe) (Pty) Ltd v Commission for Conciliation, Mediation & Arbitration & 2 Others (Case number DA8/2018).

In this case, it was held that “a trade union cannot create a class of membership outside the provisions of its constitution, and if they purport to do so, they act in excess of their powers and the act has no validity”.  A purported decision by a union to admit a member who is not eligible under its constitution to become a member is not a mere internal decision which is immune from attack by an affected employer.  Such a decision is ultra vires and invalid and as such, susceptible to challenge by the employer from whom organisational rights, based on the membership concerned, is sought.

So, what we saw in this case was the employer challenging the union’s scope in that it was successfully argued by them that the printing and packaging sector in which it operates does not form part of the union’s scope.

NUMSA (National Union of Metalworkers of South Africa) approached the employer “asking it to provide stop-orders for the deduction of union fees for its (alleged) members who were employees” of the employer.  The employer refused to recognise NUMSA by virtue of the fact that NUMSA had registered scope (“metal and related industries), specified in its constitution, which fell outside of the employer’s scope of business.  More specifically, the employer operated in the printing and packaging sector, not in metal and related industries.

The Lufil Labour Appeal court judgment held that “trade unions at common law have only those powers and capacities that are conferred on them by their constitutions.  The LRA required unions to determine in their constitutions which employees are eligible to join them and by necessary implication precludes them from admitting as members employees who are not eligible to be admitted in terms of the trade union’s registered constitution.  If it is shown that the persons concerned are precluded by the union’s constitution from becoming its members, any purported admission of such employees as members is ultra vires the union’s constitution and invalid”.

For this reason, it was held that “the employees on which (NUMSA) relied in alleging it was sufficiently representative could not be and thus were not, in law members of NUMSA, as they did not fall within the scope of the union in terms of NUMSA’s constitution”.  Put differently, Lufil operated in the printing and packaging sector, not the metal and related industries sector.