30+ years of labour relations consulting observations in SA

Our labour relations consultancy is in its 25th year, and this has inclined our team to reminisce over our journey, and prompted me to recall the trends and developments over time.  Labour relations is seldom viewed dispassionately.  It is a field which spans a multitude of collective and individual workplace interactions and experiences, from constructive relationship building initiatives to often sizzling adversarialism.

My graduation from UCT in the early 1980’s coincided almost exactly with the dawn of the present-day employment law, and labour relations regime which prevails today.  This itself may sound strange, especially if one recalls that apartheid was still at its height, and the release of nelson Mandela, and the dawn of a new democratic South Africa was over a decade away.  Even so, as early as the mid 1980’s, the concept of fairness in discipline and dismissal was already becoming prominent, as espoused by UNISA’s Professor Nic Wiehahn, a colourful character who was also renowned from his colourful neckties at the time.

It was also the time at which the so-called emerging Black unions began to increase in prominence, and display competent and powerful leadership, with Cyril Ramaphosa’s National Union of Mineworkers leading the way.  Organised labour was still none the less highly oppressed by the P W Botha Nationalist government.  At the time, and quite understandably, organised labour would put employers under enormous pressure to send a ‘telegram’ to the Minister of Police, to demand the release of union officials who had been detained without prosecution, for simply being union officials.

Over time, the then ‘Personnel Department’ morphed into being referred to in various ways, including the ‘Human Resources Department’, the ‘Human Capital Department’ and more recently, “People and Culture’, all of which are labels to describe the team within an organisation charged with various responsibilities including staff administration, training and development, recruitment and selection, employee wellness, and of course, labour relations.

In our view, the trade union landscape his significantly changed over time.  There is no doubt that the evolution of COSATU in the mid-1990’s brought greater cohesion to the realm of organised labour.  Alignment with the ANC added impetus to COSATU’s breadth of influence.  But it didn’t last.  Even though union membership in the Public sector remains high, the split within COSATU, resulting in the formation of rival union federation SAFTU, it has negated the role of trade unions in the Private sector, which currently has about one in eight employees being union members. Overall, only about twenty five percent of employees are union members.

Another consequence of the split in COSATU is the increase in numbers of trade unions, of a lesser size.  This in turn has led to an increase in union rivalry, and by and large, generally less effective trade unionism.

Trade unions have, from the very beginning, suffered from a glut in competent leadership, due primarily to the fact that competent trade union leaders are frequently fast-tracked into governmental positions.

No analysis of the SA labour relations landscape would be complete without a look at the CCMA, and bargaining Council dispute resolution centres.

The CCMA is probably approaching nine hundred labour disputes being referred to it every working day.  About seventy five percent of those cases are ‘resolved’ or ‘conciliated’, either because one or both parties are fearful of losing at arbitration, or the employer is willing to pay the ex-employee a settlement sum so as to avoid the nuisance factor associated with arbitration.

The introduction of minimum wage legislation and the recent appointment of the CCMA to address the non-payment of salaries, will probably see one thousand labour disputes being referred every working day, in the not too distant future.

Employers still lose nearly fifty percent of all arbitration hearings.  This percentage is almost certainly skewed by the SMME sector who fare far more poorly than larger, more sophisticated employers.  We remain of the sincere view that there is no reason why employers should have poor outcomes at the CCMA, if they apply the fundamentals of our discipline and dismissal protocols.

Perhaps the biggest challenge facing employers in the labour relations space is that they frequently don’t know what they don’t know.  This results in often fatal flaws being made in, for example discipline cases, which cannot then subsequently be reversed. It must still be borne in mind that approximately eighty percent of all labour disputes are discipline related, and competence in managing discipline, misconduct cases, requires close attention and training.

And finally, increasing employment law continues to decrease labour flexibility.  Some would also argue that our employment law regime is over regulated, and too job security, than job creation focussed; you can go ahead and put our firm in that camp.

Suspending employees pending finalisation of investigations and hearings

Employees can be suspended from work in either of two ways.  The two species of employee suspension are precautionary suspension and punitive suspension.  Punitive suspension occurs when an employer offers an employee a period of suspension without pay, as an alternative to dismissal, when dismissal would ordinarily be the only logical sanction, but extraordinary mitigating factors suggest that the employee is deserving of an option to retain his or her employment.

Precautionary suspension is quite different.  There are times when an employer, quite legitimately, is of the view that an investigation into suspected misconduct would benefit from the suspected offender not being at work.  There are numerous reasons why an employer may come to such a conclusion.  For example, the employer may have good reason to conclude that the employee in question may interfere with witnesses and evidence.  It is also quite possible that the employer may not know for sure whether the employee is entirely trustworthy.

This is when the precautionary suspension option becomes available to employers.  It must be borne in mind that an employee who is suspended as a precaution, must be fully paid whilst suspended, for the simple reason that they have, at that point in time, pending the outcome of an investigation, not been found guilty of any misconduct what so ever.  In fact, they have not even been charged with misconduct at that time.    In Sappi Forests (Pty) Ltd v CCMA & Others [2009] (LC), the Labour Court held that it was normally unlawful and unfair to suspend an employee without pay pending a disciplinary enquiry.  The only time this would not be the case is when there is a collective agreement permitting unpaid precautionary suspension, or it is permitted in terms of legislation, as is the case in certain areas of the Public sector.

One occasion when an employer need not pay an employee during a period of precautionary suspension is when the disciplinary hearing must be postponed due to the employee failing to attend the disciplinary, without a valid reason for not doing so, whilst on precautionary suspension.

In the case of SAEWA obo members v Aberdare Cables [2007] (MEIBC) it was held that the employer does not have to pay an employee who is on precautionary suspension from the date he or she requested for postponement. The rationale for the decision was to avoid for situations where the employee may unreasonably delay the disciplinary hearing while earning the salary.

An employer decision to invoke its right to precautionary suspension, typically does so pending the outcome of an investigation into misconduct, and/or pending the outcome if a disciplinary hearing.

There are however certain simple steps to be followed when doing so.  It has become well stablished in our law that procedural fairness requires employers to afford employees an opportunity to oppose their proposed precautionary suspension, prior to it being confirmed by the employer.

It has been widely held that the suspension of employees pending disciplinary action is permissible only when reasonable grounds exist for suspecting that the employee is guilty of serious misconduct and that employee’s presence may compromise preliminary enquiry, and after the employee has been given opportunity to make representations.

The importance of complying with a fair procedure was emphasised by the Labour Appeal Court in MEC for Education: North West Provincial Government v Errol Randal Gradwell (2012) (LAC). It held that an opportunity to make written representations to show why a precautionary suspension should not be implemented is sufficient compliance with the requirement of procedural fairness.

In the Labour Appeal court case of Member of the Executive Council for Education North West Province v Gradwell (2012) (LAC) held that “The right to a hearing prior to a precautionary suspension arises therefore not from the constitution PAYA or as an applied term of the contract of employment but is a right located within the provisions of the LRA the correlative of the duty on employers not to subject employees to unfair labour practises.  That being the case the right is a statutory right for which statutory remedies have been provided together with statutory mechanisms for resolving disputes in regard to these rights.”

So in conclusion, in  the Labour Court, case of POPCRU obo Masemola and others vs Minister of Correctional Services (2010), fairness requires the following before suspending an employee pending an investigation or disciplinary action (a) the employer has a justifiable reason to believe, prima facie at least, that the employee has engaged in serious misconduct, (b)   there is some objectively justifiable reason to deny the employee access to the workplace based on the integrity of the pending investigation into the alleged misconduct or some other relevant factor that would place the investigation or the interests of the affects parties in jeopardy and (c) that the employee is given the opportunity to state a case before the employer makes a final decision to suspend the employee.

Can employers object to employee t-shirts?

Can employers object to employee t-shirts?

How far can employers go in banning employees from wearing t-shirts which the employer considers inappropriate, and can such a ban ever infringe upon a union member’s right to freedom of association?  This was the question posed in the Labour Court case NUMSA obo members v Transnet Soc Ltd (case number JS427/15).

At the commencement of this judgment, the dispute was succinctly stated to be, “Is it legitimate for an employer to prohibit the wearing of union t-shirts in the workplace? The applicant (NUMSA) contends that such a prohibition would breach the rights of expression and freedom of association of its members. The respondent (Transnet) contends that there is no substantive right to wear a union t-shirt in the workplace as an element of the exercise of the right of expression or freedom of association, or on any other basis, except with its consent”.

In October 2014, the employer introduced a corporate and protective clothing policy which prohibited the wearing of ‘political party clothing or non-recognised union regalia’ during working hours.

Of particular importance in this case was the policy wording that “It is prohibited to wear clothing of any political party or union that has no organisational rights within the workplace…”.  This of course meant, inter alia, that members of the two recognised trade unions, SATAWU and UTATU, could wear union t-shirts, but unrecognised trade unions, such as NUMSA, could not.

Thereafter, with effect from 1 June 2015, this policy was revised to broaden the prohibition to the wearing of clothing “or any regalia of any sort of any political party or trade union…”.

The employer argued that the blanket ban on the wearing of union t-shirts was, in essence, to avoid union rivalry which had the potential to spawn conflict, or as recorded in the judgment, “The new policy, introduced in 2015, prohibits all employees, regardless of union affiliation, from wearing union t-shirts on account of its intent to maintain and ensure a peaceful environment in the workplace. The rationale for the t-shirt ban, he (the employer) said, was one related to risk management”.

The court contended that “There are two issues to be decided. The first is whether the workplace rule banning employees from wearing ‘clothing or any other regalia of any sort of any political party or trade union …during working hours’ is constitutional, lawful, reasonable and valid. Put another way, the issue is whether through its conduct in prohibiting the wearing of union t-shirts in its workplace, Transnet has infringed the protections accorded by the right to freedom of association enshrined in Chapter II of the Labour Relations Act, 66 of 1995, (LRA). The second is whether Transnet has applied the rule selectively by not taking disciplinary action against members of other unions who despite the policy, continue to wear union t-shirts to work and if so, whether this differentiation amounts to an act of unfair discrimination against NUMSA’s members”.

The Court held “having regard to the interpretation of s 5 (2) (c) (iii) adopted by the Constitutional Court, in my view, the wearing of union t-shirts constitutes a lawful activity as contemplated by s 5 (2) (c) (iii). The imposition of the union t-shirt ban, with its underlying threat of disciplinary action for an infringement of the band, constitutes a form of prejudice proscribed by that provision. In short, the t-shirt ban is unlawful and invalid with reference to s 5 (2) (c) (iii)” and “the wearing of union t-shirts constitutes a lawful activity”.

The judgment continued, however, that the right to wear union t-shirts is not unlimited – “This is not to say that the exercise of the right to freedom of association by wearing a union t-shirt in the workplace is unlimited. One can imagine a justification on the basis of a significant threat to safety, and a number of other reasons. Indeed, Matlou gave the example in his evidence of employees engaged in work on tracks being prohibited from wearing red clothing, on account of signals being the same colour and the potential for confusion that may arise.”

That is not to say that the prohibition on the wearing of union t-shirts will always be unlawful.  The judgment continued that “I have no doubt that in appropriate circumstances, inter-union rivalry and any associated violence in the workplace may justify intervention by an employer in the form of a limitation on the wearing of t-shirts and union insignia (or even its prohibition in extreme cases)”.

But for now, the blanket banning of union regalia, under normal circumstances, is prohibited.

The 2019 labour relations outlook

2019 is going to be an interesting year in the South African labour relations environment.  There are a number of reasons for this.  To begin with, the evolution of the South African Confederation of Trade Unions (SAFTU) will continue to influence the labour relations environment by increasing union rivalry.

SAFTU is by no means in the same league as COSATU in either breadth of influence, or membership, but what it does do, and has done, is duplicate union presence within sectors.

Prior to the break-away of SAFTU from COSATU, there was, pretty much. One union per sector, and that was typically a COSATU union.  Things have changed.  SAFTU is now seeking to compete with COSATU in every sector, and that results in union duplication.  This has been particularly evident in the transport sector where the splintering of COSATU’s South African Transport and Allied Workers Union (SATAWU) has been quite significant, both in term of the SATAWU equivalent, and other new independent transports sector trade unions, all vying for a sector which was, up until quite recently, dominated by SATAWU.

The proliferation of trade unions in industry sectors breeds union rivalry.  It is already evident, and will continue to grow in 2019.  The old COSATU slogan of ‘one union one industry” is under severe strain, given the emergence of SAFTU, and the growing influence of FEDUSA.

This is not good news for employers.  Union rivalry is a challenge for employers in that it promotes a multi-union workplaces, which requires duplication of, for example, organizational rights agreement san collective bargaining, if unions elect not act in unison.

It can, as it has in the past, lead to workplace violence and worse, as unions compete for membership in the same workplace.

Unions are all too aware union rivalry, and this has led to an increase in demands for closed shop agreements to shut out competing unions.  This is made all the more challenging by relatively recent amendments to the Labour Relations Act which gives organizational rights previously reserved for majority unions, to minority unions.  This includes the deduction of union subscriptions, workplace access, and the appointment of shop stewards.  It is now quite possible, for example, for more than one trade union to have statutory shop stewards appointed in a single workplace.

New labour legislation, and amendments to key pieces of existing labour laws will also add complexity to the South African labour relations environment in 2019.

Let’s start with the Minimum Wage Act, and its’ Regulations. Approximately six and a half million workers will benefit from the introduction of the R20.00 per hour minimum wage, with a lesser sum being applicable to agricultural and domestic workers, at least for now.

The CCMA will be largely responsible for resolving disputes relating to the failure by an employer to pay the prescribed minimum wages.  It remains to be seen how the CCMA will manage this increased burden on its case load, when its resources are already severely stretched.

It is furthermore highly likely that there will be a multitude of applications lodged by employers to be exempted from paying the prescribed minimum wages.  The regulations governing the Minimum Wage Act appear to set out provisions for employers to be exempted from paying the prescribed minimum wages, which could spawn widespread minimum wage exemptions.  This has already caused disquiet amongst labour federations, although minimum wage exemptions are capped at no less than ninety percent of the applicable minimum wage, and are for a maximum period of twelve months.

Other new labour law developments include paternity leave and secret strike ballots, both of which are very significant.

In simple terms, men will now qualify for two week’s paternity leave, and adoptive parents are included in this benefit, although only applicable to one of the parents.

The introduction of secret strike ballots is to be welcomed.  This enables union members themselves to vote for, or against, embarking upon protected strike action, without fear of intimidation.  It also removes the almost carte blanche decision making which union officials had to prompt strike action.

A further component of the evolution of new labour legislation is the well-intended extension of advisory arbitration awards in labour disputes which warrant dispute resolution intervention when it is the public interest for such intervention.  The shortcoming however is that the efficacy of advisory arbitration awards is minimal, as they are not binding on the parties to the dispute.

So 2019 is expected to be another year of labour strife with increased turmoil.  For example, we expect the number of disputes referred to the CCMA to exceed one thousand a day before year-end, including minimum wage disputes.

Fasten your seat belt.

Employer retrenchment do’s and don’ts

Employer retrenchment do’s and don’ts

There are a whole host of reasons why employers retrench.  Whilst the most common reason will be some form of financial stress, the reason for retrenchment could be entirely unrelated to financial difficulty.

It could be said that employers either retrench to lose less money, or retrench to make more money.  Other grounds warranting retrenchment include automation, which replaces manual jobs, and simple organizational restructuring whereby the employer concludes that the business could continue to function, and even flourish.

It’s also important to remember that retrenchment, referred to as an operational requirements dismissal in the Labour Relations Act, is one of the three categories of dismissal in our law, with the other two being misconduct and incapacity.

It is helpful to understand there are, essentially, three steps to be followed in order to ensure compliance with the procedure to be followed, as outlined in sections 189 and 189A in the Labour Relations Act.

In short the three steps are (1) notify the employee the proposed retrenchment in writing, (2) consult with the employee before finalising any retrenchment decision, and (3) finalise the procedure by deciding if the retrenchment will be confirmed as proposed.

So when must the requirements of section 189 of the Labour Relations Act commence?  Well, quite simply, an employer must issue a potential retrenchee a notice of proposed retrenchment once the retrenchment is contemplated by the employer.  In practice, this means that the process must commence once the retrenchment is the most likely, or most preferred, employer option.

Employees are entitled to be represented during the consultation process by any registered trade union whose members are likely to be affected by the proposed retrenchments, a committee appointed to represent potential retrenchees, or a colleague.

Both the employer and the potential retrenchee are equally obligated to participate in the consultation process with a view to attempting to seek consensus on possible ways of avoiding the proposed retrenchment, delay the timing of the proposed retrenchment, or ways to mitigate the adverse effects of the retrenchment.

In addition, and importantly, the employer and the employee must also attempt to seek consensus on the selection criteria to be adopted in the selection of the employees to be dismissed.  If no agreement is reached on the selection criteria, fair and objective criteria should be adopted.  This means, for example, that subjective criteria such as the employee’s disciplinary records, cannot be used to select employees for retrenchment.  This is an important compliance issue, as was held in Singh v Mondi Paper (2000) 4 BLLR 446 “the selection process must rank as the most fundamental issue for scrutiny in order to determine whether the dismissal was fair or not”.

‘Last in first out’ is the most widely recognised fair and objective selection criterion in retrenchment.  However, selection may be based on the need for skills retention, in which case last in first out not a consideration.

The severance pay to be paid to potential retrenchees is also a matter for consultation.  Employers are required to pay no less than one week’s remuneration for each completed year of service, to a retrenched employee.  You can pay more, but you can’t pay less, without an exemption to do so.

It is not uncommon for employers to agree to pay retrenchees in excess of the one week’s remuneration for each completed year of service; however, an employer would typically not do so without ensuring, in return, that the employee agrees to sign a retrenchment agreement, thereby ensuring that the employee cannot subsequently claim unfair retrenchment.

Another factor to consider in most retrenchment scenarios, is the prospect of voluntary retrenchment.  Prior to selecting employees for potential retrenchment, an employer may open a window period within which employees may volunteer to be retrenched. It may sound unlikely that an employee would volunteer to be retrenched.  However, it does occur.  For example, an employee may have been planning to resign, or has been saving to start their own business venture, in which case the severance pay will come in handy.

When such a window period for voluntary retrenchments is opened, the employer would always reserve their right to accept, or reject, applications, based on operational requirements, and the need to retain certain skills.

Finally, section 189A of the Labour Relations Act is to be complied with in the case of more large scale retrenchments, and becomes applicable, in certain circumstances, in retrenchments with employers with more than fifty employees.

Weed and the Workplace, what now?

Weed and the Workplace, what now?

On 18 September 2018, the Constitutional Court handed down its much publicised cannabis judgment which has far reaching implications in regards the private cultivation and/or use of cannabis.  This is the Minister of Justice and Constitutional Court Development and Others v Prince (Clarke and Others intervening) (CCT108/17) [2018] ZACC 30.

 The crux of the judgment is encapsulated in paragraph 109 thereof, which states that “the effect of the above reading-in is the following: (a) an adult person may, use or be in possession of cannabis in private for his or her personal consumption in private, (b) the use, including smoking, of cannabis in public, or in the presence of children or in the presence of non-consenting adult persons is not permitted, (c) the use or possession of cannabis in private other than by an adult for his or her personal consumption is not permitted, and (d) the cultivation of cannabis by an adult in a private place for his or her personal consumption in private is no longer a criminal offense”.

As such, the use, possession and cultivation of cannabis is now permitted in one’s home or a ‘private dwelling’.

This has widespread implications for society at large, including the workplace.  This judgment should not be interpreted as a legalization of cannabis.  On the contrary, it is a judgment which decriminalizes the cultivation, possession and use of cannabis in private.

As far as the workplace is concerned, this judgment has important workplace-related implications, more especially in the areas of misconduct, incapacity, and occupational health.

Employers would be well advised to review existing disciplinary and drug related policies to ensure that this judgment has no negative impact on the workplace.  This would include a reconfirmed prohibition on the use of drugs (including cannabis) and alcohol, confirming that usage would amount to summary dismissal.  Important in all matters of this nature is the existence of a rule, and proof that employees have knowledge of the rule.

It should be remembered that the mere presence of a drug in an employee’s bloodstream does not as and of itself, prove that the employee is under the influence of the drug in question.  The same applies to alcohol.  What has to be determined is whether the consumption of a drug, for example cannabis, has resulted in the performance, conduct and behavior of the employee being impeded, to the extent that they are a safety risk to themselves and/or others, and are incapable of meeting their minimum performance requirements.

Section 7(1) of the Employment Equity Act (55 of 1998) addresses medical testing at work, and stipulates that “Medical testing of an employee is prohibited unless (a) legislation permits or requires the testing; or (b) it is justifiable in the light of medical facts, employment conditions, social policy, the fiar distribution of employee benefits or the inherent requirements of the job”.

Given key employer occupational health and safety obligations, an employer would be compelled to test an employee suspected of being under the influence of cannabis, or any drug or alcohol).  The safety of employees cannot be compromised.

Employer policies relating to the use, possession and cultivation should be clearly drafted, confirming that the workplace is not a ‘private dwelling’.    Such policies should also clearly confirm that employees who are, for example. Cannabis dependent, should approach the employer in confidence, so as to initiate a process which recognises this dependency as a case of incapacity, rather than misconduct.

In addition, especially in workplace environments which are inherently dangerous, emphasise the fact that the use, possession and cultivation of cannabis amounts to an ct of gross misconduct, sanctionable by way of summary dismissal.

In short, it would be prudent to update existing drug policies and disciplinary codes to accommodate this recent Cannabis judgment.  The prohibition on the use, possession and cultivation of cannabis at work is premised upon the fact that a workplace is a public, not private, place, and employer’s would be well advised to emphasise this in amended policies.

So there we have it.  This judgment is not a license for employees to use, possess and cultivate cannabis at work.