Public Newsletter
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Worklaw subscribers receive a monthly newsletter containing commentary on the latest labour law cases and trends. This newsletter contains an article which deals with "Exposing wage discrimination through new Employment Equity reporting rules". We also discuss three new cases: the first case, from the Constitutional Court, asks whether an employee can by-pass lodging a complaint to a labour inspector under the BCEA and go directly to the Labour Court. The second case deals with the effect of changes in policy on retirement age. The third case discusses whether an employee can lodge a claim in both the CCMA and Labour Court over effectively the same dispute.
This public newsletter is a free edited version of the subscriber newsletter.
RECENT CASES
By-passing labour inspectors to get to the Labour Court
Employees alleged that the employer had, in contravention of s 34 of the BCEA, deducted tax from their salaries in respect of company cars. They instituted proceedings in the Labour Court for an order compelling the employer to refund them for the deducted amounts and an interdict restraining the employer from continuing to make the deductions in future.
This case concerns whether the Labour Court's jurisdiction under the BCEA is deferred until a matter has been dealt with by a labour inspector, appointed in terms of s 63 of the BCEA.
The Labour Court concluded that it had no jurisdiction to deal with the claim. It ruled that it lacks the competence to directly enforce provisions of the BCEA unless those provisions form part of contractual terms envisaged in s 77(3) of the Act.
Unhappy with this outcome, the employees sought leave to appeal but their application was also dismissed. And their petition to the Labour Appeal Court suffered the same fate for the reason that there were no prospects of success. The employees then approached the Constitutional Court for leave to appeal in Amalungelo Workers' Union and Others v Philip Morris South Africa (Pty) Limited and Another (CCT20/18) [2019] ZACC 45 (26 November 2019).
The Constitutional Court noted that the BCEA establishes a mechanism in terms of which compliance with the Act is monitored and enforced. That mechanism is administrative in nature and the labour inspectors are pivotal to its functioning. The question is whether they have the power to resolve disputes where they have arisen or to determine legal claims.
The functions of labour inspectors are listed in section 64(1). The Constitutional Court said that none of these functions cover dispute resolution and it does not appear to be competent to refer a dispute to a labour inspector. Although a labour inspector is authorised to issue a compliance order, these orders could be issued for a singular purpose of securing compliance with employment law. If compliance was secured by means of an undertaking from an employer, the need for a compliance order does not arise.
The ConCourt's conclusion was this: Determining disputes or adjudicating legal claims arising from the BCEA is the function of the Labour Court. This right cannot be exercised by a labour inspector who may be impartial but not independent.
Our comment is that the significance of this case goes beyond the BCEA to the EEA and other labour legislation which also requires the use of labour inspectors. Because the justification used by the Court is that none of the functions of inspectors in s 64 of the BCEA covered 'dispute resolution', the Court has chosen a conception of 'dispute resolution' which goes beyond the 'compliance undertaking-compliance order-Labour Court' enforcement system envisaged in most labour legislation.
A number of cases decided in recent years may now be suspect as a result of this CC judgment. For example in Dudley v The City of Cape Town [2008] 12 BLLR 1155 (LAC) it was held that it is not competent to institute Labour Court proceedings for a breach of Chapter III of the EEA, prior to exhausting the enforcement procedures in Chapter V. In Thekiso v IBM South Africa (Pty) Ltd (Labour Court Case number: JS415/05; judgment delivered October 2006) it was held that the EEA does not entitle employees to legally challenge that the employer has breached the Act`s affirmative action sections. In PSA obo Members v Minister of Health and Others (J3106/18) [2018] ZALCJHB 345 (12 October 2018) it was held that the Labour Court has no jurisdiction as a court of first instance in enforcing obligations under OHSA.
Policies which change the retirement age
There have been a steady flow of cases in which an employee challenges what the employer says is the "normal or agreed" retirement age. If the employer cannot prove that there is a normal or agreed retirement age, the termination could be an automatically unfair dismissal in terms of s 187(2)(b) of the LRA.
In another recent case dealing with retirement, the retirement age had changed when terms and conditions of employment were amended. The employee's letter of appointment in 2008 was silent about the retirement age but specified that working conditions may change over time.
At the time of the employee's appointment there were generalised 2007 terms and conditions which provided for retirement at 65. But in 2009, 2012 and 2015 terms of conditions were amended to set retirement at 60. The core purpose of the changes was to specify that the 60 year retirement age applied to all employees of Legal Aid SA regardless of their seniority, length of service etc, due to its operational needs.
This process of changing the terms and conditions was not unilateral, but rather multilateral and consultative, with employees afforded numerous opportunities to participate in the process and to safeguard their individual interests. It was not in dispute that the consultative process was implemented prior to the introduction of the 2009, 2012 and 2015 amended terms and conditions.
The employee made no protest at the time of the changes, but later contended that the employer had unlawfully terminated his contract when he reached the retirement age of 60. He launched proceedings in the Labour Court in terms of s 77(3) of the BCEA. The Labour Court ordered his reinstatement on the grounds that he was entitled to retire at the age of 65, and that Legal Aid SA breached his contract of employment by terminating his employment on turning 60.
On appeal to the Labour Appeal Court in Legal Aid South Africa v Theunissen (CA14/18) [2019] ZALAC 71 (25 November 2019) it was held that in the absence of any express entitlement to retire at the age of 65 years in his appointment letter, the position was governed by the employer's terms and conditions, as amended. Once the 2007 terms and conditions had been revised, the employee no longer had any entitlement to retire at 65 years. Instead, the retirement age was set at 60 years in the revised terms and conditions.
The LAC found no fault with the conduct of the employer. It put in place the revised terms and conditions in furtherance of its statutory objectives, and only did so after an extensive consultation process. The approved terms and conditions accommodated comments received by employees and the representative trade union, and were only made effective pursuant to ministerial approval. The employee was given notice well in advance of the termination of his employment when reaching the retirement age of 60.
The learning from this judgment is that it is a mistake for employees to believe that the terms of their employment are 'written in stone' at the date of their employment according to their initial letter of appointment. An employer, through consultation, can fairly amend its policies from time to time for good reason, and employees need to participate in consultations around these issues rather than remain silent in the face of proposed changes, with the intention of attempting to challenge the changes later.
Having a second shot in another court
Let's start with a confusing legal term: a "cause of action" describes the legal grounds on which a person brings a case. The facts of the case could point to the cause of action being an unfair dismissal or a breach of contract. Other facts could point to a delictual claim for negligence. The way you frame your cause of action often determines which forum (eg a court or the CCMA) has jurisdiction.
A recent case illustrates that it is possible to have two causes of action arising out of what seem to be the same facts. The employee referred an unfair dismissal dispute to the CCMA in which he claimed that his dismissal by Pinelands High School was procedurally and substantively unfair and that he should be reinstated or compensated.
At arbitration, the School contended that the employee had failed to join the School Governing Body in the proceedings, and the arbitrator directed that the Governing Body be joined as a respondent in the arbitration. Nevertheless, at the conclusion of the hearing the arbitrator found that the employee's dismissal was both procedurally and substantively fair.
The employee did not institute review proceedings against the arbitrator's award. Instead he instituted civil proceedings in the Labour Court against the School and the Governing Body. He claimed that the School was his employer and that he was removed from his employment by the Governing Body, which was unlawful and unauthorised. He claimed that the School's failure to reinstate him and/or to remedy the Governing Body's unlawful actions constituted an unlawful breach of his contract of employment.
The Labour Court dismissed the employee's claim due to a lack of jurisdiction. It held that, after pursuing a case in the CCMA based on an alleged unfair dismissal, he could not now approach the Labour Court on the basis of an unlawful breach of contract.
On appeal, the Labour Appeal Court in Archer v Public School-Pinelands High School and Others (CA12/18) [2019] ZALAC 70 (25 November 2019) overturned the LC's decision. The LAC held that the employee had both an unfair dismissal claim and a contractual claim arising from the termination of his employment contract. This entitled him to pursue a claim in the CCMA and an independent contractual claim in either the High Court or the Labour Court, which have concurrent jurisdiction to determine a contractual claim in terms of section 77 of the BCEA.
Despite the adverse finding in the CCMA, the LAC held the employee was entitled to pursue his contractual claim in the Labour Court as it had a different cause of action from his unfair dismissal claim under the LRA. Because of this, it was immaterial that the CCMA dismissed the employee's unfair dismissal claim or that the award was not taken on review to the Labour Court.
Having found that the LC did have jurisdiction to hear the matter, the LAC ordered that it be referred back to the LC to deal with the merits of the alleged breach of contract claim.
ARTICLE: Exposing wage discrimination through new Employment Equity reporting rules
By Prof Alan Rycroft
A new EEA4 Employment Equity reporting form became effective from 8 August 2019. The main purpose of the new form is to collect information for the establishment of norms and benchmarks to reduce the remuneration gap between the highest paid and lowest paid employees. Further, it intends to assess inequalities in remuneration in relation to race and gender in various occupational levels.Alan Rycroft in this article discusses the key changes resulting from this new form.
Read more (note - only available to Worklaw subscribers)
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Bruce Robertson
January 2020
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