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 provides an update on Discrimination Law, covering a number of recent LAC judgments. We also discuss three new cases: The first case identifies the key elements of theft. The second case deals with the consequences of when a fixed-term contract overruns the end date. The third case considers a LAC ruling on agency shop agreements.
This public newsletter is a free edited version of the subscriber newsletter.
RECENT CASES
When is 'possession' theft?
Many employers use the phrase 'unauthorised possession' or removal of company property in their disciplinary codes to avoid the difficulties of proving the intention to steal. But what if the possession is authorised? At what stage does an unreturned item become theft of that item?
Consider the facts in a recent case: A senior employee, a shaft engineer, needed metal scaffolding poles to mount a TV aerial at home. He was aware that there were metal scaffolding poles in the discard yard at the shaft. He telephoned the mine manager who, at that time, was on leave. He said he wanted to borrow the poles. The mine manager's answer was that if he did so, he should comply with the waybill procedure which required the removal of any company property to be documented and authorised. A practice existed in terms of which company equipment could be borrowed by employees from time to time.
The employee then instructed an artisan to cut 600mm lengths from the metal poles taken from the discard yard. These lengths were then loaded onto his bakkie and removed by him. This exercise interrupted other duties that the artisan was busy on.
The employee authorised himself to remove the material in an 'internal waybill'. He did not prepare an 'external waybill' to take the material off the mine.
The material was never returned. It was estimated to have a value of R1000 if sold as scrap. No acceptable evidence was given by the employee to explain why at any time after the removal had occurred, the poles were not returned, or could not be returned, as was his logical obligation in terms of the borrowing of the equipment.
The employee was charged with several charges including "Misappropriation of company assets", "Damage to company property", "Failure to comply with company rules and procedure", "Theft / Unauthorised removal of company property". He was dismissed.
The matter was referred to arbitration. He was found guilty of not complying with the waybill procedure but that this misconduct was "not grave and wilful". The arbitrator concluded that there was no dishonesty by the employee. The arbitrator also relied on inconsistent application of discipline by the employer. The arbitrator found the dismissal to be unfair and ordered the employee's reinstatement.
On review the Labour Court, approved the finding of guilt on the abuse of managerial authority, and on the failure to follow waybill procedure. On the other charges, the Labour Court was not persuaded that there was any dishonesty. The court said that the employee could not be found guilty of theft, but he could be guilty of some misconduct, of taking company property and not returning it. There was no evidence that suggested that this was an act of dishonesty. The court said that he was not acting secretly nor was he acting to the prejudice of the company, and confirmed the arbitrator's finding that the dismissal was unfair.
On appeal the Labour Appeal Court in Aquarius Platinum (SA)(Pty) Ltd v Commission for Conciliation, Mediation and Arbitration and Others (JA96/2018) [2020] ZALAC 23 (18 May 2020) strongly rejected the Labour Court's views. The LAC said that the crime of theft takes place when a person deliberately deprives another person of the latter's property permanently. The deliberate retaining of property which an employee is not entitled to retain is not distinguishable, conceptually, from theft. The fact that the employee removed the property openly after getting permission to borrow it, does not mean that theft could not occur. An inference can be drawn that there is theft where an employee who borrows the employer's property does not return it and, in the absence of other evidence, the probabilities lend weight to such an inference.
The LAC granted the appeal and found the employee's dismissal to be fair. This judgment provides some clarity on basic principles but, as in most cases, it will depend on the facts of each case as to whether removal or possession of property has become theft.
When a fixed-term contract overruns the end date
The article in our April 2020 Newsletter discussed "what happens when a fixed-term contract overruns the end date?" In May the Labour Appeal Court gave judgment on this issue in Department of Agriculture, Forestry and Fisheries v Teto and Others (CA8/2019) [2020] ZALAC 19 (28 May 2020).
The employees were initially employed by the Department of Agriculture, Forestry and Fisheries (DAFF) on a one-year fixed-term contract from 15 July 2013 to 14 July 2014. When their fixed-term contracts expired on 14 July 2014, they continued working in their positions performing the same tasks - until they were dismissed on 26 August 2016.
After their dismissal, the employees referred an unfair dismissal dispute to the General Public Service Sectoral Bargaining Council for conciliation and arbitration. At arbitration, DAFF contended that beyond the expiration of the fixed-term contracts, the employees ceased to be employed by it and that 'Management for Excellence', a temporary employment service and one of its implementing agents, had taken over as their employer. DAFF challenged the jurisdiction of the commissioner to determine the dispute. DAFF's argument that they were not DAFF employees was based on the fact that they were not paid directly by DAFF and that they were not on DAFF's Persal system.
The arbitrator held that this could not be the only determining factor. The employees continuously performed their work under the sole control of DAFF. Their workplan and performance agreements were signed for by DAFF. They were responsible to DAFF in their daily duties. The role of implementing agents like 'Managing for Excellence' was simply to administer their salaries. The arbitrator found that DAFF remained their sole employer.
The arbitrator then referred to the established principle that if an employee is allowed to work beyond the end of a fixed-term contract, the contract is tacitly converted into a permanent one of indefinite duration, terminable on reasonable notice. On that basis, he concluded that the employees had remained employed with DAFF until their dismissal. He held that he had jurisdiction in relation to the dispute because there was a "dismissal" as contemplated in s186 of the LRA. The employer, DAFF, had terminated their employment. The arbitrator ordered they be reinstated.
On review the Labour Court held that the terms and conditions of the respondents did not remain the same after the expiry of their fixed-term contracts as they were not on the Persal system and received less remuneration. However, it accepted that an employment relationship existed between the employees and DAFF - but not one that was permanent. The LC held that the arbitrator erred in awarding reinstatement, but that the sudden manner of their dismissals justified some form of solatium. The Labour Court set aside the reinstatement award and awarded payment of compensation in an amount equal to 12 months' remuneration.
On appeal the Labour Appeal Court confirmed that the contention by DAFF that the employees were not its employees was not sustainable for the reasons accepted by the arbitrator. The employees were subject to the control and direction of DAFF in all their work activities and received remuneration from DAFF although their payment was channelled through the implementing agent. There was no evidence of any kind that the employees concluded contracts of employment with the implementing agent. After the expiry of their fixed-term contracts with DAFF, the employees continued to work at the same workplace performing the same functions under the direction of DAFF.
Turning to the appropriate remedy, the LAC relied on s 193(2) of the LRA which provides that unless the employee does not seek to be reinstated, or the circumstances surrounding the dismissal are such that a continued employment relationship would be intolerable, or it is not practicable for the employer to reinstate the employee, or the dismissal is only found to be procedurally unfair, the commissioner must reinstate the employee. Thus, the employer bears the onus to prove that there are exceptional reasons not to afford the primary remedy of reinstatement. The Labour Court made no reference to s 193(2) of the LRA in deciding to set aside the award of reinstatement. DAFF presented no evidence that reinstatement was not practicable or that the continuation of an employment relationship was intolerable. DAFF's own witness had stated that the employees' skills were still needed and their posts had not been filled. Accordingly, there was no evidentiary basis for the Labour Court to interfere with the commissioner's decision to award reinstatement. The LAC set aside the LC's order, and ordered reinstatement.
This LAC judgment confirms that if after the expiry of a fixed-term contract, an employee continues to render services to an employer and receives remuneration for rendering those services, the contract is deemed to be tacitly "novated" (ie replaced with a new contract). The new contract may be on varied terms and its duration period must be determined in the light of the circumstances of each case. Unless a contrary intention can be inferred from the facts, it will generally be assumed that the parties intended the new contract to be of indefinite duration, terminable by reasonable notice given by either party.
In assessing whether an employee remains an employee after the expiry of the fixed-term contract, factors such as continuity of work, control and direction, reporting lines, and place of work should be taken into account.
The LAC rules on Agency Shop Agreements
The "free-rider" phenomenon arises when employees do not join a union but still benefit from its efforts to bargain better wages and conditions of employment for all employees. S 25 (1) of the LRA recognises this and allows a representative union and an employer (or employers' organisation) to conclude a collective agreement, known as an agency shop agreement, requiring the employer to deduct an agreed agency fee from the wages of employees identified in the agreement who are not members of the trade union but are eligible for membership.
But what if there is a minority union? Is it fair that its members must pay both the agency fee as well as the subscription fee for the minority union? This was the issue in a recent decision by the Labour Appeal Court in Municipal and Allied Trade Union of South Africa (MATUSA) v Central Karoo District Municipality and Others (CA6/2019) [2020] ZALAC 20 (28 May 2020).
In September 2015, SAMWU, IMATU and SALGA concluded an agency shop agreement in terms of s 25 of the LRA, which was renewed in 2018, authorising the levying of a fee equivalent to 1% of employees' salaries but not exceeding R75, for non-members of SAMWU and IMATU.
MATUSA, a minority union, had been granted organisational rights at various municipalities, including the right in terms of s 13 of the LRA to deduct membership subscriptions from the wages of employees who were its members. Some municipalities (the respondents in this case) maintained that they were obliged in terms of the agency shop agreement and s 25 of the LRA to deduct the agency fee payable to SAMWU and IMATU in addition to the subscription fee payable to MATUSA, although others did not do so.
In the Labour Court in Municipal and Allied Workers Union of South Africa v Central Karoo District Municipality and Others (C 671/18) [2018] ZALCCT 34; [2019] 2 BLLR 159 (LC); (2019) 40 ILJ 386 (LC) (6 November 2018) MATUSA claimed that it is unlawful for an employer to give effect to an agency shop agreement in respect of members of a minority union to whom the CCMA has extended stop-order rights in terms of s 13 of the LRA. It relied on s 21(8C) of the LRA, which permits the CCMA to countermand the threshold requirements in a collective agreement for the grant of organisational rights, to argue that the CCMA's decision to extend stop order rights to MATUSA overrides the agency shop agreement.
The Labour Court dismissed MATUSA's claim, holding that, in the absence of a constitutional challenge to the provisions of s 23 (governing the legal effect of collective agreements in general) and s 25 of the LRA, there was no basis to find that the agency shop agreement was unlawful or invalid on account of MATUSA members having to pay both an agency fee and a union subscription fee. The principle derived from the LC judgment is that the agency shop provisions of s25(1) are directed against employees who are not members of the representative trade union, irrespective of whether or not they are members of any other union. The LC said it would not make sense to exclude the agency shop from applying to members of a minority union, when that union is not a party to the collective bargaining effort.
On appeal, the in Municipal and Allied Trade Union of South Africa (MATUSA) v Central Karoo District Municipality and Others (CA6/2019) [2020] ZALAC 20 (28 May 2020), confirmed the LC judgment. The LAC said that the agency shop agreement advances the legitimate legislative policy of majoritarianism in collective bargaining as the preferred option for orderly collective bargaining at sectoral level. Allowing a minority union stop-order rights permits a measure of pluralism and healthy competition. That provision, however, was not intended to dilute the value of the agency shop or to exempt members of minority unions from paying the bargaining agent for the benefits they receive from collective bargaining.
The LAC confirmed that an agency shop agreement is permitted by the LRA, the Constitution and international law, and it is not possible to exempt members of minority unions from paying the bargaining agent for the benefits they receive from collective bargaining through an agency shop agreement.
ARTICLE: UPDATE ON DISCRIMINATION LAW: Disability, pregnancy, age, and 'arbitrary' grounds
By Prof Alan Rycroft
During lockdown the judges in the Labour Appeal Court released a number of judgments covering aspects of discrimination law, including discrimination on the basis of disability, pregnancy, age and 'any other arbitrary ground'.In this article, Prof Rycroft discusses the extent to which these recent judgments further develop the law on discrimination.
Read more (note - only available to Worklaw subscribers)
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Bruce Robertson
July 2020
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