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 looks at 'A consequence of ignoring a court order: Contempt of court'. We also discuss four new cases: The first case looks at when a retirement policy can constitute unfair discrimination. The second case expands the definition of 'demotion' under the unfair labour practice jurisdiction. The third and fourth cases deal with parties who ignored court orders - these are discussed in this month's newsletter article on contempt of court.
This public newsletter is a free edited version of the subscriber newsletter.
RECENT CASES
When is a retirement policy unfair discrimination?
The employee in Khan v MMI Holdings Ltd (C384/17) [2018] ZALCCT 11 (20 April 2018) alleged that he had been forced to retire and this constituted either (a) a breach of his contract of employment or (b) unfair discrimination. Had it not been for this breach, the employee argued he would have remained in employment until at least 2021, and as a result he had suffered damages in the amount of R55 548 000! The employer's position was that the contract of employment was terminable on one month's written notice by either party, and that it had given one month's written notice as it was entitled to do. There was accordingly no breach of contract.
As regards the unfair discrimination claim, the employee argued that the retirement policy which the employer relied upon was discriminatory and did not promote equal opportunity and fair treatment in the workplace. The employee argued it did this in two main ways: it failed to redress the disadvantages experienced by designated groups and/or individuals as required by Section 2(b) of the EEA; and it differentiated between persons younger than 60 and those older than 60.
The employer's argument was that if a dismissal is considered fair under the LRA's s187(2)(b), it cannot amount to unfair discrimination under the EEA. The employer accordingly defended the claims by a legal process called an 'exception', on the basis that the employee's claim lacked allegations necessary to sustain a valid cause of action. (The function of an exception is to dispose of the case, in whole or in part, and thereby avoiding the unnecessary leading of evidence.)
The LC recognised that s6 of the EEA forbids discrimination and that s187(2) of the LRA suggests that if the reason for dismissal is related to a normal or agreed retirement age, it is regarded as fair. The EEA makes no such exception and, under the EEA, unless age can be shown to be an inherent requirement of the job, the reason for dismissal will be regarded as discriminatory.
The court's view was that the existence of a retirement policy cannot in itself shield employers from an unfair discrimination claim, and that the court is entitled to consider the fairness of that retirement policy. The LC accordingly denied the employer's exception claim, and this means that evidence will now have to be led to determine the outcome of this case.
As things stand then, what we can take from this case is that despite s187(2) of the LRA, the existence of a retirement policy cannot in itself shield employers from an unfair discrimination claim. A court is entitled to consider the fairness of a retirement policy.
We think this is reasonable - a court should be able to check on the fairness of a policy used to terminate employment. But we also feel that s 187(2) is there for a specific purpose: it says that if there is an agreed or normal retirement age, dismissal is fair even though it is based on age. This exception to the automatically unfair dismissal provision exists to prevent disputes at the end of an employee's career and is intended to bring certainty to that stage of employment. The consequences - looking at this employee's massive claim - are such that our courts should be protecting the certainty given in the legislation.
We hope to give Worklaw subscribers further insights into this case, once a finding has been made on the evidence led.
Expanding the definition of demotion
In an unfair labour practice dispute, an employee claimed that he was unfairly demoted because he had been employed on 4 June 2010 in an operational specialist post but was remunerated at a rate one level below the rate he should have been paid. The employee only raised this alleged discrepancy in November 2015, when he claims he first became aware of it.
The arbitrator held that his position remained unchanged since his appointment and that neither his remuneration, responsibilities or status had been materially reduced during his employment. Accordingly, the applicant had neither been demoted nor did his dispute concern promotion because that would require him to have applied for a higher graded position. The arbitrator held that he did not have jurisdiction to arbitrate because the dispute was neither a demotion nor a promotion.
On review at the Labour Court in Xoli v Commission for Conciliation, Mediation and Arbitration and Others (JR1493/16) [2018] ZALCJHB 156 (19 April 2018), the employee contended that his dispute was that, from the commencement of his appointment, he was neither given the responsibilities in accordance with the post he was employed in, nor was he paid commensurate with the responsibilities he was supposed to perform. In other words he was engaged in a post with a particular rate of pay, but after his appointment was remunerated at a lower level, which amounted to an alteration of his actual status after his appointment.
The LC did not see why such a complaint cannot be construed as a complaint about a demotion. Accordingly the Court held that the arbitrator did indeed have jurisdiction to deal with the dispute and should not have dismissed it. The LC granted the review and ruled that the matter be referred back to arbitration to be heard by another commissioner.
Until this judgment, demotion in the ordinary sense was held to mean a reduction or diminution of importance, responsibility, status or salary (Mangcu v City of Johannesburg [2017] 10 BLLR 1055(LC)). It has also been held that a demotion can exist even though there is no loss of salary or benefits - the decisive factor is the reduction in rank, position or status of the employee (Van Wyk v Albany Bakeries Ltd & others [2003] 12 BLLR 1274 (LC)).
This case has expanded the current understanding of demotion, by saying that demotion can include the situation where an employee is engaged in a post with a particular rate of pay, but after his/her appointment is remunerated at a lower level, which amounts to an alteration of his/her actual status after appointment.
We are cautious about this expanded definition of demotion. Because the matter reverts to arbitration, there is no guarantee that the new arbitrator will regard the facts as an unfair labour practice, particularly if there was no intention on the part of the employer to deceive or alter an agreed contract.
ARTICLE: The consequence of ignoring a court order - Contempt of court
By Prof Alan Rycroft
When an interdict or court order is made requiring action to cease or other action to be taken, persons who ignore the order may be held 'in contempt of court'. At the heart of the sanction of contempt, is an intention to show that the offence was committed not by mere disregard of a court, but by the deliberate and intentional violation of the court's dignity, reputation and authority.Contempt proceedings for ignoring court orders relating to prohibiting unprotected strikes and unlawful conduct during strikes, have become a feature of the labour relations landscape.
Prof Alan Rycroft in his article, discusses two recent cases which confirm the principles and practice of contempt.
Read more (note - only available to Worklaw subscribers)
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Bruce Robertson
May 2018
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