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 'The changing understanding of the employment relationship'. The article asks whether the old master-servant definition of the employment contract is in line with contemporary law and practices. We suggest a fresh framework to consider.
We also discuss three new cases: The first case deals with the meaning to be given to the phrase "as a going concern" in the transfer of a business under section 197 of the LRA. The second case is about meaningful retrenchment consultation during the Covid-19 lockdown. The third case asks whether workers' concerns about health and safety during Covid-19 can justify unprocedural industrial action.
This public newsletter is a free edited version of the subscriber newsletter.
RECENT CASES
When is a transfer a "going concern"?
In NUMSA obo Members v Sacks Packaging (Pty) Ltd and Others (D 396-20) [2020] ZALCD 14 (8 September 2020) it was held that in deciding whether a business has been transferred as a going concern under section 197 of the LRA, regard must be had to the substance and not the form of the transaction. One of the factors is whether, prior to the transfer, the functions to be transferred were in fact performed by a discrete and relatively stable group of employees who more or less perform only the functions of the business being transferred.
Sacks Packaging manufactures bags for packaging. The company decided to outsource all functions which were not related to the actual manufacture of bags. Eleven days before the transfer was to take place, Sacks Packaging concluded a transfer of business agreement with another company and a day later, a Service Level Agreement was concluded. The transfer was to affect 96 employees.
Numsa sought an urgent order declaring that the transfer of the contracts of employment of the union's members from Sacks Packaging was invalid and unlawful. The union also sought an interdict preventing the transfer of the employment contracts of any of the union's members under section 197 of the LRA.
The Labour Court held that the transfer of the employment contracts was invalid and unlawful. The judge was not persuaded that the transfer between old and new employers was of a business as "a going concern". The LC had no problem accepting (a) the employer's claim that it was free to determine what its core business is and to streamline through outsourcing; and (b) that conceptually and operationally it was possible to make the distinction between the manufacture of bags on the one hand and packing and transport on the other. However, in relation to those employees who worked in both sections, all the employer could say was that it sought to transfer those employees who predominantly performed non-core work. The LC was therefore unconvinced that what was being transferred was, in a fully practical sense, a "going concern".
Read more (Worklaw subscriber access only)
Retrenchment consultation in a time of Covid-19
In South African Transport and Allied Workers Union and Others v Ikapa Coaches (A division of Cullinan Holdings Ltd) and Others (J 683/2020) [2020] ZALCJHB 148 (2 September 2020) it was held that even where an employer is burdened by dire financial circumstances as a result of the Covid-19 pandemic, a fair and meaningful consultation process as prescribed by section 189 of the LRA is paramount before there can be termination of employment.
The employers issued notices of retrenchment in terms of sections 189(3) of the LRA. SATAWU acknowledged receipt and indicated its intention to exercise its rights to have a facilitator appointed to facilitate the consultations. On the same date, the employers addressed correspondence to SATAWU proposing a date for consultation. SATAWU's response was to indicate that it would refer the matter to the CCMA for the appointment of a facilitator, which it then did on the same date. Only after two months did SATAWU make enquiries with the CCMA about the status of its application for facilitation.
The employers subsequently sent notices of termination to the employees. SATAWU sought an order reinstating its members until the employers complied with a fair retrenchment procedure.
The question to be determined was whether an employer is entitled to issue notices of termination, in circumstances where a CCMA facilitator, despite a request by the union, has not been appointed, and where the 60 day period contemplated in section 189A(7)(a) of the LRA has lapsed, and further where no consultations whatsoever had taken place.
The Labour Court held that the employers, even if entitled to issue a Section 189(3) notice in the light of their precarious financial position, had an obligation to do more that issue an invitation to consult, even though SATAWU had not taken the process of facilitation forward. The employers were obliged to either assist in the commencement of the facilitation process or even insist on plant level consultations. A fair and meaningful consultation process as prescribed by the LRA is paramount.
The Court said SATAWU was clearly at fault by not doing enough in ensuring that the facilitation took place. But to allow the employers to effect the dismissals where not even one session of consultations took place would clearly defeat the objectives of any form of joint consensus seeking exercise in order to avoid the retrenchment and ameliorate its consequences, as required by section 189A of the LRA.
The Court held that an appropriate order would be to compel the parties to engage in a joint consensus seeking exercise, but within strict specific time frames. It is clear from this case is that the Labour Court will not accept delays or procedural non compliance under s189A to justify not attempting meaningful retrenchment consultation.
Read more (Worklaw subscriber access only)
Striking for health and safety during Covid-19
In De Heus (Pty) Ltd v South African Commercial and Catering Workers Union (SACCAWU) and Others (J 685/20) [2020] ZALCJHB 149 (7 September 2020) it was held that even though health and safety issues in the climate of Covid-19 are paramount and that the safety of employees at all workplaces should not be compromised, this does not entitle employees to embark on industrial action at a whim, without first raising the issues with employers, or DEL where the Regulations are not complied with, or without first complying with the provisions of section 64 of the LRA.
One of the administrative employees displayed symptoms of Covid-19. Measures were taken to clean up her office in accordance with the normal protocols. Similar measures were again undertaken the next day and the cleaning was extended to the whole premises.
The employee's test results confirmed that she had indeed tested positive for Covid-19. Upon receiving her test results, the employee posted a message on a WhatsApp group of employees advising them of her results. The employer's response was to immediately reassure the employees that measures had been taken to mitigate possibilities of the spread of the virus.
The strike commenced when the day-shift failed to report for duty and employees commence picketing near the main entrance. Employees demanded that an inspection of the premises should be conducted independently by the Department of Employment and Labour (DEL), and to ensure that measures were taken and implemented to mitigate any exposure to the virus.
The employer sought confirmation of a Rule Nisi granted earlier by the Labour Court in terms of which the strike was declared unprotected, and further interdicting and restraining the employees from committing a variety of acts in pursuance of that strike.
The Labour Court held there was no doubt that the employees embarked on industrial action within the strike definition in the LRA. It held that even though health and safety issues in the climate of Covid-19 are paramount and that the safety of employees at all workplaces should not be compromised, this does not entitle employees to embark on industrial action at a whim, without first raising the issues with employers, or DEL where the Regulations are not complied with, or without first complying with the provisions of section 64 of the LRA. The industrial action embarked upon by the employees was unprotected.
Read more (Worklaw subscriber access only)
ARTICLE: : The changing understanding of the employment relationship
by Prof Alan Rycroft
Prof Alan Rycroft discusses various judgments and questions whether the old master-servant definition of the employment contract is in line with contemporary law and practices.Significant developments have over time completely re-defined the contract of employment, including the following:
- The right of employees to inflict economic harm through strikes
- The erosion of managerial prerogative
- The duty of fair dealing
- The 'death' of derivative misconduct
- A new approach to insubordination
Read more (note - only available to Worklaw subscribers)
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Bruce Robertson
October 2020
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