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We also look at three new cases: two of them look at circumstances where the court will hold a party to be in contempt of court for failing to comply with a court order. The third case looks at an employee’s obligations in a pre-retrenchment consultation. We have also provided a brief summary of various legislative updates that may interest you.
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LEGISLATIVE UPDATES
The following may be of relevance to you:
- In terms of the Unemployment Insurance Act 63 of 2001 there has been an increase of the maximum income threshold of the Unemployment Insurance Fund published with effect from 1 October 2007.
- In terms of the Employment of Educators Act 76 OF 1998 there has been an improvement in conditions of service of educators in terms of PSCBC Resolution 1 of 2007.
- In terms of the Public Finance Management Act 1 OF 1999 the rate of interest on government loans in terms of section 80 (1) (a) and (b) has been fixed at 13.00% per annum applicable from 1 September 2007.
- In terms of Schedule 1 clause 6 of the new Co-operatives Act 14 of 2005 a member of a workers’ co-operative who works for the co-operative is not an employee for the purposes of the LRA and the BCEA; however such a worker is however deemed to be an employee for the purposes of the SDA 97/1998; SDLA 9/1999; OHS 85/1993; COIDA 130/1993; UIF 63/2001 and UIC 4/2002. A workers co-operative is defined as a primary co-operative whose main objectives are to provide employment to its members, or a secondary co-operative providing services to primary worker co-operatives.
LATEST CASES
Contempt of court
It is fairly obvious that if individuals decided to ignore a court order, the entire authority of courts would be eroded. The device of being held ‘in contempt of court’ is the way in which courts can punish parties who decide not to comply with a court order. This situation arose recently in two very different contexts: an order to reinstate a dismissed employee and, secondly, in a strike situation. In the case of Ngobeni v CEO: Mpumalanga Parks Board (2007) 16 LC 1.11.15 an employee referred a dispute to the CCMA, which ordered the employer to reinstate the employee. The employee failed to comply with the arbitration award, and the employee sought the imprisonment of the employer‘s Chief Executive Officer for contempt. The employer explained that it had paid the employee the amount required in terms of the award, but could not reinstate him to his position as it no longer existed.
The court held that the employer could not choose not to comply with an arbitration award simply because it considers itself unable to comply with it. As the CEO was not the party against whom the award was made, the court said it could not order his imprisonment. However, it issued an order directing the CEO to comply with the award, failing which the employee could approach the court for his imprisonment.
In the second case, the issue of contempt of court arose in the strike context. In Security Services Employers’ Organization & others v SA Transport & Allied Workers Union & others (2007) 28 ILJ 1134 (LC), during the 2006 security strike, the Labour Court issued interdicts preventing the trade union’s members from harassing, assaulting and/or intimidating non-striking and replacement employees during the strike. The employers’ organization then applied for an order that the trade union be fined for contempt of court for its failure to comply with the terms of the interdict and requested that the trade union officials be committed to prison for their contempt of court. The court considered the legal principles applicable to contempt of court proceedings and noted that the object of such proceedings is to compel compliance with an order of court in order to vindicate the court’s honour resulting from disregard of its order. Finding that general and bald allegations were not sufficient to rebut the inference of wilfulness and male fides which are the requisites demonstrating the commission of the offence of contempt of court, the court ordered the union to pay a fine of R500 000 for contempt of the terms of the court orders, suspended for 5 years. Eleven members of the trade union were sentenced to a period of 6 months imprisonment, suspended for 5 years.
Both these cases show that the Labour Court is prepared to order the imprisonment of parties who defy an order of the court. The lesson is simply this: when you do not agree with a court order, you cannot take matters into your own hands by ignoring the order. You must appeal or comply!
Employees’ duty in the pre-retrenchment process
Most often it is employers who are blamed for not consulting properly in the pre-retrenchment process. But a recent case illustrates that the duty in the LRA to consult is a reciprocal duty: an employee cannot simply walk away. In Greyvenstein v Flaming Silver Trading 62 (Pty) Ltd t/a Sunglass World (2007) 28 ILJ 1081 (LC) the employee was employed as an area manageress, in a business specializing in the sale of sunglasses. The company wished to restructure and open a new branch in a shopping centre. The employer wanted to utilize the employee, who had not been store-bound, to run the new branch as senior sales executive. This meant she would be store-bound and lose her travelling allowance, flexible working hours and other benefits.
Consultation meetings were held with her. The employee regarded the new position as a demotion and declined it. The employee was then notified that if she failed to accept the offer of alternative employment, her services would be terminated. She was subsequently dismissed.
The Labour Court found that the employer did not intend to terminate her services and understanding had been shown to her predicament throughout the consultation process, being open to discuss further issues that arose out of the offer of alternative employment. The court found that the consultation was a consensus-seeking process entailing a dual participatory role; once the company had issued the formal offer of alternative employment, it remained open to the employee to play her part by identifying issues of concern and taking up the company’s offer of further deliberations. The absence of further and important discussions therefore lay at the door of the employee.
The court concluded that the dismissal had been procedurally fair. The evidence on economic rationale for the restructuring was unchallenged, and the court concluded that the dismissal was also substantively fair. The court confirmed that it is trite law that a company could retrench in circumstances where it was doing well economically. The decision was a calculated business one, without ulterior motive. The failure to take up alternative employment justified the employee’s dismissal as her refusal was unreasonable.
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Bruce Robertson
September 2007
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