Pick ‘n Pay Retailers (Pty) Ltd v CCMA (case C 566/11) [ZALCJHB] 359 (18 September 2014).
Last week the Labour Court criticised a large national retailer for adopting a rigid and improper approach to dismissals relating to alleged stock shrinkage.
“After nearly two decades since the LRA was enacted and six years after the Constitutional Court judgment in Sidumo v Rustenburg Platinum Mines Ltd, one might think that the precepts of Items 3(4) and 3(5) of the Code of Good Practice on Dismissal read with s 188(2) of the LRA and the emphatic weight given by the Constitutional Court to the importance of having regard to a number of factors in deciding whether it is fair to dismiss an employee for misconduct would have dispelled the notion that a finding of ‘guilt’ determines the sanction automatically”.
Unfortunately the judge himself seems to have disregarded earlier judgments decrying the use of criminal language by finding the manager “guilty of the unauthorised consumption of company property”. Thankfully the manager was reinstated with retrospective effect to February 2011 because there was no proof that his actions had detrimentally affected the enterprise.
Dismissal of manager
The case under discussion is Pick ‘n Pay Retailers (Pty) Ltd v CCMA (case C 566/11) [ZALCJHB] 359 (18 September 2014). A large retailer in Cape Town dismissed a fruit and vegetable manager, presumably without notice, on 11 June 2010 for allegedly consuming fruit belonging to the retailer. The employee had 27 years service, with the last five years as a manager. Video footage confirmed that he had tasted fruit in the preparation area. Company policy dictated that he had to be fired. The issue seemed to be the lack of authorisation to taste and where it took place. It was not disputed that as a manager he was required to do quality checks to ensure that fresh produce was not bruised or overripe.
Dishonesty or breach of policy
The CCMA arbiter ‘misstated’ the nature of the employer’s complaint as he was not accused of dishonesty; only consumption of fruit without authorisation. The Labour Court held that the arbiter had “confused submissions relevant to the issue of sanction with the finding of guilt on the misconduct” and ‘failed to determine whether Gelant was guilty on the charge for which he was dismissed. For the reasons set out below, his finding on the charge itself would in all probability [would] have been different and that must be set aside”.
Unacceptable language
It is distressing that after all these years lawyers still use language that is totally inappropriate to an employment relationship and the dignity and worth of employees. Surely the retailer should have investigated whether or not there was a valid and fair reason for considering disciplinary action. The inherent requirements and functions of his job should have been assessed, including the rules and reporting structures.
Reason must be valid and right to be heard
If senior management then believed he had not met the required standards they could have outlined the facts in a notice and convened a meeting to allow the manager to respond and be ‘heard’. As is now well known the first requirement is to prove that there is a valid reason. It will only be valid if the reason relates to the employee’s conduct or capability. In the absence of any valid reason there is no need to go any further and decide whether the reason is fair.
In this matter there was no dispute that the manager had the right and possibly even the duty to taste food. Unless senior management could prove that the manager had disobeyed a clear instruction or policy his conduct would not provide a ‘valid’ reason, let alone a fair reason to dismiss.
Reason must be fair
Assuming there was proof of a valid reason, senior management still had to prove that the reason was fair. This is where a number of factors come into play, including the impact of the incident on the health of the enterprise itself. Acts of dishonesty could destroy trust whereas acts of incapacity could destroy confidence. But in both instances more senior managers have to produce clear and convincing evidence to that effect.
Termination must be lawful
That is still not the end of the matter because the common law, bolstered by the Basic Conditions of Employment Act, require minimum periods of notice from employers before lawfully terminating an employment contract. On any basis it is hard to believe that the manager breached his contract in any material or fundamental way which could justify summary dismissal. So even if there was a valid and fair reason to dismiss he should still have been entitled to notice.
Wrongful termination should invalidate dismissal
In the absence of such notice there is now clear authority to the effect that given the unlawful and wrongful nature of the dismissal any dismissal should also be regarded as invalid and of no force. If that approach is correct, and there is no reason why it should not be followed, then in the absence of a lawful dismissal all issues concerning validity and fairness become irrelevant.
Edcon v Steenkamp and Others (JS648/13, JS51/14, JS350/14) [2015] ZALAC 2 (3 March 2015)
The Labour Appeal Court has now decided that two earlier LAC judgments were wrongly decided and that unlawfulness does not mean that the dismissal is void and invalid. It also means that unlawfulness does not result in the dismissal itself being regarded as unfair.
Lawfulness and fairness are two distinct issues. But what still needs to be decided in each case is whether the reason for dismissal has the effect of not only entitling the employer to dismiss but also whether it was serious enough to deprive the employee of the right to notice of termination.
In other words only gross misconduct, which is a material breach of contract, should have that result, and to that extent unlawfulness is relevant.