Assuming a recent judgment of the Labour Appeal Court (see below Revan Civil Engineering) is followed then logically the lawfulness of all dismissals must be proved by employers in the Labour Court before any issue of fairness is considered.
The Labour Court is a court of law and equity and obviously it was intended to ensure ‘justice with fairness’ for not only employees but also employers. Unfortunately due to the way claims are framed in the Labour Court the result is very often a zero-sum game with an employer sometimes gaining everything (while spending a small fortune on lawyers) and the employee losing everything.
Clearly the intention was to balance the interests of the parties and only deprive employees of any notice and possible severance benefits if the employer proves that the real reason for dismissal was a material breach of contract, usually referred to as ‘gross misconduct’.
While reading Imagining the Cape Colony: History, literature and the South African nation by David Johnson (UCT Press, 2012) I started imagining what a lawful and fair system of dismissal would be like in South Africa.
Recent judgments
TAWUSA & 303 others v Unitrans Fuel & Chemical (Pty) Ltd – case JS359/11 dated 13 December 2012 per Bhoola J upholding mass dismissals as not being unfair.
Unitrans Fuel & Chemical (Pty) Ltd v TAWUSA [2012] 2 BLLR 153 (LAC) per Waglay DJP – allowed appeal and set out requirements for a protected strike – strike precluded over any issue prohibited by collective agreement – strike protected if issue concerned “wage cuts” and “wage discrepancies” – see LRA s 65(1)(a) & (3)(a)(i).
Revan Civil Engineering Contractors v NUM (2012) 33 ILJ 1846 (LAC) per Landman AJA holding that dismissals were unlawful and void.
NUM v Revan Civil Engineering Contractors (2011) 32 ILJ 2167 (LC) per Rabkin-Naicker AJ – partially reversed on appeal.
De Beers Group Services (Pty) Ltd v NUM [2011 4 BLLR 319 (LAC) per Davis JA – held that failure to comply with section 189 of the LRA rendered the dismissals null and void.
Related post in Giles Files
Remedying material breaches of contract
Comment and discussion
This point is well illustrated by a recent Labour Court judgment TAWUSA & 303 others v Unitrans Fuel & Chemical (Pty) Ltd where the dismissal of 303 striking employees during November 2010, presumably summarily and without any notice or payment instead of notice, was upheld by the justice Bhoola in a well reasoned judgment that it is very hard to fault. TAWUSA claimed that the dismissals were automatically unfair as provided in the LRA sec 187(1)(a). The LRA creates a number of statutory rights, or ‘causes of action’ as lawyers like to call them. There is nothing to prevent lawyers from framing there pleadings in the Labour Court with further or alternative causes of action.
Imagine if TAWUSA had also relied on the employer’s breach of the employment contracts by summarily dismissing the 303 employees. In terms of the common law and the BCEA the employer would then have had to prove that the dismissals were lawful. To do that the employer would have had to prove the employees materially breached their contracts of employment and that there was a ‘cause recognised by law’ allowing the employer to dismiss without any notice. It is often argued that proof of gross or serious misconduct is required before an employer will succeed in justifying any summary dismissal. So was there any gross misconduct like dishonesty, theft, assault or intimidation?
Real reason for dismissal
What was the real reason for the dismissals? TAWUSA and the employees believed they were entitled to exercise their right to strike in support of their demands concerning wages. The Labour Court held that the strike was not protected and then referred to section 68(5) of the LRA which provides:
‘Participation in a strike that does not comply with the provisions of the Chapter, or conduct in contemplation or in furtherance of that strike, may constitute a fair reason for dismissal. In determining whether or not the dismissal is fair, the Code of Good Practice: Dismissal in Schedule 8 must be taken into account’.
The Code of Good practice specifies a number of considerations that must be taken into account in dismissing unlawful strikers. Item 6(1) provides in this regard as follows:
‘Participation in a strike that does not comply with the provisions of Chapter IV is misconduct. However, like any other act of misconduct, it does not always deserve dismissal. The substantive fairness of dismissals in these circumstances must be determined in the light of the facts of the case, including –
(a) the seriousness of the contravention of this Act;
(b) attempts made to comply with this Act;
(c) whether or not the strike was in response to unjustified conduct by the employer.’
[55] I agree therefore with Mr Redding’s submission that notwithstanding the LAC judgment and the second Labour Court interdict, the union’s demand was for an effective wage increase and that this was a substantive issue reserved for sectoral bargaining through the bargaining council.
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[58] Mr Redding submitted that it is clear from the submissions dealt with above that the strike was a serious contravention of the Act and had serious consequences for the respondent. The applicants could have been under no misapprehension, after the LAC decision, that they could not make a demand in relation to wage parity or discrepancies which had cost implications for the respondent. Nevertheless the union was intransigent in its demand and I accept the evidence of the respondent that impasse was reached with no realistic prospect of resolution. The strike lasted almost six days, the respondent issued four ultimatums and the evidence of Badenhorst that the respondent sustained a loss of over R3 million as well as reputational damage was not disputed. The respondent was left with no reasonable alternative other than to dismiss. Its invitation to the union and employees to make representations as to reasons why they should not be dismissed was ignored.
[59] In regard to the attempts made to comply with the Act there is no issue about the union’s compliance with the procedural formalities for a protected strike. Mr Redding submitted that it failed to recognise the terms of the main agreement and accordingly made itself guilty of infringing section 65 of the Act. He submitted further that the respondent complied with all the requirements in the Code – it contacted the union; issued ultimatums in clear and unambiguous terms and allowed more than sufficient time for employees to reflect and respond. The final ultimatum made it clear that dismissal could follow as a consequence of continued strike action. It provided an opportunity to the union and the employees to make representations as to why dismissals would not be appropriate. Mr Redding correctly submitted that the respondent was required to do no more than this to comply with audi alteram partem following the ratio decidendi of Mzeku and Others v Volkswagen (Pty) Ltd and Others and Modise and Others v Steve’s Spar, Blackheath.
[60] There was on the evidence, as Mr Redding submitted no unjustified conduct by the respondent which led to the strike. I agree with his submission that on the contrary, the respondent showed remarkable forbearance not only in repeatedly meeting with the union to determine the demand but furthermore in issuing four ultimatums, holding extensive meetings with the union and waiting for a period of six days before resorting to dismissals.
[61] As Mr Redding submitted, the difficulty was that there was a standoff when the respondent sought to enforce the main agreement to prevent the collective bargaining process from being undermined and the applicants were equally adamant that they were entitled to strike. After six days when impasse was reached it was clear that there was no prospect of resolution and given that the respondent’s interpretation was manifestly correct it had no reasonable alternative other than to dismiss. It had suffered extensive losses at this stage. The dismissals were therefore justified in that the employees participated in an unlawful and unprotected strike for a period of six days without any reasonable prospect of the dispute being resolved through negotiation with the first applicant.
Right not to be unfairly dismissed
It is important to remember that the LRA is only concerned with the fairness of the dismissal and does not necessarily mean that the dismissals will also be lawful. The LRA only makes a dismissal unfair if the reason for dismissal in unrelated to the employee’s conduct of capacity (note: no mention of misconduct or incapacity!) or based on the operational requirements of the business. So employers can resist claims based on alleged unfair dismissal even when the employees cannot be ‘blamed’ provided the dismissal is valid and there is proof that the employment relationship is no longer tolerable. This is usually done by employers in proving a serious breach of trust or the total loss of confidence in the employee concerned.
Dismissals still have to be lawful
But even if the dismissal is not regarded as unfair the employer must still prove that it is lawful. If the employer fails to terminate on reasonable notice and the employees challenge the dismissal as being unlawful the employer will have to prove gross or serious misconduct failing which the termination should be regarded as unlawful, void of no legal force.
LAC – Revan Civil Engineering Contractors v NUM
Recently in Revan Civil Engineering Contractors v NUM (2012) 33 ILJ 1846 (LAC) Landman AJA (with Davis JA and Hlophe AJA concurring) held that certain mass dismissals were unlawful and accordingly null and void.
The employer’s failure to follow the statutory procedure for consultation provided in sec 189A of the LRA meant that the employees had not been dismissed and there was no point is dealing with any statutory claim related to unfairness.
[6] Mr Rautenbach, who appeared on behalf of the appellant in the court a quo and in this court, submitted to the court a quo that as s 189A applied that court was precluded by s 189A(18) from affording the employees relief in respect of any procedural unfairness.
On the other hand, Mr Kahanovitz SC, who appeared for the union and employees in the court a quo and on appeal, submitted to the court a quo that the dismissals were in terms of s 189A(18), null and void as it was common cause that no facilitator had been appointed and the notices of termination had been given prematurely.
He relied on a decision of this court in De Beers Group Services (Pty) Ltd v NUM (2011) 32 ILJ 1293 (LAC). In this case it was held that notices of termination in terms of s 189A(8) could not be given until the period referred to in s 64(1)(a) had elapsed. Premature notice was invalid and of no force and effect.
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[12] Does s 189A(18), where it applies, preclude the Labour Court from deciding whether the foundation for a claim based on an alleged unfair dismissal exists? This subsection reads:
‘The Labour Court may not adjudicate a dispute about the procedural fairness of a dismissal based on the employer’s operational requirements in any dispute referred to it in terms of section 191(5)(b) (ii).’
[13] Unless there has been a valid dismissal a court may not consider nor grant any relief on the basis that the dismissal was unfair. Section 189A(18) is not intended to disturb this fundamental principle. This subsection cannot be read so as to preclude a party from alleging that the very foundation for a claim based on the substantive unfairness of a dismissal does not exist in law. If this were to be the case, it would lead to the absurd result that employees could be reinstated or compensated although the law did not recognize that they had lost their jobs.
[14] The court a quo should have declared that the dismissals of the employees were invalid for being in breach of the provisions of s 189A of the LRA.
[15] It follows that it is unnecessary to consider any other ground of appeal. The result is that the appeal should be dismissed with costs and the cross-appeal should be upheld with costs. The order of the court a quo should be replaced with an appropriate order. In his heads of argument, Mr Kahanovitz suggests that the order should include a provision that compensation be awarded to certain of the employees. Compensation may not be awarded where there is no dismissal. It seems to me that a simple declaration or ruling will suffice.
Conclusion
Applying the logic of the Revan decision any issue regarding fairness is now dependent on the dismissal being lawful. In that matter the employers failed to comply with a statutory provision and the dismissals were declared to be null and void.
The BCEA required reasonable notice to be given (not less than say four weeks) to ensure that any termination is ‘lawful’. A dismissal based on a ‘cause recognised by law’ exempts the employer from giving notice but proof is required.
Does it now mean that in every matter that comes before the Labour Court there must be proof of a lawful dismissal before any issue of unfairness is considered? Imagine if that is correct then unless the employer has terminated on reasonable notice, the pleadings in all dismissals should contain an allegation that the dismissal was unlawful and force the employer to prove that it was not null and void.
The LAC has decided that the Revan and the De Beers Group Services judgments were wrongly decided – see Edcon v Steenkamp 3 March 2015.