CASE UPDATES

1
CASE UPDATES by Dr. Mohamed Alli Chicktay B.Proc
LLB. LLM. Ph.D. Senior Law Lecturer at the
University of Witwatersrand Mediator and
Arbitrator
2

• Case updates have been divided under the
  following headings
• Contract cases
• Dismissal cases
• Strikes
• Transfer of business
• Trade Union liability

3

• Contract cases

4

• Motor Industry Staff Association and Another v
  Silverton Spray painters and Panel beaters (Pty)
  Ltd) (2012 ZALAC 42
• Facts During 2008, the employer started
  experiencing financial difficulties and as a
  result initiated a promotional campaign. As part
  of the campaign, the employee was instructed to
  physically go to the prospective clients to
  promote the business of the company and to
  procure work.
• The employee blatantly refused to comply with
  this instruction.
• The employee maintained that the distribution of
  brochures company clients did not form part of
  his job description and the instruction the
  employer gave amounted to a unilateral amendment
  of the terms and conditions of his employment.

5

• The Labour Appeal held that that employees do not
  have a vested right to preserve their working
  obligations completely unchanged as from the
  moment when they first begin work. It is only if
  changes are so dramatic as to amount to an
  entirely different job that there is a right to
  refuse to do the job in the required manner.
• It not a material change to the terms and
  conditions of the employee's core duties but
  simply a variation in his work practice.
• The employee did not have a vested right to
  preserve his working obligations completely
  unchanged as from the moment when he first began
  to work."
• Accordingly, the Labour Appeal Court dismissed
  the employee's appeal.

6

• Dismissal Cases

7

• National Union of Mineworkers obo Selemela v
  Northam Platinum Ltd 2013 ZALAC 10
• Facts On 20 August 2005,Selemela was dismissed
  for insubordination.
• At the CCMA Selemelas dismissal was found to be
  substantively unfair The commissioner felt that
  the employees prior warning for insubordination
  had expired and could not be taken into account.
• The LAC held that an employees written warnings,
  even after they have lapsed, may be taken into
  account, in determining the fairness of his or
  her dismissal especially where the employee
  concerned is found to have a propensity to commit
  acts of misconduct at convenient intervals
  falling outside the period of applicability of
  the written warnings.

8

• Eskom Holdings Limited v Fipza and another (LAC)
  Case no. JA 56/10
• Facts The applicant worked for Eskom in 2006 but
  was dismissed for misconduct when she had failed
  to return to Eskom timeously after her
  sabbatical. She was informed in her termination
  letter that she would be able to apply for other
  jobs at Eskom if the opportunity arose.
• In 2008 she applied for another job at Eskom. She
  went for an interview and thereafter offered a
  position. As a result she resigned from her
  current position.
• Shortly thereafter Eskom retracted the offer that
  it had given her. Eskom stated that the applicant
  had lied to Eskom by not disclosing in her CV or
  in her interview that she had previously been
  dismissed by Eskom for Misconduct.

9

• The labour Appeal court stated that it is
  generally not a requirement that a CV should
  provide reasons for leaving previous employment.
  It is a document whereby a job seeker aims to
  market himself or herself concisely and
  succinctly to potential or prospective employers.
• Recruitment forms also do not require one to
  provide reasons for leaving ones previous
  employment unless one is specifically asked this
  question in the form. Recruitment forms need to
  be filled incompletely, accurately and
  truthfully.
• The court found in favour of the former employee
  and referred the matter back to the CCMA for an
  appropriate remedy

10

• The Law Society of the Northern Province v
  Minister of labour and others (2012) 33 ILJ 2798
  (GNP)
• FACTS 25(1)(c) of the CCMA rules denies
  employees a right to legal representation at
  arbitration proceedings where the reason for the
  employees dismissal relates to misconduct or
  incapacity. The commissioner can however allow
  for legal representation if the commissioner and
  all parties consent, it would be unreasonable not
  to allow legal representation, the complexity of
  the dispute, public interest and having regard to
  the comparative abilities of the parties.
• The Law Society questioned the constitutionality
  of r25(1)(c) arguing that it violates their
  members constitutional right to participate in
  the profession.

11

• The court found the rule to be unconstitutional
  for the following reasons
• irrational
• costs
• Would lawyers obstruct the process.
• The court thus found r25(1)(c) to be
  unconstitutional and gave parliament 36 months to
  amend the rules.

12

• Solidarity and Another v Public Health and
  Welfare Sectorial Bargaining Council and Others
  (JA 71/10) 2013 ZALAC 2 2013 4 BLLR 362
  (LAC)
• FACTS Section 17(5)(a)(i) of the Public Service
  Act 103 of 1994 entails is that if an employee
  absents himself from official duties for a period
  exceeding one month without having obtained
  permission from his head of the department, he
  shall be deemed to have been discharged from the
  Public Service on account of misconduct with
  effect from the first day on which he began the
  absence.
• An employee who was suspended took employment
  elsewhere during his suspension. As a result his
  contract was terminated. The employer argued that
  the employee was not dismissed but his contract
  had been terminated by operation of law in terms
  of section 17(5)

13

• The LAC stated that In this case the employee did
  not have the permission of the head of the
  department when he assumed other employment.
• The employees conduct fell within the
  circumstances envisaged in s 17(5)(a)(i) and (ii)
  of the PSA.
• Even though on suspension he remained an
  employee of the department and was subject to its
  authority in terms of the contract of employment.
  
• The department was also contractually obliged to
  pay his remuneration during the suspension
  period.
• Accepting or assuming other employment amounts to
  being absent from duty because the employee is
  now rendering his services to another employer
  which is irreconcilable with his employment
•  

14

• Summary of principles
• One can take into account warnings that have
  expired especially where the employee has a
  propensity to commit the same offence.
• One does not need to state ones reasons for ones
  dismissal in ones CV or in the application.
• 25(c) of the CCMA rules was declared
  unconstitutional and Parliament was given 3 years
  to amend the law
• If one is suspended one is not allowed to take
  employment elsewhere

15

• Strikes

16

• SATAWU Others v Moloto NO Another (2012) 33
  ILJ 2549 (CC)
• Facts SATAWU and Equity Aviation Services (Pty)
  Ltd (Equity Aviation) entered into a recognition
  agreement in terms of which the union was the
  recognised bargaining agent of all the workers
  employed by Equity Aviation.
• When negotiations failed the matter was referred
  to conciliation.
• When conciliation failed the union sent the
  employer a strike notice stating that We
  intend to embark on strike action on 18 December
  2003 at 08H00.
• Equity Aviation argued that this notice was sent
  only on behalf of SATAWU members and that non
  member had failed to send a notice in accordance
  with section 65 thus participating in an
  unprotected strike justifying dismissal.

17

• Both the Supreme Court of appeal and the minority
  judgement in the Constitutional Court found in
  favour of the employer.
• They agreed with the employer that a purposive
  interpretation of the provisions is necessary.
• In order to serve any purpose at all, the notice
  must be issued by, or on behalf of, the parties
  who intend to strike.
• This approach promotes orderly collective
  bargaining as it enables the employer to
  reasonably determine the extent of and properly
  prepare for the looming strike.

18

• The majority in the Constitutional Court
  disagreed.
• The language used by the Legislature expressly
  requires only notice of the commencement of the
  strike to be given to the employer by anyone
  involved in the dispute, and does not oblige
  every participating employee to issue the notice
  to exercise the right to strike.
• Interpreting the section to mean what it
  expressly says is less intrusive of the right to
  strike
• To require more information than the time of its
  commencement in the strike notice from employees,
  in order to strengthen the position of the
  employer, would run counter to the underlying
  purpose of the right to strike in our
  Constitution to level the playing fields of
  economic and social power already generally
  tilted in favour of employers.

19

• In this case the union, which represented the
  dismissed strikers in the wage negotiations and
  attempted conciliation under section 64(1)(a)
  before embarking on strike action, was competent
  also to give the single notice
• To hold otherwise would place a greater
  restriction on the right to strike of
  non-unionised employees and minority union
  employees than on majority union employees.
• It is these employees, much more than those who
  are unionised or represented by a majority union,
  who will feel the lash of a more onerous
  requirement.

20

• The LAC judgment is in line with a number of
  other LAC
• County Fair Foods v Hotel Liquor Catering
  Commercial and Allied Workers Union and Others
  (2006) 27 ILJ 348 (LC).The notice need not
  specify the precise time of the day when the
  strike will start.
• Tiger Wheels Babelegi (Pty) Ltd t/a TSW
  International v National Union of Metalworkers of
  SA and Others (1999) 20 ILJ 677 (LC).Employees
  are not obliged to commence striking at the time
  indicated in the notice provided that it is
  within a reasonable time thereafter.
• Transportation Motor Spares v National Union of
  Metalworkers of SA and Others (1999) 20 ILJ 690
  (LC).If employees who have already commenced
  striking temporarily suspend the strike, they
  need not issue a fresh notice to strike or refer
  the dispute for conciliation again.

21

• Ahlesa Blankets (pty) Ltd v South African
  Clothing and textile Workers Union (SACTWU) Case
  No CA 5/2010
• FACTS Employees refused to work on a shift
  system and partook in an unprotected strike. They
  were given a ultimatums, a hearing and were
  ultimately dismissed.
• The court stated that when determining whether
  employees dismissal for participating in an
  unprotected strike is substantively fair one must
  have regard to item 6(1) of the code together
  with item 7(b). Item 6(1) determines whether
  strike procedures were complied with and the
  extent of non-compliance. It also looks at
  whether the strike was in response to unjustified
  conduct by the employer.
• Item 7(b) requires a tribunal to consider a
  number of factors when determining whether
  dismissal is an appropriate sanction.

22

• While the unprotected strikers had fallen foul of
  item 6(1) by failing to comply with any strike
  procedures without provocation their dismissal
  was not justified in terms of item 7(b). The
  short duration of the strike, absence of violence
  during the strike action, and the fact that the
  employees had a clean disciplinary record made
  the penalty of dismissal unfair

23

• South African Clothing Textile Workers Union
  (SACTWU) and Others v Yarntex (Pty) Ltd t/a
  Bertrand Group (PA07/10) 2013
• At 15h30, on 17 September 2008, strike action
  commenced at Bertrand's premises. The employer
  provided the strikers with three ultimatums, the
  unprotected strikers were reminded that they were
  on a final written warning and that they had to
  return to work or be dismissed. They were also
  asked to make representations. They failed to
  make any representations and were dismissed.
• The labour appeal Court found their dismissal to
  be both substantively and procedurally fair.
  Procedurally they were given a chance to make
  representations and substantively they did not
  comply with strike procedures and were on a final
  written warning.

24

• FAWU obo M Kapesi And 31 Others v Premier Foods
  LTD Case no CA7/2010
• Facts Employees partook in a violent strikes
  where a number of non strikers were beaten.
  Instead of conducting disciplinary proceedings
  for misconduct violent strikers were dismissed
  for operational reasons.
• The court held that the employer could choose to
  dismiss violent strikers for operational reasons
  as oppose to misconduct.
• The court found that the employers selection
  criteria was unfair as it could not be proven
  that the employees who were retrenched committed
  violence during the strike. Many witnesses were
  either afraid to testify or were missing.
• Principle one can dismissed violent strikers for
  operational reasons but tone needs sufficient
  proof when applying this as a selection criteria.

25

• Summary of principles
• Section requires a notice to be given by anyone
  and not by all the employees who intend to strike
• When determining the whether a dismissal of
  unprotected strikers are substantively fair one
  must have regard to item 6(1) and item 7(2) of
  the code.
• One can dismiss violent unprotected strikers for
  operational reasons

26

• Transfer of Business

27

• Section 197 Outsourcing and franchise agreements
• Outsourcing is where a contractor puts out a
  service in exchange for a fee. The outsourcing
  contract is usually for a fixed period of time.
  At the end of the contract it goes out to tender
  once again
• In NEHAWU v UCT (2003) 24 ILJ 95 (CC) the
  Constitutional Court stated that section 197
  could apply to outsourcing.
• The Court said that "In deciding whether a
  business has been transferred as a going concern,
  regard must be had to the substance and not the
  form of the transaction.
• Relevant factors include
• whether assets were transferred , whether or not
  workers are taken over by the new employer,
  whether customers are transferred and whether the
  same business is being carried on by the new
  employer.

28

• Aviation Union of SA another v SA Airways
  (Pty) Ltd Others 2012 3 BLLR 211 (CC)
• When employees have already been transferred to a
  company who has won the tender and the contract
  is terminated the question is whether employees
  would be transferred back to the tendering
  company (insourcing) or to the new company
  (2nd generation outsourcing)
• Facts In 2000 LGM and SAA concluded an
  outsourcing agreement for 10 years with SAA
  having the option to renew it. The parties
  agreed that LGM would provide the facilities
  management operations for a fee and that all of
  SAA employees who worked in those departments
  would be transferred to LGM. In June 2007 SAA
  terminated the agreement.
• Aviation Union sought an assurance from SAA that
  upon termination of the outsourcing agreement
  LGMs employees would be transferred back to SAA.
  SAA disagreed.

29

• The Labour Court held that the section 197 does
  not apply to a second generation outsourcing or
  subsequent outsourcing agreement because the
  agreement does not involve a transfer by an old
  employer to a new employer as required by
  section 197.
• The Labour Appeal Court rejected the literal
  meaning adopted by the Labour Court and preferred
  an interpretation that would advance the purpose
  of job protection.
• The majority judgment of the Supreme Court of
  Appeal agreed with the Labour Court that the word
  by in s197 referred to transfers from the old
  employer to the new employer The minority
  judgment held, there must have been a transfer of
  services from LGM to SAA.

30

• The Constitutional Court stated that what matters
  during the factual inquiry is the substance of
  the transaction as opposed to its form.
• Substance to be inferred from the cancellation
  agreement
• LGM became obliged to sell all fixed assets back
  to SAA
• LGM to transfer or assign all third party
  contracts to SAA
• Both parties to surrender information
  pertaining to the scope of work belonging to the
  other party .
• LGM would no longer be entitled to the lease SAA
  property.
• impossible for LGM to continue to conduct its
  business
• Court thus concluded that there was a transfer of
  business.

31

• PE Pack 4100 CC v Sanders and Others 2013 4
  BLLR 348 (LAC),
• A franchise agreement existed between Cell C and
  the respondents (as the original franchisees). In
  April 2010 Cell C cancelled the franchise
  agreements with the original franchisees and
  entered into a franchise agreement in respect of
  the same store with the appellant.
• The first respondent, who was an employee of the
  original franchisees, assumed that his employment
  contract would automatically be transferred to
  the new franchisee.
• Cell C disagreed and asserted that it was not
  buying back the franchise but had merely
  terminated the franchise as it was entitled to
  do.
• The Court a quo held that the takeover of the
  business by the new franchisee did constitute a
  transfer of business as a going concern

32

• In considering whether section 197 applies in the
  case of franchise agreements, the LAC stated that
  the nature of the business model is the key to
  the resolution of the problem.
• Upon termination of the franchise agreement, the
  franchisor is free to conclude a new franchise
  agreement with its preferred franchisee.
• The core assets and infrastructure and branding
  used in the business are retained at all times by
  the franchisor.
• The franchisor controlled the business and owned
  the infrastructure,
• The LAC thus found that typical franchise
  arrangements, such as the one in question, do not
  trigger the transfer provisions of the LRA.

33

• Criticism The majority judgment gives too much
  protection to franchisors at the expense of
  employees. Employees who work at a franchise are
  denied the application of section 197. The
  franchisor would be allowed to terminate
  franchising agreements without providing any
  protection to employees.
• If one applies the principles from the UCT
  judgement there is a transfer in this case. While
  the franchisee did not own the assets he did
  transfer the use of the infrastructure back to
  cell C and thus to the franchisee. Some of the
  staff were transferred to the new franchisee. All
  the customers were transferred to the franchisee
  as they held cell c contracts. The new franchisee
  continued the same business as the old franchisee.

34

• NUMSA Obo Ketlhoilwe 44 Others v Abancedisi
  Labour Services CC
• Facts Kitsanker asked employees, who were
  provided by a labour broker to sign a code
  regulating strike action, which they had refused
  to do. As a result they were not allowed back
  into the premises.
• NUMSA took the labour broker to court alleging
  that they were unfairly dismissed. The court held
  that the employees were not dismissed. They were
  at liberty to sue the respondent for unfair
  labour practice based on their apparent
  indefinite suspension or, alternatively, they
  could resign and sue the respondent for
  constructive dismissal in terms of section
  186(1)(f) of the LRA.

35

• NB Principle The court obiter accepted the
  principle stated in Nape v INTCS Corporate
  Solutions (Pty) Ltd (2010) 31 ILJ 2120 (LC)
  2010 8 BLLR 852 (LC where the Labour Court
  stated that agreements, which provided the client
  with the power to remove the employee from its
  premises for any reason whatsoever, was against
  public policy and an unlawful breach of the
  employees right to fair labour practices in
  terms of the LRA. The Court held that the labour
  broker could resist the clients unlawful demand
  by undertaking the following
• The labour broker is entitled to approach a court
  to compel the client not to unfairly dismiss an
  employee.
• If the court were to reinstate an employee into
  the employ of the labour broker, the labour
  broker may enforce such an order against the
  client to give effect to the employees rights to
  fair labour practices.

36

• Relevant Principles
• To determine whether there is a transfer of a
  business one must look at substance over form.
  Were assets transferred (moveable and immovable)
• Were employees transferred
• Were customers transferred
• Is the new employer doing the same business as
  the old employer
• Were third party contracts transferred.
• Were confidential information pertaining to the
  scope of work transferred

37

• Trade Union Liability

38

• SA Transport Allied Workers Union Another v
  Garvas (2012) 33 ILJ 1593 (CC)
• Facts The South African Transport and Allied
  Workers Union (SATAWU) had organised a gathering
  in Cape Town. During the gathering, private
  property was damaged.
• Section 11 of the Gatherings Act states that a
  trade union will be liable unless the damage was
  not reasonably foreseeable and that it took all
  reasonable steps within his or its power to
  prevent the act or omission in question.
• SATAWU challenged the constitutional validity of
  the law that imposed liability on organisers. The
  Union contended that the defence allowed by the
  law unjustifiably limits the right to freedom of
  assembly in section 17 the Constitution. It
  argued that one could not take reasonable steps
  to prevent damage if the damage was not
  reasonably foreseeable.

39

• Justice Jafta of the Constitutional Court stated
  that t if one interprets and to mean or this
  would avoid the absurd interpretation and by so
  doing promote the right of freedom of assembly.
• In a majority judgment, Mogoeng CJ held that the
  law aims to afford victims effective recourse
  where a gathering becomes destructive and results
  in injury, loss of property or life. The majority
  held that the defence provided for by the law is
  viable and that the limitation on the right to
  freedom of assembly in section 17 of the
  Constitution is reasonable and justifiable,
  because it serves an important purpose and
  reasonably balances the conflicting rights of
  organizers, potential participants and often
  vulnerable and helpless victims of a gathering or
  demonstration which degenerates into violence.

40

• Ngcobo v FAWU 2012 10 BLLR 1035 (HCKZN)
• Two employees were members of the Food and allied
  workers union
• Their employer dismissed them for operational
  reasons.
• They instructed FAWU to handle their unfair
  dismissal claims .
• FAWU failed to do so
• They instituted action in the High Court alleging
  that FAWU owed them the money that Nestlé should
  have been ordered to pay them.
• Justice Swain decided that FAWU had agreed to
  assist them but failed to do so and ordered FAWU
  to pay 12 months damages of R214,464
• This was upheld by the SCA
• Principle A trade union could be held liable for
  breach of contract if it fails to act on behalf
  of its members when it is required to do so.

41

• Summary of principles
• A trade union would be liable for damage caused
  during protest organised by the union if they
  fail to take reasonable steps to prevent such
  damage.
• Where a trade union fails to act on its mandate
  it could held accountable to its members