DAWN NORTON

Director: Mkhabela Huntley Adekeye Inc

Interpreting the BCEA: Recent Court decisions

20 SEPTEMBER 2014

1

SEVERANCE PAY

Section 41 (4)

Case: Astrapak Manufacturing Holdings v CEPPWAWU (2014) LAC

2

Facts in Brief:

Retrenchment situation of 286 workers

Workers refused reasonable alternative and employer refused to pay severance pay

126 offered a higher wage; 86 the same wage and balance a reduced wage of approx. 2%

3

LAC Decision:

Only Employees offered a reduced wage were entitled to severance pay.

Balance of workers – unreasonable refusal to remain in employment under a new shift system – No severance pay.

4

SEVERANCE PAY (CONTINUED)

Section 41 (5)

Case: FAWU v Ngcobo (2013) (SCA)

5

Facts in Brief:

Retrenchment of 2 Nestle workers

FAWU represented them at CCMA

FAWU failed to refer dispute to LC

Employees issued summons in HC for damages

6

SCA Decision:

FAWU breached its contract with employees / members

Compensation of 12 months. Nor a patrimonial loss but a solatium

Compensation in addition to severance pay (i.e.: no discount for severance pay paid by Nestle)

7

DEDUCTIONS FROM WAGES

Section 34 (1) and 77 (1)

Case: Davidson v Emvest Asset Management(2014) (LC)

8

Facts in Brief:

Employee, a corporate director, employed by two employers – one SA, and one Mauritian

He resigned from SA company and demanded outstanding remuneration and accrued leave

SA Company denied he was entitled, arguing deductions for PAYE for income from Mauritian country

9

LC Decision:

SA employer not entitled to deduct for taxes for income earned from Mauritian company

Issue between employee and SARS

Cost awarded on unitive scale – defence frivolous, no ongoing relationship

10

DEDUCTIONS FROM WAGES (CONTINUED 2)

Section 34 and 77

Case: Naidoo v Careways Group (2014) (LC)

11

Facts in Brief:

CEO of company instructs HR not to deduct tax from salary

Fall out with employer – incompatibility

Employer seeks to terminate relationship and stops paying her salary

Employee approaches court on an urgent basis

Employer argues CEO owes SARS and therefore not paying her salary

12

LC Decision:

Failure to pay salary amounts to a breach of contract

Failure to pay SARS not a basis to stop paying CEO

Employer ordered to pay salary less deduction for SARS

13

DEDUCTIONS FROM WAGES (CONTINUED 3)

Section 34 and 77

Case: NUM v Martin & East (2013) (LC)

14

Facts in Brief:

Refusal of about 124 employees to work (to board trucks to travel to work)

Shop stewards charged with unprotected strike action and gross insubordination

Found guilty and sanction was suspension from work for 3 months without pay as an alternative to dismissal. Given an election

Union refers to ULP to CCMA

Employer dismisses shop stewards

15

LC Decision:

Automatically unfair dismissal (because of union activity)

Suspension without pay is permissible – doesn’t contravene the BCEA

16

DEDUCTIONS FROM WAGES(CONTINUED 4)

Section 34

Case: Padayachee v Interpak Books (2014) (LC)

17

Facts in Brief:

Employee resigned in September 2011 and didn’t work in her notice period

She was called to a Disciplinary Enquiry a few days later

She did not attend and the chair found her guilty of causing damage to the amount of R180 000

The “fine” was set off against her final salary and accrued leave

18

LC Decision:

“Set off” is part of the common law and satisfies section 34(1)(b)

Employer may make a deduction if there is a fair hearing and a written agreement signed by employee about the quantum of the deduction. Deduction cannot exceed ¼ of monthly wages

Employer ordered to repay the money deducted from the employee’s final remuneration

19

NATURE OF EMPLOYMENT CONTRACT

Section 29 (1) (m)

Case: Harrandawana v Dispute ResolutionCentre (2014) LC

20

Facts in Brief:

Parties attempt to enter into 3 short fixed term contracts

Employer explains terms, Employee refuses to sign contracts

Termination some 9 months later

Dispute about termination – dismissal or termination of F / T contract

21

LC Decision:

No statutory preference for indefinite contracts

Only offer of employment – Fixed term

No factual submissions made in review papers, only conclusions of law. LC not bound to consider the matter

Review dismissed

22

SICK LEAVE

Section 23

Case: Kievits Kroon Country Estate v Mmoledi(2014) (SCA)

23

Facts in Brief:

Pastry chef asks for unpaid leave to attend a traditional healing course

Employer declines request for unpaid leave. Employee disregards the refusal and submits a sick note from a traditional healer

Employer dismisses for unauthorised absence

Dismissal found to be unfair by CCMA, LC and LAC

24

SCA Decision:

Medical certificate not required – no illness

Belief that if she failed to attend the course she may die

Belief genuinely held. Failure to obey employer was reasonable

Appeal fails

25

PAYMENT FOR ACCRUED ANNUAL LEAVE UPON TERMINATION OF EMPLOYMENT

Section 20 and 40

Case: Ludick v Rural Maintenance (2014) (LC)

26

Facts in Brief:

Employee works from Jan 2004 – April 2006

Employee takes no annual leave

Company policy – leave must be taken within 30 days of end of financial year else lapses

Employer paid for 2006 leave cycle, not for 2005 and 2004

27

LC Decision:

No payment for 2004 – entitlement falls away 6 months after end of leave cycle

Policy considerations at stake (health and safety)

Payment for 2005 annual leave

BCEA trumps term in contract of employment (less favourable)

28

EMPLOYER’S CLAIM FOR DAMAGES FROM EMPLOYEES

Section 77 (3) and 77A (e)

Case: Rand Water v Stoop (2013) (LAC)

29

Facts in Brief:

Employer dismisses employees following a disciplinary enquiry for fraud (R8 million)

Employees claim they have been unfairly dismissed and refer an unfair dismissal claim to the CCMA. Ultimately referred to the LC

The employer instituted a counterclaim – damages claim based on breach of contract – the employees had breached their implied duty of good faith and care

Employees argued point in limine that the LC had no jurisdiction as the claims were not connected to their contracts of employment

30

LAC Decision:

LC has jurisdiction to hear a civil claim, concerning a contract of employment

Determination of unfair dismissal claim and damages claim relied upon on same set of facts

Remedies are special performance, damages or compensation. (S77Ae)

Did not matter that the claim was illiquid

BCEA is not partisan to employees

LC had jurisdiction to hear the matter

31

QUESTIONS

THANKS