The abrasive, confrontational employee – you’re fired?

An employment relationship is inherently unequal. The employer dishes out instructions, and the employee is duty-bound to follow those instructions (if they are lawful and reasonable), and in general to be respectful of the employer and her authority.

For that reason, our law recognises insolence and insubordination by an employee as misconduct that, if wilful and sufficiently serious, could justify dismissal after a single offence.

An employee can be both insolent and insubordinate, or merely insolent.

Insolence refers to rudeness and disrespect. An employee might make a snide, sarcastic comment, slam a door, or ignore you when speaking. The insolence can be directed towards a senior, equal or junior in the workplace.

Insubordination goes further, and refers to a deliberate, persistent and serious challenge to, or defiance of, an employer’s authority, whether through words or conduct. Insubordinate conduct may include refusal to carry out a lawful and reasonable instruction from an employer, but could also include such actions as a verbal or physical altercation with the employer that clearly challenges the employer’s authority. The insubordination can only be directed upward, to a senior in the workplace.

A couple of weeks back, a prospective client telephoned and related an alarming incident at her office: a member of staff had screamed and shouted at her, stormed out of the office, slamming the door, stormed back in, grabbed her handbag, and announced that she was leaving and would be back in the morning. The employer concerned implored: “I need to dismiss her, I cannot accept her back in the office. This is unacceptable – other employees witnessed this incident.”

On the face of it, the employee’s conduct was certainly insolent and possibly insubordinate. But would it be grounds for dismissal?

A similar case came before the Labour Appeal Court. That employee had an acknowledged abrasive style, loud voice, and sense of justice that compelled her to speak up when she felt her rights were being infringed upon. The relationship with the employer was deteriorating, as they were unhappy with her performance and with her abrasive manner with colleagues. The employer was concerned that she had allowed staff to use a work phone and run up a sizeable bill. The employer threatened to deduct the cost from her salary, and in fact did so.

The employee was aggrieved, and approached the employer to challenge the deduction, which had in fact been unlawful. The employer refused to discuss the matter with her, and turned his back on her when she tried to talk to him. The employee than raised her voice at him, telling him not to turn his back on her. The employer claimed in evidence that she had screamed and shouted at him, calling him unprofessional and “not an MD”, but this was disputed by the evidence of witnesses to the incident.

The employer charged the employee with insubordination and dismissed her.

At the CCMA, the commissioner agreed that the employee had been guilty of insubordination, and upheld her dismissal.

The employee took the matter on review to the Labour Court, who agreed with her that the CCMA award could not stand. The Labour Court’s decision is problematic, as it wrongly held that insubordination required a prior instruction. It ruled that the employee’s conduct was not insubordination but gross insolence, and that dismissal was too harsh a penalty. The employee did not want to be reinstated and was awarded 10 months’ salary as compensation.

On appeal by the employer to the Labour Appeal Court, the court rubbished the Labour Court’s finding that insubordination only arose from non-compliance with an instruction. But it agreed that the award was unreasonable and could not stand. Significantly, the employer’s conduct in unlawfully deducting money from the employee’s salary and then condescendingly refusing to discuss the matter with her, was found to have been serious provocation. In the circumstances, the seriousness of the employee’s conduct was reduced. It was found that she had been insolent but not insubordinate, as she had not persistently, wilfully and seriously challenged the employer’s authority – she had reacted in a knee jerk manner to provocation in the heat of the moment.

In the case of mere insolence or mere insubordination, not of a particularly gross nature, a prior warning was required before dismissal. The warning had to be given after the employee had enjoyed a full opportunity to be heard on the matter. There had been no prior warning in this case, although there had been allegations of past rude conduct, and so dismissal had been inappropriate. The finding of unfair dismissal and award of compensation were upheld.

And so, could the prospective client fire the employee who had shouted at her and stormed out of their meeting? The answer is more complex than it might first appear, and what preceded the incident is important. If the employee was responding to an intolerable provocation by the employer, then the seriousness of the offence may be mitigated, and a hearing may result in a warning.

 

 

Xenophobia at the CCMA

The recent Labour Court judgment in Simba v Mothoka’s Trading and Others suggests that xenophobia is alive and well, even in the halls of justice.

The commissioner who heard this labour dispute at the outset displayed a xenophobic attitude towards the applicant, a Zimbabwean national who had been employed in South Africa and who brought a claim of unfair dismissal against his employer. Fortunately for the applicant, the proceedings were recorded (as is usually the case at arbitrations of labour disputes) and the recorded evidence persuaded the Labour Court to come to his aid.

The applicant, Mr Simba, was a boiler-maker by trade. The respondent employer hired him for a two month period, and then another consecutive two month period, after which his services were refused. The employer alleged that two fixed term contracts had run their course, and the employment relationship had ended automatically. Mr Simba alleged that he was unfairly dismissed.

The commissioner found against him, and Mr Simba took the matter on review to the Labour Court. The Labour Court expressed its displeasure with the commissioner’s handling of proceedings. The record showed that the commissioner repeatedly interrupted Mr Simba’s evidence, denying him a fair hearing. He also gave Mr Simba incorrect legal advice during proceedings. He threatened Mr Simba with contempt proceedings when there was no basis to do so. He cross-examined Mr Simba throughout his evidence , badgering him repeatedly, to the extent that the employer (no doubt highly satisfied with how matters were unfolding) elected not to even offer any evidence in its defence.

In his ruling against Mr Simba, the commissioner engaged in personal and xenophobic attacks upon him, referring to him as an “arrogant” and audacious “foreign national”, and complaining that the South African taxpayer bore the costs of the arbitration proceedings (as is usually the case).

The applicant’s review application succeeded, and he was afforded the opportunity to make his case before a different commissioner.

One has to wonder what, if any, consequences there shall be for the commissioner who engaged in this unacceptable conduct.

Key changes to the labour laws in 2015 – part 7: FIXING THE FIXED TERM CONTRACT

Many people are employed on fixed term contracts which are renewed time and again with no promise of job security beyond the current term of the contract. After the third or sixth or twelfth renewal, the employer announces that the contract will not be renewed further, and the employee’s attention is drawn to the term of the contract stating that she agrees that she has no expectation of further renewal. After three or six or twelve continuous years of employment, the relationship has been terminated without any fault on the employee’s part, and in the employer’s view no due process is called for.

The LRA has long provided that a failure by an employer to renew a fixed term contract (or an offer to renew but on less favourable terms) is a dismissal IF the employee can establish that she reasonably expected renewal. This has assisted affected employees who have the stomach to contest their dismissal at the CCMA AND who are able to produce the necessary evidence to show that they had an expectation of renewal which was reasonable in the circumstances. Many more have walked away from their employment situations with a sense that injustice has prevailed.

As of 2015, the LRA has been amended to come to the assistance of employees earning less than the currently prescribed threshold of R205 433,30 per year. Higher earners do not benefit from the new law. Exempted from compliance are employers with fewer than 10 employees, as well as employers with fewer than 50 employees who are in the initial start-up phase of two years.

The new law allows fixed term contracts (including renewals) for periods up to three months only. Fixed term contracts (including renewals) may exceed three months in duration only if (1) the work is of limited or definite duration in nature or (2) the employer can show another justifiable reason. The latter might include:

  • replacing an employee temporarily absent from work (such as on maternity leave)
  • a temporary increase in work volume not expected to last beyond one year (such as a one-off large order)
  • the employee is a student or recent graduate being trained or gaining work experience to enter a job or profession (such as a candidate attorney)
  • the employment is for work on a specific project only, of limited duration
  • a non-citizen employee has a work permit for a limited period only
  • the work is seasonal (such as apple picking)
  • the work is part of an official public works scheme or other job creation scheme
  • the position is funded by an external source for a limited period (such as in the NGO sector)
  • the employee is post-retirement age

The Act goes on to state that a justifiable reason includes the application of a system that takes account of seniority or length of service, merit, the quality or quantity of work performed, or other criteria of a similar nature.

Where the fixed term employment exceeds three months and there is no valid justification, the employment is deemed to be indefinite (that is, permanent) employment.

The employer’s offer of fixed term employment must be in writing and must specify a valid reason for the fixed term nature of employment.

In any proceedings, the employer bears the burden to prove that there was a valid reason for fixed term employment, and that the term was agreed with the employee.

Absent a justifiable reason, fixed term employees performing the same work as permanent employees are entitled to no less favourable treatment. Permanent and fixed term employees are also to be provided with equal opportunity to apply for vacant positions.

Where an employee is employed for a fixed term to work exclusively on a specific project of limited duration, for a period of over twenty-four months, then on termination the employer must pay that employee severance pay equal to one week’s pay per completed year of the contract. This applies prospectively to any work subsequent to the amendment date (1 January 2015) even if the contract was concluded before the amendment. No severance pay is payable, however, if before expiry of the contract the employer offers the employee, or procures for the employee with another employer, employment commencing at expiry on the same or similar terms.

This amendment is one of the most welcome changes to our labour law from an employee perspective, with the scope to prevent a great deal of abuse of the fixed term contract. One waits to see how strictly or generously the CCMA and courts will interpret the requirement that an employer demonstrate a justifiable reason for fixing the term of a contract.

Key changes to the labour laws in 2015 – part 4: ARBITRATIONS IN LIEU OF DISCIPLINARY HEARINGS

The Labour Relations Act has long provided for the possibility of what was called (to the dread of many an employee) a “pre-dismissal hearing”. This had the effect of a CCMA arbitration, but replaced an in-house disciplinary process by the employer. In the latter, an employer would make allegations about an employee’s conduct or capacity which could result in the employee’s dismissal, and hold a hearing and, possibly, an appeal – and perhaps then end up defending the process at the CCMA at an arbitration preceded by a conciliation. In the former, the CCMA would take over the process, enquire into the allegations, and make a decision having the effect of an arbitration award – a greatly streamlined process.

In the past this could only be done by the employer with the consent of the employee.

The new law enables industry- or workplace-wide collective agreements to provide for inquiries by arbitrators (formerly “pre-dismissal arbitrations”), instead of requiring consent by individual employees in each case.

In addition, under the new law this process may be triggered by either the employee or the employer, when an employee complains that the holding of a hearing into her conduct or incapacity contravenes the Protected Disclosures Act. That Act aims to protect whistleblowers in the workplace. This new provision is directed at maximising fairness, while minimising the protracted litigation arising in disputes under the Protected Disclosures Act.

Key changes to the labour laws in 2015 – part 3: ARBITRATION, THE LABOUR COURT AND REVIEW

PRIVATE ARBITRATION

Where an employer and employee have made no other agreement about resolution of disputes between them, their disputes are generally conciliated and, if not required to go to the Labour Court, arbitrated by the CCMA or a bargaining council, in terms of the Labour Relations Act, in what is known as “compulsory arbitration”. However some employers and employees agree up-front in employment contracts to bypass the system of compulsory arbitration, and rather have disputes resolved by way of private arbitration. Private arbitration services are provided by private companies, as opposed to compulsory arbitration which is provided by the CCMA, set up by statute, or bargaining councils, set up by industry-wide agreements.

In the past, if the CCMA accepted a dispute referral but then realised that the parties had agreed to private arbitration, the CCMA would generally decline to hear the matter, and insist that it be referred instead to the relevant private arbitrator as per the parties’ agreement.

The legislature identified abuse of the scope for private arbitration, however, and has amended the Labour Relations Act this year to require the CCMA to hear disputes, even where they ordinarily would not have the power to do so owing to a private arbitration clause in an agreement. This amendment applies (1) when an employee who earns less than R205 000* per year (*subject to change)  is required by the agreement to pay any part of the costs of the private arbitration, and (2) when the private arbitrator nominated in the agreement is not independent of the employer.

THE LABOUR COURT AND ARBITRATION

Where the Labour Court receives a referral of a dispute which ought to have been referred to arbitration, the court may either refer the dispute to arbitration or continue with the proceedings and make only an order which an arbitrator would have been empowered to make. In the past, the Labour Court could only continue with the proceedings with the consent of all the parties. As of 2015, the parties’ consent is no longer necessary, and instead the court can determine that it is expedient to continue and do so regardless of any objection by either party.

MORE RESTRICTIONS ON REVIEW APPLICATIONS

While the majority of review applications are no doubt brought in good faith, as mentioned in a previous post, they have also been much abused as delaying tactics and for employers in particular to evade compliance with awards despite there being no real prospect of overturning the awards. Some review applications have languished in court files for years, and employees have lacked the knowledge or means to force matters along effectively.

In a further attempt to tighten the reins on abuse of review applications, and resultant unnecessary delays and cost increases in proceedings, the legislature has determined that, as of 2015, no review may be brought of any decision or ruling made during conciliation or arbitration until the issue in dispute has been finally determined. The exception shall be when the court is of the view that it is just and equitable to hear the review at an earlier stage. This will prevent many a party from abandoning arbitration hearings on the first day, and holding the process hostage by filing reviews of minor determinations made by an arbitrator before even hearing evidence on the main issue.

Key changes to the labour laws in 2015 – part 1: EASIER ENFORCEMENT OF CCMA AWARDS

The long-awaited Labour Relations Amendment Act came into effect, in large part, on 1 January 2015. It brought about a number of changes in both individual and collective labour law. In this series, we consider the key changes affecting individual labour law, and of which employees and employers alike should take note.

Prior to 2002, an employee who succeeded at the CCMA but whose employer ignored the CCMA’s award, had a steep hill to climb to get satisfaction. The employee would need to approach the Labour Court and have the award made an order of court, before having a writ of execution issued and handed to the sheriff of the court. This involved a full application to court supported by an affidavit, to be served under the rules of court, and awaiting and responding to any notice of opposition and answering affidavit from the employer. The employee would need to appear before a judge to secure an order against the employer. It was a complex and intimidating process for a layperson, time-consuming, and could increase costs drastically.

In 2002, the law was changed in order to assist employees in enforcing awards. Instead of approaching the Labour Court with a full application on notice and on affidavit, the employee returned to the CCMA to have the award certified. Once the award was certified, the employee went to the Labour Court to have a writ of execution against the employer issued over the counter. This was handed to the sheriff of the court for enforcement. This was a much simpler, cheaper, quicker process. However many employees still found the process, in particular dealing with two institutions, confusing and frustrating.

As of 2015, the process for enforcement is even more streamlined. Our law now states that an arbitration award may be enforced as if it were an order of the Labour Court in respect of which a writ has been issued. An employee battling with a recalcitrant employer must still have the award certified at the CCMA as previously, but then can take her certified award directly to the sheriff of the court for execution. There is no longer any need to involve the Labour Court, provided the award requires the employer to pay over money (as opposed to doing something – such as taking the employee back into employment. Where the award requires the employer to do something, other than pay over money, contempt proceedings in the Labour Court remain appropriate.)

The new law only applies prospectively, to arbitration awards issued after 1 January 2015.

The tariffs and procedures for enforcement and execution will be those that apply in the magistrates courts, which seems appropriate given that in almost all cases the amounts of money involved in awards will fall within the monetary jurisdiction of the magistrates courts (R300 000,00 or less).

Ruling on legal representation at CCMA, reversed

The Supreme Court of Appeal has reversed the ruling of the High Court, which declared the CCMA’s rule limiting legal representation to be unconstitutional. The rule places stringent limits on parties’ rights to be legally represented where their dispute concerned dismissal for misconduct or incapacity – thereby dispensing with legal representation in about 80% of all CCMA cases. Legal representation is available as of right in all other CCMA arbitrations – even in matters with less far-reaching and devastating consequences than dismissals, such as disputes about paid suspensions.

The SCA disagreed that the distinction between dismissal and other cases was unjustified, and had some harsh words for the Law Society of the Northern Provinces, who had brought the matter to court. The court was not impressed that the Law Society appeared to be mostly concerned with the rule depriving its members of potentially lucrative work, rather than with how the rule served the needs of clients, or broader social interests.

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Employee or independent contractor?

The question whether someone is an employee or an independent contractor is one which the courts and CCMA have had to consider time and again over many years.

The issue continues to crop up in legal disputes, because an independent contractor does not have the rights and protections of an employee.

The point is usually raised as a “jurisdictional” issue, which means that a decision-maker handling a dispute must decide the issue before they are entitled to consider the main dispute. This can be decisive in an unfair dismissal or similar dispute. If a person who claims unfair dismissal is not an employee but an independent contractor, then there is no question of unfair dismissal, and the legal dispute will not be considered further in that form. An independent contractor must instead rely upon the terms of the contract, in much the same way that businesses enforce contracts between them.

The Labour Court examined the question again recently, when a radio DJ approached the CCMA with an unfair dismissal dispute. The CCMA found that he had not shown that he was an employee, and refused to consider his claim of unfair dismissal. He approached the Labour Court and argued that the CCMA’s ruling was wrong, asking the Court to compel the CCMA to consider his unfair dismissal claim.

The Labour Court ultimately agreed with the CCMA that the facts showed that the DJ was not an employee.

Various aspects of the matter did suggest that the DJ might possibly have been an employee. His contract referred to a monthly salary, and salary reviews, for example.

However, the radio station for which the DJ had presented a show, had referred to him in all documentation as an independent contractor rather than an employee, and he had failed to challenge this. This suggested that he had been under no illusion that he was an employee.

He furthermore delivered invoices to the radio station for his “salary”, via a close corporation, which had other employees whom he paid to assist him with his radio show.

The Court indicated that the most important decisive factors to consider were whether the DJ was economically dependent on the radio station, whether he was subject to the radio station’s supervision and control, and whether he formed an integrated part of the radio station’s organisation.

The Court found that, although the DJ did not pursue other commercial activities outside of his work for the radio station, this was because he chose not to, and he was not truly economically dependent on the radio station. He was contractually entitled to pursue other work for non-competitors of the radio station, although he did not pursue it.

The Court found further that the DJ enjoyed extensive control over the number of hours he spent preparing his radio show, and also over show content, and was not truly under the supervision and control of the radio station as an employee would be.

Finally, although the DJ was issued with business cards and branded clothing by the radio station, this was not indicative that he was an employee, but was merely to facilitate marketing of the radio show.

Anyone approaching the CCMA should be prepared to lead evidence to show that they are an employee, in case this point is challenged. Employees should be alive to the impact that decisions about the wording of contracts and arrangements for payment may have on their status and rights. Someone who is truly an employee should not lightly agree to a scheme whereby they invoice for fees via a company, for tax or other reasons, as they may unwittingly affect the nature of their relationship and the protections they enjoy. The courts seldom assist persons in “having their cake and eating it too”.

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High earners to lose legal protections?

Another major change to our employment law is on the way via a new section 188B to be added to the Labour Relations Act.

At present, all employees have recourse to the CCMA (or a bargaining council or private arbitration) and the Labour Court if they are dismissed and feel that the reason behind it or the procedure followed was not fair.

New section 188B will effectively strip employees earning above a certain amount – still to be determined by the Minister of Labour – of the right to challenge the fairness of their dismissals in the vast majority of cases. Provided the employer gives the employee three months’ written notice of his or her dismissal (or longer if required by their employment contract) or pays out the equivalent salary instead of notice, and the dismissal is not for an automatically unfair reason, the dismissal will be regarded by the law as fair (regardless of what the actual circumstances might be).

A dismissal is automatically unfair if it is motivated by reasons such as:

  • Retaliation for exercising a legal right from the LRA, including participation in a lawful strike, or for whistle-blowing;
  • Arbitrary grounds such as the employee’s race, gender, religion, age, ethnicity, sexual orientation or identity, pregnancy and so on;

unless it can be justified due to an essential requirement of the employee’s job or a normal or agreed retirement age.

Once the amendment has been signed into law, the exclusion will apply to all new employment contracts entered into (where the earnings exceed the threshold). Two years later it will also apply to all pre-existing employment contracts.

Employees who lose their rights of recourse due to this amendment will still have the option of enforcing any contractual obligations of the employer through the civil courts. They will have to show that the employer has acted unlawfully with reference to their agreement, rather than unfairly. Affected employees will be well-advised to participate actively in the negotiation and drafting of their employment contracts, in order to retain their rights to the greatest extent possible.

It remains to be seen where the threshold will be set. Until there is clarity in this regard, it is a matter of grave concern that many employees may be stripped of protections which they have come to regard as their basic right. When setting the threshold, the Minister will be required to consult NEDLAC and to consider the extent to which those employees “by reason of their earnings level, level of skill or position” have the bargaining power to ensure that their contracts of employment protect them adequately against unfair dismissal.