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.

 

 

The enforcability of restraints of trade

Employing a key staff member can feel like risky business. They will get to know your clients, your systems, your “tricks of the trade”. All well and good: you want your staff to be well-liked by your customers, and knowledgeable and effective in their work. But what if, having accepted your training and support to become a true asset to your organisation, your employee leaves and goes to work for your competition? Can you include clauses in your employment contract to prevent this?

A well-known labour law consultancy certainly hoped so when they employed Mr DJ in 2014. His employment contract included extensive confidentiality and restraint of trade clauses, which the Labour Appeal Court adjudicated upon last week.

After about 15 months’ employment, DJ resigned to take up employment with an employer’s organisation who competed with the consultancy to offer similar services to similar clients. His employment contract restrained him in perpetuity from disclosing any client lists, trade secrets of other company information received from the consultancy during his employment. It went on to restrain him from having any interest in any other entity providing similar services to the consultancy, engaging in any similar transactions with any of the consultancy’s clients, or in any way poaching the consultancy’s staff, for a period of 3 years after his resignation, throughout two provinces of South Africa.

The consultancy immediately drew DJ’s attention to the above restraints, and alerted him to their view that he was about to breach his obligations by taking up employment with the employers’ organisation. DJ disagreed that the two organisations were in competition with one another, but nevertheless undertook not to contact any of the consultancy’s clients to attempt to lure their business away.

The consultancy was not satisfied, and launched urgent proceedings  to interdict DJ and the employers’ organisation concerned, from entering into an employment relationship. The consultancy expressed the fear that DJ would take unfair advantage of his knowledge of its clients, pricing and business strategies, and abuse the strong relationships he built up with its clients to lure them away. DJ denied having any special access to the consultancy’s business strategies, saying that he had learned these before starting work for it and that the information was in any event readily available on the internet. He aso denied having any special bond with any of the consultancy’s clients.

The Labour Court was not satisfied that there was special, confidential information in DJ’s possession which could be abused to the detriment of the consultancy. Neither was it satisfied that DJ had been shown to enjoy especially close relationships with the consultancy’s clients. The consultancy had not proven that it had any protectable interest, and to enforce the restraint would be unreasonable as against DJ and only have the effect of stifling competition.

The consultancy approached the Labour Appeal Court with an appeal against this decision. It complained that DJ had entered employment with it as a blank slate, and had only become a valuable asset worthy of being head-hunted by its competitors, as a result of the training and resources it had invested in him. It argued that it was unfair to allow such an employee, who had signed a restraint when accepting employment, to go over to a competitor who would reap the benefits of this investment.

The Appeal Court noted that restraints of trade are enforceable unless they are proven to be unreasonable. Their reasonableness is determined by balancing the need for parties to comply with their contractual promises and the right to freely exercise one’s trade or occupation. A restraint would only be reasonable if it protected an interest worthy of protection, such as confidential information and trade secrets, or customer and trade connections. For information to be confidential it had to be useful, restricted to a small number of people, and have economic value to the employer. Customer or trade connections could be protectable if they were of such a nature that the employee could induce such connections to follow him or her to a new employer. An interest in preventing competition was not in itself protectable.

The employer’s protectable interest had to outweigh the employee’s interest in being economically productive. It stated that an employee cannot be restrained from taking away and using his or her skills, experience and knowledge, even if these were acquired chiefly through the employer’s training of the employee. These skills were not the property of the employer.

The Appeal Court found that DJ had been a relatively junior employee and had lacked access to truly confidential information. The forms he used for his work were freely available on the internet. He had no access to sensitive financial information or business strategies.  DJ’s evidence was that he only handled the simplest of tasks for clients and that he had no ongoing relationships with any clients such that they felt an attachment to him. He had no role in recruiting clients at either organisation.

As no protectable interest had been proven, the Appeal Court noted that it was unnecessary to weigh up the interests of the parties. DJ was entitled to pursue his career unfettered by the clear language of the restraint he had concluded with the consultancy.

Restraints of trade remain contested territory, with the enforceability of restraints coming down to the circumstances of individual cases. In general, they are of most use in the case of absolutely key personnel only, and should not be concluded with employees simply to fetter their career path and keep them from joining the competition.

Exiting the exit agreement: a departing employee’s claims of coercion and duress

It happens with some regularity that an employee refers a dismissal dispute to the CCMA, and the employer arrives at the hearing bearing a termination agreement with the employee’s signature. In it, the employee agrees to resign from employment, often in return for some benefit such as an extra month or two’s pay, or the privilege of leaving honourably rather than being dismissed and incurring a disciplinary record for serious misconduct. The employee will usually concede that they signed the agreement, but argue that they were bullied into it. The CCMA commissioner will advise them that the agreement is binding until set aside by the Labour Court on solid grounds, such as duress, and close their file.

In the recent matter of Gbenga-Oluwatoye versus Reckitt Benckiser SA, an employee went as far as approaching the Labour Court and, thereafter, the Labour Appeal Court, in his quest to get out of a termination agreement he admitted signing with the employer.

The employee was approached by a headhunter while employed in a lucrative position with a large multinational. He later left his lucrative position, but actively concealed this from the headhunter, negotiating a generous sign-on bonus on the false basis that he was losing a handsome shareholding by leaving the large multinational to join the employer. In short, he deceived and defrauded the new employer.

Some months into his employment with the new employer, the employee’s misconduct came to light. He was suspended pending a disciplinary hearing,  and then summarily dismissed. On receipt of his termination letter, the employee approached the employer requesting a “softer exit”. He offered to repay the money over time, in exchange for the employer delaying action to revoke his work permit and housing allowance. The employer agreed, and the employer expressed his gratitude for the humanity shown him.

A termination agreement was then drawn up in draft form. The employee was unwilling to sign the first draft, but agreed to sign a second draft. The agreement recorded that it was in full and final settlement of any claims between the parties, and that it was entered into voluntarily without any coercion or pressure. The employee agreed, in the agreement, that he waived any right to approach the CCMA and Labour Court arising in any way from his employment and the termination agreement.

A week later, however, the employee brought an urgent application to the Labour Court, for an order setting aside the termination agreement and reinstating him into his employment. He argued that the agreement was against public policy and that he had been coerced into signing it through fear of losing his work permit and housing and other allowances.

The Labour Court was unsympathetic. It had regard to the fact that the employer had a legal entitlement to dismiss the employee summarily on account of his serious misconduct, and also the fact that the agreement had been further negotiated after the employee had been dissatisfied with the first draft. There were no facts to indicate that he signed the agreement only as a result of duress by the employer.

The employee was unrelenting, and took the matter further to the Labour Appeal Court, on appeal.

The Labour Appeal Court pointed out that, in order to get out of an agreement on the basis of duress, intimidation or improper pressure had to be proven of such magnitude that the purported consent of the signatory was no true consent. There had to be actual violence or a fear caused by the threat of a considerable evil. The threat had to be unlawful or against the morals of the community.

Although the Court did not point this out, it goes without saying that the loss of a work permit and of allowances due to termination of employment by resignation or by summary dismissal for gross misconduct, are lawful and reasonable consequences. They cannot be construed to be unlawful or against the morals of the community.

The Court did point out that, while everyone has the constitutional right to seek redress through the courts, this right could be limited in reasonable circumstances. Parties were free to limit this right in their free contractual dealings. The Court found that the employee was an experienced, senior managerial employee, who would understand the import of what he was agreeing to. Clauses limiting the right of redress were standard in termination agreements, and of practical value.

Finally, the Court point out that it had no power to set aside agreements simply because they appeared to be unfair.

The Court accordingly upheld the termination agreement, and dismissed the employee’s application with costs.

Caveat subscriptor – “signer, beware!” – is a well-worn legal maxim for good reason. All parties should be slow to sign any agreement unless they are completely satisfied with the terms, and should be aware that by signing an agreement they trigger important legal consequences which cannot be easily evaded. In the absence of compelling evidence of significant unlawful pressure, a party who foolishly signs an unfair or prejudicial agreement, will be held to its terms.

 

 

 

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 6: BRINGING LABOUR BROKERS IN LINE

Throughout recent deliberations on amendments to the Labour Relations Act, the status of labour brokers, or “temporary employment services (TES)” was a hot button issue. Trade unionists called for their outright banning. At last, however, the law governing their operation was instead tightened up, in the interests of protecting those employed by them. Many of the amendments are aimed at halting abuses whereby employers circumvented  labour laws, sectoral determinations and collective agreements by employing staff via a TES.

Since a prior amendment, the Act has held a TES and its client jointly and severally liable for contraventions of basic conditions and other requirements – even though technically the TES is the employer, and the client is a third party to the employment relationship.

The new amendments go further.

(a) Where the TES and its client are jointly and severally liable for contraventions:

  1. The employee may sue either or both of them;
  2. The Department of Labour can take enforcement action against either or both;
  3. A court order or arbitration award issued against one in favour of the employee or labour inspector, may be enforced against either.

(b) TES employees must be given written employment particulars, compliant with the law on basic conditions of service, when they are employed.

(c) The terms and conditions of employment must comply with the Act and any labour law. In addition, significantly, where a TES employs an employee to do work for a client in whose sector there is a collective agreement or sectoral determination, the TES must comply with those too.

(d) A special level of protection is offered to employees of TES who earn below the threshhold currently set at R205 433, 30 per year. Such an employee remains an employee of the TES only if she works for the client for less than three months, is substituting for an employee of the client who is temporarily absent, or performs work which has been defined as temporary work in a collective agreement, sectoral determination, or notice by the Minister of Labour. Failing falling into those categories, the employee is deemed in law to the employee of the TES’s client. She is entitled to treatment which is not less favourable than that given to an employee of the client performing the same or similar work unless there is a “justifiable reason” for different treatment.

Key changes to the labour laws in 2015 – part 5: SOME RELIEF FOR AGGRIEVED EMPLOYEES IN SMALL RETRENCHMENTS

Prior to 2002, any dispute arising from an employee’s retrenchment from work, had to go to the CCMA for conciliation (a sort of mediation) and thereafter, if not resolved, to the Labour Court for adjudication after a full trial. This was of course costly, time-consuming and complex, and deprived a great many employees from access to justice. Those who did not have personal wealth or the support of a well-resourced and capable trade union, could often not afford legal representation to pursue their dispute, and lacked the skills to pursue the dispute as an unrepresented layperson.

In 2002, the legislature amended the Labour Relations Act to state that an employee who was dismissed following a retrenchment process that applied to her only, had an election to approach either the Labour Court for adjudication of the dispute, or the CCMA for arbitration.

This proved to be insufficient, however, as it did not assist other employees in a similarly isolated and vulnerable position in the retrenchment context.

This year, the legislature again amended the Act, now to extend the election between approaching the Court or the CCMA also to:

  • single employees retrenched, even where the preceding processes involved a larger pool of employees; and
  • employees retrenched by smaller employers (with ten of fewer employees) no matter how many employees were retrenched.

Whilst this is a move in the right direction, the different treatment of dismissals for conduct or capacity (which go to the CCMA for arbitration) and dismissals due to retrenchments (which usually go to the Labour Court for adjudication) is still open to criticism. The apparent rationale that retrenchment disputes are more complex may not be valid, and a more sweeping amendment allowing all employees in retrenchment disputes to elect to approach the CCMA instead of the Labour Court, would arguably be more appropriate.

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).

Dismissal for comments made on Facebook

“But one cannot be happy in a family business, especially when the kids join the company after you have been there for six years and they try everything in their power to make you look stupid.”

“Now we have the son working there as well who has no idea but is pretending he has a clue!”

“Had a day from hell! “

“My boss was a total meanie 😦 no idea how to treat people let alone management.“

“From so called ‘professionalism’ 2 dumb brats runnin a mickey mouse business.”

Do any of the above Facebook posts sound familiar? If you are an employee, hopefully not – or it is worth having (at the least) a very careful check on your privacy settings.

Although the employee who posted the comments above did not name her company or the persons she was referring to, and claimed that her Facebook page was private, her employer was able to view and print content from her page and lawfully dismissed her as a result.

When rejecting the employee’s challenge to her dismissal for posting the comments, the CCMA arbitrator found that by leaving her Facebook page public, the employee had waived any protections her posts might otherwise have enjoyed as private communications. It was highly likely that some people viewing the posts knew to whom the employee was referring (especially as her Facebook friends included colleagues and ex-colleagues), and there was a real potential that the comments would harm the company’s and individuals’ reputations.

The employee was guilty, at the very least, of gross insolence, if not insubordination, and dismissal was justified.

Even with privacy settings in place, disrespectful posts about an employer could find their way to the employer’s notice (especially if your Facebook friends include colleagues or friends of colleagues) and could result in disciplinary action. It does not matter that the posts are made outside of working hours and from a home computer.

The bottom line? The arbitrator in one case pointed out that “if employees wish their opinions to remain private, they should refrain from posting them on the internet”. Or, in the colourful turn of phrase of American technology journalist Erin Bury: “Don’t say anything online that you wouldn’t want plastered on a billboard with your face on it”. This advice applies equally to Facebook, Twitter, as well as any other online forum.