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Changing Conditions of Employment


Nampak Metal Packaging Limited (Bevcan) vs Numsa and others (JR 1949/08: 19 December 2008)

Facts: Since 1998, Bevcan had a discretionary plant incentive scheme in place. The bonus is triggered if a particular 'efficient machine utilisation' (EMU) target is met. If an 85% budgeted EMU is achieved, then production employees would receive 2.8% of their basic wage for each 1% achieved above the EMU target.

NUMSA declared a dispute against Bevcan after it indicated its intention to increase the line speed from 1600 to 1800 cans per minute. NUMSA contended that an increase in the line speed would make it difficult for its members to cope and would result in Bevcan unilaterally changing the terms and conditions of employment of its members.

Bevcan argued that no change to terms and conditions of employment stipulated in the employees' contracts of employment was intended. Rather, it was seeking to enhance business efficiency by increasing the actual speed of its machines as this would increase the number of beverage cans that could be manufactured per shift. There was no extra work necessary by the employees. It did not extend their working hours nor did it increase the effort on their part.

NUMSA wanted to take advantage of an expedited route to a protected strike in terms of Section 64(4) of the Labour Relations Act, 1995. To do so, there needed to be 'a change to conditions of employment'. NUMSA issued a notice of intention to strike.

Decision: Bevcan successfully obtained an interdict in the Court in order to prevent the strike from taking place. The interdict centred upon a distinction between an employer changing conditions of service and a contemplated change in work practice.

The Court found that "none of the changes affect(ed) the employees' terms and conditions of service. The bonus payable to employees would be assessed on the same formula. The target remains at 85% of the EMU. .... Although the modified machines will produce 200 cans more per minute, the employees have to exert no greater effort to produce the extra cans."

The Court further found that NUMSA produced no evidence to suggest that the modification of the machinery would change any conditions of employment, the employees' hours of work, shift patterns or wages.

The Court concluded that NUMSA's case was no more than a demand for a wage increase that was camouflaged as a dispute based on erroneous complaints about unilateral changes to the conditions of employment.

"Slippery Floor" Liability


In Chartaprops 16 (Pty) Ltd and Another v. Silberman 2009 (1) SA 265 (SCA), the Supreme Court of Appeal heard an appeal by two defendants who at trial were held liable, jointly and severally, for a "slippery floor" incident. The defendants were the owner of a shopping mall where the incident occurred and the company engaged by the owner to keep the floors of the mall clean.

In its defence, the owner pleaded that it had done all that was necessary to render its premises reasonably safe for use by the public by appointing competent contractors to carry out the task of protecting the users of the mall from harm.

The law is that a principal is liable for the acts of his agent where the agent is an employee, but not where the agent is an independent contractor. However, in some circumstances the duty to take care cannot be delegated and where that duty has been breached, the principal also will be liable. In such cases, the principal's liability does not arise via the agent but because there was also a duty on the principal which he has not fulfilled. The legal position is that there is a duty not merely to take care but a duty to provide that care is taken.

In this case the court agreed with the owner of the building that by engaging a competent contractor, it had taken the necessary care to make the premises reasonably safe. There was no way in which it could have known that the contractor's work would be defective.

Accordingly, the court upheld the owner's appeal, but on the facts found that the contractor had been negligent and was liable to the plaintiff for the loss she had suffered.

Accommodating an Underperforming Employee


Often at issue is the extent of an employers' obligation to provide underperforming employees with further training, counselling and monitor work performance prior to dismissal.

This issue was recently was considered by the Labour Court in reviewing a CCMA decision in the case of Chesteron Industries (Pty) Ltd v CCMA & Others (2008). The case highlights there is good reason for sticking to the code of good practice in schedule 8 of the Labour Relations Act.

Facts: a salesman failed to meet his monthly sales targets over a period of three years. He was provided with training, counselling and had a manager assigned to accompany him to each client sales meeting. Nonetheless, he failed to meet the minimum targets by a substantial margin, while his colleagues were clearly able to meet theirs. After several written warnings the salesman was invited to a poor performance hearing and dismissed. The salesman went to the CCMA alleging that he was unfairly dismissed.

CCMA Decision: the Commissioner agreed that the employee was underperforming, but was of the view that the employer, over and above the counselling, training and managerial assistance provided, could have made an extra effort to accommodate the employee.

The Commissioner suggested that the solution was for the employer to have unilaterally changed the employee's terms and conditions of employment so that his remuneration package was based on commission only.

Labour Court Decision: on review the Labour Court overturned this award. The Court found that the Commissioner's conclusion was not reasonable in that he had only taken into account the interests of the employee and had failed to appreciate the implications for the employer, who had complied with the law and had taken reasonable steps to accommodate the employee over a long period of time.

Public Holiday on Election Day


Election Day, 22 April 2009, has been declared a Public Holiday throughout the Republic by proclamation in the Government Gazette No. 32039 of 19 March 2009. This means that:

  • no employer may require an employee to work on that day other than by agreement
  • employees must be paid for the day at ordinary rates, if they do not work
  • if employees do work, they must be paid double their normal rates
Remember that in terms of section 2(2) of the Public Holidays Act you can exchange a public holiday for any other day by agreement.

Termination of Employee with Capacity as Director and Employee


In Amazwi Power (Pty) Ltd v Turnbull JA 14/07 [2008] ZALAC 8, the Labour Appeal Court dealt with the question whether Ms Turnbull's resignation as the Financial Director of Amazwi also resulted in the termination of her employment. It found that terminating the directorship of an employee does not automatically terminate the employment contract.

Facts: In her letter of resignation, Ms Turnbull wrote that she was resigning as a director but "would continue to give 100% on behalf of the company as an employee". Amazwi wrote to her accepting her resignation as director and also from employment with the company. Ms Turnbull bought an unfair dismissal dispute arguing that she did not resign as an employee.

Decision: The Labour Appeal Court held that a director is not an employee of a company, although he or she can be an employee in addition to holding the independent office of a director. The two relationships are regulated by different terms and conditions. On the one hand, the appointment of a director is regulated by the company's Articles of Association and any contract of directorship entered into between the parties. On the other hand, the employment relationship is regulated by labour legislation and the terms and conditions agreed between the parties in the contract of employment.

Thus it was possible for Ms Turnbull to resign as a director but not as an employee. Her dismissal was therefore unfair.

From this decision, employers should be careful when they appoint directors who are also employees. The terms and conditions of employment and directorship should include an express provision that where the employee's employment terminates for whatever reason, the directorship is also terminated too and vice versa. If the employee does not agree to this, then the employer must follow the Labour Relations Act when terminating the employment contract and the requirements of its Articles of Association and the Companies Act in terminating the appointment of a director.

Directors' Duties and Board Governance under New Companies Act


From a corporate or board governance perspective, the most important provisions in the new Companies Act are those creating a new dispensation of statutory duties for directors.

Section 76 ("Standards of directors conduct") creates a dispensation of statutory fiduciary duties for directors (to act in good faith for a proper purpose and in the best interest of the company) and the duty of reasonable care (to act with the degree of care, skill and diligence of a director that may reasonably be expected of a person, measured both objectively and subjectively).

There is a positive duty found in section 76(2) that a director must disclose any material information (not only confidential information) to the board. This obligation can be seen as more onerous than common law duties. However, there is a defence for directors under section 76(4).

The statutory duties of directors are supplemented by new provisions on conflicts of interest in section 75. Section 75 contains a comprehensive procedure to be followed by a director to disclose any personal financial interest.

Section 77(2) deals with the liability of a director who breaches their duties. When a fiduciary duty is breached, the principles of common law will apply. Where the duty of reasonable care is breached, a director will be held liable under common law.

The new Act further contains provisions which aim to promote transparency and accountability. A summary of some of these provisions is:

  • flexibility in the manner and form of shareholders meetings, the exercise of proxy rights and the standards for the adoption of ordinary and special resolutions;
  • retaining the existing qualifications for directors with enhanced flexibility for very small companies with a single shareholder or director;
  • recognition of alternate directors, directors who may be appointed by designated persons and ex officio directors; and
  • the introduction of a more certain and nuanced scheme for the removal of directors - section 71 provides that both shareholders and directors are entitled to remove a director.
The statutory duties of the new Act of directors are certainly one of the more controversial parts of the new Act and their practical implementation and their effect will most certainly be lively debated.

Renaming of High Courts


The Renaming of High Courts Act, 2008 commenced on 1 March 2009.

Besides the obvious fact that all pleadings and notices in litigation have to change, it has an effect on commercial agreements. Frequently commercial agreements describe the court in which the proceedings will take place and the new names or the seat of court will have to be used. The new names of the various High Court divisions are:

Seat of High Court / Name of High Court:
Bhisho / Eastern Cape High Court, Bhisho
Bloemfontein / Free State High Court, Bloemfontein
Cape Town / Western Cape High Court, Cape Town
Durban / KwaZulu-Natal High Court, Durban
Grahamstown / Eastern Cape High Court, Grahamstown
Johannesburg / South Gauteng High Court, Johannesburg
Kimberley / Northern Cape High Court, Kimberley
Mafikeng / North West High Court, Mafikeng
Mthatha / Eastern Cape High Court, Mthatha
Pietermaritzburg / KwaZulu-Natal High Court, Pietermaritzburg
Port Elizabeth / Eastern Cape High Court, Port Elizabeth
Pretoria / North Gauteng High Court, Pretoria
Thohoyandou / Limpopo High Court, Thohoyandou

Restraint of Trade: Lack of Proprietary Interest


In the unreported case of Digicore Fleet Management (Pty) Ltd vs Steyn and Another (722/2007: SCA) handed down on 22 September 2008, the SCA had to determine the enforceability of a restraint of trade undertaking made by Steyn in favour of Digicore.

Facts: Steyn was employed by Digicore for eight months as a sales executive for motor vehicle tracking devices. Her employment contract had provisions that she maintain confidentiality in her work and restrain from competing with her employer for two years after leaving Digicore.

Digicore specialised in the sale of different tracking devices to fleet owner clients and also supplied tracking systems for individual users.

Steyn had prior experience in selling tracking systems, and had also worked in the insurance industry, where she developed good client networks.

Whilst working for Digicore, Smartsurv approached Steyn with a job offer of better pay and benefits. Steyn accepted, resigned from Digicore at the end of December 2006 and commenced work for Smartsurv in January 2007.

On learning that Steyn had approached two of its clients in early 2007, Digicore sought to restrain Steyn from competing with it for the duration of the restraint period.

Claim: Digicore contended that the restraint was reasonable in order to protect its interest in its customer base. It claimed that it had trained Steyn and provided her with support to enable her to market and sell its recovery systems. It also claimed to have provided her with confidential information, such as client lists.

Steyn argued that she had not undergone any induction programme and received little support from Digicore. She admitted being given a list of 20 customers.

Steyn averred that Digicore concentrated mainly on corporate and fleet management clients and that she had brought her own potential customers and cultivated contacts because of her experience and expertise. This was new business that followed her when she joined Smartsurv.

Decision: When Steyn left Digicore she took with her no more than what she had brought to the business initially. The High Court concluded that Digicore did not have a proprietary interest that was in jeopardy when Steyn resigned to join a competitor. The clients Steyn had attracted had been previously unknown to Digicore and it had no right to prevent her from using them.

In determining whether or not the High Court had been correct to conclude that Digicore had no proprietary interest worthy of protection, the SCA had reference to the four-fold test enunciated by Nienaber JA in Basson vs Chilwan 1993 (3) SA 742 (A) at 768F-H, namely:

  • Is there an interest of the one party which prior to the conclusion of the restraint agreement warranted protection?
  • Is that interest threatened by the other party?
  • If so, does the interest weigh "qualitatively and quantitatively" against the interest of the other party resulting in that party becoming economically inactive and unproductive?
  • Is there another aspect of public interest that does not affect the parties per se, but requires that the restraint be enforced?
Applying this test, the SCA concluded that Steyn presented no threat to Digicore's interests. She was using her own contacts and information acquired before her employment with Digicore. She was not making improper use of confidential information. She had no experience in fleet management clients and made no effort to break into that area of business. Her employment with Digicore had also been very short. Her client contacts wished to move with her to Smartsurv. It could not be said that Digicore's interest could be regarded qualitatively or quantitatively as warranting protection. Steyn, on the other hand, could have been left economically inactive if the restraint was enforced. There was no other public interest issue requiring such enforcement. The appeal was dismissed with costs.

This case provides a practical set of guidelines to determine whether a restraint of trade covenant is capable of enforcement. The four questions are the key considerations in determining whether there is a protectable interest, which is a factual debate.

Consumer Protection Bill


The Consumer Protection Bill ("the Bill") was passed on 11 November 2008 and has now been sent to the President to be signed into law.

Following public submissions and passage through Parliament, several amendments were made to the version released in June 2008. A significant change to the Bill is that the size of the proposed transaction will no longer determine whether or not the Bill applies. To ascertain whether the Bill will be applicable, one will have to look at the size of the consumer involved.

The Bill will not apply to any transaction where the consumer is a juristic person whose asset value or annual turnover, at the time of the transaction, equals or exceeds a threshold value determined by the Minister. This threshold is not yet known and will be published by the Minister after the Bill is signed into law by the President. It is anticipated that this threshold will be relatively low as the Bill is not aimed at protecting big business.

Financial advice and intermediary services under the Financial Advisory and Intermediary Services Act are now excluded from the ambit of the Bill, as are insurance services under the Long-Term Insurance Act and Short-Term Insurance Act.

It should be noted that the Bill's specific provisions relating to the renewal and expiry of fixed-term agreements no longer apply to transactions between juristic persons (i.e. companies, close corporations, partnerships or trusts). The rest of the provisions of the Bill will apply to all fixed-term agreements, regardless of whether the consumer is a juristic person or a natural person.

Timing for compliance
The Bill will be gradually phased in. The provisions dealing with the establishment of the various consumer protection bodies and those authorising the Minister to make regulations will come into effect one year after the date on which it is signed by the President. All other provisions will come into effect 18 months after the date of signature by the President ("the general effective date").

Importantly, the Bill will apply to goods or services supplied after the general effective date, even if the agreement or transaction related to such goods or services was concluded before the general effective date. This means that most of the Bill's provisions dealing with the delivery, return and quality of goods should be taken into account when transactions or agreements are entered into before the general effective date.

Where an agreement is for a fixed term which will expire more than two years after the general effective date, the provisions of the Bill will not only apply to the goods or services supplied, but also to the agreement itself, even if it was signed before the general effective date.

Well-Known Foreign Trade Marks


Trade marks are territorial in nature. It is an established principle of South African trade mark law that the fact that a trade mark is registered or used in a foreign country does not in itself constitute a bar to its adoption and registration by some other person in South Africa, provided that the trade mark is not well known in South Africa. The Trade Marks Act deals with the protection of well-known foreign trade marks.

Also of vital importance are the provisions of the Advertising Standards Authority Code of Advertising Practice (the ASA Code). The reason for this is that using a foreign trade mark in South Africa could well amount to copying an international advertisement.

Also, the ASA Code can provide a useful tool for restraining the unauthorised use of a trade mark or get-up in circumstances where the common law remedies of unlawful competition and/or passing-off would have been used traditionally, and that using this tool is a far quicker, easier and less expensive route to follow than employing these common law remedies.

This point is well made by the ASA complaint by Carma Laboratories, Inc. against Avid Brands SA (Pty) Ltd. In this case, the complainant was a manufacturer of lip balm products which it sold internationally under the brand name CARMEX, on a substantial basis although sales in South Africa were less substantial and were insufficient to prove the requisite reputation for purposes of proceeding on the basis of passing-off. The respondent also produced a range of lip balm products, which it sold in South Africa under the brand name LIPSANO. It is clear that the trade marks themselves are not confusingly similar, however, both product ranges were sold in containers consisting of a white tub with a yellow lid and with black print appearing on the lid of the product.

Carma Laboratories lodged a complaint against Avid Brands claiming contravention of clauses 8 and 9 of the ASA Code, and obtained a ruling in its favour on the basis of clause 9 of the Code, forcing Avid Brands to change the packaging of their products and to phase out the 'old' product packaging within a specified period.

In conclusion, it is very important to bear in mind the provisions of the ASA Code, in addition to the provisions of the Trade Marks Act, when considering adopting a foreign trade mark for use and registration in South Africa. It is also useful to bear in mind that the ASA Code can provide a useful, user friendly and comparatively cost efficient means of restraining unauthorised use of a trade mark or get-up, where the reputation of the aggrieved party is likely to be insufficient to rely on the traditional remedies of unlawful competition and / or passing-off.

Liability for Actions of Security Personnel


In Saayman v Visser (Case number 411/07; judgment handed down 30 May 2008), the Supreme Court of Appeal considered the question of who is liable if you hire an armed guard to protect your property, and that guard proceeds to unlawfully and negligently wound a passer-by.

Facts: The defendant, Visser, was a diamond digger and businessman. He was often away from home (where he kept valuables) and required protection for his wife and daughter who stayed in the house. Visser orally agreed with Griekwa Security CC to provide an armed security guard, 24 hours a day, as protection for himself, his family and his assets.

Visser could not nominate the particular guard to be employed, and also had no say about the manner in which the guard was to perform his duties. The guards were all instructed to only follow instructions from Griekwa Security CC. The security company also requested home owners to take up any problems that they might experience with a guard with the company itself, and not with the guard.

The plaintiff, Saayman, and an associate of his, Smith, had been heavily drinking one night. Just after midnight, Saayman and Smith walked to a pub that was close by. On the way home, they passed Visser's house and decided to play a prank. In their inebriated state, they decided to overturn a pot plant that was located on the lawn. They easily entered the premises but the plot was too heavy to dislodge so they decided to leave. It was at this stage that they were spotted by the Griekwa security guard, who fired several shots in their direction. Saayman was struck in the back and the neck.

Because the security company had very little assets, Saayman sued Visser for his injuries.

The court made the following rulings:

  • An employer is not responsible for the negligence of an independent contractor that he utilises, unless the employer himself was negligent, having regard to the conduct of the independent contractor.
  • An employer (or an independent contractor) owed a third party the degree of care which the circumstances demand. Unlike English law, the fact that the work to be performed is dangerous, is only one factor to be considered.
  • Further factors that must be considered include the nature of the danger, the context in which the danger may arise, the degree of expertise available to the employer and the independent contractor, and the means available to the employer to prevent the danger.
  • Although the risk of danger was reasonably foreseeable when Visser employed an armed security guard, nothing in the manner in which the security company conducted itself would have put a reasonable person on his guard. Nothing indicated that the security company did not possess the necessary expertise or that it operated outside of the law.
  • When the shooting incident occurred, Visser was asleep, unaware of the existence of a dangerous situation, and unable to intervene to prevent the harm that eventuated.
  • In the present case, a warning sign would probably not have avoided the harm. Saayman and Smith were intoxicated and may even have been spurred on by a warning sign. It is also open to doubt whether the public should be informed where exactly an armed guard is positioned or that his position should be well-lit, as that may put the guard in danger of attacks.
  • To expect an armed guard to first use blank ammunition in the face of danger, is without merit.
The Court therefore dismissed Saayman's claim for damages.

BEE Codes Hold-Up


Companies will have to wait even longer for clarity on BEE codes after a Treasury announcement that it expects no progress with the Public Finance Management Act (PFMA) in the near future. Reports attribute the delay to the upcoming elections for which no final date has been set.

The PFMA will replace parts of the Preferential Procurement Policy Framework Act and provide new codes for most of industries. The Treasury has also informed the SA Federation of Civil Engineering Contractors (Safcec) that no interim codes will be published. Reports says senior business executives expressed their frustration that no verification agencies have been accredited to certify the new empowerment status of companies.

Parties Bound By "Trading Conditions"


Is a contracting party bound to "trading conditions" referred to in the main contract, whether the party had sight of these trading conditions or not? This was the question decided by the court in Kuehne & Nagel (Pty) Ltd v Breathetex Corporation (Pty) Ltd [2008] 2 All SA 446 (SE).

Facts: Kuehne & Nagel ("K") agreed to act as freight forwarder for Breathetex Corporation ("B"). They concluded a written agreement that was headed "Credit Application Form". The clause in dispute in the contract read as follows:
"I / We understand that all business is undertaken in terms of the trading conditions of the South African Association of Freight Forwarders, a copy of which has been left with me / us. I / We confirm that I / we have read and understood the contents thereof."

K delivered the blank form to B's business premises. One of B's employees completed the form whereafter B's financial manager and its operations director signed it.

When K sued B for services rendered in terms of the contract for R204 682, B counterclaimed for R196 809 relating to damages suffered as a result of breach of the contract. B denied that the trading conditions formed part of the contract as it alleged that it never received a copy of these conditions. If the conditions formed part of the contract, it would afford K a defence to B's counterclaim.

The court held that the trading conditions formed part of the agreement between the parties. It reached this conclusion on the following basis:

  • The term incorporating the trading conditions into the contract was not covertly introduced into the agreement. The main agreement constituted one page, and the disputed clause appeared directly above the signatures of B's representatives. The clause was in the same print as the rest of the document.
  • K took reasonable steps to bring the clause to B's attention.
  • B cannot blame K for the nonchalance or negligence of its representatives in not reading the document before signing it.
  • The document also required each signatory to acknowledge that a copy of the conditions had been left with that signatory, and the signatory had to confirm that he had read and understood these conditions.
  • B's argument that this clause obliged K to prove that the conditions had actually been left with B is inconsistent with the clear wording of the clause. If B's argument is accepted, it means that words such as "provided that" or "only if" must be read into the clause and be inserted before the phrase "a copy of which has been left with me / us". Such an interpretation would run counter to the clear, ordinary meaning of the clause.
  • The clause was inserted into the contract to bring about certainty as to whether a copy of the conditions had been left with K's signatories and whether they had read and understood the conditions. If K's argument is accepted, the clause would not achieve its purpose. In terms of the agreement the parties reached during litigation, the court then awarded judgment in K's favour for R196 809.

Restraint of Trade in Commercial Agreements


Replication Technology Group (Pty) Ltd vs Gallo Africa Ltd, case no. 92/IR/Sep07 concerned a restraint undertaking emanating from a sale of shares agreement.

The restraint was contained in a sale agreement in which RTG disposed of its shareholding in Compact Disc Technologies (CDT) to Gallo, which had hitherto owned a portion of the shares in CDT and was now its parent company.

The agreement restrained RTG from competing with CDT in the markets for CD and DVD entertainment, but operated only in respect of the provision of designated services to a list of specified customers for a period of two years. RTG could therefore remain in these markets by servicing customers not specifically identified as CDT customers.

RTG remained in these markets by operating in the adult entertainment niche of the market, a segment that CDT did not wish to service, and also by dealing with customers not specified as CDT customers. RTG would, in terms of the restraint, also be entitled to compete in the restricted part of the market where it obtained the prior written consent of Gallo.

The Tribunal found the restraint of trade valid. It emphasised the limited nature of the restraint that operated in the RTG case. In particular, the RTG restraint was of a limited duration, a modest two years. Additionally, the restraint did not require RTG to refrain from participation in the market altogether, it was merely required to refrain from doing business with certain customers of RTG for a limited period and could, in any event, seek Gallo's permission to circumvent the restraint if required. The restraint was required for sound commercial reasons, to protect Gallo's investment in RTG following its purchase of the remaining shares from RTG.

Labour Court Interfering in Disciplinary Proceedings


Generally, employees must abide by their employers' right to conduct internal disciplinary enquiries. However, it has often be held that the Court could interfere prior to conclusion of an internal disciplinary process, under exceptional circumstances, to ensure that the employee is not treated unfairly in the internal disciplinary process, where for instance grave injustice or miscarriage of justice might otherwise result.

In R Booysen v the South African Police Service and the Minister of Safety and Security case number C60/08 (as yet unreported), the contrary view is, however, expressed.

Facts: Mr Booysen sought the Court's intervention in a disciplinary process conducted against him by his employer. Mr Booysen averred that he was incapable of participation, in consequence of suffering from post traumatic stress disorder. Both Mr Booysen and his employer had led the evidence of expert witnesses regarding his ability to participate. After having listened to the respective experts, the Chairperson decided that Mr Booysen was indeed able to participate in the disciplinary enquiry.

Mr. Booysen asked the Court to intervene, effectively seeking a review of the aforementioned decision of the Chairperson of the disciplinary enquiry.

Mr. Booysen's legal team contended that the Court should have jurisdiction to intervene on one or more of the following grounds:

  • the right to a fair dismissal procedure under the Labour Relations Act 66 of 1995 (the LRA);
  • the breach of the constitutional rights to dignity, fair labour practices and fair administrative action; and/or
  • the inherent power of the Court to remedy an injustice.
Cheadle AJ evaluated each of the grounds relied on by Mr. Booysen and came to the following conclusions:
  • In respect of the first ground relied on by Mr. Booysen, the LRA defines the "four walls" of the Court's jurisdiction. None of the sections evaluated expressly cloth the Court with the necessary jurisdiction to interfere in internal disciplinary enquiries. Even on a purposive interpretation of the LRA, Cheadle AJ found that the LRA could not be interpreted to provide the Court with the requisite jurisdiction to intervene in disciplinary proceedings.
  • The argument that Mr. Booysen should have a constitutional right to the Court's interference also met with no success. Cheadle AJ evaluated each of the constitutional grounds relied on, and rejected them in turn.
  • Cheadle AJ also concluded that there is no indication in the LRA that it intended to grant the Court a so-called "...roving power to correct any injustice outside of the specific areas in which it is given jurisdiction." This also put paid to the final argument.
The judgment is bound to reverberate in employment circles as it appears to affirm the right of employers to manage their own internal disciplinary processes without outside undue interference. Employees are thus left to challenge the fairness of the dismissal at the CCMA, Bargaining Council or Labour Court after the event.

Termination of Employment for Incarcerated Employees


Employers are often faced with absenteeism as a result of employees being imprisoned on the suspicion of committing an offence, or being refused bail after their first appearance. In such circumstances, employers are left to determine when, if, and how, they can go about terminating the employment relationship.

One such question is whether an employee can be dismissed, as a result of his/her incarceration, based on the operational requirements of the employer. This question arose in the recent bargaining council award of Commissioner Stemmet in NUM obo Maloma / Samacor Tubatse Works [2007] 7 BALR 593 (MEIBC).

Briefly, the facts were as follows: Mr Maloma was detained for two weeks by the South African Police Services on suspicion of involvement in a robbery. After this detention he was charged with absenteeism and found not guilty. On 20 May 2006 he was re-arrested on the same charge. Ten days later, he was dismissed in his absence for operational incapacity because he was unable to perform his duties (a letter informing Mr Maloma of this, written by Mr Niewoudt, was delivered to the police station). A post dismissal hearing was held on 2 November 2006. The chairman of the hearing (also Mr Niewoudt) found that the time period of absenteeism (some 137 days) was too long to expect the employer to accommodate Mr Maloma.

The commissioner found that:

  • absenteeism is a disciplinary offence that cannot be treated as operational incapacity;
  • whatever procedure purportedly followed by the employer did not afford the applicant an opportunity to present his case. No effort was made to ascertain for how long Mr Maloma was likely to be detained and the matter was not discussed with him or his union;
  • the chair of the post dismissal hearing was the same person who took the original decision to dismiss the applicant after ten days of absence. This, in the eyes of the Commissioner, created a perception of bias and rendered the dismissal procedurally unfair.
Owing to the fact that the employer did not take into account Mr Maloma not having control over the circumstances and duration of his absence, the Commissioner found the dismissal to be substantively unfair as well, and could find no evidence that Mr Maloma' occupied such a key position in the company to justify his dismissal after only ten days.

Mr Maloma was reinstated, as the Commissioner was not convinced that the continued employment relationship had been rendered intolerable.

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