SASLAW GAUTENG
CHAPTER SEMINAR
4 APRIL 2012
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Dispute resolution
Unfair dismissals and unfair
labour practices
Name of presenter:
Anton Myburgh SC
Title of Presentation:
LABOUR RELATIONS AMENDMENT BILL, 2012
Themes to the amendments
 Enhancing the effectiveness of the LC and CCMA
 Rectifying anomalies and clarifying uncertainties that
have arisen from the interpretation and application of
various sections since 2002
DISPUTE RESOLUTION –
AMENDMENTS TO 16 SECTIONS
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115:
127:
138:
143:
144:
145:
147:
150:
functions of the CCMA
accreditation of BCs
general provisions for arbitration proceedings
enforcement of arbitration awards
variation and rescission
review of arbitration awards
private arbitration override (section 147(6))
CCMA conciliation in public interest
DISPUTE RESOLUTION –
AMENDMENTS TO 16 SECTIONS
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151:
154:
157:
158:
159:
161:
168:
170:
establishment and status of the LC
LC judges’ tenure, etc
jurisdiction of the LC
powers of the LC
Rules Board for the LC
Representation before the LC
Composition of the LAC
LAC judges’ tenure, etc
Dispute resolution: CCMA / BCs
Amendment of section 115 (functions of CCMA)
 CCMA rules
 review every 2 years
 no longer responsible for ESC
 power to make rules regulating representation
 power to make rules regulating consequences of nonattendance
 Assist indigent employees to serve documents
 Widening of powers to provide advice and training
Dispute resolution: CCMA / BCs
Amendment of section 127 (accreditation of BCs)
 Accreditation to certify ballots
Dispute resolution: CCMA / BCs
Amendment of section 138 (general provisions: arbitration)
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No longer necessary for CCMA to lodge original
arbitration award with the LC
Dispute resolution: CCMA / BCs
Amendment of section 143 (enforcement of awards)
 Award for payment of money which has been certified may
be enforced as if it were an order of the LC ‘in respect of
which a writ has been issued’
 Award for reinstatement which has been certified may be
enforced, ‘without further order’, by way of contempt
proceedings in the LC
 Enforcement of awards to pay money will occur in terms of
the rules and tariffs applicable to the Magistrate’s Court
Dispute resolution: CCMA / BCs
Amendment of section 144 (variation and rescission)
 Award or ruling can be rescinded if good cause is shown
Dispute resolution: CCMA / BCs
Amendment of section 145 (review of awards)
 Applicant must apply for a hearing date within 6 months
 Review will not suspend the operation of the award, unless
security is furnished
 24 months’ remuneration where the award is
reinstatement
 the equivalent of the amount of compensation awarded
 Judgment must be handed down within 6 weeks
 Review interrupts prescription
for
Dispute resolution: CCMA / BCs
Legislative intervention to address systemic failures
 Shoprite Checkers v CCMA [2009] 7 BLLR 619 (SCA)
(delivered in March 2009)
 Equity Aviation Services v SATAWU [2012] 3 BLLR 245
(SCA)
Dispute resolution: CCMA / BCs
Amendment of section 147(6) (private arbitration override)
 CCMA must elect to itself arbitrate
 if the employee earns less than 4 times the
prescribed BCEA threshold and is required to pay any
part of the costs, or
 if the arbitrator is not independent of the employer
Dispute resolution: CCMA / BCs
Amendment of section 150 (conciliation in public interest)
 director may initiate conciliation at request of parties, or in the
public interest
 before appointing a commissioner, director must consult with the
parties and secretary of BC
 director may appoint commissioner who has already conciliated the
dispute
 to assist the appointed commissioner, director may appoint a
representative of labour and business
 CCMA’s intervention does not affect parties’ entitlement to strike or
lock-out
Dispute resolution: LC
Amendment of section 151 (establishment and status of LC)
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Status of provincial division of the Supreme Court is
amended to a ‘Division of the High Court’
 Note: sections 153(2)(a), 154(7) and 160(2) should
be amended accordingly
Dispute resolution: LC
Amendment of section 154 (LC judges’ tenure, etc)
 A number of amendments providing for security of
tenure of LC judges
 These amendments are contained in a schedule to the
Superior Courts Bill, 2011, but are being fast-tracked
Dispute resolution: LC
Amendment of section 157 (jurisdiction of LC)
 Amendment excludes the jurisdiction of LC to adjudicate
disputes that are required, not only by the LRA but by
‘any employment law’, to be determined by arbitration
Dispute resolution: LC
Amendment of section 158 (powers of LC)
 LC empowered to order compliance with LRA or ‘any
employment law’
 Except in exceptional circumstances, LC may not
review any decision or ruling made during
conciliation or arbitration before issue in dispute has
been finally determined
Dispute resolution: LC
Amendment of section 158 (continued)
 LC’s assumption of jurisdiction under section
157(2): consent of parties no longer required
(expediency is the sole criterion), and LC no longer
sits as arbitrator
 Judgments of LC to be handed down within 6
months
 Note: no similar time-limit in respect of handing
down of judgments of LAC
Dispute resolution: LC
Amendment of section 159 (Rules Board)
 Minister of Labour instead of Justice to appoint
members of Rules Board
 JP must ensure that Rules Board meets at least once
every 2 years to review rules
Dispute resolution: LC
Amendment of section 161 (representation before LC)
 ‘Members’ of trade unions or employers’ organisations
no longer have right of appearance
 Save for legal practitioners, persons who have right of
appearance (directors, office bearers, officials) may not
charge for their services, unless permitted by LC
Dispute resolution: LAC
Amendment of section 168 (composition of LAC)
 LAC can now consist of HC and LC judges
 The explanatory memorandum says that this is
intended to ensure that LAC functions as a
specialist institution
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Note: in keeping with this amendment, section 153(2)(a)
should be amended to provide that JP and DJP must be
judges of the HC or LC, and section 169(2) should be
amended to provide that judges of HC and LC may be
appointed to serve as acting judges in LAC
Dispute resolution: LAC
Amendment of section 170 (LAC judges’ tenure, etc)
 LAC judges may resign from that office
 Provisions dealing with tenure and remuneration
UNFAIR DISMISSALS AND UNFAIR LABOUR
PRACTICES – 7 AMENDED SECTIONS
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186:
187:
188A:
188B:
meaning of dismissal
automatically unfair dismissals
pre-dismissal arbitration
dismissal of employees earning above
threshold
 189A: large-scale retrenchments
 190: date of dismissal
 191: disputes about unfair dismissals and ULPs
a
Unfair dismissal and ULP
Amendment of section 186 (meaning of dismissal)
 Various amendments to the effect that termination of
employment (as opposed to termination of ‘a contract
of’ employment) constitutes a dismissal
 An employee engaged on a FTC is deemed to be
dismissed if he reasonably expected employer to retain
him on an ‘indefinite contract of employment’ but
otherwise on the same or similar terms as the FTC, but
the employer did not do so
Unfair dismissal and ULP
Amendment of section 187(1)(c) (auto unfair dismissal)
 Currently a dismissal is automatically unfair if reason
for dismissal is ‘to compel employee to accept a
demand in respect of any matter of mutual interest
between employer and employee’
 Amendment provides that a dismissal is automatically
unfair if reason for dismissal is ‘a refusal by employees
to accept a demand iro any matter of mutual interest
between them and their employer’
Unfair dismissal and ULP
Amendment of section 187(1)(c) (continued)
 Explanatory memorandum
‘This section is amended to remove the anomaly arising from
the interpretation of section 187(1)(c) in NUMSA v Fry’s Metals
(2005) 26 ILJ 689 (SCA) which held that the section had been
intended to remedy the so-called “lock-out” dismissal which
was a feature of pre-1995 labour relations practice. The effect
of this decision … is to discourage employers from offering reemployment to employees who have been retrenched after
refusing to accept changes in working conditions.’
Unfair dismissal and ULP
‘The amended provision seeks to give effect to the
intention of the provision as enacted in 1995 which is to
preclude the dismissal of employees where the reason
for dismissal is their refusal to accept a demand by the
employer over a matter of mutual interest. This is
intended to protect the integrity of the process of
collective bargaining under the LRA and is consistent
with the purposes of the Act.’
Unfair dismissal and ULP
Amendment of section 188A (pre-dismissal arbitration)
 Change of terminology from a pre-dismissal arbitration
to ‘an enquiry’
 Number of formal amendments to facilitate use of
process, including that consent can now be given ‘in
accordance with a collective agreement’
Unfair dismissal and ULP
Amendment of section 188A (continued)
 2 amendments relating to protected disclosures
 Despite sub-section (1) (which provides that parties must
consent to the process), if an employee alleges that holding of a
disciplinary / performance enquiry contravenes the PDA,
employee or employer may require that enquiry be conducted in
terms of this section
 Holding of enquiry in terms of this section and suspension of
employee pending outcome thereof do not constitute an
occupational detriment as contemplated by the PDA
Unfair dismissal and ULP
Amendment of section 188A (continued)
 Explanatory memorandum
‘… the section is amended to avoid disputes where an
employee claims that the holding of the enquiry into
allegations of misconduct, and suspension pending
such an enquiry, breaches the provisions of the PDA.
By permitting either party to insist on an enquiry under
this section the amended provision reduces the risk of
collateral litigation, including HC litigation, which has
been common in these circumstances.’
Unfair dismissal and ULP
New section 188B (dismissal of employees earning above
threshold)
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Section applies to employees earning above prescribed
threshold on dismissal
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In determining threshold in consultation with NEDLAC,
Minister must take into account ‘the extent to which
employees, by reason of their earnings level, level of skill
or position, have sufficient bargaining power to ensure that
adequate provision may be made in their contracts of
employment for protection against unfair dismissal’
Unfair dismissal and ULP
New section 188B (continued)
 Provided it is not automatically unfair, dismissal of employee
to whom this section applies is deemed to be fair if employer
gives employee prescribed notice or pays him in lieu thereof
 Prescribed notice is 3 months or longer
 In respect of contracts concluded before commencement
date of this section, the section will take effect 2 years after
commencement date
Unfair dismissal and ULP
New section 188B (continued)
 Explanatory memorandum
 ‘At the heart of the change is the disproportionate
cost, complexity, and impact on an employer’s
operations of procedures to terminate the
employment of high earning employees in
circumstances where the reason for doing so may
not fall clearly and neatly within the fair reasons for
dismissal specified in section 188.’
Unfair dismissal and ULP
 High earning employees do not suffer from an inequality of
bargaining power and are ‘generally able to influence to a
material extent the terms on which they are engaged, and to
make decisions about whether and on what terms to take up
employment with a particular employer’
 It is intended that the threshold will be in excess of R1million per annum
 Where high earning employees are dismissed summarily or
on shorter notice than that prescribed, they will be entitled to
exercise the remedies provided by LRA
Unfair dismissal and ULP
New section 188B (continued)
 JDG Trading v Brunsdon [2000] 1 BLLR 1 (LAC):
‘It is in the highest degree desirable that an employer should,
in the interests of efficiency, be entitled to chose with as
much freedom as is compatible with the honest exercise of a
discretion, who it wants at or near the helm of its enterprise.
Qualities like leadership, resolve, business acumen,
judgment and effective administration are not readily
provable in a court. A deficiency in such qualities is not
readily provable either.’
Unfair dismissal and ULP
Amendment of section 189A (large-scale retrenchments)
 A consulting party may not unreasonably refuse to
extend period for consultation if such an extension is
required to ensure meaningful consultation
 Sub-section (19), which provides a statutory test for the
substantive fairness of a large-scale retrenchment
(including that the dismissal must be operationally
justifiable on rational grounds), is deleted.
Unfair dismissal and ULP
Amendment of section 189A (continued)
 Explanatory memorandum
‘Specifying the test to be applied in section 189A
retrenchments has led to uncertainty about whether and to
what extent this should apply to cases of retrenchment
where section 189 applies. The courts should retain their
discretion to develop the jurisprudence in this area in the
light of the circumstances and facts of each case and to
articulate general principles applicable to all retrenchment
cases.’
Unfair dismissal and ULP
Amendment of section 190 (date of dismissal)
 If employer terminates employee’s employment on
notice, the date of dismissal is the date on which
notice expires or, if an earlier date, date on which
employee is paid all outstanding salary
Unfair dismissal and ULP
Amendment of section
dismissals and ULPs)
191
(disputes
about
unfair
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Trigger to arbitration is date of issue of certificate,
elapse of 30 days since referral ‘or any further period
agreed between the parties’
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CCMA’s jurisdiction over unfair retrenchments
extended (at election of employee/s) to individual
retrenchments and to employers who employ less
than 10 employees
Summary
Key and significant amendments
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Dispute resolution
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Expedition around reviews
LC judges: security of tenure and career path to LAC
Unfair dismissal and ULP
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Section 187(1)(c) (auto unfair)
Section 188B (high earners)
QUESTIONS AND COMMENTS