The Labour and Employment Disputes Review: South Africa

Introduction

During the period of transition to democracy between 1990 and 1998, a series of statutes regulating labour relations and employment were enacted. The most important of these were the Labour Relations Act 66 of 1995 (LRA) the Basic Conditions of Employment Act 75 of 1997 (BCEA) and the Employment Equity Act 55 of 1998 (EEA). Taken together, these statutes as amended formed a detailed legal framework for the regulation of labour relations and employment law.

The LRA regulates aspects of both collective labour law and individual labour law. In respect of collective labour law, it makes provision for the establishment of collective bargaining institutions at sectoral level, the most important of these being bargaining councils. These bodies also provide dispute resolution mechanisms in the sectors over which they have jurisdiction. The LRA also regulates recourse to strikes and lockouts by employees and employers, respectively. At the level of individual labour law, the LRA provides protection for employees against unfair dismissal, and against a range of defined unfair labour practices that can be committed by employers. The BCEA provides a floor of minimum terms and conditions of employment, including the regulation of working time and various forms of leave. It does not provide for a minimum wage. This is dealt with in the National Minimum Wage Act.

The EEA prohibits unfair direct and indirect discrimination by employers against employees on a wide range of grounds, the most important being race, sex, gender, sexual orientation, age, pregnancy and marital status. It also requires employers to implement affirmative action measures.

Procedure

One of the objectives of the LRA is to attempt to ensure that all types of labour disputes will be addressed and, if possible, resolved expeditiously. It prescribes that by far the majority of disputes that fall within its ambit must first be referred to conciliation. The idea is that the conciliator will seek to assist the parties to resolve the dispute. If there is a bargaining council with jurisdiction over the dispute, the conciliation will usually be undertaken by an official of that council. If there is no bargaining council, the conciliation will be undertaken by an official of the Commission for Conciliation, Mediation and Arbitration (CCMA).

If conciliation fails to resolve the dispute, three possibilities arise. The first is that, for certain types of disputes, employees may acquire the right to strike and employers may acquire the right to lock out employees, provided that certain further requirements are met. If employees comply with these requirements, a strike will be regarded as a protected strike. The result will be that employees may not be dismissed for participation in the strike and that trade unions and their members cannot be held civilly liable for any losses suffered by employers arising from the protected strike. The second is that employees may acquire the right to refer certain types of disputes to arbitration to be conducted by an official of a bargaining council or the CCMA. The third is that employees may acquire the right to refer certain types of disputes to the Labour Court. In some cases, employees may have a choice of routes to follow.

The Labour Court has jurisdiction to consider certain types of disputes; for example, those concerning the dismissal of strikers, as well as contractual disputes. It also exercises a supervisory jurisdiction in the sense that it can review and set aside arbitration awards issued by the CCMA or a bargaining council. It can also hear appeals against CCMA awards dealing with discrimination claims.

The ordinary civil courts retain their right to consider contractual disputes between employer and employee.

Types of employment disputes

The LRA draws a distinction between disputes that can be the subject of a strike or a lockout and those that may be resolved through arbitration by officials appointed by a bargaining council or the CCMA, or may be adjudicated by the Labour Court.

For the purposes of this chapter, disputes that can be arbitrated or adjudicated are the most important. By far the majority of disputes that are arbitrated or adjudicated concern an allegation that an employee has been unfairly dismissed or that an employee has been the subject of an unfair labour practice. The grounds on which an employer can justify the fairness of a dismissal are the misconduct of an employee, poor work performance on the part of an employee, an employee's incapacity or the employer's operational requirements. A fair procedure must also be followed prior to the dismissal. In certain cases, dismissals are regarded as being automatically unfair (e.g., if the reason for the dismissal is membership of, or participation in the affairs of, a trade union, or participation in a protected strike). Unfair labour practice disputes can involve a range of employer actions, including unfair suspensions, the unfair failure to promote an employee, the unfair demotion of an employee, and unfair employer conduct relating to training or the provision of benefits.

The jurisdiction to consider disputes relating to benefits is a particularly important one because of the wide interpretation given to the term 'benefit'. In Apollo Tyres South Africa (Pty) Ltd v. CCMA & Others,2 the Labour Appeal Court held that the definition of a benefit, as contemplated in Section 186(2)(a) of the LRA, was not confined to rights arising from the contract of employment but included rights judicially created, and advantages or privileges employees have been offered or granted in terms of a policy or practice, subject to the employer's discretion.

The LRA grants valuable rights to employees of temporary employment services, part-time employees and people employed in terms of fixed-term contracts. A significant number of disputes involving the enforcement of these rights are being referred to the CCMA. Other types of disputes that may be the subject of arbitration or adjudication are those that deal with the interpretation of collective agreements, those that concern the granting of organisational rights and those that relate to whether or not a strike is protected. The latter type of dispute usually occurs when an employer approaches the Labour Court as a matter of urgency to interdict a strike from taking place.

The resolution of the above-mentioned types of dispute is regulated by the LRA. In addition, arbitrators and the Labour Court are being called upon to deal with an increasing number of disputes dealing with allegations that an employer has unfairly discriminated against an employee or a group of employees. Most of these disputes deal with allegations that the employer breached the equal pay provisions of the EEA. These are dealt with in terms of the provisions of the EEA.

Finally, a steady stream of disputes are referred to the Labour Court or the ordinary civil courts in which an employee or an employer seeks to enforce contractual rights.

Year in review

i Covid-19 pandemic

The global outbreak of the coronavirus (covid-19) resulted in a national state of disaster being declared in terms of the Disaster Management Act 57 of 2002. This enabled the Minister of Co-operative Governance and Traditional Affairs to issue regulations in terms of Section 27 of this Act aimed at preventing the contraction and spread of the coronavirus in the workplace and in society in general. The regulations in turn authorised the ministers of other state departments to issue directions to address issues of particular relevance to their departments.

The regulations make provision for the promulgation of various alert levels, ranging from alert level 1 to level 5. Alert level 5 is the strictest alert level and places the greatest restriction on various facets of life in South Africa, including travel, gatherings and economic activity. When the state of disaster was first promulgated in March 2020, alert level 5 was applied. This placed severe restrictions on the movement of people. All persons were required to stay at home and could only leave their residence for a narrow range of purposes. This restriction meant that only employees involved in the provision of essential services could leave their homes and report for duty. However, as the number of people contracting the virus fell in the subsequent months, the country moved to lower alert levels, each level permitting a wider range of economic activity. Level 1, which permits a wide range of economic activity, is currently (March 2021) in force.

The regulations require all employers to adopt measures to promote physical distancing of employees. These include enabling employees to work from home or minimising the need for employees to be physically present at the workplace; the provision of adequate space; restrictions on face to face meetings; and the implementation of special measures for employees with known or disclosed health issues or comorbidities, or with any condition that may place such employees at a higher risk of complications or death if they are infected with the virus.

The Department of Employment and Labour has published the detailed Consolidated Direction on Occupational Health and Safety Measures in Certain Workplaces, which applies to all employers and employees except those engaged in mining operations. The direction requires employers to perform risk assessments in relation to the workplace in order to develop a plan outlining the protective measures that ought to be taken to ensure safety in the workplace. Employers are required to appoint a compliance officer and notify employees about the content of the plan and of their rights and obligations in view of the pandemic. Employers also have an obligation to minimise the number of employees in the workplace to prevent the spread of the virus and to notify the relevant governmental departments of any positive cases. The Direction also requires that social distancing measures and symptom screening be implemented by employers. Employers are required to make available sanitisers and disinfectants and cloth masks must be worn by employees at all times. Workplaces must have sufficient ventilation and, if necessary, employees must be provided with specialised personal protective equipment.

The Department of Mineral Resources and Energy has published a notice in terms of the Mine Health and Safety Act 29 of 1996 containing guidelines that employers in the mining sector must follow in the drafting a mandatory code of practice for the prevention, mitigation and management of covid-19 outbreaks.

Clearly, the covid-19 pandemic has had a huge impact on the way that employers run their operations and on the labour market. Unfortunately, as a result of the local and global economic contractions associated with the pandemic, employers have downsized or even closed their operations. South Africa reported that, in the second quarter of the year, 2.2 million South Africans lost their jobs.

Covid-19 also had a profound impact on many employees in varying degrees. During the early stages of the national lockdown (alert level 5), only essential workers were allowed to leave their places of residence to work, meaning that most employees were required to work from home. Those employees whose jobs could not be executed from home were forced to stay at home and not work. Because the restriction on movement was legislated, it was generally accepted that if employees could not tender their services as a result of not being allowed to travel to their workplaces, this would constitute supervening impossibility of performance in terms of the contract of employment, and that this excused the employer from complying with its reciprocal obligation to remunerate employees. Whether or not employers acted unfairly or unlawfully in this regard is yet to be decided by the courts.

At the outset of the national lockdown, the Covid-19 Temporary Employee/Employer Relief Scheme (TERS) was introduced by the government in order to ameliorate the financial impact caused by the lockdown. The TERS provided for a benefit to be paid to employees in circumstances where they could not work as a result of the restrictions imposed by the national lockdown. The benefit was paid from the Unemployment Insurance Fund, a social security fund to which employees and employers contribute on a monthly basis.

The covid-19 pandemic also gave rise to difficult questions about industrial relations and dispute resolution. For example, in the decision of Food and Allied Workers Union (FAWU) v. South African Breweries and Another,3 the impact of the pandemic on the obligation to consult with employees or their representatives on possible dismissals for operational requirements was considered. The facts of the case were that, in January 2020, South African Breweries (SAB) determined that it was necessary to restructure its operations. It began consultation on this issue as required by the LRA. But when the state of disaster at alert level 5 was declared, the stringent restrictions on mobility and the implementation of social distancing measures meant that face-to-face consultation could no longer take place. In order to continue with meaningful consultations, SAB proposed that consultations continue via the videoconferencing application Zoom. The FAWU adopted the position that it could not consult via Zoom and that the consultations could only resume once face-to-face consultations were permitted. SAB continued consultations with the remaining consulting parties, notwithstanding the FAWU's objections. The FAWU did not attend these consultations. The FAWU then launched an application in terms of Section 189A(13) of the LRA, seeking an order that, in continuing consultation via Zoom, SAB was acting in a procedurally unfair manner. The Labour Court dismissed the application and held that the LRA does not prescribe the form in which consultations must take place. The Court noted that the covid-19 pandemic meant that a 'new normal' had to be adopted and that, in the circumstances, applications such as Zoom must be used to ensure that health and safety of individuals are maintained.

In Macsteel Service Centres SA (Pty) Ltd v. National Union of Metalworkers of South Africa and others,4 the Labour Court was required to determine whether employees could embark upon a strike in circumstances where the employer had unilaterally implemented a 20 per cent reduction in salary across the workforce as an emergency measure to ensure the continued viability of the business during the national lockdown. The Labour Court affirmed the principle that remuneration is the quid pro quo for services tendered by employees. Despite the challenging circumstances brought about by the pandemic, the employer was not entitled to unilaterally implement the salary reduction and the strike in support of the demand that status quo be returned was found to be protected.

ii Dismissal following a refusal to accept an employer's demand

In the decision of National Union of Metal Workers of South Africa and Others v. Aveng Trident Steel (a division of Aveng Africa (Pty) Ltd) and Another,5 the Constitutional Court (the highest court in South Africa) addressed the long-running controversy as to whether an employer can dismiss employees who refuse to accept a change to conditions of employment proposed by the employer. The answer to this question depended on the interpretation of Section 187(1(c) of the LRA, which provides that a dismissal will be automatically unfair if the reason for dismissal is a 'refusal by employees to accept a demand in respect of any matter of mutual interest between them and their employer'.

During 2014, the employer, Aveng Trident Steel (Pty) Ltd, experienced a downturn in sales and accordingly gave notice to the National Union of Metal Workers of South Africa (NUMSA) of possible retrenchments. It proposed that the workforce be restructured and that job descriptions be redesigned to suit the operational requirements of the business. The consultation process proceeded and this resulted in some 253 employees taking voluntary severance benefits and four employees being retrenched.

Thereafter, an interim agreement was concluded between Aveng and NUMSA in terms of which NUMSA agreed to work in accordance with Aveng's proposed redesigned job descriptions until such time as a five-grade job structure proposed by NUMSA could be finalised and implemented. However, NUMSA terminated the agreement before the job grading system was implemented.

During subsequent negotiations, NUMSA indicated that it would only work in accordance with Aveng's system if its members were granted a wage increase. Aveng stated that it could not incur the costs of the wage increase and indicated that it would continue to implement the redesigned job descriptions to address its operational requirements. NUMSA members were given the opportunity to continue performing the redesigned jobs but were told that if they rejected this offer, they would be retrenched.

Approximately 733 employees rejected the offer and were subsequently dismissed on the basis of Aveng's operational requirements. NUMSA referred a dispute to the Labour Court and argued that the dismissals were automatically unfair and that the employees had been dismissed because they had refused to accept Aveng's demand that they work in accordance with the redesigned job descriptions. NUMSA and its members were unsuccessful in both the Labour Court and the Labour Appeal Court and appealed to the Constitutional Court.

The Constitutional Court delivered three judgments on the question. Although the three judgments differed in respect of the test used to determine the reason for the dismissal, the judgments confirmed that where an employer has dismissed employees as a result of their refusal to accept a proposed change to their terms and conditions of employment, as an alternative to retrenchment and as part of a business restructuring to meet its operational needs, then such a dismissal will be for a fair reason and not constitute a contravention of Section 187(1)(c) of the LRA.

This decision was made with cognisance of the prevailing economic conditions in which employers are operating. The Court stated that employers should be allowed to restructure their business in order to adapt to the ever changing economic climate and remain competitive in the market.

iii Unconstitutional exclusion of domestic workers from social protection

In Mahlangu and Another v. Minister of Labour and Others,6 the Constitutional Court handed down a landmark decision dealing with the rights of domestic workers. Domestic workers are excluded from the definition of an 'employee' contained in the Compensation for Occupational Injuries Act, 1993 (COIDA). This means that they and their dependents are not entitled to claim compensation in terms of this Act in the event of an occupational injury or disease. The Constitutional Court found that this exclusion constitutes an infringement of the constitutional rights to: access to social security; equal protection and benefit of the law; and human dignity. It also constitutes indirect discrimination on the base of race, sex, gender and class.

The Constitutional Court stated that no legitimate objective is advanced by excluding domestic workers from COIDA and that, in considering those who are most vulnerable or most in need, a court should take cognisance of those who fall at the intersection of compounded vulnerabilities because of intersecting oppression based on race, sex, gender, class and other grounds. It went on to state that 'to allow this form of state-sanctioned inequity goes against the values of our newly constituted society namely human dignity, the achievement of equality and ubuntu'.

iv Majoritarianism in South African labour law

The constitutional validity of Section 189(1) of the LRA was called into question in Association of Mineworkers and Construction Union and Others v. Royal Bafokeng Platinum Limited and Others.7 In this case, the Constitutional Court was called upon to determine whether a collective agreement according a majority trade union in an employer's workplace the exclusive right to be consulted when the employer contemplates dismissing employees due to its operational requirements, passes constitutional muster.

This decision dealt with the situation where the National Union of Mineworkers (NUM) represented a majority of employees employed at Royal Bafokeng Platinum Limited's workplace. UASA (formerly known as the United Association of South Africa) and the Association of Mineworkers and Construction Union (AMCU) enjoyed minority support in the workplace.

The NUM, the UASA and Royal Bafokeng entered into a collective agreement in terms of which Royal Bafokeng agreed to consult exclusively with the two unions over any dismissals related to Royal Bafokeng's operational requirements. In August 2015, Royal Bafokeng, after issuing employees with notices in terms of Section 189(3) of the LRA, commenced consultations with the NUM and the UASA, to the exclusion of other trade unions (including the AMCU), in accordance with the collective agreement.

The consultation process resulted in the NUM, the UASA and Royal Bafokeng concluding a further collective agreement in terms of which Royal Bafokeng dismissed 103 employees (some of whom were AMCU members) for reasons related to its operational requirements (the 'retrenchment agreement'). The retrenchment agreement was extended to employees who were not members of NUM or UASA, including members of AMCU, in terms of Section 23(1)(d) of the LRA. It also contained a clause in terms of which the members of the NUM and the UASA, and those members of the AMCU to whom the retrenchment agreement was extended, waived their rights to challenge the lawfulness or fairness of their dismissals.

AMCU challenged the constitutionality of Section 189(1)(a) of the LRA and alleged that it infringes minority unions' and non-unionised employees' rights to fair labour practices guaranteed in terms of Section 23(1) of the Constitution of South Africa. This is because it excludes them from the very consultation process that determines their fate. Royal Bafokeng relied on the primacy that collective bargaining is afforded in terms of the LRA and accordingly argued that there is no need to interfere with the principle of majoritarianism. This, they argued, is because the retrenchment process is a collective one and the rights in issue are therefore collectively held.

The Constitutional Court found that there was no entitlement to individual consultations under Section 189 of the LRA. Furthermore, Section 23(1) of the Constitution, which provides that every employee has the right to fair labour practices, does not expressly or impliedly guarantee a right to be individually consulted in a retrenchment process. It held that the procedure for dismissals based on operational requirements is exhaustively set out in Section 189 of the LRA, which excludes any requirement of individual or parallel consultation in the retrenchment process outside the confines of the hierarchy Section 189(1) itself creates. The consultation process (and the hierarchy prescribed by Section 189(1)) is procedurally fair and accords with international standards. Compliance with Section 189 of the LRA (which will render any dismissals procedurally fair) does not mean that the substantive unfairness of dismissals related to operational requirements may not be challenged.

The Constitutional Court accordingly found that a majority-driven consultation or collective bargaining process passes constitutional muster in the context of a retrenchment and that no right to further individual or dual consultation outside of the hierarchy prescribed by Section 189(1) exists. In the circumstances, the Court found that a retrenchment agreement could lawfully be extended across the workplace to apply to persons who were not consulted during the consultation process. The Constitutional Court found that the provisions of Section 189(1) of the LRA were not unconstitutional, nor were they irrational, and it accordingly dismissed the AMCU's application for leave to appeal.

Outlook and conclusions

There is little doubt that the primary challenge facing South Africa employment law in 2021 will be dealing with the new normal occasioned by the covid-19 pandemic. How will employer policies have to be amended to meet the increasing practice of working from home? What will be the employer's health and safety obligations in this context? What are the rights and obligations of an employer if an employee's comorbidities means that he or she is no longer able to work without being exposed to the increased risk associated with contracting the virus? The answers to these and other questions will probably be provided by the courts flowing from litigation before them. There is, however, the question whether legislation will also be necessary to address certain issues. It remains to be seen whether South African legislation (such as the BCEA), which is premised on a classical model of work, (i.e., work performed at the employer's workplace for a number of consecutive hours) will be amended to cater for the different working arrangements that have become prominent and popular during 2020.

One of the important objectives of the LRA is to provide institutions and procedures that will encourage the effective resolution of labour disputes. A major concern in this regard is the backlog of cases to be determined by the Labour Court. The cause of this backlog is a combination of the sheer number of employment disputes that are referred to the Court and a lack of resources to appoint more judges to adjudicate matters. Two recent interventions may have a positive impact on this issue:

  1. the BCEA has been amended to give the CCMA jurisdiction in relation to certain contractual claims that would ordinarily be adjudicated by the Labour Court; and
  2. it is expected that new Rules of the Labour Court will be introduced in order to curtail certain proceedings, particularly review proceedings.

Footnotes

1 Ross Alcock is a director and Peter le Roux is an executive consultant at ENSafrica.

2 [2013] 34 ILJ 1120 (LAC).

3 [2020] JOL 47365 (LC).

4 [2020] 8 BLLR 772 (LC).

5 (CCT178/19) [2020] ZACC 23.

6 (CCT306/19) [2020] ZACC 24.

7 (2020) 41 ILJ 555 (CC).

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