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DAWN NORTON Director: Mkhabela Huntley Adekeye Inc Interpreting the BCEA: Recent Court decisions 20 SEPTEMBER 2014 1.

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Presentation on theme: "DAWN NORTON Director: Mkhabela Huntley Adekeye Inc Interpreting the BCEA: Recent Court decisions 20 SEPTEMBER 2014 1."— Presentation transcript:

1 DAWN NORTON Director: Mkhabela Huntley Adekeye Inc Interpreting the BCEA: Recent Court decisions 20 SEPTEMBER 2014 1

2 SEVERANCE PAY Section 41 (4) Case: Astrapak Manufacturing Holdings v CEPPWAWU (2014) LAC 2

3 Facts in Brief:  Retrenchment situation of 286 workers  Workers refused reasonable alternative and employer refused to pay severance pay  126 offered a higher wage; 86 the same wage and balance a reduced wage of approx. 2% 3

4 LAC Decision:  Only Employees offered a reduced wage were entitled to severance pay.  Balance of workers – unreasonable refusal to remain in employment under a new shift system – No severance pay. 4

5 SEVERANCE PAY (CONTINUED) Section 41 (5) Case: FAWU v Ngcobo (2013) (SCA) 5

6 Facts in Brief:  Retrenchment of 2 Nestle workers  FAWU represented them at CCMA  FAWU failed to refer dispute to LC  Employees issued summons in HC for damages 6

7 SCA Decision:  FAWU breached its contract with employees / members  Compensation of 12 months. Nor a patrimonial loss but a solatium  Compensation in addition to severance pay (i.e.: no discount for severance pay paid by Nestle) 7

8 DEDUCTIONS FROM WAGES Section 34 (1) and 77 (1) Case: Davidson v Emvest Asset Management (2014) (LC) 8

9 Facts in Brief:  Employee, a corporate director, employed by two employers – one SA, and one Mauritian  He resigned from SA company and demanded outstanding remuneration and accrued leave  SA Company denied he was entitled, arguing deductions for PAYE for income from Mauritian country 9

10 LC Decision:  SA employer not entitled to deduct for taxes for income earned from Mauritian company  Issue between employee and SARS  Cost awarded on unitive scale – defence frivolous, no ongoing relationship 10

11 DEDUCTIONS FROM WAGES (CONTINUED 2) Section 34 and 77 Case: Naidoo v Careways Group (2014) (LC) 11

12 Facts in Brief:  CEO of company instructs HR not to deduct tax from salary  Fall out with employer – incompatibility  Employer seeks to terminate relationship and stops paying her salary  Employee approaches court on an urgent basis  Employer argues CEO owes SARS and therefore not paying her salary 12

13 LC Decision:  Failure to pay salary amounts to a breach of contract  Failure to pay SARS not a basis to stop paying CEO  Employer ordered to pay salary less deduction for SARS 13

14 DEDUCTIONS FROM WAGES (CONTINUED 3) Section 34 and 77 Case: NUM v Martin & East (2013) (LC) 14

15 Facts in Brief:  Refusal of about 124 employees to work (to board trucks to travel to work)  Shop stewards charged with unprotected strike action and gross insubordination  Found guilty and sanction was suspension from work for 3 months without pay as an alternative to dismissal. Given an election  Union refers to ULP to CCMA  Employer dismisses shop stewards 15

16 LC Decision:  Automatically unfair dismissal (because of union activity)  Suspension without pay is permissible – doesn’t contravene the BCEA 16

17 DEDUCTIONS FROM WAGES (CONTINUED 4) Section 34 Case: Padayachee v Interpak Books (2014) (LC) 17

18 Facts in Brief:  Employee resigned in September 2011 and didn’t work in her notice period  She was called to a Disciplinary Enquiry a few days later  She did not attend and the chair found her guilty of causing damage to the amount of R180 000  The “fine” was set off against her final salary and accrued leave 18

19 LC Decision:  “Set off” is part of the common law and satisfies section 34(1)(b)  Employer may make a deduction if there is a fair hearing and a written agreement signed by employee about the quantum of the deduction. Deduction cannot exceed ¼ of monthly wages  Employer ordered to repay the money deducted from the employee’s final remuneration 19

20 NATURE OF EMPLOYMENT CONTRACT Section 29 (1) (m) Case: Harrandawana v Dispute Resolution Centre (2014) LC 20

21 Facts in Brief:  Parties attempt to enter into 3 short fixed term contracts  Employer explains terms, Employee refuses to sign contracts  Termination some 9 months later  Dispute about termination – dismissal or termination of F / T contract 21

22 LC Decision:  No statutory preference for indefinite contracts  Only offer of employment – Fixed term  No factual submissions made in review papers, only conclusions of law. LC not bound to consider the matter  Review dismissed 22

23 SICK LEAVE Section 23 Case: Kievits Kroon Country Estate v Mmoledi (2014) (SCA) 23

24 Facts in Brief:  Pastry chef asks for unpaid leave to attend a traditional healing course  Employer declines request for unpaid leave. Employee disregards the refusal and submits a sick note from a traditional healer  Employer dismisses for unauthorised absence  Dismissal found to be unfair by CCMA, LC and LAC 24

25 SCA Decision:  Medical certificate not required – no illness  Belief that if she failed to attend the course she may die  Belief genuinely held. Failure to obey employer was reasonable  Appeal fails 25

26 PAYMENT FOR ACCRUED ANNUAL LEAVE UPON TERMINATION OF EMPLOYMENT Section 20 and 40 Case: Ludick v Rural Maintenance (2014) (LC) 26

27 Facts in Brief:  Employee works from Jan 2004 – April 2006  Employee takes no annual leave  Company policy – leave must be taken within 30 days of end of financial year else lapses  Employer paid for 2006 leave cycle, not for 2005 and 2004 27

28 LC Decision:  No payment for 2004 – entitlement falls away 6 months after end of leave cycle  Policy considerations at stake (health and safety)  Payment for 2005 annual leave  BCEA trumps term in contract of employment (less favourable) 28

29 EMPLOYER’S CLAIM FOR DAMAGES FROM EMPLOYEES Section 77 (3) and 77A (e) Case: Rand Water v Stoop (2013) (LAC) 29

30 Facts in Brief:  Employer dismisses employees following a disciplinary enquiry for fraud (R8 million)  Employees claim they have been unfairly dismissed and refer an unfair dismissal claim to the CCMA. Ultimately referred to the LC  The employer instituted a counterclaim – damages claim based on breach of contract – the employees had breached their implied duty of good faith and care  Employees argued point in limine that the LC had no jurisdiction as the claims were not connected to their contracts of employment 30

31 LAC Decision:  LC has jurisdiction to hear a civil claim, concerning a contract of employment  Determination of unfair dismissal claim and damages claim relied upon on same set of facts  Remedies are special performance, damages or compensation. (S77Ae)  Did not matter that the claim was illiquid  BCEA is not partisan to employees  LC had jurisdiction to hear the matter 31


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