IVAN ISRAELSTAM: Firms need to update rules and policies as employment laws change
Since 1995 the Labour Relations Act (LRA) and Basic Conditions of Employment Act have been replaced with entirely new versions. In addition, legislation in the form of the Skills Development Act and the Employment Equity Act has been introduced. Since then labour legislation has been amended more than once, and further far reaching amendments are about to come into effect. Attached to these acts are numerous codes of practice that provide guidelines as to what is fair and acceptable.
However, as large as this body of legislation is it often falls short when it comes to detail. For example, the LRA requires employers to prove that a dismissed employee’s conduct must have been so gross as to render a continued employment relationship intolerable. However, the LRA neither defines what would make an employment relationship intolerable nor what degree of behaviour can be considered gross.
Therefore, employers and employees need to look to case law for more detailed guidance as to what the law means and what would be fair in specific circumstances. In addition, the employer’s own rules, as well as terms and conditions of employment, can, within limits, play a significant role in determining what discipline is and is not fair.
For example, in the case of Rubin Sportswear vs Sactwu (SA Clothing & Textile Workers Union) and others (2004, 10 BLLR 986) the employer took over a business and then introduced a rule changing the age at which employees were to take retirement. The Labour Appeal Court found that the word “normal” means “the way things are normally done” and that the employer could not unilaterally change what was normal.
Latest interpretation
It is therefore imperative that employers have their rules reviewed in line with the latest interpretation of the law by the courts. Furthermore, had the new employer, at the time of takeover, negotiated renewed employment contracts with its employees, it could have included the new retirement age in those contracts. This would have legitimated the change in the retirement age.
There are other equally important reasons that employers need to update their rules and terms and conditions of employment. For example, employers are not allowed to suspend employees unfairly and one element of unfairness could be the extreme length of the employee’s suspension period. That is, if the employer’s disciplinary code does not cater for protracted suspensions then a drawn out period of suspension could be considered unfair even if the employee is being paid.
Protracted suspensions could be unfair not only on the employee but also on the employer and on the public! This is because, where the employee is being paid to sit at home without working, the employer bears the burden of the cost of the employee’s unearned remuneration. Thus, either the company’s shareholders have their profits eroded or the taxpayer shoulders the burden where the employer is the state. For example, it was reported in The Star that 11 officials of the Road Accident Fund were suspended on full salary for a period not less than 10 months at a cost of R5.3m (The Star, June 3 2004).
The standard clauses in employer’s disciplinary codes are no longer sufficient because provision needs to be made for exceptions as well. For example, should the employer wish to discipline an employee twice for the same act of misconduct the employer’s disciplinary code should provide for this. In the case of BMW (SA) vs Van der Walt (Contemporary Labour Law volume 13 No 5) the Labour Appeal Court held that it is important, that, for a second hearing for the same incident of misconduct to be fair, this should ideally be permitted by the employer’s disciplinary code. In addition, the holding of a second hearing must be fair in all respects. Employers are warned that the holding of such second hearings will only be fair in exceptional cases.
Should employers fail to keep up with such decisions of court judges and of arbitrators they will be unable to run their organisations according to law because labour law is a constantly changing thing. Should employers fail to update their rules, disciplinary codes and terms and conditions of employment in the light of new case law decisions they will be caught short when it comes to implementing discipline and dismissal. This is because an employer’s rules and policies should encapsulate the latest labour laws so that, when management applies the policies, they are in line with the law.
It can be a laborious and complex task for an employer to draw up a comprehensive set of rules, but dealing with the consequences of having no rules can be far more onerous for employers at the Commission for Conciliation, Mediation and Arbitration, bargaining councils and Labour Court. If employers are not in a position to take charge of this vital task there are experts they can use who can take over the pain of carrying it out and making sure it is done properly.
• Israelstam is CEO of Labour Law Management Consulting.