The definition of employee relations refers to an organisation’s efforts to create and maintain a positive relationship with its employees.
In order for us to successfully manage our client’s Industrial Relations and Human Resources concerns, we will perform a comprehensive IR and HR audit on the company…
VIP is an efficient, professional system that assists in doing basic salaries, wages and commissions. Invictus can assist you in giving you the spread of essential functions.
Auditing typically refers to financial statement audits or an objective examination and evaluation of a company’s financial statements.
To achieve B-BBEE compliance, we will attend to an organisation B-BBEE– gap
analysis and submit a strategy proposal in which we will address all elements of the B-BBEE scorecard relative to the client’s business sector.
To ensure that designated employers are compliant with Employment Equity & Skills Development, requires the following
ABOUT US
Invictus provides a proactive, outsourced Industrial Relations management service, with the aim of assisting and contributing towards the overall management of companies on a daily basis.
Regardless of the size of the organisation, Invictus aspires to identify and solve problem areas within the workplace, thereby ensuring the efficient operation of companies.
We are a strategic partner that offers a wide range of employment related services, a comprehensive infrastructure, personal attention, and immeasurable long term benefits.
TRENDING NEWS
Latest Posts Cards
Provocation is one of the key defences for charges of assault or fighting on duty in the workplace. In our employment law context, provocation as a defence potentially affects the outcome of disciplinary inquiries. Understanding how provocation is evaluated and applied under South African labour law is crucial for both employers and employees to ensure fair and just handling of workplace conflicts .
What is provocation?
Provocation is described as a wrongful act or conduct from one person towards another which deprives the other person/s of their power to react or have self-control. In the context of a workplace, it can be described as the retaliation of an employee against some provoking conduct or statement made by another employee. It can further be stated that provocation is accepted as a defence in the South African legal system. However, the question arises of what happens when an employee raises provocation as a defence in a disciplinary inquiry?
When an employer is faced with such a defence in a disciplinary inquiry, the employer is required to consider all the relevant factors surrounding the misconduct, taking into account the requirements for provocation as a defence as well as the reasonable man test.
The reasonable man test:
When considering provocation, the employer should apply the principle of “the reasonable man test”, being the same test that is used in charges of negligence. The employer is required to consider:
Whether the employee’s conduct was a reasonable reaction in the circumstances. The action and the reaction are required to be on a similar or same level in order for provocation to be successful as a defence.
Eg.: If an employee is slapped in the face, stabbing the employee who stabbed him/her would not be seen as a justifiable reaction to the initiating conduct. Moreso, it could be viewed as an excessive reaction.
Eg.: If an employee is slapped in the face and slaps the employee who slapped him/her in the face or punches them then the reaction could be viewed as self-defence to provocation since it can be viewed as a justifiable reaction to the initiating conduct.
Whether the employee’s conduct was an immediate reaction to the “provoking act” in that there is no pre-meditation involved before reacting.
Requirements for provocation:
Provocation as a defence involves an involuntary immediate reaction to when a person finds themselves in a threatening situation. There can be no room for consideration of the facts and the planning of the conduct, and once this is present the issue then involves intention to act in a certain manner and no longer qualifies as an involuntary immediate reaction.
In the case of Tedco Plastics (Pty) Ltd v National Union of Metalworkers of SA & others (2000) 21 IlJ 2710 (LC), the requirements for provocation were listed as:
The reaction must be reasonable: ie. the provocation must be of such a nature to justify the physical reaction by means of assault; and
The reaction must be immediate and proportionate: ie. the reaction to the provocation needs to be immediate and does not provide any time for pre-meditation or consideration of a possible reaction. Furthermore, the reaction needs to be proportionate to the provocation itself.
The above matter entailed a female co-worker having been struck by a hydraulic pipe several times on the back as a response to allegedly provoking her colleague. The response of the attacker was excessive in nature in comparison to the alleged provocation which took place.
Case Law:
In the case of Nelson Mandela Bay Metropolitan Municipality v Independent Municipal & Allied Trade Union on behalf of Tshabalala & others (2019) 40 ILJ 1021 (LAC), the court stated that:
“ The employee’s further argument that he acted in self-defence cannot avail him. The commissioner’s conclusion that ‘any reasonable person would have reacted in the manner did’ and that ‘as a man, he could not walk away from the fight’, goes against the grain of conduct expected of an employee. In our law every person is expected to control his/her temper. In addition, there is no obligation on an individual to accept a challenge. Either employee could have walked away from the scene.”
The above matter entailed the production superintendent placing a handwritten note in the men’s cloakroom reminding staff to keep the cloakroom clean to avoid a stench. The dispute was between the production superintendent (Majoni) and Yengo (the manager) who was responsible for overseeing the cleanliness of the cloakroom. There was an argument which ensued between them and Yengo called Majoni a coward and used Khosa words to say that he would hit him. There was a further exchange of words whereby the provocation escalated and resulted in physical assault.
In the case of Nampak Products (Pty) Ltd t/a Megapak v Commissioner for Conciliation, Mediation & Arbitration and Others (C 512/2018) ZALCCT 99 (LC), the court found that a dismissal of the employee whose conduct did not meet the requirements of provocation was substantially fair given the assault that occurred. It was further discussed in this case that all factors need to be considered when dealing with a matter where provocation is raised as a defence.
Conclusion:
Given that provocation is a sui generis defence, it should be considered on a case-by-case basis. The defence of provocation does not automatically excuse an employee in the workplace from a charge of “fighting whilst on duty” or “assaulting a fellow employee ”, neither does it reduce the sanction of dismissal. The onus, however, remains on the employee to prove that s/he was in fact provoked in order to retaliate in the form of the misconduct which s/he is being charged with. The employer also bears a responsibility to investigate and determine whether there was provocation, the extent thereof and the circumstances surrounding the offence itself.
Contact Invictus for guidance and assistance in navigating workplace violence & provocation. Get in touch with our office at 086 173 7263 or email us at admin@invictusgroup.co.za [...]
Read more...
Employee abscondments in the workplace presents a significant challenge for employers, impacting operational efficiency and team morale. This issue not only disrupts business operations but also complicates the process of addressing an employee’s absence from the workplace efficiently, and it complicates the balance between the need for effective management and the rights of employees.
What is Absconding?
Absconding refers to an employee leaving their job or workplace abruptly, often with the intention of avoiding their responsibilities or obligations. It can suggest that the individual has left without informing their employer, possibly with the intention of not returning to the workplace. Uncommunicated absence for a period of more than 3 days will be dealt with as absconding in most disciplinary measures.
Communicated absence from work cannot be dealt with as abscondment since the employee has shown an interest and intention to return to work by informing his employer of his whereabouts.
An employer must determine if an employee intends to return to work by informing the employee to return to work immediately. The employer can also get hold of the employee by either calling them on their cell phone, sending them a message via SMS , WhatsApp, E-Mail and/or Telegram and delivering a letter to the employee enquiring their whereabouts.
This would subsequently follow up with a notice to attend a disciplinary inquiry. The employee will be charged with abscondment or unauthorized leave from work. The employee should be given the notice to attend at least 48 hours before the inquiry. The employee should also be notified that if he/she is absent during the disciplinary inquiry, it will still take place. In the event that the employee was dismissed, the company should then inform the employee on their dismissal and remind them of their right to refer the matter to the CCMA within 30 days of the dismissal.
In order for the dismissal to be considered fair, it is up to the employer to prove that there has been reasonable attempts were made in order to have made the employee return back to work, a reasonable period of absence was taken by the employee before the dismissal was deemed as an appropriate sanction, the unreasonable absence period, the impact that it has had on the operational requirements and work dynamics of the company and lastly, that the employee had no intention of returning to work.
As seen in previous cases, The case of Meerholz v Norman – 1916 TPD 332 held that wilful and deliberate act of being absent from work is required. Further, the commissioner had considered the employees employment record; long years of service and high unemployment rate of the country. Even then, these considerations were to be contemplated together with all other relevant factors in this case, which were that the employee had not shown good cause for his prolonged absence. The invariable conclusion that his absence in such circumstances was wilful is inescapable and warranted dismissal and In Khumalo & Another v Otto Hofmann Handweaving Co (1988) 9 ILJ 883 (IC) and in Moroke v Maksal Tubes 12 BALR 1321 (P), the Court held that dismissal is justified where absence is frequent enough to disrupt work and appropriate where an employee shows an intention to abandon their employment.
In Classic Number Trading 80 (Pty) Ltd t/a Nashua Tshwane v Shaik-Ahmed and others (JR 838/13) ZALCJHB 71 (handed down on 15 March 2015) the Employee failed to provide a satisfactory justification for his prolonged absence without permission.
The LC held that the absence was excessive and thus required frank and proper justification. Being a supervisor placed an additional burden on the Employee to set an example of good conduct and compliance with policies to his juniors. He was totally indifferent to the interests of his Employer, and in the circumstances, it was unreasonable to expect the Employer to keep the Employee in its employ when he has little regard to its operational interest, and on top of that showed no remorse when confronted about the incident.
While both absconding and absenteeism pertain to an employee’s absence from the workplace, they differ substantially in the intent and the context. Unlike absconding, absenteeism may not fundamentally imply any intent to avoid responsibilities and is commonly managed through established workplace policies and procedures. Understanding these differences helps employers address each situation appropriately and thus supports maintaining fair and effective workplace practices.
Contact Invictus for guidance and assistance in terminating employees for abscondment. Get in touch with our office at 086 173 7263 or email us at admin@invictusgroup.co.za [...]
Read more...
Employers often underestimate the value of reducing the agreements that they have with their employees to writing, as they feel that verbal agreements would often suffice. However, in the realm of employment law, reducing written particulars into a contract of employment is crucial for establishing a clear, mutual understanding between employers and employees. A written contract of employment often functions as the foundation of an employment relationship, wherein the terms and conditions of employment are formalized, the rights and obligations of the parties are safeguarded, and where one can determine the applicability of the governing employment legislation. As such, it is important for employers to take note of the basic outlines of written particulars and why contracts should preferably be reduced to writing.
What does “written particulars of employment” mean?
As soon as an employee starts to work for their employer, certain details must be written down. These details are referred to as the written particulars of employment, and they outline basic, yet crucial details about the employment relationship between the employer and employee. In Rumbles vs Kwabat Marketing (Pty) Ltd D1055/2001) ZALC 57 (21 May 2003), Judge van Niekerk gave a definition of written particulars of employment and stated that this refers to a conspectus of all the relevant facts including any relevant contractual terms, and a determination whether these holistically viewed establish a relationship of employment as contemplated by the statutory definition.
Section 29(1) of the Basic Conditions of Employment Act 75 of 1997 states that the following details must be supplied to an employee by their employer at the start of the employment relationship:
the full name and address of the employer;
the name and occupation of the employee, or a brief description of the work for which the employee is employed;
the place of work, and, where the employee is required or permitted to work at various places, an indication of this;
the date on which the employment began;
the employee’s ordinary hours of work and days of work;
the employee’s wage or the rate and method of calculating wages;
the rate of pay for overtime work;
any other cash payments that the employee is entitled to;
any payment in kind that the employee is entitled to and the value of the payment in kind;
how frequently remuneration will be paid;
any deductions to be made from the employee’s remuneration;
the leave to which the employee is entitled;
the period of notice required to terminate employment, or if employment is for a specified period, the date when employment is to terminate;
a description of any council or sectoral determination which covers the employer’s business;
any period of employment with a previous employer that counts towards the employee’s period of employment;
employee’s period of employment; and
a list of any other documents that form part of the contract of employment, indicating a place that is reasonably accessible to the employee where a copy of each may be obtained.
Section 29(2) of the Act states that, if any of the above particulars should change during the employment relationship, then these changes must be written down and the employee must receive a document where the changes are reflected.
Why reducing these written particulars to a contract of employment is beneficial
The written particulars of employment referred to above are an excellent starting point for employers to determine the type of information that they need to give their employees at the start of their employment. Since these particulars are legally required to be reduced to writing in any case, employers would only be doing themselves a favour by drafting contracts of employment for their employees. In doing so, employers would be able to prevent misunderstandings about any material terms of the employment relationship, clearly outline duties and responsibilities of their employees, safeguard themselves against the detrimental effects of any legal disputes, and ensure that they remain compliant with employment legislation.
Contact Invictus for guidance and assistance in navigating employment contracts.
Get in touch with our office at 086 173 7263 or email us at admin@invictusgroup.co.za [...]
Read more...
The terms “protected disclosures” or “whistleblowing” are not new phenomena to the employment law landscape, but there is often great uncertainty about how protected disclosures are dealt with in practice, and the lengths to which our judiciary would go to protect an employee’s rights in these cases. The case of Railway Safety Regulator v Kekana 1 BLLR 40 (LAC) serves as an excellent example.
What is a protected disclosure and how is it governed?
A protected disclosure refers to a situation where an employee passes on or reports information about any wrongdoing that they have witnessed or experienced at their workplace. Since protected disclosures are usually made in relation to serious matters in the workplace, our legislature has ensured that that these disclosures are encapsulated by the relevant legislation. For example, the Protected Disclosures Act 26 of 2000 affords protection to employees fearing reprisals due to them blowing the whistle on their employers, regardless of whether the disclosure was made to authorities within the company or outside of it. More importantly, employees are also protected by sections 186(2)(d) and 187(1)(h) of the Labour Relations Act. Section 186(2)(d) states that it would be an unfair labour practice for an employer to impose occupational detriment on an employee on account of them having made a protected disclosure in terms of the Protected Disclosures Act. On the other hand, section 187(1)(h) states that any dismissal of an employee based on their disclosures in terms of the Protected Disclosures Act would be an automatically unfair dismissal.
Case Study
In the case of Railway Safety Regulator v Kekana 1 BLLR 40 (LAC), the employee, a senior manager, lodged a grievance about the CEO’s alleged unlawful conduct. The employee lodged their grievance as soon as they realised that the CEO had sent an unqualified investigator without any experience to investigate a train incident together with another contractor, and this same investigator issued an order prohibiting the setting up of a commission of inquiry when a second accident occurred. After this grievance was lodged, the employee was suspended, a disciplinary hearing was held for the employee, and he was subsequently dismissed. The employee referred an unfair dismissal dispute to the CCMA and Labour Court, and the Labour Court ordered that the employee be reinstated. The employer took the matter on appeal to the Labour Appeal Court and argued, among other things, that the Labour Court lacked jurisdiction to determine an automatically unfair dismissal dispute as it had not been proven that the dismissal was related to a protected disclosure made by the employee.
The Labour Appeal Court found that, if an employee demonstrates a prima facie case that they made a protected disclosure within the confines of the Protected Disclosures Act, and there is causal link between their dismissal and their protected disclosure, then the employer is required to prove that the dismissal was for a fair reason. In this case, the Labour Appeal Court was convinced that the employee had established this causal link, as the disciplinary action was taken against him seven days after the disclosures were brought to the employer’s attention. Moreover, the fact that the employee was found guilty at a disciplinary inquiry which he could not attend due to ill health, coupled with the fact that the recommendation of an appeal chairperson that the matter be heard by another person was rejected, also did not bode well for the employer in this case.
Conclusion
Employers are advised to tread carefully when instances of protected disclosures arise in their workplace, especially since the onus that an employee would bear in these cases is easily dischargeable. Employers should note that any disciplinary action taken against employees for reasons even remotely
Contact Invictus for guidance and assistance in navigating dismissal disputes.
Get in touch with our office at 086 173 7263 or email us at admin@invictusgroup.co.za [...]
Read more...
In order to maintain fair labour practices in the South African workplace, procedural and substantive fairness are vital considerations.
Procedural fairness highlights the procedure followed by an employer when disciplining an employee for misconduct or negligence. Procedural fairness ensures that an impartial, fair, and thorough disciplinary inquiry is conducted, that the employee is informed of the charges against them, and that the employee is provided with the opportunity to respond to these charges.
Substantive fairness, on the other hand, requires a fair and valid reason for an employer to discipline or dismiss an employee for misconduct or negligence.
Schedule 8 of the Code of Good Practice offers key guidelines for determining whether dismissals for misconduct are fair. It emphasises that the following elements must be taken into account when assessing such cases: “whether the employee violated a workplace standard or rule; whether the standard or rule was valid and reasonable; whether the employee knew or should have known about the standard; whether the employer applied the standard consistently; and whether dismissing the employee was an appropriate sanction.”
It is crucial for employers to develop clear policies on workplace misconduct and negligence, to ensure that these policies are communicated effectively, and to ensure that fair procedures are followed when taking disciplinary action against employees.
Understanding Misconduct in the Workplace:
In the South African workplace context, misconduct can be defined as an intentional act or omission by an employee that is considered inappropriate or unacceptable in the workplace and violates a standard of conduct. Employment contracts, codes of conduct, and legislation establish these standards of conduct.
Misconduct encompasses various forms, including but not limited to: insubordination and insolence, absenteeism and poor timekeeping, theft, fraud and dishonesty, violence, assault, harassment, intoxication, and discrimination. Disciplinary outcomes for different forms of misconduct may vary, depending on the severity of the conduct in question, given that misconduct can be further categorised into ordinary and gross misconduct.
Ordinary misconduct refers to less serious breaches of workplace policies and procedures. Generally, these breaches do not directly cause substantial damage, disruption, loss, or harm. Such conduct is addressed through progressive disciplinary measures. It should be noted, however, that ordinary misconduct may justify dismissal if it can be shown that there is a lack of improvement or if the conduct recurs after progressive disciplinary measures have been implemented, as held in Meerholz v Norman (1916) and National Nuclear Regulator v CCMA and others (2016).
Gross misconduct, on the other hand, refers to a severe breach or violation of standards of conduct, policies, and/or procedures, which may warrant immediate dismissal without notice if a procedurally fair inquiry has been conducted and the outcome is substantively fair. The extent of this form of conduct damages the trust relationship between the employer and the employee, making a continued employment relationship intolerable, as held in Waterskloof Municipality v SA Local Government Bargaining Council (Western Cape Division) and Others (2010) as well as South African Revenue Services v Commission for Conciliation, Mediation and Arbitration and Others (2023).
Understanding Negligence in the Workplace:
The definition of negligence in the South African workplace context is largely determined by case law and legal precedents, which influence the interpretation and application of the term. Negligence is a form of misconduct that constitutes a failure to exercise the degree of diligence and care that a reasonable person would in similar circumstances, ultimately resulting in loss, injury, or harm.
Based on Kruger v. Coetzee 1966 (2) SA 428 (AD)’s three-part test, defendants are liable for culpa (fault) if a reasonable person in similar circumstances would have anticipated that their conduct would injure or harm another person or property, or would foresee it resulting in a financial or potential financial loss. It would also be expected of such a person to take reasonable steps against such injury or harm, and such a person can be found negligent if it can be shown that they failed to execute these reasonable steps.
National Union of Metal Workers of South Africa obo Selepe v. ORAWAB Investments (Pty) Ltd t/a Bergview Engen One-Stop 5 BALR 481 (MIBC) made the following distinction between gross negligence and ordinary negligence: “Ordinary negligence encompasses carelessness or a simple failure to fulfil employment duties. Gross negligence, on the other hand, demonstrates a conscious and voluntary disregard for applying reasonable care, likely to result in severe injury or harm. Gross negligence demonstrates an elevated level of risk beyond typical neglect, emphasising the foreseeable nature and severity of possible harm if appropriate care is not taken.”
The lack of care or diligence accompanying the act or omission renders an employee liable for negligence, not the act or omission itself. If the employee was persistently negligent or if the act or omission proved to be significant, the negligence would have to be gross to warrant termination of the employment agreement.
In Closing:
In order to maintain fair labour practices, South African employers are urged to establish a clear distinction between misconduct and negligence in the workplace. While negligence and misconduct entail similar disciplinary procedures, the substantive fairness of the disciplinary actions taken is based on significantly different criteria and considerations.
When addressing such concerns, employers are urged to have clearly established policies and procedures in place, to communicate them effectively, and to adhere to substantive and procedural fairness criteria upon taking disciplinary action. This approach would not only foster a fair and equitable work environment but would reduce the risk of unfair disciplinary action and the associated legal and financial repercussions for employers.
Contact Invictus for guidance and assistance in navigating workplace misconduct and negligence.
Get in touch with our office at 086 173 7263 or email us at admin@invictusgroup.co.za [...]
Read more...
Section 192(2) of the Labour Relations Act states that the employer is responsible for proof in a disciplinary procedure. This principle aligns with the adage, “they who allege must prove.” Thus, the employer, also known as the initiator, is required to present evidence first.
Section 188 of the Labour Relations Act outlines the fundamental criteria for fair dismissals due to misconduct, incapacity, or operational needs. The procedural fairness requirement focuses on how employers handle decisions affecting employees’ rights, especially in cases of dismissal or disciplinary measures. It’s, therefore, crucial for employers to provide employees with a fair and unbiased hearing or disciplinary process.
Setting the Standard
The standard of proof in a disciplinary inquiry is on a balance of probabilities. In Assmang Limited (Assmang Chrome Dwarsriver Mine) v Commission for Conciliation Mediation and Arbitration and Others (2015), it was explained that a balance of probabilities entails “establishing facts by a preponderance of probability,” indicating that the standard of proof is lower than the criminal threshold of “beyond reasonable doubt.”
Employers must thoroughly prepare for disciplinary inquiries to meet this burden of proof. In Minister of Safety and Security v Jordaan t/a Andre Jordaan Transport (2000) 21 ILJ 2585 (SCA), it was held that the inference drawn from the evidence only needs to be “the most natural or acceptable inference,” not the sole inference.
Similarly, in Bates and Lloyd Aviation (Pty) Ltd and Another v Aviation Insurance Co (1985) 3 SA 916 (A), it was held that reasoning by inference often involves considering multiple hypotheses and selecting the most natural and plausible one based on the balance of probabilities.
According to the Labour Court in Potgietersrus Platinum Ltd. v CCMA (J1459/98 of 30 July 1999), an employer only needs to show that the circumstantial evidence pointing to an employee’s guilt is more plausible than the possibility of their innocence.
In Selamolele v Makhado 1988 (2) SA 372 (V), the court held that a finding on a balance of probabilities involves a qualitative assessment of the truth and inherent probabilities of the evidence rather than simply weighing the quantity of proof or number of witnesses. The court must, therefore, determine which version of events is more probable based on this assessment.
Preparing for a Disciplinary Hearing
Before initiating a disciplinary hearing, the employer must thoroughly investigate the alleged misconduct. Gathering all relevant evidence, including witness statements, documents, and other supporting material, ensures a strong foundation for the disciplinary hearing.
The types of evidence an employer should prepare include:
Documentary Evidence: typically includes written records such as the company’s code of conduct, contracts, policies, emails, and letters. These documents must be accurate, relevant, and related to the case. The company’s disciplinary code of conduct is crucial, as it outlines the expected behaviours and standards employees must adhere to, providing a clear benchmark against which their actions can be measured. This code is a critical reference point, ensuring the inquiry is grounded in established rules and expectations.
Real Evidence: Tangible items like surveillance footage, damaged property, or any physical proof connected to the incident. These items should be preserved and presented in their original form to maintain their integrity.
Testimonial Evidence: Statements from witnesses or those involved in the incident can provide critical insights. However, witnesses must be credible and consistent.
Case Study – Woolworths (Pty) Ltd v CCMA & Others
In the case of Woolworths (Pty) Ltd v CCMA & Others (2011) 32 ILJ 2455 (LAC), the court stated that the “evidentiary burden starts with the employer, but once the employer provides prima facie proof of the misconduct as alleged, the ‘evidentiary burden’ shifts to the employee to prove his defence.
If the employee fails to put up a defence or prove his defence, the employer’s prima facie proof of misconduct becomes conclusive proof, and the employer has then discharged the ‘overall onus’ that always rested with it.” This case emphasises that while the initial burden is on the employer, establishing a prima facie case can shift the evidentiary burden to the employee. This ensures a balanced approach where both parties have responsibilities to present their cases.
By gathering comprehensive evidence and preparing diligently, employers can successfully navigate disciplinary hearings, meet the burden of proof, and ensure that disciplinary actions are fair and justifiable. This thorough approach not only strengthens the employer’s case but also upholds the principles of justice and fairness in the workplace.
Involving professionals such as the Invictus Group can be invaluable in navigating these challenges. Please contact our offices at 0861 737 263 if you have any queries or require assistance regarding such matters and implementing the necessary disciplinary actions. [...]
Read more...
On May 28, 2024, President Ramaphosa signed the Cannabis for Private Purposes Act (CFPPA) into law. This act intends to regulate the cultivation, possession, and personal use of cannabis by adults in privacy.
The CFPPA removes cannabis from the Drugs and Drug Trafficking Act and makes it an offence to smoke cannabis in a public place, in a vehicle on a public road and the presence of non-consenting adults as well as children.
Further, any person convicted of an offence related to cannabis, as per Section 8 of the CFPPA, will automatically have their criminal record containing their conviction and sentence expunged.
What this means for employers
Whilst the CFPPA provides clarity as to where one can make use of cannabis as well as the amount of cannabis one can have in their possession, it also sets out the relevant offences and penalties if the CFPPA is not adhered to.
Although the CFPPA itself does not provide clarity on how to regulate the discipline of employees found to be under the influence of cannabis within the workplace, we are led by the below court cases that set out when employers have grounds to discipline staff due to cannabis infringements and when employees’ use of cannabis outside of the workplace has no bearing on the employer. Therefore, no disciplinary action can be taken.
Case study – Marasi v Petroleum Oil and Gas Corporation of South Africa
In the case of Marasi v Petroleum Oil and Gas Corporation of South Africa (C219/2020) ZALCCT 34 (27 June 2023), the court determined whether PetroSA’s Drug and Alcohol Policy testing requirement was an inherent requirement of the job. Considering the nature of PetroSA’s working environment (which includes the exploration of oil and gas), as well as the health and safety requirements regulated by law, the Court found that testing negative for substances such as cannabis was necessary for all employees in a hazardous work environment, was aligned with health and safety legislation of South Africa and did not discriminate against the employee. A zero-tolerance policy is enforceable in instances where the workplace is inherently dangerous.
The above judgement significantly differs from that of Enever v Barloworld Equipment South Africa, a Division of Barloworld South Africa (Pty) Ltd (JA86/22) ZALAC (23 April 2024), in which the Labour Appeal Court submitted that the employee in this case did not operate in an environment with heavy machinery.
Thus, the Drug and Alcohol Policy was overbroad. Whilst Barloworld argued that they had a generally dangerous working environment and that it was an inherent requirement of the job not to make use of cannabis, the court found that this standard could not be applied to employees who work in an office environment away from any health and safety risk. A zero-tolerance policy may not be enforceable when the workplace is not considered inherently dangerous, and the employee is not considered intoxicated.
Case study – NUMSA obo Nhlabathi and 1 Other v PFG Building Glass (PTY) Ltd
In NUMSA obo Nhlabathi and 1 Other v PFG Building Glass (PTY) Ltd (JR 1826 /2020) ZALCJHB 292 (1 December 2022), two employees were dismissed after they tested positive for cannabis due to a tip being received by management that the said employees were smoking cannabis in the workplace.
Prinsloo J confirmed that dismissal was fair and that the court does not protect employees against disciplinary action should they contravene company policies and procedures, especially in dangerous working environments. This case demonstrates that notwithstanding the decriminalisation of the private use, possession or cultivation of cannabis, employees may be dismissed for testing positive for cannabis while in a workplace that is considered inherently dangerous.
Employers are still within their rights to have a Drug and Alcohol Policy that indicates no person is to be under the influence whilst on duty. However, the above case law provides us with guidance as to what steps and procedures can be taken in different circumstances. Employers need to consider the nature of the employee’s duties and the environment in which they work before considering disciplinary steps. A zero-tolerance policy can be enforced if there is a direct correlation to preserving workplace safety.
If you have any questions or need assistance disciplining employees found under the influence of cannabis in the workplace, please contact Invictus at 086 173 7263 or email us at admin@invictusgroup.co.za. [...]
Read more...
Requiring employees to submit doctor’s notes for absence due to illness is a standard practice aimed at validating the legitimacy, or not, of an employee’s sick leave. However, this practice can expose employers to significant challenges, particularly concerning the submission of fraudulent doctor’s notes.
Risks of Fraudulent Medical Certificates
While medical certificates are intended to ensure that employee absences are justified and to maintain workplace productivity, the risk of fraud and/or misrepresentation on the part of the employee can take away from this objective. Employers are urged to be very attentive in verifying the authenticity of such documentation as failure to do so can lead to abuse of sick leave policies, increased absenteeism, and operational disruptions.
Case Study: Woolworths v Maseko
In the recent case of Woolworths v Maseko (JA90/2022 (LAC), the Labour Appeal Court ruled on the dismissal of an employee accused of submitting, what was presumed to be fraudulent medical certificate. The employer alleged the certificate was obtained from a doctor involved in selling such certificates, and accordingly dismissed the employee.
Court’s Findings
However, the Court found that there was insufficient evidence to prove that the employee was aware of the doctor’s questionable practices, or that she was not genuinely ill when visiting the doctor. The doctor was qualified and registered with relevant medical bodies. The LAC emphasized that employees should not be disciplined solely based on their choice of a qualified doctor, even if the employer distrusts that doctor’s methods. Employers should first investigate suspicions about a doctor through regulatory bodies and warn employees if necessary. The Court accordingly confirmed the dismissal was substantively unfair as it was based on the employer’s dissatisfaction with the doctor’s practices rather than any proven misconduct by the employee.
Legal Implications and Best Practices
The ruling furthermore rightfully emphasises that dismissal may be justified if an employee knowingly submits a fraudulent or altered sick note or consults an unregistered or unqualified doctor. However, this situation is notably different from the case at hand, highlighting the importance of handling such matters with extreme caution and considering applicable legislation. Improper handling can lead to legal consequences, reputational damage, and diminished employee trust and morale.
Get in touch with our office at 086 173 7263 or email us at admin@invictusgroup.co.za. [...]
Read more...
A designated employer could face the risk of fines should they be found non-compliant with the Employment Equity Act 55 provisions of 1998. The Act defines a designated employer as any employer who employs more than 50 employees or who employs less than 50 employees but exceeds the industry thresholds as detailed below:
SCHEDULE 4TURNOVER THRESHOLD APPLICABLE TO DESIGNATED EMPLOYERS
Sector or subsectors in accordance with the Standard Industrial ClassificationTotal annual turnoverAgricultureR6.00mMining and Quarrying R22.50mManufacturingR30,00mElectricity, Gas and WaterR30,00mConstructionR15,00mRetail and Motor Trade and Repair ServicesR45,00mWholesale Trade, Commercial Agents and Allied ServicesR75,00mCatering, Accommodation and other TradeR15,00mTransport, Storage and CommunicationsR30,00mFinance and Business ServicesR30,00mCommunity, Social and Personal ServicesR15,00m
Chapter 3 of the Act lists the duties and responsibilities of a designated employer. One key aspect is submitting an annual employment equity report. The act outlines duties and responsibilities that must be met before a designated employer can be considered a complainant.
Before submitting the annual employment equity reports, a designated employer must first ensure it meets the following criteria:
Assign responsibility for the process to a senior manager.Establish an employment equity committee that needs to meet at least once quarterly.Conduct an analysis and identify barriers to employment equity.Prepare an employment equity plan in which a designated employer outlines strategies and measures to address identified barriers and promote diversity.Submit annual employment equity reports to the Department of Employment and Labour detailing the progress made in implementing the employment equity plan.
Non-compliance with the Employment Equity Act could lead to the following consequences:
Non-compliant employers can face a fine ranging from R1.5 million to 10% of the employer’s annual turnover.Non-compliant employers can also find themselves in costly litigation due to fines issued by the Labour Court, which result in astronomical legal fees.
The system for employment equity submissions will be open from September 1st to January 15th, 2024.
Contact Invictus for guidance and assistance to ensure you meet all the EE requirements before submitting your annual EE reports.
Get in touch with our office at 086 173 7263 or email us at admin@invictusgroup.co.za [...]
Read more...
Employers often use precautionary suspensions while investigating employee misconduct. The presupposition (and standard practice) is that the employee would be suspended on full pay pending the disciplinary inquiry.
Still, this practice could cause frustration for the employer when the employee proceeds to delay disciplinary proceedings and the matter never reaches finality. This leads to whether suspension without pay would be an option and, if so, whether this would be the appropriate recourse for the employer.
Case Studies
Over the years, our courts and forums have dealt with several disputes surrounding paid suspension pending disciplinary inquiries, its application, and its effects. The consensus is that the employer bears the onus of expeditiously dealing with their labour disputes while balancing their prerogative to investigate the alleged misconduct and ensuring that the suspension does not amount to an unfair labour practice.
In Msipho and Plasma Cut (2005) 26 ILJ 2276 (BCA), an employee was suspended on full pay pending their disciplinary inquiry for alleged misconduct. At the time of the disciplinary investigation, the employee wanted to exercise their right to have a representative present with them in the investigation. Their union official was not present, so the inquiry was postponed for six weeks to enable the employee to secure the attendance of their representative.
However, the employer did not pay the employee during the latter six-week period, and the employee referred an unfair labour practice to the Centre for Dispute Resolution, claiming that he was entitled to be paid for the full suspension period. The arbitrator found that it was the employee’s responsibility to secure the attendance of their representative for the initial inquiry date, and he failed to discharge this onus.
Also, as the postponement was granted at the employee’s instance, the employer was not liable for remuneration for the extended six-week period. Otherwise, employees would find reasons to delay disciplinary proceedings at their employers’ cost. The arbitrator found that this was not an unfair labour practice. The same principles and approach were echoed in the matter of SAEWA obo Members and Aberdare Cables 2 BALR 106 (MEIBC).
More recently, in the matter of Strydom v ArcelorMittal South Africa (J 1764/2023) (2024) 45 ILJ 931 (LC) (27 December 2023), a disciplinary inquiry was initiated for the employee on the 31st of January 2023 and he was placed on suspension with full pay pending the outcome thereof. Unbeknownst to the employer, a series of postponements and delay tactics by the employee and his legal representative ensued, whereafter, the parties eventually agreed that the matter be postponed for one final time to the 1st and 4th, and 10th and 11th of February 2024.
In the meantime, on December 5, 2023, the employer informed the employee that his further suspension would be without pay. This is when the employee approached the Labour Court, claiming that this constituted an unfair labour practice. Regarding jurisdiction, Judge Prinsloo noted that disciplinary inquiries are to be conducted simply and expeditiously and should not be treated as criminal hearings.
Moreover, when employees are suspended pending their disciplinary inquiries, and the delay in the inquiry leads to an unreasonably long suspension extension due to the employee’s continuous requests for postponements or other reasons, it would be unfair to apply the principle of full pay for their suspension. The Court echoed previous arbitration awards where unpaid suspension was justified due to employees’ delay tactics.
Conclusion
These cases confirm that disciplinary inquiries are to be conducted and concluded expeditiously, with minimal legal technicalities and without any malintent or use of delay tactics. Moreover, once an employee is suspended on full pay, no reason should exist for them to unnecessarily delay the disciplinary proceedings at their employer’s cost, as this amounts to an abuse of process. Employers should amend their disciplinary code or policies and procedures to allow for the possibility of suspension without pay when their employees unduly delay the disciplinary proceedings.
Contact Invictus for guidance and assistance in booking and conducting hearings in a timely manner. Get in touch with our office at 086 173 7263 or email us at admin@invictusgroup.co.za [...]
Read more...
During his first budget vote speech as newly appointed Minister of Home Affairs, Dr Leon Schreiber made a point of implementing stricter measures against undocumented workers during his term, starting with more workplace inspections. Schreiber stated that the increased inspections would start at restaurants, spaza shops, farms, and mines, but the broader aim is to increase the number of workplace inspections across all industries by 50% in the coming year.
He further highlighted the increased effectiveness of these inspections through interdepartmental collaboration, stating that he would coordinate with colleagues in relevant departments to conduct joint operations. This approach maximises their capacity to hold everyone involved in illegal activities accountable. According to Schreiber, the increase in workplace inspections is necessitated when one considers the ever-increasing rate of illegal immigration and the threat that this poses to national security and economic growth in South Africa.
Why is the increase in workplace inspections relevant for employers?
As a point of departure, all employers are responsible for ensuring that their employees are properly documented and accounted for in terms of the relevant governing legislation. Consequently, employers are urged to ensure that all employees submit valid identity documentation for them to have on file during any workplace inspection, and these documents should be kept up to date to ensure that employers remain compliant.
This onus is only heightened for foreign workers, as any non-compliance could lead to dire consequences. Should employers fail to discharge this onus during any workplace inspection by the relevant governing body, they risk fines or incarceration relative to their degree of non-compliance.
Worried about compliance? Contact Invictus for assistance at 086 173 7263 or email us at admin@invictusgroup.co.za [...]
Read more...
When an employee becomes unemployed or cannot work due to illness, maternity, adoption, or parental leave, the Unemployment Insurance Fund (UIF) provides temporary relief. It also offers consolation to a deceased contributor’s dependents.
The UIF is controlled by the Unemployment Insurance Act of 2001 and the Unemployment Insurance Contributions Act (UIC Act). These Acts, which went into effect on April 1, 2002, set forth the benefits to which contributors are entitled and collect contributions to the UIF. The Contributions Act, enacted in 2002, is generally applicable, with a few notable exclusions, including employees working fewer than twenty-four hours per month, students, public servants, and others.
Responsibilities for unemployment insurance contributions
The employer is responsible for registering the business and deducting the appropriate amount from the employee’s compensation. Under the Unemployment Insurance Contributions Act of 2002, employers who neglect to comply with this requirement will be subject to harsh fines and interest.
During an employee’s employment, the employer is required to contribute 2% of the employee’s salary to the fund (1% given by the employee and 1% by the company). This amount must be deducted at the end of each month and paid to the fund within seven days.
Changes enacted on March 1, 2018, require international workers employed in South Africa, as well as their employers, to make contributions to UIF. Learners hired as per the criteria stipulated in the Skills Development Act are included now. Both the employer and the employee are expected to contribute 1% of the employee’s compensation monthly, up to a maximum commitment of R148 72.00 per month or R178 464.00 annually.
Understanding UIF benefits and employer compliance
The UIF fund covers five kinds of benefits, including unemployment benefits, illness benefits, maternity benefits, and death benefits.
Workers may file claims if they have contributed to UIF and are registered with the Fund. However, it’s crucial to remember that if you’ve resigned from your employment, you are not eligible to make a claim. Unemployment compensation claims can only be obtained in the event of termination of employment, retrenchment, or contract expiration.
Contact Invictus for payroll services at 086 173 7263 or email us at admin@invictusgroup.co.za [...]
Read more...
Derivative misconduct occurs when an employee is linked to or implicated in another employee’s misconduct, even if they were not directly involved in the misconduct themselves. It includes situations where an employee was aware of the misconduct and failed to report it, actively assisted in it, or covered it up.
From a practical perspective, the concept was created by our courts to overcome difficulties when identifying all the guilty parties involved in group misconduct. It refers to an employee’s refusal to disclose information that may assist their employer in identifying the perpetrator of misconduct.
Employee Accountability in Group Offenses
It is termed “derivative” because the employee in question would be reprimanded for refusing to assist the employer in apprehending and disciplining the culprit or culprits of the original offence and not for being involved in the primary misconduct.
Case Study
In the case of National Union of Metalworkers of South Africa obo Khanyile Nganezi and Others v Dunlop Mixing and Technical Services (Pty) Limited and Others, the Constitutional Court established the test for Derivative Misconduct and what an employer must prove to justify dismissing an employee for Derivative Misconduct.
The matter involved members of the National Union of Metal Workers who were engaged in a protected strike, which turned violent and damaged property. Dunlop dismissed the workers involved in the strike. When it became violent, 65 workers were not positively and individually identified as being present when the violence was committed but were dismissed for derivative misconduct.
Three groups of employees were identified at Arbitration:
Those who were positively identified as committing violence;
Those who were identified as present when the violence took place but who did not participate and
Those who could not be identified as being present when the violence took place, the latter category, are dealt with in the content below.
Constitutional Court Findings
The matter made its way to the Constitutional Court, which held that to prove derivative misconduct, it must be a probable inference that each of the employees was present at an instance where the misconduct was committed, they would have been able to identify those who committed the misconduct, they would have known that their employer needed the information from them, they failed to disclose the information to their employer and the reason why they did not disclose the information, was because they knew that the employees were guilty.
The Court held, “the duty of good faith does not imply the imposition of a unilateral fiduciary obligation on employees to disclose known information of misconduct by their co-employees to their employer.”
The Court further elaborated that our law does not imply fiduciary duties in all employment relationships. The duty generally arising in an employment relationship is a reciprocal contractual duty of good faith. This does not impose an obligation on any employee to disclose information about their fellow employees’ misconduct to their employer in the absence of any reciprocal obligation by an employer itself to give something to the employees in return (such as in the Dunlop matter, guaranteeing their safety).
Reciprocal Duty of Good Faith
The contractual duty of good faith applicable to all employees is reciprocal, and consequently, employees who are called to identify those committing misconduct must be offered something in return.
Subsequently, the Court confirmed that the employees in question did not have a duty to disclose information and were not guilty of Derivative Misconduct. The Labour Court and Labour Appeal Court orders were set aside, and the Arbitration ruling of substantively unfair dismissal and an order for reinstatement of the Applicants stood.
Employers will need to be more vigilant in monitoring and identifying perpetrators of workplace misconduct. They are required to demonstrate by direct or compelling circumstantial evidence that the employee is/are directly or indirectly associated with or participated in the misconduct in question.
Please contact our offices if you have any questions or require assistance regarding Derivative Misconduct or any other subject matter in the workplace. [...]
Read more...
Consistency in applying company policies in disciplinary actions is crucial to maintaining a fair and productive work environment. This is particularly crucial in South Africa, where various bodies such as the CCMA, Bargaining Councils and Labour Court closely monitor labour laws and adherence to fair labour practices.
South Africa’s labour laws, mainly concerning the Labour Relations Act (LRA) of 1995, emphasise the importance of fair treatment of employees. This includes fair disciplinary procedures aligned with the company’s disciplinary code and policies. Failure to adhere to these consistently can potentially result in a lengthy legal battle that can be costly, leading to financial losses and damage to a company’s reputation.
The importance of consistency in workplace disciplinary actions
Consistency in applying a set precedent of the company means treating similar cases in the same way based on how previous cases were handled in terms of the disciplinary code. For example, if two employees commit the same offence, ie misappropriation, they should receive similar, if not the same, disciplinary sanctions. This principle prevents discrimination, unfair treatment and bias in the workplace.
This protects the company from further legal challenges. Consistent policy application provides a solid defence against such challenges. It demonstrates that the company follows fair and transparent procedures, which allows commissioners to make a reasonable conclusion should the case end up at the CCMA or Bargaining Council for arbitration.
Consistency also helps set clear expectations for employees. When employees see that rules are applied consistently, they are more likely to understand what is expected of them and comply with company policies. This, in turn, leads to a more harmonious and efficient work environment.
Building trust in the workplace
Furthermore, consistent application of disciplinary action helps build trust between employees and management. Employees are more likely to trust management if they believe that disciplinary action is fair and impartial. This trust is essential for maintaining a positive workplace culture and fostering employee loyalty.
Companies should have clear and well-defined disciplinary policies to ensure consistency in disciplinary action. These policies should outline the procedures for handling disciplinary issues and the consequences for any transgressors. Managers and supervisors must also be well-trained on these policies, as they will ensure compliance with them daily.
Consistency in applying company policies, especially in disciplinary action, is essential for fostering a fair, productive, and legally compliant work environment. It helps build trust, maintain a positive workplace culture, and protect the company from legal challenges.
Companies in South Africa should prioritise consistency in their disciplinary practices to ensure compliance with labour legislation and that they have a strong case should they be challenged at the CCMA or their relevant dispute resolution body.
Contact Invictus for tailored policies & procedures that drive compliance and efficiency at 086 173 7263 or email us at admin@invictusgroup.co.za [...]
Read more...
The Property Practitioners Regulatory Authority (PPRA) has stated that it will not issue a Fidelity Fund Certificate (FFC) to any Real estate agent without a complaint B-BBEE certificate for the upcoming renewal period for FFCs in 2025.
Section 48 of the Property Practitioners Act of 2022 states that no FFC may be issued without a valid B-BBEE certificate. Previously, the requirement was only for a SANAS-accredited B-BBEE certificate with no minimum score. The PPRA has made it clear that they will only issue an FFC to an agent who has achieved at least a level 8 scorecard, which is the lowest level achievable.
Achieving a level 8 or compliant B-BBEE certificate does not require ownership but would require compliance with the following elements thus, achieving a complainant certificate would still depend on the following elements:
For skills development, the target is calculated at 3% of the total annual payroll for companies with an annual turnover of between R10M and R49M (QSE Companies) and 6% for companies with a turnover greater than R50M (Generic Companies)
For preferential procurement, 60% of the annual total cost of sales must be procured from B-BBEE-compliant companies for QSE companies and 80% for generic companies.
Social, economic development solutions to the value of 1% of Net Profit After Tax (NPAT)
Supplier development support is needed at the value of 1% of NPAT.
Enterprise development to the value of 1% of NPAT.
Achieving a compliant B-BEE certificate requires strategic planning, and real estate agencies looking to become B-BBE compliant can face the following compliance challenges:
Financial Challenges
Becoming B-BBEE compliant requires a substantial investment in skills development, Enterprise Development, Supplier Development, and social economic development. This can be quite the financial burden on smaller property firms with limited resources, which could have a detrimental impact on the sustainability and competitiveness of these smaller real estate practitioners.
Administrative Challenges
Completing the Property Practitioners Act and becoming a B-BBEE complainant can place a strain on a property practitioner’s resources. Compiling a portfolio of evidence for a B-BBEE rating can be administratively intensive, especially for sole proprietors.
Capacity constraints
Complying with the management control element of the scorecard requires employees within the entity. Most property practitioners are small enterprises and cannot diversify their employment profile. Implementing skills development initiatives requires specialised expertise and resources, and there is a need for internal capacity and infrastructure to effectively execute these programs internally, hindering their ability to become B-BBEE compliant.
In addressing the B-BBEE compliance challenges, property practitioners must embrace innovation, collaboration and capacity-building initiatives to drive meaning and complete transformation within the sector. Proactive measures and strategic partnerships enable practitioners to navigate the regulatory landscape more effectively.
Contact Invictus for tailored B-BBEE compliance strategies. For more information, contact us at 086 173 7263 or email us at admin@invictusgroup.co.za [...]
Read more...
In what has been labelled as a “landmark decision”, the Constitutional Court recently dismissed an application by Home Affairs Minister Aaron Motsoaledi for leave to appeal against the Gauteng High Court’s ruling that the ZEP programme had been unlawfully terminated.
The Helen Suzman Foundation and Consortium for Refugees and Migrants in South Africa (CoRMSA) opposed Motsoaledi’s decision to terminate the ZEP programme under the Promotion of Administrative Justice Act (PAJA). Their challenge led to the Constitutional Court confirming that all ZEP holders have a right to fair administrative action.
Summary of events
In a significant turn of events, the Pretoria High Court declared in June 2023 that Minister Motsoaledi’s decision to terminate the ZEP programme was unlawful, unconstitutional, and invalid. This was due to the lack of a fair process regarding the relevant governing legislation. The Minister had initially announced the end of the programme in 2021, but further extensions were granted to the 178,000 permit holders.
During these extension periods, Motsoaledi urged the permit holders to apply for other visas or return “home.” The High Court held that Motsoaledi did not conduct a fair “notice and comment” process and subsequently directed the Minister to conduct a fair process in reconsidering the end of the permits.
The High Court’s decision was set aside and remitted back to Minister Motsoaledi to conduct these processes. Despite the Minister’s subsequent attempts to appeal this decision, the Constitutional Court dismissed Motsoaledi’s application for special leave to appeal on June 18, 2024, as the application had “no reasonable prospects of success.”
Impact of the Constitutional Court’s decision
The Constitutional Court’s dismissal of the application for special leave to appeal means that Minister Motsoaledi must now comply with the High Court’s order, and any future decisions regarding the ZEP programme must be made in a “fair and just manner” in terms of which the ZEP holders’ views and interests are to be given adequate consideration. Notably, the ZEP will remain effective until 29 November 2025.
Does this new ruling affect you or your employees? Contact Invictus Group for legal advice. [...]
Read more...
An employer must pay the Unemployment Insurance Fund (UIF) for an employee who works more than 27 hours a month. The employer must register as a contributor to UIF and register all employees as beneficiaries. Upon registration, the employer will receive a contributor number and must use it when paying the contributions.
The employer deducts 1% from the employee’s salary, which is added to the employer’s 1% contribution and paid to the UIF. 2% is contributed towards the employee’s UIF.
Why must an employer pay UIF?
Compliance with the Unemployment Insurance Fund (UIF) is vital for an employer, as it provides short-term financial support to employees during ill, maternity leave and unemployment.
Key compliance obligations for employers
UIF Registration: Businesses must register with the UIF and obtain a UIF reference number. This unique identifier is used in all interactions with the UIF, including submitting employee information, making contributions, and claiming benefits on behalf of employees. An employer must also register with the UIF, and it would receive a contributor number. This number is used when paying contributions, introducing new employees, and making employee claims.
Compulsory Contributions: Employers are required to enrol their employees in UIF (Unemployment Insurance Fund) contributions. The employer and the employee are obligated to contribute monthly, determined by the employee’s earnings. The employer must precisely compute and remit these contributions to the UIF through the monthly Emp201 declaration submitted via the SARS e-filing platform.
Declaring Employees: Employers are responsible for providing precise employee details to the UIF. This encompasses information such as employees’ names, ID numbers, earnings, and dates of employment. Ensuring timely and accurate submissions guarantees that UIF records remain current and accurate.
Employee UIF Claims: When employees fulfil specific eligibility criteria, such as unemployment, illness, or maternity leave, they become eligible to claim UIF benefits. Employers play a vital role in assisting these claims by furnishing precise and prompt information to the UIF on behalf of the affected employees.
Employer UIF Returns: Employers are required to provide monthly reports to the UIF outlining the contributions made for each employee. These reports encompass details such as the number of employees, their earnings, and the total UIF contributions. Consistent and precise reporting is imperative to ensure compliance with regulations.
Keeping Record: Employers must retain precise records of UIF contributions, employee data, and pertinent documentation for at least five years. These records may undergo audits conducted by the Department of Labour, and failure to comply could lead to penalties.
What are the risks involved when an employer does not contribute to UIF?
Ensuring compliance with UIF regulations is crucial for South African businesses, not only as a legal requirement but also to safeguard employees’ well-being. Failure to meet UIF obligations can lead to penalties, legal repercussions, and company reputation damage.
Employers must stay informed about UIF rules and maintain accurate records to support the system, which provides financial assistance to employees during difficult times, promoting a more stable workforce. It’s the employer’s responsibility to pay over the UIF contributions for all employees, and failure to do so can result in personal liability for the outstanding amount. Non-payment is considered an offence, with the UIF imposing a 10% penalty on unpaid contributions and interest calculated by the finance committee.
Contact Invictus today for expert legal advice and guidance on mandatory labour compliances. For more information, contact our call centre at 086 173 7263 or email us at admin@invictusgroup.co.za. [...]
Read more...
Ramadan and Eid are significant times for Muslim employees, encompassing religious observances, fasting, prayers, and communal gatherings. Understanding the importance of these occasions and offering support can build a more inclusive and respectful workplace.
This article explores the origins of Ramadan, the obligations during this month, and practical ways employers can accommodate and support their Muslim employees during these sacred times.
The origin of Ramadan
It is believed that Ramadan is the most holy and sacred month of the year in Islam. This is so because it was during the month of Ramadan that the angel Gabriel appeared to the prophet Muhammad and revealed the holy Qur’an, the religious book of Islam. The night that the holy Qur’an was revealed to the prophet is called Laylat-Ul-Qadr, which directly translated means the night of power.
Muslims show respect and appreciation for this night and the revelation of the holy Qur’an by fasting during Ramadan every year to commemorate the holy Qur’an. Ramadan is, therefore, considered the most crucial month in Islam and carries blessings and obligations for Muslims worldwide.
As a Muslim, one strives to abide by all 5 pillars of Islam, which are:
“Profession of faith (shahada)” is the belief that there is no god but Allah, the God of Muhammad, the messenger and all.
“Prayer (salat)” takes place five times a day at set times every day and increases during Ramadan.
“Donation (zakat)” is feeding the poor and giving to those in need.
“Fasting (sawm)” is the abstention from eating and sometimes drinking from sunrise until sunset daily during the month of Ramadan and certain other days of the year that are favourable to do so religiously.
“Pilgrimage (hajj)” – the most important, visiting Mecca in Saudi Arabia, the birthplace of the prophet Muhammad and Islam.
Obligations during Ramadan
During Ramadan, Muslims fast, worship, have communal gatherings, and spiritually develop themselves and their families. During this month, the holy Qur’an is expected to be recited and memorised in its entirety and taught and explained. To achieve this, every night during this month, Muslims pray and read from the holy Qur’an in the Mosque, with the Imam (the Islamic preacher) teaching the meaning of the content.
A Muslim must fast from sunrise until sunset, read and study the holy Qur’an, and pray the five basic prayers during the day and additional prayers at night after breaking their fast. During Ramadan, Muslims are also required to donate and do good deeds.
Breaking the fast (iftar) during Ramadan occurs around sunset (Magrib) and involves enjoying a meal with family and loved ones. Gatherings at Iftar are believed to be a blessing, and as such, many people create feasts for families, friends, and even strangers to eat together.
What is Eid?
Ramadan is usually followed by a celebration of breaking the fast, initiated by the prophet Muhammad in Medina, where he resided. The celebration is called Eid-ul-Fitr. Eid-ul-Fitr starts with a morning Eid prayer and the everyday prayers of a Muslim’s day. This Eid prayer is done in large groups, followed by feasts and celebrations.
The second Eid, which is celebrated by Muslims, is Eid-ul-Adha, which is the Eid of sacrifice. It is believed by Muslims that Ibrahim (Abraham) was willing to sacrifice his son as an act of obedience to God’s command and that in the absence of sacrificing his son, he was given a lamb to slaughter as a sacrifice.
This Eid honours the willingness of Ibrahim to sacrifice his son to God, and in commemoration, Muslims usually slaughter a lamb or a sheep as a sacrifice. The meat of the animal that is killed is divided into three portions: one portion is to be consumed by the family who has offered the animal, one portion is to be consumed by the friends and neighbours/relatives of the family who have provided the animal, and the third portion is to be distributed amongst the poor and needy within the community.
Eid-ul-fitr typically lasts three to four days, while Eid-ul-Adha (the bigger of the two) lasts four to five days. Celebrations differ from family to family and culture to culture. What is shared among all is that in the workplace, it is common for Muslims to take one day of leave for Eid.
The importance of Eid can be compared to that of Christmas for Christians, and as such, many Muslims take the day off from work or school and just participate in the celebrations after taking part in the special morning prayer.
Discussions about the recognition of other religious holidays within the Republic of South Africa
Religious spokesperson Moulana Abdullah Khan of the Jamiatul Ulama KZN stated in 2015 that he does not support that every religious holiday should be a public holiday. He added that South Africa is a multi-cultural and multi-religious society, and recognising the holidays of all religions and cultures as public holidays will result in a loss of revenue in South Africa as there are far too many holidays to be recognised.
The Basic Conditions of Employment Act (BCEA)
The BCEA provides that there are set public holidays which employees are entitled to take off and that if they are required to work on these public holidays, there needs to be an agreement between the employer and employee providing for such. It is important to note that the BCEA has yet to be amended or changed to date, and as such, employees of a different faith do not have an automatic right to a holiday should it be related to a religious holiday.
The law in South Africa
The Constitution of the Republic of South Africa (the Constitution):
Section 9(3) of the Constitution restricts the state from unfairly discriminating against any person based on any ground, including religion. Section 9(4) of the Constitution provides that any person is prohibited from unfairly discriminating against any other person based on any ground, including religion. Section 15(1) of the Constitution provides that everyone has the right to freedom of religion. Section 31(1) of the Constitution provides that people belonging to a religious community may not be prohibited from practising their religion.
Caselaw – TDF Network Africa (Pty) Ltd vs Faris 2019 40 ILJ 326 (LAC):
In this case, it was stated that section 6(1) of the Employment Equity Act 55 of 1988 prohibits direct or indirect unfair discrimination against any employee based on the grounds of religious beliefs.
The court held that:
“ithout question, an employment practice that penalises an employee for practising her religion is a palpable invasion of her dignity because it supposes that her religion is not worthy of protection or respect. It is a form of intolerant compulsion to yield to an instruction at odds with sincerely held beliefs on the pain of losing employment. The employee is forced to make an unenviable choice between conscience and livelihood. In such a situation, the dictates of fairness and our constitutional values oblige the employer to exert considerable effort in seeking reasonable accommodation.” (par 45)
Caselaw – FAWU & Others vs Rainbow Chicken Farms (2002) 21 ILJ 615 (LC):
This matter involved Muslim butchers who were dismissed for taking unauthorized leave for Eid. It was found that the employees, who were all Muslim butchers specifically employed to slaughter chickens (according to the Halaal standards) and refused to work on Eid, were not unfairly dismissed since they were absent for a religious holiday and not on an official public holiday.
The Labour Court held that the employees were not unfairly discriminated against because of their religion and that there would have been discrimination if the employer had permitted some employees to take leave and not others.
In this case, specifically, it was crucial for operational requirements that all employees be present. If they were all permitted to take the day off for Eid, this would have resulted in the factory being inoperable and having to close down completely. The court, therefore, held that “requiring employees to work on religious holidays that are not official public holidays is justifiable on operational grounds.”
How can an employer accommodate a Muslim employee in the workplace?
A balance needs to be reached between the interests of the employer and the employee, and an agreement must be reached accordingly. On the one hand, Muslim employees may be refused a day off for Eid due to operational requirements, which will not be considered unfair by the Labour Court. However, this can only be determined on a case-by-case basis.
On the other hand, nothing stops an employer from understanding and making alternative arrangements for an employee of a different faith by agreement. Although the law is clear, to respect the religion of Muslims, an employer should reach an agreement with their employees.
The employer could, for example, allow an employee of a Muslim faith to take a day off for Eid (one for each Eid) and enable an employee further to finish work one hour earlier during the month of Ramadan. Due to the employee, the time given off could be recuperated from accrued leave days.
It is important to note that the current position in South Africa is that employees of a different faith, such as Muslims and Hindus, benefit from the public holidays as declared by South African law. If they require leave for their religious holidays, the common practice is to apply for annual leave, failing which unpaid leave is at the discretion of the employer.
In conclusion, it is clear that there needs to be a balance between the rights of the employer and the employee when considering time off for a religious holiday and that there has to be a mutual agreement between both the employer and the employee, taking into consideration all relevant factors. Such an agreement should be discussed at the onset of an employment relationship with an employee of a different religious faith.
Contact Invictus today for expert legal guidance & advice on how to accommodate your Muslim Employee this coming Eid. For more information, contact our call centre at 086 173 7263 or email us at admin@invictusgroup.co.za [...]
Read more...
Insubordination in the workplace is often a serious matter because it can affect working relationships between an employer and employee, undermine the structural lines of authority in a workplace, and it could have long-term adverse effects on team morale within a company.
However, not every disagreement in the workplace can be labelled as insubordination, and employers are often left perplexed as to what constitutes insubordination, especially when insubordination is of such a gross nature that it would warrant dismissal.
What is insubordination?
In layman’s terms, insubordination occurs when an employee refuses to accept the authority of their employer or of a person in a position of authority over an employee, such as a line manager.
Insubordination usually occurs when an employer gives an employee a reasonable instruction that is capable of being performed within the ambit of the employee’s job or course and scope of employment, and the employee refuses to accept this authority or refuses or fails to obey the instruction. In a legal context, the offence of insubordination has been described in several cases over the years.
Case study – Palluci Home Depot (Pty) Ltd v Herskowitz and Others
One of the best examples of such a description can be found in Palluci Home Depot (Pty) Ltd v Herskowitz and Others (2015) 36 ILJ 1511, where the Court stated that: The offence of insubordination in the workplace has been described as a wilful and serious refusal by an employee to obey a lawful and reasonable instruction or where the conduct of an employee poses a deliberate (wilful) and serious challenge to the employer’s authority. In some cases, defiance of an instruction may indicate a challenge to the employer’s authority, but this is not so in every case.
Insubordination may also be found to be present where disrespectful conduct poses a deliberate (wilful) and serious challenge to or defiance of the employer’s authority, even where there is no indication of the giving of an instruction or defiance of an instruction.
When does insubordination become gross insubordination, and when will it justify dismissal?
Schedule 8 of the Labour Relations Act, 66 of 1995 (also known as the Code of Good Practice) lists gross insubordination as a permissible ground for dismissal, but Item 3(4) of this Schedule lists a vital prerequisite as far as dismissal for this conduct is concerned, and it states the following: Generally, it is not appropriate to dismiss an employee for a first offence, except if the misconduct is severe and of such gravity that it makes a continued employment relationship intolerable.
Examples of serious misconduct, subject to the rule that each case should be judged on its merits, are gross dishonesty or wilful damage to the property of the employer, wilful endangering of the safety of others, physical assault on the employer, a fellow employee, client or customer and gross insubordination. From this Item, one can deduce that the severity and gravity of the misconduct play essential roles when a distinction stands to be made between insubordination and gross insubordination.
Fortunately, our courts have elaborated on key considerations for employers before they dismiss an employee for alleged insubordination. In NUMSA & Another v Kromberg & Schubert (Pty) Ltd (2008) 29 ILJ 1343 (BCA), for example, the court stated that the alleged insubordination must be serious, persistent, and deliberate and that the employer must adduce proof that the employee was in fact guilty of defying an instruction.
Case Study – Independent Risk Distributors SA (Pty) Ltd (JR 1906/19)
The case of Independent Risk Distributors SA (Pty) Ltd (JR 1906/19) is a practical example of how our courts deal with insubordination. In this case, the employer had dismissed their sales representative for gross insubordination after the latter had allegedly challenged or undermined the authority of the company’s CEO during a staff meeting when the sales representative had questioned and/or challenged the instruction issued to them by the CEO in the presence of their colleagues.
The CEO instructed all the sales representatives present to go home, reflect on their performance, and return to the office the following day. The employee allegedly proceeded to challenge and undermine the CEO’s authority.
During the arbitration proceedings, and after considering the evidence and witness statements, the arbitrator concluded that the employee’s dismissal was unfair and ordered the employee reinstated. From the witness statements on behalf of the employer, it became clear that the employee had questioned the CEO in a problematic manner and that the employee asked questions, and whenever the CEO tried to speak, the employee interrupted the CEO with an unacceptable and disrespectful tone. However, one witness stated that the employee asked questions after the CEO gave the instruction but that the employee’s conduct was not inappropriate.
The employer applied for a review of this decision, and the Labour Court aptly laid down key considerations during its enquiry into the gravity of the insubordination concerned, namely that it must consider the employer’s action before the deed, the reasonableness of the instruction, and the presence of wilfulness by the employee.
The Labour Court held that dismissal is reserved for all instances of gross insubordination, or the wilful flouting of an employer’s instructions and that a single act of defiance by an employee is insufficient for an employer to conclude that insubordination had occurred. As for gross insubordination, the Court held that the conduct had to be severe, persistent, and deliberate, and, according to the Labour Court, this was not the case in this matter.
Conclusion
From the Labour Court’s ruling in Independent Risk Distributors SA (Pty) Ltd (JR 1906/19), it is evident that a single instance of insubordination is not always reason enough to dismiss an employee. For dismissal to be justified, each case must be examined on its own merits whilst bearing in mind that dismissal is usually reserved for instances where the insubordination was severe, persistent, and deliberate enough to render any further working relationship intolerable.
If you would like to find out more about your rights as an employer and on what grounds you have for fair dismissal, then please feel free to contact Invictus Group at 086 173 7263 or email us at admin@invictusgroup.co.za [...]
Read more...
The new Collective Agreement of the Bargaining Council for Restaurants, Catering, and Allied Trades (BCRCAT) in Johannesburg was released on April 26, 2024. This development aims to update and enhance labour relations within the hospitality industry, addressing long-standing challenges and setting the stage for improved working conditions and business operations.
The new Collective Agreement introduces adjustments to the cleaning and transport allowances, modifications to minimum working hours, an increase in the bargaining council levy, a higher night shift allowance, and notable increments in minimum wage rates across various job categories. These reforms are designed to foster a more equitable and productive working environment, reflecting the evolving needs of both employees and employers in this dynamic and challenging industry.
Some key changes restaurant owners can expect to implement starting on 1 June 2024:
Cleaning allowance
This amount will increase from the current amount of R100.00 per month / R23.08 per week to the amount of R110.00 per month/ R25.39 per week.
Hours of work
The minimum number of hours permanent employees are required to work will increase from the current 130 to 135 per month. The maximum number of hours, 195 per month, will remain the same, with overtime still capped at 40 hours per month.
Transport allowance
The current “night hours” for transport will change from 22h30 to 21h30.The transport allowance will also increase from R200.00 per month/ R 46.16 per week to R230.00 per month until May 31st, 2026, and then R240.00 per month thereafter.
Bargaining Council levy
The levies required to be paid by both the employer and every employee are R10.00 (employer), R6.00 (employee) for Council Expenses, and R4.00 for Council Admin Expenses.
This will increase to R11.00, R6.50 for Council Expenses, and R4.50 for Council Admin Expenses until May 2026 and then to R12.00, R7.00, and R5.00, respectively, from June 2026.
Night shift allowance
Employers are currently expected to compensate staff who work from 18h00 to 06h00 with 0.88c per hour, which has now increased to R1.00 per hour.
Minimum wage
The following increases will be implemented from 1 June 2024:
Category / ClassCurrent Rate – 31/05/202401/06/2024 – 31/05/2025Chef ManagerR 47.07R 50.36Assistant ManagerR 33.03R35.34BartenderR 29.35R 31.40CashierR 29.35R 31.40ClerkR 29.35R 31.40Security GuardR 29.35R 31.40SupervisorR 29.35R 31.40Assistant BartenderR 27.58R28.83Assistant CashierR 27.58R28.83Head CookR 27.58R28.83Head WaiterR 27.58R28.83Head Wine StewardR 27.58R28.83Management TraineeR 27.58R28.83ReceptionistR 27.58R28.83Kitchen SupervisorR 27.58R28.83Counter AssistantR 27.58R 28.76Part-time DriverR 27.58R 28.76Waiter / Wine StewardR 27.58R 28.76Employee not elsewhere specifiedR 27.58R 28.76Motor vehicle driver(s)R 27.58R28.85(a) Extra HeavyR 27.58R28.85(b) HeavyR 27.58R28.85(c) LightR 27.58R 28.76Baker / CookR 27.58R 28.76Catering AssistantR 27.58R 28.76Delivery EmployeeR 27.58R 28.76General AssistantR 27.58R 28.76Watchman / Security GuardR 27.58R 28.76
All further requirements not stipulated (ie: clauses pertaining to leave, etc) are to remain the same as they are aligned with the Basic Conditions of Employment Act 75 of 1997.
For employers, these changes necessitate careful planning and implementation to ensure compliance and to foster a more equitable and productive work environment. Contact The Invictus Group at admin@invictusgroup.co.za or call our offices at 086 173 7263 for guidance on complying with the new BCRCAT stipulations. [...]
Read more...
Section 188 (1) of the Labour Relations Act 66 of 1995 (‘LRA’) states that;
“a dismissal which is not automatically unfair is still unfair if the employer fails to prove – •(a) That the reason for the dismissal is a fair reason –
•(i) Related to the employee’s conduct or capacity; or
•(ii) Based on the employer’s operational requirements; and
•(b) That the dismissal was effected in accordance with a fair procedure.”
It should be borne in mind that dismissal and the procedures followed in accordance with that are regulated mainly by internal company policies. However, it is sometimes possible to deviate from dismissal policies and procedures; for the sake of this article, let’s consider both options:
1 – Where internal dismissal policies and procedures exist
Riekert v Commission for Conciliation Mediation and Arbitration and Others (JR686/03) ZALC 90; 4 BLLR 353 (LC); (2006) 27 ILJ 1706 (LC) (28 September 2005) the Court found that the employer had an extensive disciplinary code which it had deviated from in the dismissal of an employee, and subsequently held, on review, that “the CCMA arbitrator had been wrong in accepting the employer’s deviation from its code in the absence of any compelling reason for such deviation.”
As far as internal disciplinary policies and procedures act as guidelines, it is of the utmost importance that employers stay within the fundamentals contained therein. Without compelling reasons, an employer may not simply disregard its internal policies and procedures and dismiss an employee whichever it deems fit. Where internal policies and procedures are entrenched, the employer is bound to that and should follow its dismissal procedures accordingly.
2 – Where there are no internal dismissal policies and procedures
Item 4 of Schedule 8 of the Code of Good Practice on Dismissals describes a fair dismissal procedure as “the employer should investigate to determine whether there are grounds for dismissal. This does not need to be a formal enquiry. The employer should notify the employee of the allegations using a form and language that the employee can reasonably understand.
The employee should be allowed to state a case in response to the allegations. The employee should be entitled to a reasonable time to prepare the response and to the assistance of a trade union representative or fellow employee. After the enquiry, the employer should communicate the decision taken”.
Common law, as codified by the Code of Good Practice, dictates that an employee MUST be allowed to be heard for a dismissal to be considered fair. There is no statutorily imposed approach that should be followed before dismissing an employee, primarily where compelling evidence and circumstances exist in support of a dismissal.
3 – Case Law
Case law, such as Steenkamp and Others v Edcon Limited (CCT29/18) ZACC 17; 2019 (7) BCLR 826 (CC); (2019) 40 ILJ 1731 (CC); 11 BLLR 1189 (CC) (30 April 2019), supports this stance in laying out that the onus placed upon an employer when dismissing an employee is at a basic level and should one determine that fair process was followed, albeit not in accordance with ‘traditional’ dismissal procedures, such a dismissal will be under Section 188 of the LRA and thus considered fair.
4 – Fair procedure
Typically, the employer should investigate whether there are grounds for dismissal. This does not need to be a formal enquiry. The employer should notify the employee of the allegations using a form and language that the employee can reasonably understand. The employee should be allowed to state a case in response to the claims. The employee should be entitled to a reasonable time to prepare the response and to the assistance of a trade union representative or fellow employee. After the enquiry, the employer should communicate the decision and provide the employee with written notification.
Discipline against a trade union representative or an employee who is an office-bearer or official of a trade union should only be instituted by first informing and consulting the trade union.
If the employee is dismissed, the employee should be given the reason for dismissal and reminded of any rights to refer the matter to a council with jurisdiction to the Commission or any dispute resolution procedures established in terms of a collective agreement.
In exceptional circumstances, if the employer cannot reasonably be expected to comply with these guidelines, the employer may dispense with pre-dismissal procedures.
An employer CAN NEVER dismiss an employee without having held some form of hearing/inquiry/investigation; the nature of that hearing/inquiry/investigation and its fairness would then be open to interpretation.
For assistance in navigating corrective disciplinary action or advice on proper labour procedures, email us at admin@invictusgroup.co.za or call our offices at 086 173 7263. [...]
Read more...
Success in navigating South Africa’s BBBEE landscape hinges on effective planning and strategic implementation. In this instalment, we explore crucial steps for businesses to maximise empowerment outcomes.
In our previous article, we discussed each aspect of the BBBEE Scorecard. In this follow-up, we’ll focus more on early strategy development, targeted fund allocation, and focused initiatives that allow companies to ensure their efforts contribute meaningfully to economic transformation.
Having a clearly defined strategy is paramount for businesses seeking to navigate the intricacies of BBBEE compliance and maximise their empowerment outcomes. A well-articulated strategy provides direction, clarity, and alignment with organisational objectives, ensuring that empowerment initiatives are purposeful and effective.
Additionally, leveraging the expertise of credible management companies further enhances this process by tapping into specialised knowledge, experience, and resources. These companies deeply understand BBBEE regulations, best practices, and emerging trends, enabling businesses to navigate compliance complexities with confidence and precision. By entrusting strategic planning to reputable management firms, companies can streamline their empowerment efforts, mitigate risks, and optimise their impact on economic transformation and societal upliftment.
Allocating funds timeously to the right projects
Allocating funds to suitable projects early on in the financial year will ensure that they yield sustainable outcomes; this is essential for businesses committed to driving meaningful impact through BBBEE initiatives.
Sustainable outcomes ensure the efficient utilisation of financial resources and foster enduring socio-economic benefits, such as job creation, skills development, and economic empowerment. Moreover, investing in sustainable projects aligns with the principles of responsible business practices and contributes to the organisation’s overall resilience and competitiveness.
Focusing on enterprise development
Enterprise Development (ED) is a fundamental pillar of BBBEE compliance. It emphasises the cultivation of small, black-owned enterprises to foster economic sustainability and inclusivity. Effective ED structuring necessitates the identification of viable opportunities, targeted capacity-building interventions, and sustained support mechanisms to bolster the resilience and viability of beneficiary enterprises.
Elevating social development initiatives
Social Development (SD) initiatives constitute another cornerstone of BBBEE compliance, aimed at addressing societal inequities and fostering community upliftment. By prioritising SD projects, businesses can affect tangible social change while accruing requisite BBBEE points. Structuring SD initiatives entails meticulous needs assessment, stakeholder collaboration, and the implementation of sustainable solutions that engender enduring societal benefits.
Collaborating with Invictus Group
Strategic partnerships with established service providers can streamline processes and augment outcomes when navigating the complexities of BBBEE compliance and empowerment initiatives. Invictus Group emerges as a distinguished ally, offering tailored solutions to fortify businesses’ compliance endeavours, sourcing and designing projects, and driving substantive empowerment outcomes. With a demonstrated commitment to excellence and innovation, Invictus Group empowers enterprises to navigate the intricacies of BBBEE compliance with confidence and efficacy.
Be sure to reach out before submission day! We’re here to assist you throughout the entire financial year to ensure compliance is as effortless as possible. Speak to Invictus Group now and ensure that your initiatives are strategically aligned and effectively implemented.
If you would like to find out more about BBBEE Compliance and whether or not your business qualifies for incentives, then please feel free to contact Invictus Group. [...]
Read more...
The significance of early engagement with BBBEE (Broad-Based Black Economic Empowerment) compliance efforts cannot be overstated. By acting promptly and efficiently to structure empowerment initiatives in alignment with BBBEE codes and scorecards, you not only mitigate compliance risks but also unlock strategic advantages and growth opportunities.
Delaying such endeavours compromises the ability to leverage empowerment as a competitive differentiator and impedes the realisation of long-term organisational objectives.
The scorecard explained
The BBBEE codes delineate multifaceted criteria, each carrying distinct weightings that collectively shape your company’s empowerment rating. Strategic alignment with these criteria demands meticulous planning and execution, ensuring enterprises maximise empowerment outcomes while enhancing their competitive standing.
The BBBEE Scorecard serves as a comprehensive framework for evaluating and measuring a company’s level of compliance and commitment to economic transformation in South Africa. It comprises various elements, each designed to assess different facets of empowerment and inclusion.
Some elements are considered priority elements, which means that one would need to achieve at least 40% of the score set out in the scorecard for the element. Failure to accomplish the subminimum of one of these priority elements leads to being discounted a level. It should be noted that should you fail to meet two or more of these subminimums, the discount shall only be applied once.
Exploring each aspect of the BBBEE Scorecard
1. Ownership:
This is considered a priority element. It assesses the extent to which black individuals own and control the company. It considers both direct and indirect ownership and the voting rights associated with such ownership.
Various ownership vehicles can be utilised, such as direct shareholding by previously disadvantaged, shares can be held in a trust fund of which either previously disadvantaged employees or previously disadvantaged individuals are the beneficiaries, or a company with majority black shares can also hold shares in a measured entity.
2. Management control:
Management Control evaluates the representation of black people in management positions within the company. It looks at the composition of the board and executive leadership, as well as the decision-making authority held by black individuals, and the composition of the senior management, middle management, and junior management. This is measured against the economically active statics and measured against the guidelines as set out in the Employment Equity Act.
3. Skills development:
Skills Development is considered a priority element that measures the company’s investment in training and development initiatives to improve black employees’ skills and qualifications. This includes formal training programs, mentorship opportunities, leadership opportunities, apprenticeship opportunities and support for further education.
The target is calculated at 3 – 6 % of a measured entity’s annual payroll. This would depend on whether a measured entity is considered a qualifying small enterprise (3%) or a generic enterprise (6%) according to its turnover and the sector thresholds set out in the various sectors’ BEE codes of good practices.
4. Enterprise and supplier development:
This element drives B-BBEE compliance; a measured entity is required to spend 80% of their cost of sales on B-BEE compliant companies, and cost can be allocated towards this 80% according to a supplier B-BBEE compliance rating between a level 1 to 8 for a level 8 supplier, one can allocate 10% of the total spent with the supplier towards the 80% spent target and a 135% total paid for a level 1 supplier. A measured entity can force a supplier to become B-BBEE compliant for this element or risk losing the business relationship with the measured entity.
The element also focuses on the company’s efforts to support and develop black-owned businesses. It includes initiatives such as supplier development programs and enterprise development programs. Measured entities must assist a 51% black-owned company on the supplier’s list, equivalent to 1% of the measured entity’s net profit after tax. Additionally, they must offer further assistance of 1% of their net profit after tax to any 51% black-owned company with an annual turnover of less than R50M.
5. Socio-economic development:
Socio-economic development evaluates the company’s contributions to socio-economic initiatives that benefit black communities. These could include donations to charitable organisations, community development projects, and infrastructure or social programs investments.
6. Sector-specific scorecard:
Certain industries or sectors may have additional requirements or specific scorecards tailored to their unique characteristics. These sector-specific scorecards ensure that the BBBEE framework remains relevant and adaptable across different sectors of the economy.
Each aspect of the BBBEE Scorecard contributes to a company’s overall empowerment rating. By addressing these elements comprehensively and strategically, businesses can enhance their BBBEE compliance, foster economic transformation, and contribute to a more inclusive and equitable society in South Africa.
Don’t wait until submission day to reach out! We’re here to assist you throughout the entire financial year to ensure compliance is as effortless as possible. Speak to Invictus Group now and ensure that your initiatives are strategically aligned and effectively implemented from the start.
Visit our website: https://invictusgroup.co.za or contact our call centre at 086 173 7263. [...]
Read more...
Unfair discrimination has a storied history in South African employment law. Since the dawn of South Africa’s democracy, our legislature has actively clamped down on it through various acts, codes, rules, and regulations.
Arguably, one of the most important mechanisms is the Employment Equity Act 55 of 1998, which aims to promote equal opportunity and fair treatment in employment by eliminating unfair discrimination. In contrast, employers commonly reserve the right to protect their interests and ensure sustainability by employing the correct type of employees.
This issue was pivotal in the case of Connor v LexisNexis (Pty) Ltd (P18/24) ZALCPE 11 (11 April 2024).
Background facts of the case
At the beginning of 2024, LexisNexis offered Mr Elsworth O’Connor a job as a Senior Data Discovery and Enrichment Expert I, which entailed organising and classifying the information published in LexisNexis’ legal products. During the application phase, on 20 January 2024, a representative of the respondent emailed O’Connor and said that his interview was positive and that O’Connor would be moving on in the application process.
The representative asked that O’Connor fill in their “RefCheck Consent and Indemnity Form”, which included a section on his criminal background. O’Connor completed the form and responded “yes” when asked whether he had ever been criminally charged. When asked for further details, O’Connor replied that he had been indicted for theft in 2001 but that this record had been expunged.
Upon completing his application and the RefCheck Consent and Indemnity Form, O’Connor was asked to provide his fingerprints at a local PostNet office to conduct a criminal background investigation. On January 29th, 2024, the representative on behalf of LexisNexis emailed O’Connor the job offer, which he accepted on the same day.
On January 30, 2024, O’Connor was emailed his contract of employment, which he duly signed and sent back to the representative. However, on February 6, 2024, the employer retracted the “conditional offer” of employment because O’Connor’s criminal check revealed six counts of theft, one count of fraud, and two counts of defeating the course of justice.
After failed attempts at solving the matter in the CCMA, O’Connor brought an urgent application to the Labour Court, requesting that LexisNexis be ordered to honour its original offer. Arguably, the most critical part of O’Connor’s case revolved around his assertion that LexisNexis, through their retraction of the offer of employment, had unfairly discriminated against him on the arbitrary ground of past criminal convictions within the meaning of section 6 of the Employment Equity Act.
The legal framework
Section 6 of the Employment Equity Act deals with the prohibition of unfair discrimination. Section 6(1) states that No person may unfairly discriminate, directly or indirectly, against an employee in any employment policy or practice on one or more grounds, including race, gender, sex, pregnancy, marital status, family responsibility, ethnic or social origin, colour, sexual orientation, age, disability, religion, HIV status, conscience, belief, political opinion, culture, language and birth.
Though this is a substantial list of grounds for unfair discrimination, this list is incomplete. In support of this section of the Act, Paragraph 7.3.32 of the Code of Good Practice on the Integration of Employment Equity into Human Resource Policies and Practices states that an employer should only conduct integrity checks, such as verifying the qualifications of an applicant, contacting credit references, and investigating whether the application has a criminal record, if this is relevant to the requirements of the job.
Paragraph 17.3.6 of this Code states that an employer may not collect personal data regarding an employee’s sex life, political, religious, or other beliefs or criminal convictions, except in exceptional circumstances where such information may be directly relevant to an employment decision.
Acting Judge Meyerowitz’s application of the legal framework to the matter
After considering the legal framework relevant to the matter, Acting Judge Meyerowitz, in his obiter dicta, concluded that these legislative provisions suggest that the exclusion of an applicant from employment based on a criminal past would constitute unfair discrimination, even if this criminal past is irrelevant to the job requirements. This exclusion would be arbitrary because the decision would be without rational justification.
Meyerowitz explained that O’Connor’s criminal history had become an inherent attribute that is intimately connected to the societal perception of him. Still, our criminal justice system is premised on the idea that a person must be allowed back into society once they have paid their proverbial dues and debt to society.
Furthermore, Meyerowitz explained that the denial of a person’s right to participate in society freely would also constitute a denial of their Constitutional rights as a person. Based on this application, Meyerowitz concluded that there was little to no evidence that O’Connor’s prior convictions would in any way, shape, or form preclude him from fulfilling a role as a Senior Data Discovery and Enrichment Expert I, save for an unfathomable situation where he might “maliciously miscategorise legal information for his benefit”.
LexisNexis was subsequently ordered to employ O’Connor on the terms and conditions set out in the employment contract offered to him.
Impact of the Judgment
In the context of employment practices, this judgment stresses the importance of determining which factors, attributes, skills, or experience are deemed necessary and inherent job requirements. If, for example, one’s criminal past has no bearing on one’s ability to organise information on a computer, then employers would be well versed in not denying an applicant a job due to their perceptions of him.
If you need further advice on employment policies, then please feel free to contact our legal team. [...]
Read more...
The Basic Conditions of Employment Act and Labour Relations Act do not specify a mandatory retirement age for employees. Specific industries adhere to additional basic employment conditions outlined in a collective bargaining agreement that may include that employers must provide benefits such as a retirement fund to their employees.
The retirement fund is administered by a registered financial institution, which determines the terms and conditions of the fund, including the retirement age linked to the fund. In the absence of a collective bargaining agreement, the specified retirement age is at the employer’s discretion. The employer can decide and agree upon a retirement age with their employees or rely on the average retirement age, which is 60 – 65 years, based on social norms.
Relevant legislation
When employers decide on an appropriate retirement age, they must be aware of any applicable laws and regulations that govern their employment practices, including those related to age discrimination. Employers should ensure that their retirement policies comply with relevant laws and are implemented fairly and transparently.
Employers must be cautious about potential age discrimination issues, as the Employment Equity Act highlights. Dismissing an employee based solely on age can be seen as discriminatory unless the employer can demonstrate that there is a legitimate and inherent requirement for a particular role.
Section 187(2)(b) of the Labour Relations Act guides how a dismissal based on age can be considered fair. The dismissal may be deemed fair if an employee reaches the expected or agreed retirement age for persons employed in that capacity.
In Rubin Sportswear v SA Clothing & Textile Workers Union and others (2004) 25 ILJ 1671 (LAC), the LAC held, “Section 187(1)(b) creates two bases upon which an employer can justify the dismissal of an employee on the grounds of retirement age. The one is an agreed retirement age; the other is a normal retirement age. Those are the only two bases.”
In Cash Paymaster Services (Pty) Ltd v Browne (2006) 27 ILJ 281 (LAC), the LAC held that “(t)he provisions relating to the normal retirement age only applies to the case where there is no agreed retirement age between the employer and the employee.”
Case law
In Solidarity obo Strydom and Others v State Information Technology Agency SOC Ltd, the issue was the dismissal of employees by the employer, SITA (State Information Technology Agency SOC Ltd). Solidarity, representing the employees, argued that the dismissal was automatically unfair according to section 187(1)(f) of the Labour Relations Act (LRA) (C 148/18; JS ZALCJHB 95 (9 May 2022).
Solidarity presented two alternative claims:
That the dismissal was unfair under section 188 of the LRA.
A contractual claim for damages under section 77(3) of the Basic Conditions of Employment Act (BCEA).
The dispute arose because the employees, although members of the Alexander Forbes Pension Fund (Pension Fund), were allowed to work beyond the average retirement age of 60 years. However, the employer decided to enforce the retirement age per the Pension Fund Rules and served the employees with individual retirement notices in September 2017.
The relevant legal principles, particularly section 187 of the LRA, were considered. Section 187(1)(f) states that a dismissal is automatically unfair if the employer unfairly discriminates against an employee based on arbitrary grounds, including age. However, section 187(2)(b) provides that a dismissal based on age is fair if certain conditions are met:
The dismissal must be based on age.
The employer must have an average or agreed retirement age for persons employed in that capacity.
The employee must have reached the age referred to in (2) above.
The court noted that the dismissal is considered fair once these conditions are established according to the statute. Therefore, in the context of this case, if the employer met these conditions, the dismissal based on age would be deemed fair, and the court would not consider it further.
When an employer is bound by a collective bargaining agreement specifying a retirement age, strict adherence to that agreement is paramount. Alternatively, without such an agreement, the employer retains discretion over setting the retirement age.
Nevertheless, to mitigate potential labour disputes and ensure transparency, it is strongly recommended that the retirement age be stipulated either within the employment contract or a comprehensive retirement policy. This proactive approach fosters a harmonious employer-employee relationship and promotes compliance with relevant labour laws and regulations.
For assistance in including retirement age specifics within your employment contract or establishing a comprehensive retirement policy, email us at admin@invictusgroup.co.za or call our offices at 086 173 7263 [...]
Read more...
The various SETA systems for submitting Annual Training Reports and Workplace Skills Plans are open until April 30, 2024. Companies that successfully submit their annual training reports and Workplace skills plans are entitled to receive 20% back of their annual skills development levies from their relevant SETA.
For the report to be approved by the SETA, a company must capture the following information and submit the accompanying documents of evidence on the relevant
SETA online system:
1. An updated employee profile containing the following information must be captured on the online SETA system.
• Employee name and Surname
• Employee Job title
• Employee race, gender and age
• Some SETA systems also require employee ID numbers; this is only needed for some SETA systems.
2. All companies must capture their nominated banking details with the SETA to ensure that any refunds are expediently paid to the employer. Furthermore, the following confirmatory steps must be met:
• A bank account confirmation letter over three months old must be uploaded to the online submission system.
• A contact person other than the person submitting the report must be captured along with the banking details.
3. All training that took place within the reporting period, as well as the employees that completed the various training interventions, along with the following supporting documents:
• Invoices and proof of payments for external training,
• Certificates of completion if these were issued,
• Signed attendance registers for training completed,
• Internal training registers on a company letterhead can also be drawn up internally and need to contain the following information:
• Employee Name and Surname,
• Employee ID no,
• Race and Gender of employee,
• Employee’s Job tile,
• Description of subject matter,
• Name and Surname of employee/company representative providing training,
• Duration of training intervention in either days or hours,
• Combined rate of trainee and trainer per hour this is used to calculate the cost of the internal training intervention,
• Both the trainee and trainer need to sign the register,
• Start date of internal training intervention,
• End date of internal training intervention.
Claim back 20% of your Skills Development levy
Workplace skills plan setting out what training would take place over the next reporting period; this can range from internal training to mandatory required training, training related to operational needs or even training related to B-BBEE certification requirements.
Once the required data and supporting documents have been uploaded to the relevant SETA online submission system, an authorisation document will be generated. This needs to be signed by the relevant company representatives, and it would then need to be uploaded to the online system before the system allows for the submission to be finalised.
Once a company’s annual training report and workplace skills plan have been submitted to the relevant SETA online system, the relevant SETA systems will review the applications and the supporting documents and notify the nominated contact person if there are any queries regarding the application.
Alternatively, the relevant SETA will issue a letter of approval to which the applying company can expect 20% of their annual Skills Development Levy contributions back in four quarterly tranches as set out in the Skills Development Levies Act of 1999.
Failing to submit means losing out on the 20% annual skills development levies contribution, furthermore, companies that wish to be B-BBEE compliant will not be able to do so without an approved annual training report and workplace skills plan.
For assistance in having your annual training report and workplace skills plan submitted and approved by your relevant SETA and claiming back 20% of your annual Skills Development Levies, email us at admin@invictusgroup.co.za or call our offices at 086 173 7263. [...]
Read more...
As discussed in a previous article, Cannabis in the Workplace, many companies adopt a zero-tolerance policy for alcohol and intoxicating substances. A zero-tolerance approach is justified if the employer can prove that such a rule is necessary and valid. The high-risk nature of the employer’s operations or a particular job, such as employees working at altitude, driving heavy vehicles or operating dangerous machinery, would justify a zero-tolerance policy.
Confirming intoxication and guilt at a disciplinary hearing once an employee is suspected of being under the influence of alcohol is not simple. Recent case law suggests it’s more complex than conducting a Breathalyzer test. This complexity underscores the importance of thorough and fair procedures in such cases.
Breathalyser tests are admissible as evidence in disciplinary hearings; however, their evidentiary value is questionable.
Using a Breathalyzer test without corroborating evidence is insufficient to prove intoxication and subsequent guilt at a disciplinary hearing. This underscores the necessity of a comprehensive approach, where a Breathalyzer test is just one part of the puzzle, and other evidence, such as an Observation report or blood test, is also considered.
Case Study
In the recent case of Samancor Chrome Ltd (Western Chrome Mines) v Willemse and Others (JR312/2020) ZALCJHB 150; (2023) 44 ILJ 2013 (LC) (29 May 2023), the company had a zero-tolerance policy: “a person shall be deemed to be unfit to enter the premises if their breath-alcohol level exceeds 0.000 per cent.” Their disciplinary code further stated that breaching this rule is considered gross misconduct and could result in dismissal on a first offence.
Mr. Willemse tested positive while reporting for duty with a breath-alcohol reading of 0.013%, confirmed by a second reading on the same Breathalyzer instrument and a third reading on a different Breathalyzer device, whereafter he was dismissed. At the CCMA, Mr Willemse challenged the substantive fairness of the dismissal based on an expert witness and a negative blood test conducted closely after the Breathalyser tests.
He argued that the results of the breathalyser tests were not sufficiently accurate to prove that he was intoxicated and breached the company’s zero-tolerance policy, further, there was the chance that the Breathalyzer tests showed false positive results based on a list of factors, including a person having consumed a product with yeast or who had been fasting for more than 8 hours. The Commissioner ruled that the dismissal was substantively unfair and ordered reinstatement with backpay.
He added that the Chairperson of the disciplinary hearing ought to have considered the laboratory blood test results more accurate and reliable than a Breathalyzer test.
Limitations of the breathalyser test
The company took the CCMA’s ruling on review to the Labour Court. The court found that the chances of the Breathalyzer tests presenting false positives were a good possibility. Therefore, there was insufficient evidence to prove guilt based on a balance of probabilities. The application for review was dismissed with costs.
The above case demonstrates that employers cannot rely solely on Breathalyzer tests to dismiss an employee for allegedly breaching the company’s zero-tolerance policy. Whilst a Breathalyzer test can be a useful screening tool, an employee should not be subjected to a disciplinary inquiry unless there is sufficient supporting evidence to corroborate intoxication and subsequent guilt, especially when contested by the employee. Where a Breathalyzer test is positive, an employee should be subjected to an Observation and/or Sobriety test, whereafter an Intoxication Report must be completed to support the positive reading of intoxication.
For more information on the above or assistance with the Observation on Intoxication Report, contact Invictus Group. [...]
Read more...
Employers, especially those involved in the hospitality and service industry, are understandably considerate of clients’ perceptions of their service and employees’ conduct towards their clientele. Since the turn of the century, employers have often turned to review platforms with the adage “the customer is always right” firmly in mind. However, this mindset cannot be absolute and must account for notions of fairness in terms of labour law. This “balancing exercise” begs the question of whether employees may be disciplined based on these written client complaints.
The legal principles
The basic tenets of employee discipline are firmly entrenched in Schedule 8 of the Labour Relations Act, 66 of 1995 (also known as the Code of Good Practice). From this Schedule, it is readily apparent that an allegedly offending employee has a right to a procedurally fair disciplinary hearing, which, in a broader context, would include the right to state their case and face their accusers. The complications of a written client complaint at a disciplinary hearing.
There are multiple intricacies at play when dealing with a written client complaint. An employer does not want to risk writing the complaint as nothing more than a feeble matter. However, a written client complaint is very tricky, as it is a complaint that a client has written off-premises, most likely after their experience with the employer. This poses a practical conundrum for an employer, as they must now investigate the matter based on the written complaint, often without the luxury of having a face-to-face conversation with the client.
This leads to a situation where employers initiate disciplinary hearings and merely present the allegedly offending employee with the written client complaint without calling the client to confirm the contents of their complaint. In these cases, an employee could either agree with the material aspects of the client’s complaint or deny these aspects.
Case Study
In the case of Magic Company v Commission for Conciliation Mediation and Arbitration and Others (C682/03) ZALC 37 (19 January 2005), Murphy AJ was tasked with the review of this exact issue. In this matter, the employee was dismissed based on a customer’s written complaints of abysmal service, which the employee vehemently denied at her disciplinary hearing. The employee insisted that the customer be called to the hearing but to no avail.
Eventually, the employee was reinstated at arbitration, and this decision was upheld on review. Murphy AJ noted that, whilst employers are often afforded leeway about the strict rules of evidence and procedural compliance, employees undoubtedly have the right to challenge their accusers directly. Thus, if the accuser is not available to be cross-examined, the employer should at least have other corroborating and testable evidence to substantiate the contents of the written complaint they have presented.
Practical implications for employers
When a client complains, an employer should always aim to agree with the client so that they can testify at any future enquiry. Should the client refuse, the employer should ask the client to make a sworn statement, whereafter, the employer should find corroborating evidence to present at a hearing. Also, the employer should reach out to the employee before a hearing and try to establish whether the employee disagrees with the statement and, if so, narrow it down to the aspects with which the employee disagrees.
Need more practical advice from our legal experts? Speak to us. We’re here to provide the best legal guidance at every step of the process.Call us today – 086 173 7263 [...]
Read more...
Section 188 (1) of the Labour Relations Act 66 of 1995 (‘LRA’) states that;“a dismissal which is not automatically unfair is still unfair if the employer fails to prove –(a) That the reason for the dismissal is a fair reason –(i) Related to the employee’s conduct or capacity; or(ii) Based on the employer’s operational requirements; and(b) That the dismissal was effected in accordance with a fair procedure.”
It should be borne in mind that internal company policies primarily regulate dismissal and the procedures followed. However, it is possible to do away with dismissal policies and procedures, for the sake of this article, let’s consider both options:
Where internal dismissal policies and procedures exist
Riekert v Commission for Conciliation Mediation and Arbitration and Others (JR686/03) ZALC 90; 4 BLLR 353 (LC); (2006) 27 ILJ 1706 (LC) (28 September 2005) the Court found that the employer had an extensive disciplinary code which it had deviated from in the dismissal of an employee, and subsequently held, on review, that “the CCMA arbitrator had been wrong in accepting the employer’s deviation from its own code in the absence of any compelling reason for such deviation.” Albeit internal disciplinary policies and procedures act merely as guidelines, this does not permit employers to stray from their procedures as they please.
In the absence of compelling reasons, an employer may not simply disregard its own internal policies and procedures and dismiss an employee in whichever manner it deems fit, where internal policies and procedures are entrenched, the employer is bound thereto and should follow its dismissal procedures accordingly.
Where there are no internal dismissal policies and procedures
Item 4 of Schedule 8 of the Code of Good Practice on Dismissals describes a fair dismissal procedure as “the employer should investigate to determine whether there are grounds for dismissal. This does not need to be a formal enquiry. The employer should notify the employee of the allegations using a form and language that the employee can reasonably understand. The employee should be allowed to state a case in response to the claims.
The employee should be entitled to a reasonable time to prepare the response and to the assistance of a trade union representative or fellow employee. After the enquiry, the employer should communicate the decision taken”. Common law, as codified by the Code of Good Practice, dictates that an employee MUST be allowed to be heard for a dismissal to be considered fair. There exists no statutorily imposed approach which should be followed before the dismissal of an employee, mainly where compelling evidence and circumstances exist in support of a dismissal.
Case Study
AUSA obo Melville v SA Airways Technical (Pty) Ltd (2002,6 BALR 573) quoted, “The Code of Good Practice in Schedule 8 makes it clear that, while the process can be informal, the employee should nevertheless be told what case he has to meet and be given a proper opportunity to prepare and present his response.” Case law supports this stance in laying out that the onus placed upon an employer when dismissing an employee is at a basic level, and should one determine that fair process was followed, albeit not per ‘traditional’ dismissal procedures, such a dismissal will be following Section 188 of the LRA and thus considered fair.
In conclusion, an employer CAN NEVER dismiss an employee without having held some form of hearing/inquiry/investigation, the nature of that hearing/inquiry/investigation and the fairness in respect thereof would then be open to interpretation.
Contact our offices today at 0861 737 263 or email us at info@invictusgroup.co.za to learn more about how we can assist you in achieving a fair and favourable outcomes. [...]
Read more...
As our law develops, a very important question arises for every business owner in South Africa: How can I protect the secrets of my trade while investing in the furtherance of my business? A restraint of trade is defined as a clause in an employment contract that restricts an individual from conducting trade or profession in a competitive market. In South African law, there is no formal legislation relating to restraint of trade.
What is “Restraint of Trade”
The concept of restraint of trade is based on the idea of unlawful competition and is then enforced in a contract through a restraint of trade clause. Section 18 of the Constitution affords each citizen the right to freedom of association. Furthermore, Section 22 allows people to freely choose their trade, occupation, or profession. Regarding Section 23, each South African citizen has the right to fair labour practices. The Competition Act 89 of 1998 does not provide a clear definition of unlawful competition but proposes to prohibit the same.
One of the initiating steps when starting a new business or taking on a new employee is to provide training and orientation. In doing so, the employee is exposed to specific procedures, processes, methodologies, recipes, and the like, more formally known as the secrets of the trade, to further the business. Whilst no law prohibits competition, there is a limitation in the South African law of contract, which provides limited protection of the proprietary rights of business owners.
The Role of Employment Contracts
Once training is provided and such sensitive information is disclosed to an employee in good faith, it becomes impossible to reverse the information disclosed or undo habits adopted by an employee once an employee’s employment is terminated. Therefore, a need has arisen for the protection of trade secrets that an employee learns and adopts.
The law makes provision to include a clause in an employment contract which stipulates that for a limited duration, and depending on the industry/business, an employee is restricted from conducting business or performing work which falls within the same description or industry as that which the employee was already taking part in before the termination of their employment. This is done to ensure that the employee takes none of the secrets of the trade of a specific business to direct competitors to gain an unfair competitive advantage.
Case law
The restraint of trade clause in an employment contract provides protection for a limited duration, normally between 6 and 12 months, after an employee leaves their previous employer.
The validity of such a clause has been questioned and discussed in our case law as follows:
In the landmark case of Magna Alloys and Research SA (Pty) Ltd vs Ellis 1984 (4) SA 874 (A), it was held that a restraint of trade clause is enforceable if it is reasonable and unenforceable if it is contrary to public policy. It was further held that the onus is on the party who alleges that the restraint of trade is unenforceable to prove that it is unreasonable.
In Reddy vs Siemens Telecommunications (Pty) Ltd (2006 ZASCA 135; 2007(2) SA 486 (SCA), it was held that the maxim pacta servanda sunt, which is the contractual obligation for agreements to be met, needs to be weighed up against the Constitutional right in section 22, which provides for the right to engage freely in trade, commerce, or a chosen profession.
In the matter of Botha & another vs Carapax Shadeports (Pty) Ltd 1992 (1) SA 202 (A), it was held that an ordinary restraint of trade is entered into for the benefit of the business itself and not that of the owner and that such benefit is incidental to the business and part of its goodwill. As such, when a company is transferred in terms of section 197 of the Labour Relations Act, there is a cession of the rights passed through the contract, which will entitle the new owner to enforce the restraint. However, if the benefit of the restraint does not form part of the goodwill, then it is not enforceable.
In the case of Micros South Africa (Pty) Ltd and Others v Kleynhans and Others (074606/2023) ZAGPPHC, the court held that the decision to enforce a restraint against an employee should consider legitimate interest, reasonableness, and protection of confidential information. The court held that where an employee voluntarily agreed to sign a restraint of trade and the ex-employee’s actions now create a substantial risk of taking proprietary interests to a competitor, the court would grant an interdict restraining the ex-employee.
In conclusion, a restraint of trade is enforceable provided that it is reasonable, and the prejudice from applying such a clause does not outweigh the right to freedom of trade as provided for in the Constitution. It is also applicable within the restructuring of an organisation if it is stipulated in the employment contract between the employer and the employee.
Please feel free to contact our offices on 086 173 7263 if you require any assistance navigating the restraint of trade in your industry. [...]
Read more...