Employment law update

Talita Laubscher BIur LLB (UFS) LLM (Emory University USA) is an attorney at Bowman Gilfillan in Johannesburg.

Monique Jefferson BA (Wits) LLB (Rhodes) is an attorney at Bowman Gilfillan in Johannesburg. 

Reinstatement in constructive dismissal cases

In Western Cape Education Department v General Public Service Sectoral Bargaining Council and Others [2014] 10 BLLR 987 (LAC) the respondent employee, Mr Gordon, suffered from prolonged ill health after he suffered a heart attack. He accordingly applied for ill health retirement and temporary incapacity leave. His application form was handed to his senior manager, Mr Elliott, who undertook to attend to the application personally and to ensure that the form was signed by two witnesses. A few months later, Mr Gordon was informed by the employer, the department, that his application had not been processed as there had been a technical error in that it was not signed by two witnesses. He was informed by the department that he was required to report for duty, failing which he would be dismissed for abscondment. He was further informed by the department that his absence over the past two years would be regarded as unpaid leave and that in order for the department to recover the amount that had already been paid to him in respect of his salary during his period of absence, an amount of R 753 352,02, monthly instalments of R 12 000 each would be deducted from his salary. This was a deduction of roughly 80% of Mr Gordon’s monthly salary. 

Mr Gordon then lodged a grievance and on receiving no response to the grievance, he resigned. A meeting was then convened between Mr Gordon and the department during which he was given the option to proceed with the resignation or to retract it and continue with his application for ill health retirement. He was also informed that the head of the department would be approached about the decision to regard his absence as leave without pay and the resultant deductions. Being under the impression that his grievance and concerns would be seriously considered by the head of department, Mr Gordon retracted his resignation. However, at the end of that month a further R 12 000 was deducted from his salary and he still heard nothing about the outcome of his grievance. Another grievance meeting was convened and when nothing further happened for another month, he resigned and referred a constructive dismissal dispute to the bargaining council. 

The bargaining council found that the dismissal was unfair and ordered reinstatement. On review, the Labour Court per Steenkamp J, held that while it was unusual for an employee to seek reinstatement in a constructive dismissal claim, reinstatement was nevertheless an appropriate remedy in these circumstances. 

The matter was then taken on appeal to the Labour Appeal Court (the LAC). The LAC was required to consider the following –
• whether Mr Gordon’s resignation constituted constructive dismissal; 
• whether the department had made the employment relationship intolerable; and 
• whether reinstatement was the appropriate remedy. 

As regards Mr Gordon’s contention that he was constructively dismissed, the LAC (per Molemela AJA, Davis JA and Sutherland AJA) found that in determining whether or not an employer made continued employment intolerable, the employer’s conduct has to be considered as a whole.

Furthermore, the requirement is not that the employee must have no other choice but to resign but only that the employer made continued employment intolerable. In this case, the senior managers in the department had frustrated Mr Gordon’s application process for ill health retirement and had had no regard for the fact that he had been suffering from anxiety and post-traumatic stress disorder. The department had also reached a decision to treat his period of absence as unpaid and had insisted on making unreasonable deductions from his salary. In terms of s 38 of the Public Service Act 103 of 1994 an employer is permitted to recover amounts from employees where there has been an overpayment but these deductions must be reasonable. The LAC concluded that a deduction of 80% of an employee’s salary was not reasonable. Furthermore, the department did not seriously consider Mr Gordon’s grievance and had continued to make deductions from his salary despite his request that a moratorium be placed on the deductions pending the outcome of his temporary incapacity application.  The LAC found that these deductions were significant and were sufficient to render Mr Gordon’s employment intolerable, especially in light of the department’s apathy in resolving his issues. This was further compounded by the fact that the department had been careless in ensuring that Mr Gordon’s application be processed. Had Mr Elliott procured the signature of two witnesses as he undertook to do, the application would have been processed and Mr Gordon would not have found himself in a situation where he had to repay the amounts that had been paid to him over a period of two years. Thus, the LAC held that Mr Gordon had discharged the onus of proving that his employment was rendered intolerable. 

The LAC considered the fact that Mr Gordon was seeking reinstatement but found that this did not defeat his claim that he had been constructively dismissed. This was because he was seeking reinstatement more than two years after the termination of his employment and work environments change. Thus, the fact that Mr Gordon sought reinstatement did not mean that the circumstances had not been intolerable at the time that he resigned. In this regard, Mr Gordon argued that the work environment would be different if he were to be reinstated as he would not be subject to deductions or if he was required to repay the amount, the deductions would be reasonable. He also had reason to believe that the matter would be handled better as the department had implemented better procedures. Furthermore, Mr Gordon had recovered psychologically since his constructive dismissal.
The LAC held that while it is unusual to grant reinstatement in constructive dismissal cases, the courts are not precluded from doing so where the circumstances that gave rise to the constructive dismissal have changed. It was found that in this case there had been a change in circumstances and thus reinstatement was appropriate. The appeal was accordingly dismissed.

Moksha Naidoo BA (Wits) LLB (UKZN) is an advocate at the Johannesburg Bar.

Question:

My employer was aware of my criminal record for many years but did nothing and let me continue to work as a law enforcement officer. My criminal record became a problem when I was successfully appointed into a senior position and I was subsequently dismissed. After a three year battle I was forced to accept an agreement at bargaining council, as the commissioner said prior to arbitration hearing that reinstatement would not be an option because of my criminal record. We eventually reached an agreement whereby the employer would give me five months’ salary and amend my employee record from dismissal to resignation.

Answer: 

The fact that you reached a settlement agreement puts an end to your dispute, unless you want to review the settlement agreement. A party can review a settlement agreement on the basis that they entered into same under duress or by relying on a material misrepresentation. The onus would be on the party wishing to set aside the agreement, to prove either duress or misrepresentation.

While you are of the view that your employer was aware of your criminal record at all material times (a view which I have no reason not to accept), in my experience there is a high probability that the employer’s version is that it only became aware of this fact while you were in its employ and thereafter took the necessary disciplinary steps.

It would serve little purpose to discuss the factual dispute, if indeed one exists, as to whether your employer was or was not aware of your criminal record but would rather discuss what could happen when an employer becomes alive to the fact that an employee has been dishonest when applying for a position he or she is employed for.

I feel it necessary to stress that I am not insinuating that you were dishonest in any manner, or that your dismissal was substantively fair in light of the factual dispute you raised, but the facts you have presented (and in the absence of anything to the contrary), invites us to have a discussion on what is commonly referred to as curriculum vitae (CV) fraud. 

In general CV fraud is when a prospective employee is dishonest having regard to a material requirement of the position they are applying for, so as to secure or increase their chances of being offered such position. 

Our courts have taken a tough stance against employees guilty of such an offence. 

In SA Post Office Ltd v Commission for Conciliation, Mediation and Arbitration and Others (2011) 32 ILJ 2442 (LAC), the employee made an application to the appellant wherein she alleged she was in possession of a valid driver’s licence. On the strength of the employee’s application, she was shortlisted, interviewed and subsequently accepted the position she was offered. Sometime later it was discovered that the employee only had a learners licence and was dismissed for dishonesty. 

The Labour Appeal Court (LAC) upheld the employer’s appeal and found the dismissal substantively fair. In doing so the LAC rejected the employee’s version that she was not dishonest and had mistakenly not inserting ‘learners licence’ in her CV. With regard to the seriousness of the misconduct Waglay DJP (as he then was) held:

‘Furthermore the misconduct was indeed serious. This is evident from the consequence that followed the supply of the false information. It led to the third respondent being shortlisted and being appointed at the expense of other properly qualified applicants. The unchallenged evidence of the appellant was that had it known that the third respondent only had a learner’s licence, she would not [have been] shortlisted and therefore she would not [have been] considered for the job. ... The provisions of the employment contract not only reinforced the fact that the applicant had to be in possession of a valid driver’s licence, but required this driver’s licence as an integral part of the job specification to enable the incumbent to perform the functions allied to the post. The fact that the third respondent performed well at the interview and thus secured the post is irrelevant. It is also of no consequence as to how the discovery was made about her not having a driver’s licence.’

In Hoch v Mustek Electronics (Pty) Ltd (2000) 21 ILJ 365 (LC) the employer discovered the employee had misrepresented her qualifications when she had been hired, seven years prior. Despite the fact that the qualification under review was not related to the duties the employee was hired for, the employer dismissed the employee for dishonesty. 

In upholding the dismissal the Labour Court per Basson J held:

‘...even though the applicant was an employee of seven years’ standing and was honest and trustworthy in her work and even though the applicant’s qualifications were irrelevant to her position as debtors’ clerk at the time of her dismissal, the respondent was, in my view, justified to consider her dishonesty as serious enough to have irreparable damaged the unique trust relationship enjoyed by her. 

It is for the employer to set standards of conduct for its employees. As long as these standards are reasonable the court will not interfere (see the requirements of item 7 of schedule 8 to the Act).’

Labour law practitioners should be aware of the distinction between an act of dishonesty and the failure by any prospective employee to disclose information they were not specially required to disclose. 

In Fipaza v Eskom Holdings Ltd (2010) 31 ILJ 2903 (LC) the employer, Eskom dismissed the employee for failing to disclose the fact that she had been employed at Eskom in the past and was dismissed for being absent without permission. The arbitrator held the dismissal fair describing the employee’s non disclosure as a fraudulent omission. In setting aside the award, Lagrange AJ (as he then was) held:

‘In this instance, the fact of the applicant’s dismissal was not within her exclusive knowledge, even though it may have been a material issue. It may not have been within the knowledge of the members of the interview panel, but it can hardly be said they were not in a position to ascertain the circumstances in which the applicant’s previous employment with Eskom ended either by simply asking the applicant, or by consulting Eskom’s own records. Moreover, in its dealings with the applicant, Eskom gave no indication that it expected more information than it specifically requested.  

When the commissioner found that the applicant had a duty to disclose her previous dismissal to Eskom, he did not give consideration to the proper legal principles applicable to determining when such an obligation arises in contract. As a result, he gave no consideration to the principle that there is no general duty on a contracting party to tell the other all she knows about anything that may be material, nor to the fact that the applicant’s dismissal was not a matter within her exclusive knowledge in this case.’

This was confirmed by the LAC who dismissed Eskom’s appeal in Eskom Holdings Ltd v Fipaza and Others (2013) 34 ILJ 549 (LAC).

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