The Labour Court of South Africa Rules in Favour of SATAWU, Sihlangene Pays the Price for Unfair Procedure

On 27th March 2018, the Labour Court gave a ruling on the matter of SATAWU and Others versus Sihlangene Security & Cleaning CC and Another (Case No: JS 79/11) expressing its displeasure in the procedure of dismissal of the employees involved as well as the failure to prove that the employees were dismissed for a fair reason or on an operational basis.

The Sihlangene Security and Cleaning CC (Sihlangene) employed workers from the South African Transport and Allied Workers Union (SATAWU) to work as security officers. Sihlangene had signed a contract to provide security services to the Johannesburg Metropolitan Police Department (JMPD). The workers from SATAWU were then employed to provide services to JMPD at its Roodepoort Region C.

In August 2010, JMPD’s contract with Sihlangene was terminated. The JMPD subsequently signed a contract with Enlightened Security Force (Pty) Ltd (Enlightened Security) which thereafter provided the security services.

On Monday 31st August 2010, the workers hired by Sihlangene from SATAWU reported for work as they normally did, only to discover new personnel on the ground wearing security uniforms. Upon inquiry, they learned that the new employees were from Enlightened Security and who had been hired to take over Sihlangene’s contract with JMPD. The SATAWU employees were therefore barred from providing their services to Sihlangene as of 31st August 2010. The termination was considered not to have followed the right procedure since the employees were not presented with a written notice of termination of their employment, notice pay, or even severance pay.

The Statement of Claim

Following the SATAWU employees dismissal by Sihlangene, the affected workers made a Statement of Claim in which they sought an order, effective 1 September 2010, declaring a transfer of their contracts of employment from Sihlangene to Enlightened Security (according to Section 197 of the Labour Relations Act No. 66 of 1995 (LRA)). In the alternative, they also wanted an order that declared their dismissals by Sihlangene substantively and procedurally unfair, while also seeking just and equitable compensation and notice pay, as well as an order for an amendment to also include severance pay, the last of which was granted by the court.

The Court Ruling

Following the evidence brought to the table by both the SATAWU employees and Sihlangene, the judge declared that the dismissals of the SATAWU employees were substantively and procedurally unfair, and ordered Sihlangene to pay the wrongfully-dismissed employees an amount equivalent to twelve months’ remuneration calculated at the individual rate of pay on the day of dismissal, a payment that needed to be paid within a month of the judgement, as well as notice pay and a severance pay per the law. The former employer was also mandated to pay for the applicant’s costs.

The Law’s Take on Unfair Dismissal of Employees: Section 194 of the LRA

The Labour Relations Act (LRA) has limitations in place that dictate the compensation an employee can receive following an unfair dismissal or due to unfair labour practice. These limits depend on whether a court rules the dismissal as automatically unfair or otherwise. Section 194 of the Labour Relations Act dictates that if an employee’s dismissal is ruled procedurally or substantially unfair, they can be awarded up to 12 months’ compensation.

However, when the dismissal is ruled as automatically unfair, the employee can receive up to twenty-four months’ compensation equal to the employee’s remuneration at the time of dismissal. A dismissal is classified as automatically unfair if it is done for the following reasons, as stated in the in the LRA:

  • The employee participated in or supported a protected strike or protest action
  • If the dismissal is due to a transfer of a business from an entity to another.
  • If the employee was dismissed for refusing to work because they are participating or supporting a protected strike
  • If the dismissal was in an attempt to force the employee to accept a demand that is related to a matter of mutual interest between employee and employer. This could be any issue relating to employment between the two parties. The matter can relate to a right and could lead to resorting to industrial action or a lockout.
  • If the employee took or had the intent to take action against the employer by participating in any LRA proceedings or invoking a right provided for in the LRA.
  • If the dismissal was due to any reason surrounding pregnancy or intended pregnancy.
  • If it resulted from employee discrimination due to their race, sex, gender, religion, political opinion, disability, colour, ethnic or social origin, age, sexual orientation, conscience, culture, belief, language, family responsibility or marital status.
  • If the dismissal is due to the employee making a protected disclosure in terms of the Protected Disclosures Act, 2000.

A Stern Reminder to Employers

An employee who has been a victim of unfair labour practice can be awarded up to a maximum of 12 months or even 24 months compensation. The case highlighted in this report acts as a stern reminder to employers that unless they conduct employee dismissals within the lines of fair reason and procedure, they could face a hefty compensation award and a cost order.

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