Author: Imraan Mahomed - Practice Area Lead, Employment/Labour Law
South African labour relations has over time become dominated by a large number of advisors and it is important that an organisation guard against poor advice which, once implemented, will result in unintended risk and cost to business down the line.
Adding to the problem is the fact that many organisations do not seem to believe labour law is very important.
Imraan Mahomed, partner and employment law practice area leader at Hogan Lovells, Johannesburg says one area at issue is dismissals. This often requires going through very elaborate processes and using extensive resources.
He says the public sector is a particularly striking example of the dismissal paralysis that has developed with time.
"We know the obvious examples in recent times. There are also numerous examples of individuals that are placed on suspension, with pay, and at the taxpayers’ expense where the employee remains on suspension for a long time before any action is taken. This is an unnecessary expense to the state," Mahomed says.
He says this is contrary to the intentions of the Labour Relations Act (1995), which was intended to simplify internal processes and do away with the complex ones that had existed prior to 1995.
“The old processes were intended to be dismantled and it was expected that it would become easier for business to conduct itself and deal with disciplinary issues. The intention was for the processes to move out and fall into the province of the Commission for Conciliation, Mediation and Arbitration (CCMA) and other labour tribunals. However, this has not always happened and the public sector is a classic example,” Mahomed says.
The problem is not with the Act but rather the way that people have applied the Act.
“The Act was designed to encourage an internal process that is quick and fair. Should the dismissal still be in dispute the matter should be dealt with in the CCMA so that an independent third party can adjudicate the dispute.
“Time and effort was meant to be spent post-dismissal as opposed to pre-dismissal. One of reasons for this failure is that the mindset has not necessarily transformed from the perspective of trade unions and there was no incentive for them to make the change.”
For example, trade unions conclude agreements with municipalities, universities and even private business that provide for certain internal processes that need to be complied with before a dismissal, he says. “That constitutes a process that must be complied with in addition to the requirements of the law. This means that you have lawyers unnecessarily involved in internal processes and a ‘criminal’ style process that plays out internally all at the taxpayers’ or shareholders’ expense,” Mahomed says. "This is all unnecessary".
Government needs to provide a mechanism to unlock the internal processes and bring them into line with the spirit of the Act. The courts are making a serious effort to get back to basics but this only assists employers that do not impose further obligations – outside of the law – upon themselves.
All too often these “further obligations” are historic in that they were put in place prior to 1995 or simply persisted with because of a failure to receive appropriate practical advice.
“While the courts are trying to unravel the tangled threads, agreements that are concluded with unions or that are provided for in employment contracts come back to create more of these unnecessary and undesirable processes.
“This is something in my experience employers do not fully appreciate and they need to re-examine their current position, update employment contracts and bring them into line with the current law…the Labour Relations Act must be the foundation upon which labour relations are conducted,” Mahomed says.
Strike action
Another example that illustrates that both the public and private sectors need to take labour law very seriously is the fact that strike action and its consequences often stem directly or indirectly from unsatisfactory labour relations. Furthermore, strikes have become increasingly violent and costly.
“Strikes often reflect not just the dispute but also underlying social issues and they are characterised by violence rather than a peaceful withdrawal of labour as a part of the negotiation process,” he says. In addition, these strikes can result in mass dismissals which are then disputed and take years to conclude in court.
“The costs in back wages for say 200 "blue collar" workers that are adjudged unfairly dismissed four years ago can run into millions of Rand and will certainly play havoc with a company’s profitability or a public sector entity’s budget – this is a reality,” Mahomed says.
Perhaps, he says, labour law should not be an afterthought.
Edited version of an article published in Business Day on 26 April 2017
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