Home » Judgements

Category: Judgements

Legalese and Labour Law

Labour Law and Legal Jargon

Trend toward legalese

Labour Law and legal jargon do not belong together in a perfect world. Clearly, we are not living in a perfect world. There is an unfortunate trend amongst many lawyers that they can make a simple matter complex by resorting to legal gymnastics to make the law fit their case.

This has spin off into how some documents are drafted. There are cases were a simple contract runs to several pages because of the extensive definitions clauses and the multitude of exclusions added at the end. There are some where the actual content of the agreement makes up a small percentage of the overall written document. But that is a discussion for another time.

‘Cost-effective and Expeditious’

The Labour Relations Act 66 of 1995 was drafted with the best intentions of simplifying labour law and creating what is often referred to a ‘cost-effective and expeditious’ way to resolve labour disputes. Whether it is cost-effective can be debated, but even the most ardent supporter of the new dispute resolution regime will have to concede the system is anything but expeditious. Brought in the normal course (ie with out jumping the queue via an urgent application), an opposed application in the Labour Court will take a year to be heard.

Obviously the losing party can then attempt to appeal that order, which will then stay its implementation (in terms of s 18 of the Superior Courts Act). Even if one of the parties expedites the matter (assuming the losing party will seek to drag out this process), judgement on the application for leave to appeal can take several months. Then of course there is the opportunity to petition the Labour Appeal Court. If they grant leave, the appeal can take another year, and (although there is a marked improvement by that Court) judgement can take a couple of months. Then there is the appeal to the Constitutional Court.

NUMSA v Dunlop

The recent Constitutional Court judgement in National Union of Metalworkers of South Africa obo Khanyile Nganezi and Others v Dunlop Mixing and Technical Services (Pty) Ltd and Others [2019] ZACC 25 highlights this problem. The employees were dismissed on 26 September 2012, despite participating in a protected strike.

The matter went to arbitration, which ruled in the employees’ favour. The Labour Court then overturned that decision, and the Labour Appeal Court confirmed that judgement. On 28 June 2019 the Constitutional Court set aside the decisions of those two Courts and reinstated the decision of the arbitrator to reinstate the employees.

In other words, it took close to seven years for the employees to be reinstated, after they took part in a protected strike where they must have thought the law was on their side. Ultimately it was, but how did they eat? How did they afford rent? Seven years is a long time to remain unemployed while the lawyers and the Courts take their time.

‘Interpreting’ the Law

And what caused the problem in the first place? Quite simply, the very simple terms of the Labour Relations Act have been turned on their head by the ways lawyers have found to bring legalese into a supposedly simple process.

What are the grounds for dismissing an employee? Section 188 of the Labour Relations Act rather clearly sets out that there are only three grounds which an employer can fairly rely on for dismissing an employee: Operational requirements, capacity or conduct. Each have their own procedures and requirements, set out in the Act and its schedules. What could be more clear?

The problem comes with the ‘interpretation’. As a Judge recently said in the Labour Court, you can’t rely on the Act you have to see how the Courts have applied it. Of course, that strays dangerously close to the line of the separation of powers – the Courts are meant to apply legislation, not amend it by applying it in a different way.

Derivative Misconduct

This is what happened in the Dunlop matter, where the Court was faced with the question of ‘derivative misconduct’. Put very simply, before the Constitutional Court judgement, an employee, who has done nothing wrong, could be dismissed for not disclosing to their employer what someone else has done wrong. As with most ‘doctrines’, its original can be traced back to a tenuous source, being an obiter dictum in Labour Appeal Court judgement, which was then ‘interpreted’ by lawyers and academics to the point where it developed into a new ground for dismissal.

The Constitutional Court, thankfully, put an end to that line of reasoning. In paras [30] and [31] the Court clearly set out the grounds on which an employer can dismiss an employee:

“Misconduct, incapacity and operational requirements are the gateways to fair dismissal under the LRA. For an employer, each has its own difficulties of proof and process. Dismissal for operational reasons involves complex procedural processes, requiring consultation, objective selection criteria and payment of severance benefits. Dismissal for incapacity requires proof that performance standards deal with the alleged incapacity and that alternative ways, short of dismissal, were unsuccessfully pursued before dismissal can take place. Dismissal for misconduct in circumstances where the primary misconduct is committed by one or more of a group of employees and the exact perpetrators cannot be identified, is complicated by the accepted principle that the misconduct must be proved against each individual employee.”

It then went on to critically analyse the concept of derivative misconduct and came to the conclusion, which is so often the case, that the normal principles can be applied to those situations where it had been thought that a contrived concept was the only solution.

Reciprocal Duty of Good Faith

Essentially, the Court found that, save for those situations where the facts gave rise to a different conclusion, the duty of good faith was reciprocal. Employees don’t only owe to the employer, but by the employer owes it to the employee as well. In that case, where there was a protected strike, the employer could not expect employees who were not part of any violence (whether directly or indirectly) to expose their co-employees without catering for the obvious concerns (not least of which was safety) of the innocent employees. There may well be situations where, even though an employee was not part of violence relating to a strike, the circumstances of their employment created a duty on them to report those who were. It would be a breach of that duty which constituted the misconduct.

Which brings one to the question: If the normal principles could be applied so easily, why was it ever necessary to muddy the waters with an esoteric concept which the average employee (and employer) could never be expected to understand unless it was to take labour law out of the domain of the average person and into the exclusive playing ground of the lawyers.

Incompatibility

Incompatibility is another concept which has grown traction from a very tenuous beginning. It has transformed from being seen as a form of dismissal for operational requirements to a species of incapacity. From there it has changed to its own ground for dismissal. Section 188 of the Labour Relations Act, and the relevant codes of good practice, have not barred this development.

Hopefully this has been arrested by the recent Labour Appeal Court case of Baise v Mianzo Asset Management (Pty) Ltd [2019] ZALAC 42. Although in an obiter remark, the Court said:

“I agree that such a finding could not have been made on this body of evidence. The irretrievable breakdown in the working relationship between the two key actors in the business, called on occasion “incompatibility” – perhaps an extravagant and possibly technically incorrect use of that concept as usually invoked in Labour litigation – is a common cause fact, and in any event, is an objectively demonstrable fact.”

The Court then expanded upon this statement in a footnote where it said:

“Precisely how to conceptualise the idea of ‘incompatibility’ and how it relates to, or is distinct from, “incapacity” and has or has not any bearing on “operational requirements” as defined in the LRA, is a question which remains open for a resolution, but is unnecessary to resolve in this matter. The term seems to have used in this case interchangeably with “irretrievable breakdown”. This is a good illustration
why too much effort to label occurrences is unwise; a proper description of the happening or the condition is often quite enough.”

While obviously not giving any clear guidance as to what role ‘incompatibility’ plays in labour law, the last sentence illustrates the problem with which the Constitutional Court also grappled: “too much effort to label occurrences is unwise; a proper description of the happening or the condition is often quite enough”.

Rewritten in simple English, the Courts were saying: Apply the law as it stands, don’t complicate it by adding labels which then take on their own life.

Summary – Labour law and legal jargon

These two cases highlight the problem encountered by the layperson who comes into contact with the law. Apart from criminal law they are most likely to do so in the field of labour law. Lawyers (sometimes abetted by the Courts) love to use complex terminology to cater for the simplest of situations. There is no need to resort to ‘derivative misconduct’ when applying the normal principles to the employer/employee relationship will show if the employee is guilty of misconduct, in the sense of breaching the duty they owe to the employer or not.

Likewise, the resort to ‘incompatibility’ risks putting the cart before the horse. If the comments made in Baise are correct, then there is a danger that an employee faces the sanction before a finding on their culpability is made. In effect, the employer is saying that it is dismissing the employee without any resort to s 188 and then opposing reinstatement on the basis of ‘irretrievable breakdown’. Obviously that cannot be allowed, otherwise s 188 is toothless.

The solution to this problem of legal jargon being used to avoid the provisions of the Labour Relations Act is to insist on a return to basic principles, as the Constitutional Court did. Whatever the parties call their claim or defence, they should be required to bring them within the ambit of the Act. Then the attraction for esoteric doctrines and obscure labels will rapidly disappear.

The two cases above are among the 26 500 other judgements in our database. Subscribe to access them and use the powerful search functionality of our database.

Is Rescission Appealable?

Is Rescission Appealable?

It is not always easy to reconcile decisions of the Courts. Just when it seems that a definite decision has been made on a particular point of law, a conflicting decision comes along. When it is the same Court, in quick succession, it is more confusing. One case closed the door to appeals against the granting of rescission. The second left open the question: Is Rescission appealable?

In Crockery Gladstone Farm v Rainbow Farms (Pty) Ltd [2019] ZASCA 61 the Supreme Court of Appeal decided that an order granting rescission is not appealable. The rationale is that it is not a final order.

In Bayport Securitisation RF Ltd v Sakata [2019] ZASCA 73 the Court upheld an appeal against a decision of the High Court where it granted rescission in upholding an appeal from a magistrates’ court which had refused to rescind a default judgement granted by the clerk of that court.

The Court clearly wished to correct an incorrect decision in the Eastern Cape High Court in Bayport and therefore heard (and upheld) the appeal. However, it did not expressly state that it was making an exception to the rule in Crockery Gladstone Farm.

It has regrettable consequences for parties when the Courts give conflicting judgements. Some legal representatives will jump at the opportunity to use the conflicting judgements to further muddy the waters. There won’t be any certainty as to whether to appeal the granting of rescission or not. Cases will be potentially delayed for months or years while parties seek to appeal based on Crockery Gladstone Farm only to find that the Court applies Bayport.

Eastern Cape High Court was clearly wrong and had created precedent which needed rectification. However, the SCA could have stated that it was only hearing the appeal because of the exceptional circumstances.

So, that leaves the question: Is rescission appealable?

When A Party Delays Its Own Justice

When A Party Delays Its Own Justice

The Supreme Court of Appeal has now settled that the granting (as opposed to the refusal) of an application for rescission is not appealable.

This was confirmed in Crockery Gladstone Farm v Rainbow Farms (Pty) Ltd [2019] ZASCA 61 handed down on 20 May 2019.

History of the Matter

The matter began with an application in the Limpopo High Court, Polokwane, in June 2016 for an order declaring the termination of a contract null and void. The parties entered into settlement negotiations. While these were proceeding, the matter was set down for hearing on the unopposed motion roll. However, the Crockery’s attorneys indicated to the Rainbow’s attorneys that the matter will be ‘sorted out’. Despite this, Rainbow briefed counsel to attend at court and ensure the matter was postponed. Crockery’s counsel opposed any postponement and obtained an order in the absence of an answering affidavit.

Rainbow applied for rescission, which was opposed. The Court refused rescission on the basis that it was not a default judgement because Rainbow was represented by counsel when the order was granted.

Appeal Against Granting of Rescission

Rainbow appealed to the Limpopo Full Bench. That Court upheld the appeal in October 2017 and granted Rainbow leave to defend the matter. Not satisfied, Crockery appealed to the Supreme Court of Appeal. The SCA heard the appeal on 20 May 2019 and handed down judgement the same day. It dismissed the appeal, ruling that the granting of rescission is not appealable.

The effect of this is that, nearly three years after the case commenced, it has not progressed beyond where it was when default judgement was taken. Presumably the contract has remained terminated.

Would it not have made a lot more sense for Crockery’s attorneys to have agreed to rescission and got on with the case? Sometimes because one can, doesn’t mean one should. This seems to be one of those cases.

This is classic case where a party has denied its own justice. Instead of appealing against the granting of rescission it should have proceeded with the case on the merits immediately.