Specific forms of unfair labour practice

Nicolene Erasmus

Promotion

Employees can be promoted on the basis of regular evaluations, with promotion to a higher level (a lateral transfer is not promotion), or on the basis of applying for advertised vacancies. Under common law, employees do not have a legal entitlement to be promoted to a higher level, unless they can prove a contractual right or “legitimate expectation”. The refusal or failure to promote an employee does not fall within definition of an unfair labour practice, unless the failure to do so is unfair. Employees will have a valid argument when they can show that they have been overlooked for promotion where they possess qualifications or experience which the successful candidate does not, and the employer cannot explain why they were overlooked. If an employer takes irrelevant criteria into consideration when choosing between two or more candidates, the failure to promote the better qualified candidate will be unfair.

In some instances employers give employees a “legitimate expectation” – that is when the employee is given a reasonable impression (promises etc) that he will be promoted, but this expectation never realises. A question often asked is whether a legitimate expectation is created when employees are allowed to act in higher positions for considerable periods. In PSA v Department of Correctional Services [1998] 7 BALR 854 (CCMA) the commissioner concluded that “the applicants in this instance have been the incumbents of the posts in some instances for a number of years. During these years, no efforts were made to appoint another person or persons in the posts and no comparison was made between the current incumbents and any other person or persons to fill those posts on a permanent basis. Some posts were advertised and some of the applicants indeed applied for those positions without success. In fact, in some instances they were informed that the posts were not vacant notwithstanding the fact that they were the only persons that applied for those posts. How can one ever accept that a post that one occupies in an acting capacity for years is not vacant especially when no steps are taken to fill such a post? Surely, the applicants, after many years of loyal service in those posts, must have formed some kind of expectation to be promoted to the posts they so occupied.

I am of the view that the present incumbents had a legitimate expectation to be appointed to those posts; they had the necessary skills and experience to fulfil those posts. Respondent did not advance a proper defence on the reason why it does not want to promote the applicants merely by stating that the reason is related to its internal policies and procedures relating to the selection of suitable candidates for the various posts. On the applicants’ evidence (individual letters, which was common cause), they did all the required functions of the posts, they were fully qualified to fulfil all the required tasks and complied with all requirements to receive promotion to the posts they acted in. The commissioner ordered that the applicants must be promoted with immediate effect as from the date of this award to the ranks which they acted in.

In SAPS v Safety & Security Sectoral Bargaining Council & others [2010] 8 BLLR 892 (LC) (review application) the Court held that the review should be approached in the light of the following principles:

(i) decisions on promotion should be made in a manner that does not constitute an unfair labour practice; (ii) the definition of unfair labour practice covers only disputes concerning promotion, and does not extend to disputes over whether employees deserved to be promoted; (iii) the decision whether or not to promote falls within an employer’s discretion, which should not be interfered with in the absence of gross unreasonableness or bad faith; (iv) arbitrators should not usurp the discretion of employers by deciding who is the best candidate; (v) the mere fact that an employee has been acting in a post does not give the employee a right to be permanently appointed to it; (vi) in deciding on whether decisions not to promote constitute unfair labour practices, arbitrators must strike a balance between the employer’s prerogative and employees’ right to be treated fairly. In this case it was concluded that the mere fact that the employee’s post was re-evaluated and then upgraded and the mere fact that she already was in the post, does not give her an automatic entitlement to the post.

In Christiansen / University of KwaZulu-Natal [2006] 12 BALR 1200 (CCMA) the question to be decided was whether the respondent had committed an unfair labour practice as alleged in failing to grant the applicant a promotion to associate professor, and if so, what relief would be appropriate.

The facts were as follows: After the university by which the applicant was employed as an associate professor merged with the respondent, the applicant was given a post of senior lecturer in mathematics. She later applied for a post of associate professor. When her application was turned down, she alleged that the respondent had committed an unfair labour practice because the committee which had considered her application had not credited her with research work she had completed and activities in which she had been involved before joining the respondent’s staff, and had also failed to take into account work that had since appeared in certain approved publications. The applicant contended that she was entitled to promotion according to the terms of the respondent’s promotions policy. The respondent argued that even if the applicant had proved that the promotions panel had placed an excessively narrow interpretation on the promotions criteria set by the policy, this did not render the decision not to promote the applicant an unfair labour practice.

The commissioner held that even on the approach urged by the respondent, the only conclusion that could be reached was that the applicant had been subjected to an unfair labour practice. The evidence indicated that the committee had failed to apply its collective mind to the criteria set by the university’s promotions policy. The committee’s finding that there was “little evidence of research engagement”, could not be sustained on the facts, as was its conclusion that the applicant had not been engaged in research supervision.

The commissioner noted further that after the merger, the applicant had been informed that she would have been appointed at the rank of associate professor had such a post been available. In fact, the respondent had permitted her to retain the title of Professor. The applicant’s head of department had strongly recommended her promotion. The commissioner found it incomprehensible that the committee had not strongly recommended the applicant’s promotion. Had it done so, its recommendation would certainly have been accepted.

While it is so that the promotion of staff falls within the prerogative of management, interference is warranted when the decision or process is grossly unfair, as was the case in the present matter.

The respondent was ordered to promote the applicant retrospectively to the date on which the appointment would have been made had it not been for the committee’s adverse decision.

Demotion

The demotion of employees without their consent amounts to the repudiation of the contract. In order to succeed with such a claim, the employee should have been demoted. A demotion does not necessarily occur when the employee is placed in another post. Likewise the mere fact that an employee’s job title and remuneration remains as is, does not mean that a demotion has not taken place.

In SAPS v Salukazana & others [2010] 7 BLLR 764 (LC) the first respondent, then provincial head of supply chain management, referred a dispute concerning his temporary transfer to another post, and filed a grievance, claiming that the transfer amounted to a demotion. Before the grievance was resolved, the applicant received a letter informing him that he had been permanently “laterally” transferred to the post of Section Head: Inspections. He claimed again that his transfer constituted a demotion, and referred a dispute to the Safety and Security Sectoral Bargaining Council. A jurisdictional point was raised by the SAPS – it was argued that the issue in dispute was a transfer, not a demotion, and that the court lacked jurisdiction. The court however agreed with the applicant’s arguments, and concluded that: “if one has regard to the wording, the second respondent is clearly referring to the demotion issue. The fact that he said the transfer is unfair does not remotely suggest that he was arbitrating an unfair transfer dispute. I shall deal with this issue later. Demotion can manifest itself in many ways.

It can arise through the reduction of salary, change in terms and conditions of employment and indeed transfer. In Nxele, supra, the LAC had the following to say which demonstrates the point:

“I agree with counsel for the appellant that the mere fact that the appellant’s rank and remuneration were not going to change does not mean that the transfer to Pollsmor could not or did not constitute a demotion. I agree, too, that status, prestige and responsibilities of the position are relevant to the determination whether or not a transfer in particular constitute a demotion.” Come to think of it, demotion and transfer share commonalities. In a demotion there is a movement equally in a transfer there is. If a movement leads to a reduction in status, such is a demotion, irrespective what the employer may wish to term it. The fact that an employee challenges the effect of a transfer would not of necessity mean that he or she is challenging the transfer per se. Put it differently, if a transfer leads to a change in terms and conditions of employment which amount to demotion, an employee is entitled to bring a claim of unfair labour practice in terms of section 186(2). That shall be so even if a transfer is procedurally and substantively appropriate as it were. The cause of action would not be premised on the fairness or otherwise of the transfer.

In my view the issue of the transfer is more an issue in a dispute but certainly not an issue in dispute in this matter. The transfer was the causa of the demotion. Had there been no transfer, the demotion would not have arisen. In terms of section 186(2), what is objectionable is the unfair conduct in relation to aspects mentioned in there. Those are promotion, demotion and provision of benefits. An arbitrator considering a dispute about an alleged unfair labour practice should be satisfied that the conduct in question relating to one of the aspects, is unfair. In other words, if the conduct that led to a demotion is fair, then a demotion does not amount to an unfair labour practice as defined.

The same applies to a promotion and provision of benefits. For an example if employer A only provides benefits to tall people only. A short person resorting under the provisions of section 186(2) can approach the CCMA or the Bargaining Council and complain. His or her main complain would be non-provision of benefits. The arbitrator in dealing with the matter must find as matter of law that the conduct of only benefitting tall people is unfair. The fact that he or she finds as such does not suggest that the dispute was about the fairness of benefiting tall people.

Similarly, the fact that the second respondent found, as he should, that the conduct that led to the demotion, which happens to be a transfer, is unfair does not mean that what he was determining was an unfair transfer dispute. In fact the wording is not unfortunate as conceded by Advocate Grobler. It is appropriate. The transfer is the conduct that led to the demotion. Finding that it is unfair is actually consistent with the definition in the Act. Contrary to what Advocate Grobler argued, the LRA recognises that there may be a fair demotion. To take it further, in an instance where a demotion arose as result of it being a penalty imposed at the disciplinary inquiry, the focus in determining whether the demotion is lawful as it were, would be the disciplinary inquiry for instance. If a finding is made that the conduct of disciplining was unfair then the demotion is unlawful as it were. However, I emphasise, it does not make the dispute one of the fairness of the disciplinary inquiry.

Unlike in the LAC judgment referred to earlier and relied upon by Advocate Kroon, in this matter, the first respondent did not apply for transfer and was turned down. In the LAC matter, Mr Badenhorst applied for transfer and same was turned down. He then chose to lodge a dispute about interpretation and application of a collective agreement in terms of section 24 of the LRA. In this matter, the transfer was the conduct or an act if you like of the applicant.

In my view, there is nothing wrong with the wording. The wording does not suggest that the dispute was about the fairness of the transfer. Accordingly, the jurisdiction ground is bound to fail.

Is the decision based on a fundamentally incorrect premise?

The alleged fundamentally incorrect premise referred to is the usage of “lateral” transfer. According to Advocate Kroon, the word does not appear in the policy, therefore it must be a term coined by the second respondent from nowhere. Advocate Grobler conceded that the word does not emanate from the policy. From the record, it is revealed that the term actually emanates from the applicant. The caption of its letter of transfer dated 18 February 2008 makes reference to the term. All what the second respondent did, which informed his continued usage of the term, was to question the first respondent as to his understanding of the term used. He testified that he understands it to mean moving with his status and responsibilities. In his (the first respondent) case he did not move with his status and responsibilities; therefore it was not “lateral” in his understanding. In cross-examination, this version was not challenged.

Therefore the finding hereunder is unassailable:

“I am therefore satisfied that the applicant ( first respondent) has proved on a balance of probability that his transfer was not a lateral transfer and therefore the post he now currently holds is lower in responsibility and status. Therefore, that to me amounts to demotion.”

The finding is not only consistent with the evidence before him, it is also consistent with what the courts have said is a demotion. (Ndlela v SA Stevedores Ltd (1992) 13 ILJ 663 (IC) and Nxele, supra). First respondent testified that if he does not move with his status and responsibility, that does not amount to lateral transfer as the applicant sought to convey in the letter of 18 February 2008.

Probation

The purpose of probation is to put the employer in a position to make an informed decision about the capabilities of the employee to do a specific job. Any termination of a probationer’s employment for reasons other than deficiencies of performance or unsuitability, or unreasonable extensions of probation, falls under the prohibition.

Item 8(1)(c) of Schedule 8 to the LRA (the Code of Good Practice: Dismissal) reads as follows:

“Probation should not be used for purposes not contemplated by this Code to deprive employees of the status of permanent employment. For example, a practice of dismissing employees who complete their probation periods and replacing them with newly-hired employees, is not consistent with the purpose of probation and constitutes an unfair labour practice.”

Any termination of a probationer’s employment for reasons other than deficiencies of performance or unsuitability, which is not hit by the definition of dismissal, falls under the prohibition. So, too, apparently, do unreasonable extensions of probation.

1. a. Provision of benefits

The meaning of the term “provision of benefits” has been the focus of a number of cases. A broad definition of benefits includes wages, pension, medical aid etc. The Labour Court however favour a narrow interpretation – thereby excluding all payments that could be interpreted as falling under the broad ambit of “remuneration”.

In Schoeman & another v Samsung Electronics SA (Pty) Ltd [1997] 10 BLLR 1364 (LC) the employer had prohibited the first applicant from returning to work, an action which both parties termed a “lock-out” and which was instituted because the first applicant refused to accept a reduction in her sales commission. The first applicant had been appointed as a sales executive on a basic salary with a car allowance. Her employment contract made no mention of any commission. There was some delay in the setting of commission structures, and when it was set at a rate lower than the first applicant expected, the matter was referred to the CCMA for arbitration, which had not occurred at the time of the application. The first applicant sought a declarator that the lock-out was illegal, and orders inter alia directing the respondent to restore her salary package and to pay her commission calculated at 0.5 per cent of projected sales and to pay compensation for the losses attributable to the “lock-out”, and that the dispute be referred to arbitration by the CCMA.

The court argued that according to The Concise Oxford Dictionary, 6ed (edited by JB Sykes), the meaning of the word “benefit” is defined as follows: “Advantage or an allowance to which a person is entitled under insurance or social security (sickness, unemployment, supplementary, benefit) or as a member of benefit club or society”.

Commission payable by the employer, forms part of the employee’s salary. It is a quid pro quo for services rendered, just as much as a salary or a wage. It is therefore part of the basic terms and conditions of employment. Remuneration is different from “benefits”. A benefit is something extra, apart from remuneration. Often it is a term and condition of an employment contract and often not. Remuneration is always a term and condition of the employment contract.

The conclusion therefore is that the “benefits” does not refer to remuneration and that a unilateral reduction of an employee’s salary by reduction of her commission rate does not fall within definition of an unfair labour practice.

In NUM obo Lalifa / Xstrata Alloys – Lydenburg A div of Xstrata South Africa (Pty) Ltd [2010] 5 BALR 477 (MEIBC) the employee, a Zimbabwean national, was killed by hijackers. A contribution list for donations, to assist the employee’s family with funeral arrangements, was circulated among employees, but the respondent failed to contribute. The applicant union claimed that the respondent’s failure to pay for the repatriation of the deceased to Zimbabwe and for his funeral constituted an unfair labour practice.

The commissioner noted that what constitutes a benefit has been extensively canvassed by the courts. In respect of a claim related to benefits, the applicant is required to show that there was a contractual entitlement. It was common cause, that the applicant had been employed on a fixed term contract and that the salary package paid to fixed term contractors was substantially higher than the basic rate paid to permanent employees. Equally, it was common cause that fixed term contractors were not entitled to contribute to the provident fund and therefore there were no derived funeral/death benefits which accrued to such employees. There is no credible evidence to show that the applicant was entitled to the benefit in terms of the contract of employment and/or arising out of any collective agreement on wages and terms of condition of employment in respect of funeral/repatriation as demanded by the applicant. Equally, the applicant has placed no reliable evidence to show that the practice of differentiating between permanent fixed term contractors amounted to discrimination because permanent employees enjoy benefits not granted to fixed term contractors. The dispute is not a rights dispute but an interest dispute, as the demand was for the employer to be ordered to contribute to the costs of repatriation of the deceased back to Zimbabwe to enable his family to bury him in his country of birth with dignity and respect, something which the employer has not provided in the past. The applicant’s argument is premised not on a factual basis but on a moral argument. The case was dismissed.