Class notes
Mercantile Law 311 - Labour Law
- Institution
- Stellenbosch University (SUN)
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Labour LawMercanti le Law 311
Table of Contents
1 INTRODUCTION.................................................................................................................................................................... 3
1.1 WHY IS LABOUR LAW IMPORTANT?..................................................................................................................................................3
1.2 FUNDAMENTAL CHALLENGES...........................................................................................................................................................3
1.3 HOW LEGISLATION IMPOSES FAIRNESS ON EMPLOYMENT RELATIONSHIP..................................................................................................4
1.4 SOURCES OF LABOUR LAW..............................................................................................................................................................4
1.5 THE CONSTITUTION...................................................................................................................................................................... 5
1.6 PICTURE OF LABOUR LAW..............................................................................................................................................................7
1.7 PRETORIUS V TRANSPORT PENSION FUND.........................................................................................................................................7
1.8 OLD MUTUAL LTD V MOYO 2020.................................................................................................................................................. 9
1.9 BALOYI V PUBLIC PROTECTOR 2020..............................................................................................................................................11
2 & 4 THE CONTRACT OF EMPLOYMENT & THE TERMS & CONDITIONS OF EMPLOYMENT.......................................................15
2.1 APPROACH TO CHAPTER 2 (CONTRACT) & CHAPTER 4 (MINIMUM STANDARDS LEGISLATION)....................................................................15
2.2 THE CONTRACT AS A SOURCE OF TERMS & CONDITIONS OF EMPLOYMENT.............................................................................................15
2.3 CONTRACTUAL TERMS.................................................................................................................................................................18
2.4 THE LEGISLATION – TERMS IMPLIED FROM THE NMWA & BCEA.......................................................................................................25
3 THE MEANING OF ‘EMPLOYEE’............................................................................................................................................ 38
3.1 INTRODUCTION.......................................................................................................................................................................... 38
3.2 DEFINITION OF AN EMPLOYEE....................................................................................................................................................... 38
3.3 ‘EMPLOYEES’ & ‘INDEPENDENT CONTRACTORS’................................................................................................................................40
3.4 THE STATUTORY PRESUMPTION..................................................................................................................................................... 43
3.5 THE CHANGING NATURE OF WORK.................................................................................................................................................44
4 T’S & C’S OF EMPLOYMENT [DEALT WITH IN CONJUNCTION WITH TOPIC 2].........................................................................50
5 DISMISSAL – OVERVIEW & DEFINITION............................................................................................................................... 51
5.1 DISMISSAL OVERVIEW..................................................................................................................................................................51
5.2 SECTION 188 LRA..................................................................................................................................................................... 51
5.3 SUBSTANTIVE & PROCEDURAL FAIRNESS..........................................................................................................................................52
5.4 “DISMISSAL”............................................................................................................................................................................. 52
5.5 TYPES OF DISMISSAL IN SECTION 186(1).........................................................................................................................................53
6 UNFAIR DISMISSAL – AUTOMATIC UNFAIRNESS.................................................................................................................. 65
6.1 INTRODUCTION: S187 – AUTOMATICALLY UNFAIR DISMISSAL..............................................................................................................65
6.2 REASON 1: INFRINGEMENT OF SECTION 5 LRA................................................................................................................................67
6.3 REASON 2: PARTICIPATION IN A PROTECTED STRIKE...........................................................................................................................69
6.4 REASON 3: REFUSAL TO DO THE WORK OF PROTECTED STRIKERS..........................................................................................................70
6.5 REASON 4: REFUSAL TO ACCEPT A DEMAND ABOUT A MATTER OF MUTUAL INTEREST..............................................................................70
6.6 REASON 5: EXERCISE OF RIGHTS....................................................................................................................................................72
6.7 REASON 6: PREGNANCY.............................................................................................................................................................. 74
6.8 REASON 7: UNFAIR DISCRIMINATION............................................................................................................................................. 75
6.9 REASON 8: SECTION 197 TRANSFER...............................................................................................................................................78
6.10 REASON 9: PROTECTED DISCLOSURE............................................................................................................................................80
7 DISMISSAL BASED ON INCAPACITY...................................................................................................................................... 82
7.1 INCAPACITY – BACKGROUND.........................................................................................................................................................82
7.2 FIRST TYPE OF INCAPACITY: POOR PERFORMANCE.............................................................................................................................85
7.3 SECOND TYPE OF INCAPACITY: MEDICAL INCAPACITY.........................................................................................................................98
8 DISMISSAL FOR MISCONDUCT........................................................................................................................................... 103
8.1 MISCONDUCT – OVERVIEW OF DISCIPLINARY PROCESS.....................................................................................................................104
8.2 SUBSTANTIVE FAIRNESS..............................................................................................................................................................105
1
, 8.3 PROCEDURAL FAIRNESS..............................................................................................................................................................113
9 DISMISSAL BASED ON OPERATIONAL REQUIREMENTS....................................................................................................... 115
9.1 DEFINITION OF RETRENCHMENT..................................................................................................................................................115
9.2 ‘SIMILAR NEEDS’ OF EMPLOYER...................................................................................................................................................116
9.3 ‘RETRENCHMENT’: DISTINCTION BETWEEN SMALL- & LARGE-SCALE DISMISSALS....................................................................................117
9.4 OPERATIONAL REQUIREMENTS DISMISSAL: SUBSTANTIVE FAIRNESS.....................................................................................................117
9.5 PROCEDURAL FAIRNESS..............................................................................................................................................................119
9.6 LARGE SCALE DISMISSAL BY LARGE EMPLOYER (S189A)....................................................................................................................123
9.7 SMALL SCALE DISMISSAL – DISPUTE RESOLUTION............................................................................................................................124
10 EQUALITY IN EMPLOYMENT............................................................................................................................................ 125
10.1 CONSTITUTIONAL FRAMEWORK................................................................................................................................................. 125
10.2 UNFAIR DISCRIMINATION.........................................................................................................................................................129
10.3 AFFIRMATIVE ACTION IN TERMS OF THE EEA...............................................................................................................................139
11 UNFAIR LABOUR PRACTICES & DISPUTE RESOLUTION...................................................................................................... 149
11.1 UNFAIR LABOUR PRACTICES......................................................................................................................................................149
11.2 DISPUTE RESOLUTION..............................................................................................................................................................160
2
,1 INTRODUCTION
Overview:
Where labour law comes from and why labour law today is largely legislative in nature;
The different mechanisms legislation uses to ensure fairness in the employment
relationship;
What the different sources of labour law are and how they interact.
1.1 Why is labour law important?
What is labour law:
o Individual dimension employer and every individual employee. Relates to the
conclusion of the contract of employment by the employer & individual
employee, the contents of that contract, how the contract is enforced & how the
contract is terminated
o Collective dimension relationship between employers, employers’
organisations, trade unions & union federations = collective relationships.
Involves collective bargaining between employers & trade unions, strikes (i.e.,
collective action by group of employees) & ‘lock-outs’ (i.e., employer locking
employees out of workplace).
o Individual & collective labour law overlap.
For individual employee: survival; self-fulfillment (growth/ aspirations); access to
societal processes (eg. education for your children)
For employers: smooth and continued production/ rendering of service
For society: labour law regulates the labour market/ effect of labour relations on
economy/ economic development/ growth/ equality/ social justice
1.2 Fundamental challenges
There is an inherent conflict between employers & employees (they have different
expectations when coming into this relationship)
There is also a power differential between the employer & the employee
o From the onset, there is a risk because the employer is an inherent bearer of
power
o For many years, this relationship was left to simply be regulated by the contract
of employment
Traditional common law regulation (law of contract)
o Power differential – risk of exploitation/ actual exploitation (no bargaining power)
o Termination on notice (irrespective of the reason/ no reason at all) which results
in job insecurity on the side of the employee
o Frozen in time (unless renegotiated) – in principle, a contract of employment
does not cater for growth & expectations
o Individualised - does not recognise collective dimension/ shared concerns that
employees or groups of employees may have with one another
o lawfulness vs fairness: Traditionally enforced through ordinary civil courts, not
through labour dispute institutions that understand the realities of the labour
relations dynamics & the unique nature thereof (do not understand labour
relations dynamic)
a consequence of this is that legislation has given us a tailor-made system
of labour dispute resolution, parallel to the ordinary civil courts
3
, So, the story of labour law is the story of recognising that leaving this NB
relationship to be regulated by the contract of employment ONLY is not
necessarily fair to employees.
o Therefore, labour law is the story of the use of legislation (gradually adopted) to
force fairness onto the individual employment relationship (contract)
1.3 How legislation imposes fairness on employment relationship
5 fairness mechanisms (to address the common law’s deficiencies):
1 Fair terms & conditions of employment – job security & minimum conditions of
employment
Directly: BCEA & NMWA (minimum standards legislation)
This legislation provides the minimum terms & conditions of
employment that employers have to afford employees. It directly
interferes in the ability of the 2 parties to provide for worse terms &
conditions of employment in the contract of employment.
Most NB legislation: Basic Conditions of Employment Act 1997 &
National Minimum Wage Act of 2018
Indirectly: promotion of collective bargaining (LRA)
Recognises trade unions by recognising freedom of association,
giving trade unions organizational rights to make them effective in
workplaces,
giving employees the right to strike in support of their demands &
giving effect to the outcome of collective bargaining, namely
collective agreements, making sure they are recognised in law & to
ensure they are declared as more NB sources of T’s & C’s of
employment than the individual contract of employment
2 Protection against unfair dismissal (LRA)
Dismissal could be lawful, but it still has to be fair.
For it to be fair, there must be a good reason & the employer must follow
a fair procedure
3 Protection against residual unfair labour practices (LRA)
Designed to protect employees while they are in employment
4 Protection against unfair discrimination (EEA)
5 Tailor-made ‘fairness’ dispute resolution institutions (LRA)
These institutions operate parallel to the courts
The LRA makes a distinction between disputes of right & disputes of
interest
Disputes of right – a right that already exists for eg. in a contract
or legislation
o Disputes of right are processed through the CCMA/
Bargaining Councils/ Labour Court (all disputes first have to
be conciliated, then only either arbitration/ adjudication)
Disputes of interest – where there is no pre-existing right, but
you have a legitimate interest & there is something that you want
o Processed through collective bargaining
1.4 Sources of labour law
International Labour Organisation (“ILO”) Conventions (eg. 87 (freedom of association),
98 (collective bargaining), 111 (Discrimination))
Constitution (sections 9, 23 & 33)
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