Background
In the recent Labour Court matter, heard on 17/05/2019, Jacobson v Vitalab (LC) (unreported case no JS 1042/12, 25/05/19), Van Niekerk J dealt with the interpretation and the ambit of section 187 (1)(c) of the Labour Relations Act 66 of 1995 (LRA). The matter at hand was if an individual employee can successfully rely on section 187 (1)(c) to claim that his dismissal was automatically unfair.
Section 187(1)(c) was amended in 2014 to provide that a dismissal is automatically unfair if the reason is a refusal by employees to accept a demand in respect of any matter of mutual interest between them and their employees.
A dismissal is automatically unfair if the employer, in dismissing the employee, acts contrary to section 5 of the LRA, which covers protections relating to the rights of freedom of association and on members of workplace forums. A dismissal will also be automatically unfair if the reason for the dismissal is inter alia refusal by employees to accept a demand in respect of any matter of mutual interest between them and their employees.
Facts
In the present matter of Jacobson v Vitalab, Jacobson (the applicant) was a founding director and shareholder of Vitalab (the respondent), as well an employee of the respondent. Jacobson was also a director and shareholder of another corporate entity, Strawberry Bush which was the owner of the premises Vitalab is situated.
During 2016, the directors of Vitalab implemented a retirement age of 70 years. Jacobson expressed that he wishes to continue working, subject to his good health, until the age of 75. The parties subsequently entered into a fixed-term employment contract for the period of 1 July 2018 to 31 May 2019.
Jacobson resigned as director from Vitalab, as well as Strawberry Bush but remained a shareholder in both entities. On 9 July 2019, a second proposed agreement was sent to Jacobson, in terms of which he would agree to:
- Retire from active practice and resign as an employee of Vitalab.
- That he would sell his shares in Vitalab for a stipulated price;
- And that he would be re-employed by Vitalab until 31 May 2019 at a stipulated net salary.
Jacobson objected to accepting and signing the proposed agreement until he received financial information that he had requested pertaining to his shareholding in Vitalab as well as Strawberry Bush.
Jacobson received correspondence from Vitalab on 26 July 2019, advising him that unless the proposed agreement, dated 9 July 2019, was signed by 30 July 2019, his services would be terminated. Vitalab subsequently terminated Jacobson’s services on 1 August 2019, with effect from 31 August 2019.
Jacobson contested the fairness of the dismissal and referred the dispute to the CCMA. On 19 September 2019, a certificate of nonresolution was issued and the dispute was referred to the Labour Court.
Jacobson argued that his dismissal was automatically unfair in that the main cause of his dismissal was his refusal to accept a demand, to sell his shares in Vitalab and/or Strawberry Bush on the terms set out in the proposed agreement dated 9 July 2019, in respect of a matter of mutual interest between himself and Vitalab.
Court findings
The Labour Court had to determine whether or not section 187(1)(c) of the LRA finds any application in the dismissal of an individual employee.
Section 187 (1) (c) refers to a matter of mutual interest. The LRA does not provide a clear definition of what constitutes a matter of mutual interest. The concept includes matters of direct relevance to the workplace and job security of employees. It has also been referred to as matters that are work-related or matters concerning the employment relationship.
The main purpose of the amendment of section 187(1)(c) is to protect the integrity of the collective bargaining process. For this section to find application, there must be an employer demand made to two or more employees. They must refuse to accept the demand which refusal must lead to a dismissal.
Conclusion
The conclusion is that section 187(1)(c) is not intended to apply in individual dismissal disputes, this is fortified in the wording of the section. The Legislator’s intention is clear, the wording of the provision clearly refer to plural. The use of the plural makes it clear that the extent of the prohibition against dismissal applies only where an employer seeks to extract a concession by employees to demands made in a collective context.
This judgement is important given that a number of individual employees relied on the pre-amended version of section 187(1) (c). This is no longer possible given the advent of the new section and this recent judgement.
About the author:
Recognition for this article is given to Nadia Froneman BSocSci LLB (Rhodes) a legal practitioner at Eversheds Sutherland in Johannesburg.