Employment law update – Are you entitled to severance pay if you refuse a reasonable offer of alternative employment?

September 1st, 2020
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In Lemley v Commission for Conciliation, Mediation and Arbitration and Others [2020] 7 BLLR 676 (LAC), Mr Lemley (the employee) was employed by T-Systems SA (Pty) Ltd (the employer) in Port Elizabeth. The employer commenced a retrenchment process in which the employee was identified as potentially affected.

As an alternative to retrenchment, the employee was offered a position in East London. The employee refused the offer without providing any reasons. The employee then received a revised offer in which the employer had agreed to increase the period of payment of a rental subsidy offered to him for purposes of relocating to East London. This too was rejected by the employee. Further, as the employee was 57 years of age, the employer offered to subsidise the shortfall in the employee’s pension fund up until the date of his retirement to allow him to take early retirement. This offer was similarly not accepted by the employee.

Given the employee’s refusal to accept the offers afforded to him, the employee was dismissed, as a result of the employer’s operational requirements without payment of a severance package. Aggrieved by the decision, the employee referred a dispute to the Commission for Conciliation, Mediation and Arbitration (CCMA). The CCMA Commissioner found that the employee was not entitled to severance pay because he had refused a reasonable offer of alternative employment. On review, the Labour Court (LC) agreed with the Commissioner’s decision and dismissed the employee’s review application.

On appeal to the Labour Appeal Court, the issue to be determined was whether the Commissioner’s finding that the employee was not entitled to severance pay was reasonable. In this regard, the employee contended that the Commissioner had erred in finding that he had unreasonably refused the alternative position offered to him by disregarding his age and personal circumstances, which rendered it impossible for him to relocate. The employer, however, contended that the offer of alternative employment was reasonable, even more so on the basis that the employee did not communicate to the employer the reasons as to why he could not accept the offer. The employee was the only individual to reject the offer of alternative employment.

The court noted that s 41 of the Basic Conditions of Employment Act 75 of 1997 requires an employer to pay at least one-week’s remuneration for each year of completed service as severance pay to an employee who is retrenched, unless the employee unreasonably refuses to accept an offer of alternative employment. The court found that the purpose of this section is clear, an employee is not entitled to insist on being paid severance pay where they unreasonably refuse to accept the employer’s offer of alternative employment. There are compelling reasons why the payment of severance pay has been limited in this manner. Not only does it incentivise an employer to provide alternative employment, but it also seeks to limit job losses through retrenchment.

In the present matter, the employer had taken steps to avoid retrenching the employee. The employee, in turn, had made no effort to engage with the employer regarding the difficulties he had faced in accepting the alternative position. Instead, he elected to refuse the initial and revised offers of alternative employment without advancing reasons. When the issue of his age and personal circumstances was later raised, no further steps were taken by him to detail these circumstances or discuss the matter further with the employer.

The court held that the employee’s approach to the offers made by the employer was obtuse and unreasonable in the circumstances. His age and personal circumstances did not alter the fact that he unreasonably refused the offers of alternative employment made to him. In the circumstances, the Commissioner’s finding that the employee had unreasonably refused an offer of alternative employment and was not entitled to severance pay was reasonable and the LC had correctly declined to review the Commissioner’s award.

The appeal was dismissed.

 

Drinking on duty

In Duncanmec (Pty) Ltd v Williams Itumeleng NO and Others [2020] 7 BLLR 668 (LAC), the employee was employed by Duncanmec (Pty) Ltd (the employer) as a welder. While on duty, the employee was allegedly found to be under the influence of alcohol. The employee denied that he had consumed alcohol and refused to take a breathalyser or blood test. In the circumstances, the employer inferred that the employee was intoxicated and, following a misconduct hearing, the employee was dismissed.

Aggrieved by the decision, the employee referred an unfair dismissal dispute to the relevant bargaining council. During the arbitration proceedings, the employer’s witnesses testified that –

  • the employee had been found napping in the toilet;
  • when approached he smelt strongly of alcohol and had bloodshot eyes;
  • his movements were uncoordinated; and
  • he had acted aggressively.

The employee, on the other hand, testified that he was busy working at the workshop when he was called in by the employer’s safety officer to be tested for being under the influence of alcohol. He was upset about this and denied that he was intoxicated or unsteady on his feet. He, however, conceded that his eyes were bloodshot as a result of an injury he sustained at work.

Faced with two irreconcilable versions, the Arbitrator found the employee’s version to be more credible on the basis that the employee’s evidence was not challenged by the employer’s legal representative in cross-examination. As the employer did not prove that the employee was unsteady or smelt of alcohol, a negative inference could not be drawn from the employee’s refusal to undergo tests. The Arbitrator accordingly found the employee’s dismissal to be unfair and reinstated the employee with back pay.

Dissatisfied with the outcome of the award, the employer took the award on review. The Labour Court (LC) found that the Arbitrator’s award fell within the range of reasonableness and accordingly dismissed the employer’s application.

On appeal to the Labour Appeal Court, the employer contended, among other things, that the Arbitrator could not simply reject its version on the basis that the employer’s representative failed to put its version to the employee in cross-examination. The court noted that the test on review is not whether the Arbitrator had made errors, but whether the outcome of the arbitration proceedings was reasonable. Reasonableness is, therefore, the yardstick against which an arbitrator’s award must be assessed. The issue in the present matter was whether the employee was under the influence of alcohol.

The court found that the witnesses who testified on behalf of the employer were diverse and had no reason to conspire against the employee. Furthermore, they were consistent in their testimony that the employee was under the influence of alcohol. The only reason the Arbitrator had rejected the employer’s version was that its legal representative had not put aspects of the employer’s version to the employee in cross-examination due to pressing family commitments. In this regard, the court held that the failure to cross-examine the employee could not be detrimental to the employer as the employee had been well aware of the employer’s version throughout the proceedings.

The court held further that the Arbitrator’s finding that the employee was not under the influence of alcohol was unreasonable. The employee had not explained why he had refused to submit to a breathalyser or blood test, in circumstances where he had done so in the past. The Arbitrator had also assumed that the employee’s bloodshot eyes were not a sign of intoxication because his eyes were red when he appeared at the arbitration proceedings, without inviting a response to that observation from the employer or any of the parties present at the arbitration.

The court stressed that this was one of the many cases in which employees and employers alike rush to court on technicalities, which obscure the real issues. The gist of this matter was whether the employee was under the influence of alcohol. But for the fact that the employer did not put forward its version in cross-examination, the Arbitrator would have found in the employer’s favour. It is, however, the duty of an arbitrator to be fair not technical. In the present matter, the overwhelming weight of evidence showed that the employee was under the influence of alcohol, which warranted dismissal because the employer had a zero-tolerance policy against consumption of alcohol on duty for safety reasons.

In the circumstances, the court found that the LC erred in finding that the decision of the Arbitrator was reasonable. The court was satisfied that the appropriate sanction in the matter was that of a dismissal.

The appeal was upheld.

Nadine Mather BA LLB (cum laude) (Rhodes) is a legal practitioner at Bowmans in Johannesburg.

This article was first published in De Rebus in 2020 (Sept) DR 48.