Employment law update – Automatically unfair dismissal for having made a protected disclosure

June 1st, 2018

Monique Jefferson BA (Wits) LLB (Rhodes) is an attorney at Bowmans in Johannesburg.

In John v Afrox Oxygen Ltd [2018] 5 BLLR 476 (LAC), the employee was dissatisfied with the employer’s re-grading process and referred the matter to the employer’s internal audit department. She did not receive any feedback on the matter and shortly thereafter was approached with an offer to terminate her services. When she did not agree to the termination of her services, she was summarily dismissed. The employer alleged that she was dismissed on the basis of incompatibility with her colleagues following alleged negative feedback from her subordinates.

The employee challenged her dismissal alleging that the dismissal was automatically unfair as it had been on account of her having made a protected disclosure in terms of the Protected Disclosures Act 26 of 2000 (the PDA). The Labour Court (LC) found that in order to constitute a protected disclosure the disclosure must have been made in compliance with s 9 of the PDA. This requires, inter alia, that the employee reasonably believes that the information disclosed is substantially true. According to the employee, she had made the disclosure as she had concerns that the re-grading process had taken place in the absence of consultation with the employees in circumstances where the re-grading had a negative effect on the future salary increases of the employees. Furthermore, she was of the view that the re-grading distorted the accuracy of the employer’s employment equity report in relation to wage differentials. The LC found that the employee had not made a protected disclosure as she had not shown that she had a reasonable belief that the information disclosed was true. Furthermore, it was found that the information was not serious enough to elevate the information disclosed to the overriding importance of public interest.

The employee took the matter on appeal to the Labour Appeal Court (LAC) and alleged that the LC erred in finding that the disclosure was required to be made in compliance with s 9 of the PDA. In this regard, she alleged that s 9 of the PDA applied to disclosures made to a party, other than an employer, and in such circumstances it needed to be considered whether it was reasonable for the employee to make the disclosure. In circumstances where the disclosure was only made to the employer then the employee only needs to comply with s 6 of the PDA. In this case, the employee made the disclosure only to her employer and the LAC (per Waglay JP, Ndlovu JA and Coppin JA) found that only s 6 of the PDA was relevant. In this regard, in terms of s 6 of the PDA the employee was required to prove that:

‘(a) She had reason to believe that the information she disclosed tended to show that a criminal offence had been committed, is being committed or may be committed in the future, or that the [employer] failed, is failing or may in the future fail to comply with a legal obligation;

(b) the disclosure was made in good faith; and

(c) the procedure prescribed or authorised by the employer was followed when making the disclosure’ (my italics).

It was held that the LC’s approach was misconceived in that the inquiry is not about the reasonableness of the information disclosed, but rather about the reasonableness of the belief. Reference was made to case law in which it was held that the requirement of a reasonable belief cannot be equated to personal knowledge of the information disclosed and thus a belief can be reasonable even if the information is incorrect. Thus, a mistaken belief can be reasonable and the standard set by the LC in requiring the employee to prove the correctness of the facts was too high.

In conclusion, all that is required for a disclosure to an employer to be a protected disclosure is for the employee to reasonably believe that the conduct complained about is unlawful. It was held that the employee acted in good faith and reasonably believed that the re-grading process had been conducted in a manner that violated the employer’s legal obligations, that is, without following a consultation process. It was held that the only probability was that the employee’s dismissal was in retaliation for having made a disclosure about irregularities in the re-grading process. Thus, the employee was dismissed for having made a protected disclosure and accordingly suffered an occupational detriment. Her dismissal was found to be automatically unfair and compensation equal to 18 months’ remuneration was ordered. The employee also sought notice pay in that she had been summarily dismissed, but the court found that there was no reason to order the payment of notice pay in addition to the compensation order. The appeal was upheld with costs.

Reasonable expectation of extension of fixed term contracts

In Smith and Another v Office of the Chief Justice and Others [2018] 5 BLLR 523 (LC), the applicants were employed as ‘pool secretaries’ in terms of a fixed term contract of employment that had been renewed for a period of 12 months. Prior to the expiry of the 12-month fixed term period, the applicants received an e-mail inviting them to collect their extension letters. In terms of the extension letters, their employment was extended for a further three months as opposed to the usual 12 months. They were informed that previously their contracts were automatically extended without following any recruitment process, but that going forward there would need to be a proper recruitment process, in accordance with a recommendation by the office of the Auditor-General. The contracts were extended for a period of three months to allow for the completion of the recruitment process in accordance with the Public Service Regulations.

During this three month period, the applicants received an e-mail with an advertisement for the position of judge’s secretary on the basis of a three year fixed term contract. The applicants each applied for the position. One of the applicants was not shortlisted or invited to an interview, as she did not meet the basic requirements of the position. The other applicant attended an interview, but was not successful in the recruitment process.

The applicants then approached the Labour Court (LC) seeking an order declaring them to be permanent employees, alternatively fixed term contract employees for a three year period, alternatively a renewal of their fixed term contract for 12 months on the same basis as their previous contract. The applicants argued that the requirements in the Public Service Regulations were not applicable to their position as they regulate the filling of vacant positions and these were positions that were already filled. Furthermore, they argued that they had a reasonable expectation of either permanent employment or to be offered the three year fixed term contract as there was still a need for a pool of secretaries. Accordingly, they alleged that the failure to employ them as permanent or fixed term employees constituted a dismissal as contemplated in s 186(1)(b) of the Labour Relations Act 66 of 1995 (the LRA).

The applicants later abandoned the relief sought in respect of permanent employment and employment on a three year fixed term contract and conceded that the only reasonable expectation that they had was for appointment on a one year fixed term contract. The LC, per Prinsloo J, found that the LRA does not contemplate a right not to be unlawfully dismissed nor does it contemplate invalid dismissals or orders declaring dismissals invalid and of no force and effect. Thus, Prinsloo J found that there was no remedy that the court could afford the applicants to the extent that their claim was that their dismissal was unlawful. To the extent that they alleged that their dismissals were unfair, it was held that the LC is only empowered to adjudicate unfair dismissal claims in circumstances contemplated in s 191(5)(b) of the LRA and only after the dispute has been referred to conciliation. Thus, the court had no jurisdiction to determine the dispute as the matter had not yet been referred to conciliation. It was held that the applicants did not establish any substantive right, which the LC could directly enforce. The application was accordingly dismissed with no order as to costs.

This article was first published in De Rebus in 2018 (June) DR 40.