Do company policies have to be complied with?

September 1st, 2023

Employers must make sure that when new policies are put into effect, they consult employees. To consult with employees is to say to them, for example, ‘I have intentions of doing this; what do you wish to say about that?’ as compared with ‘this is what is going to be done’.

If the policy materially alters the employees’ employment terms and circumstances, both parties must endeavour to reach an agreement that benefits both parties, as this might be an issue of dispute. Where there is a union that represents employees, consult with it, and explain what the purpose of the policy is, allowing them to provide input. A typical consultation would involve the following –

  • presenting the employees or the union with the necessary details concerning the change that is planned;
  • allowing the employees or the union to communicate their or its opinions in reaction to the information presented; and
  • a genuine review of the employees’ or the union’s viewpoints prior to reaching a final decision and implementing the policy.

Policies matter because they promote consistency and the achievement of a given objectives. They are important in establishing rules that regulate an organisation’s behaviour and are an important element of an organisation’s culture.

The issue of compliance with the company’s policy was recently brought into focus in the Labour Court (LC) in Taguzu v Commission for Conciliation, Mediation and Arbitration and Others (LC) (unreported case no JR1785/18, 27-6-2023) (Tlhotlhalemaje J). In this case, the Chefs Warehouse, a restaurant, introduced a policy after consulting with all its staff, requiring all front waiters to declare all cash gratuities received from customers. The policy’s purpose was for the restaurant to ensure that at least 25% of all gratuities were divided with all back-of-house staff members, who also contributed to patrons’ services and diners’ experience.

With the exception of the applicant, all staff members supported the policy. All staff members signed the policy, and the applicant refused to sign it; yet, while refusing to sign it, the applicant verbally agreed to abide by it. The applicant also demonstrated adherence to the policy by declaring her gratuities on the same day the policy became effective.

However, it was determined that on 10 and 11 February 2018, the applicant failed to declare the gratuities she received in accordance with the policy thereby breaching the policy. In the end, the applicant was dismissed for failing to adhere to the restaurant policy, and the matter was referred to the Commission for Conciliation, Mediation and Arbitration (CCMA). In the CCMA, the applicant claimed she never agreed to the policy since she never signed it, that there was no proper consultation, and that she had not failed to disclose her gratuities. The commissioner, on the other hand, stated that proper consultations were made and that her refusal to sign the policy did not render it unlawful or invalid. The commissioner determined that if the applicant had concerns about the policy’s implementation, she should have filed a complaint with the CCMA, which she did not do. The commissioner further determined that the applicant had violated the policy by failing to declare the customer gratuities she had received.

The applicant brought this matter to the LC for review, contending, among other things, that the commissioner failed to apply his mind to the facts and thereby reached an unfair and irrational conclusion.

After reviewing the matter, the LC agreed with the commissioner that the policy was not invalid. The LC also contended that the fact that the applicant did not agree to the policy did not imply that she was not consulted. The judge commented that the applicant seemed to have endeavoured to comply with the policy as and when it suited her.

The LC was also of the view that the policy did not in any material respects alter the applicant’s terms and conditions of employment. Finally, the LC decided to dismiss the applicant’s application to review and set aside the arbitration award.

A takeaway here is that if an employee or union is dissatisfied with the company’s policy that is being implemented, they should approach the CCMA.

The policy could be invalid if it materially alters the terms and conditions of employment. However, the LC in this matter pointed out that if indeed the applicant’s terms and conditions were altered, she ought to have approached the CCMA with a dispute in that regard under the provisions of s 64(4) or s 186(2)(a) of the Labour Relations Act 66 of 1995.

A further finding is that not signing a policy does not automatically render it invalid.

The last point is that before policies are implemented, the employer must ensure that employees or the union are properly consulted.

Michael Kabai LLB (UL) LLM (Unisa) LLM (NWU) MBA (Regent) is a legal practitioner, adviser, and legal and compliance manager at the South African National Space Agency (SANSA). The views expressed in Mr Kabai’s article are his own and do not reflect the views of SANSA.

This article was first published in De Rebus in 2023 (Sept) DR 12.