In Mkhutshulwa v Department of Health, Eastern Cape and Others [2023] 8 BLLR 809 (LC), a senior employee who was employed as an assistant director resigned and stated in her resignation letter that the reason for her resignation was that her employer had rendered her continued employment intolerable. She then referred a constructive dismissal dispute alleging that when she had to report to a new person in an acting role, she was marginalised and was not given any work by that person over a number of months. She alleged that this affected her psychologically and resulted in her being admitted to a psychiatric facility. The matter was arbitrated, and the arbitrator dismissed the claim.
The employee then took that arbitrator’s decision on review on the basis that the arbitrator committed gross irregularities and reached an unreasonable decision. The employee alleged that she had led evidence to prove her case, but the arbitrator had misconstrued and disregarded the evidence.
The employer conceded before the Labour Court (LC) that the arbitrator’s decision did not pass muster. It was accordingly held that the decision should be reviewed, and the LC had to determine the appropriate relief after considering the papers. The employee sought an order that the arbitration award be substituted with an order for compensation. On the other hand, the employer argued that the matter should instead be remitted for an arbitration de novo before a different arbitrator.
The LC held the view that justice would be served by resolving the dispute before the LC and not remitting it for arbitration to be resolved at a later stage. The LC referred to the test for constructive dismissal as per the case law. In this regard, the test is an objective one and the conduct of the employer toward the employee and the cumulative impact must be such that objectively the employee could not reasonably be expected to cope in that situation and resignation must have been a reasonable step in the circumstances. The complaints, therefore, need to be considered as a whole. In this case the employee was the only one who led evidence at the arbitration as the employer had elected not to call witnesses notwithstanding its right to do so. Therefore, the employee’s evidence was unchallenged. It was found by the LC that based on the evidence led, the employee’s employment was rendered intolerable as the evidence demonstrated that the employee did not receive work for months. There was also evidence that she had escalated this to her employer and there was initially a solution of reassigning her to the Extended Public Works Programme. After this came to an end there were no further solutions and again, she found herself in a situation where she was not given work. She made further complaints and raised grievances about her working conditions, but this was not resolved. The employee also did not sit idle during this period but tried to improve herself by furthering her studies.
It was held that the employer was under an obligation to ensure that the employee received work so that she could further develop her expertise, and simply providing her with a monthly salary was accordingly not sufficient. It was also not a defence that she had been afforded an opportunity to study because she had no work. It was found that it would be just and equitable in the circumstances to order compensation equal to ten months’ remuneration. There was no order as to costs.
In National Union of Metalworkers of South Africa and Others v Scaw South Africa (Pty) Ltd [2023] 8 BLLR 852 (GJ), it was held that the High Court does not have jurisdiction to determine disputes about entitlement to severance pay and such disputes must be determined by statutory arbitration even if the amount claimed exceeds the minimum prescribed by the Basic Conditions of Employment Act 75 of 1997 (BCEA) and even if the claim is based on a breach of contract regarding severance pay.
In this case the employer informed a number of employees who were retrenched that they would not be paid severance pay because they had unreasonably refused offers of alternative employment. The employees’ employment contracts referred to severance pay of two weeks’ salary per year of service and an ex gratia amount. National Union of Metalworkers of South Africa (NUMSA) on behalf of its members accordingly argued that the employer breached the employment contracts by refusing to pay the employees severance pay and sought an order directing the employer to pay severance pay in accordance with the contracts.
The employer argued that the High Court did not have jurisdiction to determine the dispute because the dispute resolution procedure in the BCEA was required to be followed. NUMSA on behalf of the employees argued that the High Court did have jurisdiction as the pleadings were based on a breach of contract and not an entitlement under the BCEA.
The employer argued that the employees were not entitled to severance pay on the basis of s 41(4) of the BCEA as they had unreasonably refused an offer of alternative employment. The High Court found that when a contract provides for more favourable severance pay this is still subject to s 41(4) of the BCEA and the employer accordingly could still rely on the provisions in the BCEA, which permitted an employer not to pay severance pay in certain circumstances.
The High Court held that it lacked jurisdiction to determine whether severance pay could be forfeited as per the BCEA as s 41(6) confers exclusive jurisdiction on councils or the Commission for Conciliation, Mediation and Arbitration to deal with severance pay disputes regardless of whether or not the severance pay dispute is based on the statutory minimum severance pay. It was found that it would defeat the purposes of the BCEA if the High Court were to take over the functions of a specialised tribunal that in terms of the law has been tasked to determine such disputes. The application was accordingly dismissed with costs.
Monique Jefferson BA (Wits) LLB (Rhodes) is a legal practitioner at DLA Piper in Johannesburg.
This article was first published in De Rebus in 2023 (Oct) DR 45.
