Employment Law Update – The feasibility of ‘bumping’

August 1st, 2024
x
Bookmark

In SACTWU obo Members v Fyvie G N.O and Others (LC) (unreported case no D258/2020, 5-5-2024) (Norton AJ), the respondent, a father and son, managed two farming operations in KwaZulu-Natal, one for vegetables and one for macadamia nuts. The respondent employed 23 workers, 15 of whom were Southern African Clothing and Textile Workers’ Union (SACTWU) members, to carry out the vegetable farming operations. These employees grew sweetcorn, broccoli, cabbages, and peas. The nature of their work was relatively simple – planting, harvesting, sorting, and packing vegetables. The macadamia farming operations was, however, more complex and required training in processes particular to the cultivation of macadamia nuts.

After the father fell ill, the son took over the management of both farms. This proved to be too stressful and following a catastrophic season in 2019, the respondent decided to cease farming vegetables. The respondent commenced a large-scale retrenchment process in respect of the 23 workers and informed them that they were considering ceasing the vegetable farming operations. On their last working day, the workers, however, launched an urgent application in the Labour Court (LC) to interdict the retrenchments and compel the respondent to adhere to a fair procedure. The LC ordered the respondent to conduct further consultations on the issue of alternatives and selection criteria.

As regards selection criteria, the respondent had selected the 23 workers for retrenchment on the basis that they were all engaged to work on the vegetable farm. SACTWU, however, proposed that the respondent apply the last-in, first-out (LIFO) principle, in particular bumping, in terms of which the long serving employees on the vegetable farm replace the employees on the macadamia farm with less years of service. The respondent rejected this proposal and claimed that it was not feasible. The consultations continued and the 23 workers were subsequently retrenched.

SACTWU, on behalf of its members, referred an unfair dismissal dispute to the LC contending that the retrenchments were substantively unfair on the basis that the respondent had failed to apply LIFO and implement ‘bumping’.

At the outset, the court noted that ‘bumping’ is situated within the LIFO principle, which is rooted in the concept of fairness. Longer serving employees have devoted a considerable part of their working lives to the employer and their experience and expertise is an invaluable asset. Fairness accordingly requires that their loyalty be rewarded. However, ‘bumping’ does not apply to employees if the longer serving employee cannot do the work of the employee with shorter service. This limitation applies more frequently where competence, professional knowledge, and technical skills are involved. Where the necessity arises of retraining those who are transferred, this should only be carried out if it does not place an unreasonable burden on the employer.

The respondent led evidence in respect of the vegetable and macadamia farming operations. It was explained that macadamia farming was different to vegetable farming in that it required complex irrigation, probing soil moisture, scouting, mulching and pruning. With respect to the farming of vegetables, the irrigation system was simpler, and no scouting, mulching or pruning is required. Higher degrees of judgment were required from workers on a macadamia farm because of the sophistication of systems and the long-term growth of the trees.

SACTWU, however, argued that the skills of the workers were indeed comparable and because of their longer service, the respondent should have applied LIFO and in particular bumping, essentially to retrench macadamia farm workers and replace them with vegetable farm workers.

The LC found that while promoting the practice of bumping, our courts have drawn the line in circumstances in which the skill sets of the employees are not compatible, and the training requirements would be unduly burdensome for the employer. The court noted that the respondent was at pains to point out that the skills of the workers were not interchangeable, and it would be unduly onerous to begin training vegetable farm workers on the intricacies of macadamia nut farming. Only the 23 workers were impacted by the closure of the vegetable farm, and they did not have the skill set to take over the positions of macadamia nut workers. It would be unduly onerous for the employer to train those workers in the craft of growing macadamia trees.

The LC held that the respondent’s actions in retrenching only the vegetable farm workers was reasonable and economically sensible. While bumping is a valid practice to reward long standing employees, it cannot be applied in circumstances in which those employees do not have the skills of others, and where it would be unduly burdensome on the employer to upskill the employees. In the present case, SACTWU did not make out a compelling case for LIFO or bumping – far from it. The court found SACTWU’s arguments unconvincing, and it had failed to persuade the court that the selection criteria was unfair.

SACTWU’s unfair dismissal claim was accordingly dismissed.

Inaccurately pleading the review test – reasonableness or correctness?

In Cape Peninsula University of Technology v Kabengele and Others [2024] 6 BLLR 553 (LAC), Mr Kabengele (the employee) was employed as an engineering lecturer by the Cape Peninsula University of Technology (CPUT) on six recurrent fixed-term contracts between 2011 and 2020. Throughout his employment, the employee held refugee status in South Africa. In 2015, the employee was employed by CPUT on a five-year contract, and he was advised that his further appointment would be subject to him obtaining a work permit within a reasonable time. Despite his five-year contract being extended for a further year, the employee was thereafter informed that his contract would not be renewed and would expire in December 2020.

Disgruntled with CPUT’s decision, the employee referred an unfair dismissal dispute to the Commission for Conciliation, Mediation and Arbitration (CCMA) contending that he held a reasonable expectation that his contract would be renewed and that CPUT’s failure to do so constituted a dismissal in terms of s 186(1)(b) of the Labour Relations Act 66 of 1995 (LRA). The CCMA found that the employee had not been dismissed by CPUT.

The Employee took the CCMA award on review and alleged that the CCMA commissioner had inter alia arrived at an unreasonable decision and had committed several reviewable irregularities. In this regard, the Labour Court (LC) found that the employee had in fact discharged the onus of proving that he had been dismissed and that his dismissal was procedurally and substantively unfair. Consequently, the LC ordered CPUT to reinstate the employee on a permanent basis as a senior lecturer.

CPUT took the judgment on appeal to the Labour Appeal Court (LAC) and contended that –

  • the review application ought to have been dismissed because the employee had pleaded the wrong review test, namely reasonableness and not correctness, and the court ought not to have decided the application on grounds that had not been pleaded;
  • the employee had not discharged the onus of proving that he had been dismissed; and
  • if he was shown to have proved a dismissal, compensation was the appropriate remedy and not reinstatement.

The employee opposed the appeal and argued that, properly considered, his pleadings could be read to incorporate a review on the basis of correctness. The employee further cross-appealed against the reinstatement order, as it did not specify the amount of back pay nor the date of reinstatement.

The LAC accepted that whether a dismissal has taken place within the meaning of s 186 of the LRA is a jurisdictional issue. As a jurisdictional issue, the finding of the CCMA as to the existence of a dismissal is subject to review on the grounds of correctness and not on the grounds of reasonableness. Having said this, the Constitutional Court has repeatedly emphasised that labour disputes should not be treated like civil matters, and that labour dispute resolution must be simple, accessible and cost-effective. Although many rules of civil litigation are followed by the LCs, an overly technical approach should not be applied so as to avoid unduly shutting the doors on litigants.

Considering various case law authority, the LAC noted that implicit in the allegation of unreasonableness was the fact that an employee considered the award to be wrong. In the present matter, and although reasonableness was expressly pleaded, it was clear that the employee also took issue with the correctness of the award. In suggesting that the employee should be non-suited on this basis, CPUT sought to raise an unmeritorious technical defence, which the LC had justifiably rejected. Within the context of labour litigation, such defences are to be viewed with caution by our courts and not to be quickly accepted given the nature of, and approach to, the resolution of labour disputes.

Turning to whether a dismissal had been proved by the employee, the court noted that the onus rested on the employee to put up facts which, objectively considered, established an expectation of renewal of a fixed-term contract on the same or similar terms. In this regard, the LAC found that the facts indicated that the employee held a reasonable expectation that his fixed-term contract would be renewed for a further year. This was so in that on six occasions from 2012 he was employed on various fixed-term contracts, his status of refugee had remained unaltered, and he had never been placed on terms to obtain a work permit before his final contract was terminated. On this basis, the CCMA award fell to be set aside.

However, the LAC held that there was no merit in the LC’s finding that the employee held a reasonable expectation of permanent employment. On his own version, the employee had always been employed on a contract basis. As the employee held a reasonable expectation that his contract would be extended for a further year, and given the time that had elapsed, the appropriate remedy would be an award of compensation equivalent to 12 months’ remuneration.

CPUT’s appeal was accordingly upheld in part, the employee was awarded compensation, and the employee’s cross-appeal was dismissed.

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

This article was first published in De Rebus in 2024 (Aug) DR 55.

X
De Rebus