Is a lay-off a suspension or not?
Case:
Aminto Precast and Civil Engineering CC v CCMA and Others (JR 790/22) [2023] ZALCJHB 55; [2023] 6 BLLR 521 (LC); (2023) 44 ILJ 1491 (LC) (17 March 2023)
Facts: Mqokolo (employee) was employed as a driver of heavy-duty vehicles by Aminto (employer).
With the arrival of Covid-19, the employer faced a severe slump during the regulated lock-down period. As a result, the employer had no work for the employee for some time, and the employee was considered for retrenchment.
After discussions with the employee, the employer decided that instead of dismissing him for operational requirements, he would be laid-off for about three months. As a result, the employee was given a written notice of lay-off effective from 12 November 2021, which lay-off was to be reviewed in January or February 2022.
Aggrieved, the employee initially referred an unfair dismissal dispute to the CCMA, but later changed the dispute to one of unfair labour practice relating to suspension. The alleged unfair labour practice dispute was arbitrated, and the Commissioner concluded that the lay-off was an unfair labour practice, as defined in section 186(2)(b) of the LRA. The arbitrator ordered the employer to reinstate the employee into his position on the same salary and benefits as they applied at the date of his suspension, with backpay. Unhappy with the outcome, the employer took the award on review.
Decision:
On review, the Labour Court held that a lay-off because of a shortage of work does not amount to an unfair suspension in terms of section 186 (2)(b), which is limited to a disciplinary suspension and forms part of a closed list. The Commissioner made an error of law by incorporating a lay-off in section 186(2)(b) of the LRA and such “undue expansion” of the section distorted the outcome he reached. Secondly, not faced with a dispute concerning an unfair labour practice, the CCMA did not have jurisdiction to arbitrate the dispute and the decision was thus a nullity in law.
The Court commented that a lay-off may be a unilateral change to the terms and conditions of employment, but this too does not fall within the definition of an unfair labour practice. The Court saw likelihood in framing the dispute as a unilateral change to terms and conditions of employment in terms of section 64 (4) of the LRA, but did not consider the case of Nhlapo-Mofokeng v Emfuleni Local Municipality and Another (J 943/2022) [2022] ZALCJHB 236; [2023] 1 BLLR 63 (LC) (18 August 2022) which held that section 64(4) does not establish a substantive right for individual employees aggrieved at unilateral change to their terms and conditions of employment.
The case, finding that the CCMA had no jurisdiction to hear a matter which fell outside the definition of unfair labour practice, leaves an individual laid-off employee without apparent remedy, other than to rely on the Labour Court’s inherent jurisdiction in employment matters. While a lay-off will often be a unilateral change to terms and conditions of employment, section 64(4) of the LRA can only be used as a remedy for collective disputes.
Interestingly, the Court expressed the opinion that legislative change might be needed to give effect to the right to fair labour practices contained in section 23 of the Constitution and provide a remedy for an unfair lay-off by expanding the meaning in section 186 (2). The legislature might also introduce a provision similar to section 54 of the Canadian Labour Relations Code which establishes a duty on the employer to give consult in good faith when it intends to introduce a change that affects the terms, conditions or security of employment, and give 60 days’ notice before it implements the change.
Principle: “A lay-off because of a shortage of work does not amount to an unfair suspension in terms of section 186(2)(b) of the LRA. Because a lay-off does not fall within the definition of unfair labour practice, the CCMA lacks the jurisdiction to arbitrate. A lay-off may be a unilateral change to the terms and conditions of employment regulated in terms of section 64(4) of the LRA”.
Conclusion
“An unfair labour practice is confined to conduct outlined and defined in section 186 (2) of the Labour Relations Act, 1995. A lay-off is not considered to amount to an unfair labour practice. Section 191(5)(a)(iv) of the LRA empowers the [CCMA] to arbitrate disputes concerning an unfair labour practice as defined. Where the conduct does not amount to an unfair labour practice as defined, the CCMA lacks jurisdiction to arbitrate such conduct that may have arisen between an employer and an employee. An arbitration award issued without the necessary jurisdictional powers is a nullity and ought to be set aside as such.”
The Court concluded that the award issued was unjustifiable in law and a nullity. Accordingly, the arbitration award was reviewed and set aside and replaced with an order that an unfair labour practice was not committed.
