What is a con-arb process?

The con-arb process is governed by the provisions of section 191(5A) of the Labour Relations Act 66 of 1995 (LRA). Con-arb simply means that  that the arbitration hearing  is scheduled to take place straight after the conciliation hearing, on the same day, in the event that the parties are not able to settle the conciliation hearing.

The purpose of the process is to save time and costs for the parties and to reduce the demands on the limited and over-stretched resources of the CCMA or a bargaining council. It also assists parties to avoid problems associated with the fading memories of witnesses, losing contact with witnesses or other interested parties and/or documentary evidence going missing.

 

The nature and procedural steps of conciliation and arbitration are the same as those used in a con-arb hearing. Therefore, parties must come to con-arb hearing ready and prepared for arbitration in the event that they do not manage to resolve their dispute at conciliation.  This includes ensuring that witnesses, relevant documents and any other required evidence that they may want to present to an arbitrator should be available for the arbitration hearing.

 

When is con-arb process used?

The con-arb process is only aimed at unfair dismissal and unfair labour practice (ULP) disputes. However, not all dismissal and ULP disputes are necessarily subject to con-arb.

 

When is con-arb process compulsory?

The con-arb process is only compulsory for the following disputes:

• Dismissal related to probation.
• An unfair labour practice related to probation.

 

When is a con-arb process not permitted?

The con-arb process is excluded in dismissal and ULP disputes which are subject to Labour Court adjudication rather than arbitration. Disputes where con-arb is not applicable are:

• Dismissal in breach of freedom of association principles.
• All automatically unfair dismissals, i.e. where the reason for dismissal falls within one of the seven reasons stated in section 187 of the LRA.
• Dismissals based on the operational requirements of the employer (retrenchment), where the employees do not have the option of referring the dispute for arbitration.
• An unfair labour practice where the unfair labour practice resulted from an employee having made a protected disclosure as set out in the Protected Disclosures Act 26 of 2000.

When is a con-arb process optional?

In all other dismissal and unfair labour practices disputes mentioned in section 191(5) (a), the parties have a choice either to have the dispute resolved by con-arb or by conciliation and arbitration as two distinct processes. If either party objects to con-arb, the processes will be separated.

 

These disputes include:

• Dismissal related to the employee’s conduct or capacity.
• Constructive dismissal.
• Operational requirements (retrenchment) of only one employee (or more than one if the employer employs less than 10 people).
• Where the employee does not know the reason for dismissal.
• An unfair labour practice as described in section 186(2) (a) to (c) of the LRA.

The LRA form 7.11 refers a dispute to conciliation and, if necessary, to arbitration at the same time. If an employee wants to avoid the con-arb, the employee must indicate clearly on the referral form that s/he does not want the dispute to be processed as a con-arb. This will mean that the dispute will be conciliated on the date scheduled, but if unresolved, the employee will have ninety (90) days in which to complete and submit an LRA form 7.13 referral of the dispute to arbitration.

The employer also has a choice to use con-arb or not (except in disputes related to probation). Once the 7.11 form has been served on the employer party to the dispute, the employer may object to con-arb as the dispute resolution process. This must be done at least seven (7) days before the scheduled date of the hearing. If the employer objects to con-arb in disputes other than those where objection is not an option, the CCMA / bargaining council will schedule a conciliation hearing only.

 

Object to a con-arb 

Con-arb has significant time and cost-saving advantages for the employer, the employee, and the CCMA or bargaining council. More importantly, it brings finality and legal certainty to the dispute much more quickly than two separated processes. This is an important consideration.

It is advisable that an employer should not object to con-arb if it is fully aware of the facts of the matter and the employee’s allegations and is able to prepare in advance and bring witnesses and evidence to the con-arb.

It may be appropriate to object to con-arb if the employer is uncertain what allegations the employee will raise, and is therefore not able to prepare fully for arbitration or where the cost of bringing witnesses is very high and the possibility for settlement is good. In these circumstances it would be better for the employer to attend the conciliation in order to attempt to reach a settlement, and if not, to determine what issues are being raised by the employee, and (if the dispute is not settled) to prepare for arbitration accordingly.

Objection to con-arb must take place at least seven (7) days before the scheduled con-arb hearing, and must be served on the other party. Proof of service of the objection must be filed with the CCMA or bargaining council. If a party does not object within the required timeframe, an application for condonation must be submitted as well.

What happens when a fixed-term contract comes to an end?

 

What is a fixed-term contract?

 

An employer may have a need for someone to fill a specific position or do a specific job. To meet this need, the employer may use a fixed-term employment contract.

 

A fixed-term contract is defined in section 198B of the Labour Relations Act 55 of 1996 (LRA) as one which expires upon:

1. the occurrence of a specified event;
2. the completion of a specified task or project;
3. a fixed date, other than an employee’s normal or agreed retirement

Note that section 198B of the LRA applies to employees who earn below a specific threshold as set out in section 6 of the Basic Conditions of Employment Act 75 of 1997.

 

For more information on section 198 contracts, see the Information Sheet “Different forms of non-standard employment contracts and when they are used”.

What constitutes a dismissal in terms of section 186 (1) (b) of the LRA?

A dismissal arises, in terms of section 186 (1) (b) of the LRA if:

“…an employee employed in terms of a fixed-term contract of employment reasonably expected the employer-

(i) to renew a fixed-term contract of employment on the same or similar terms but the employer offered to renew it on less favourable terms, or did not renew it; or

(ii) to retain the employee in employment on an indefinite basis but otherwise on the same or similar terms as the fixed-term contract, but the employer offered to retain the employee on less favourable terms, or did not offer to retain the employee…”

 

If the contract period has expired, the contract comes to an end automatically. In such a case there is no dismissal.

 

Fixed-term contracts may terminate prior to a fixed date for a reason recognised in law – e.g. misconduct or poor performance. However, a fair procedure has to be followed as per the requirements of the LRA.

 

What must the employee prove in order to succeed with a claim of dismissal?

 

In terms of section 192 of the LRA, an employee bears the duty of proving that there was a dismissal. To prove that he/she was dismissed an employee must prove:

1. the existence of a fixed-term contract of employment;
2. conduct on the part of the employer that led the employee to reasonably expect:

• the employer to renew the contract on the same or similar terms, but the employer offered to renew it on less favourable terms ,or the employer did not renew it, or
• to be retained in employment on an indefinite basis but on the same or similar terms but the employer offered to retain the employee on less favourable terms, or the employer did not offer to retain the employer.

 

What situations are envisaged as dismissals in terms of section 186(1) (b)?

 

Four kinds of situations are envisaged:

1. The first, the most common, is where the employer does not renew the fixed term contract at all.
2. The second situation where this provision may come into play, is where the employer does renew the contract, but on less favourable terms than before.
3. The third is where the employer does offer to retain an employee in employment on an indefinite basis, but on less favourable terms.
4. The last situation is where the employer fails to offer to retain the employee on an indefinite basis.

 

What is meant by a reasonable expectation of renewal?

 

The fact that the employer does not renew the contract does not in itself amount to a dismissal. It is only if the employee had a reasonable expectation that the contract would be renewed that section 186(1) (b) comes into play.

The Labour Appeal Court has made a number of important points in this regard:

• The duty is on the employee to prove that s/he had a reasonable expectation of renewal.
• To discharge this duty, the employee must place facts before the commissioner to show what the expectation was based on. The test is objective: it does not focus solely on the employee’s wish or subjective feelings or perceptions.
• The test can be summarised as follows: “The enquiry is whether a reasonable employee, in the circumstances prevailing at the time, would have expected the employer to renew his or her fixed-term contract on the same or similar terms”.
• Fixed-term contracts almost always contain a clause stating that the employee should have no expectation of renewal. However, if there is such a clause in the contract, the employee will have to present even more evidence to show that he or she had a reasonable expectation of renewal. The employee’s evidence must, in such a case, be even more compelling.

Fixed-term contracts are often over-used or used inappropriately by employers.

Employees on fixed-term contracts have the same rights and obligations as indefinite-period employees. Therefore, if a fixed-term contract employee commits misconduct, this should be dealt with through the normal disciplinary procedures.

What happens when an employee retires?

 

People often use the expression “going on retirement”. In many cases, employees are aware of their retirement age, and there are no issues when they retire. However, there are situations in which an employee does not want to “retire,” leading to the employer terminating the employment relationship. When an employer terminates the employment relationship this is termed a dismissal as per section 186 (1) (a) of the Labour Relations Act 66 of 1995 as amended (“LRA”).

According to section 187(1)(f) of the LRA an employee may not be unfairly discriminated against on any arbitrary ground, including age. The LRA goes on to state that a dismissal based on age is fair if the employee has reached the normal or agreed retirement age.

 

Our courts have given the following important guidelines regarding termination of employment based on age:

 

• Dismissal based on age will be automatically unfair unless the employer can show that the employee has reached the normal or agreed retirement age for persons employed in that capacity.
• It is not unfair for an employer to terminate the services of an employee based on age at any time after the employee has reached his/ her agreed or normal retirement age.
• Employers may include the retirement age in the contract of employment. Under such circumstances this may be regarded as the agreed retirement age.
• The “normal retirement age” applies when there is no agreed retirement age. When determining the normal retirement age, the provident or pension fund rules, company policy or the “norm” (custom and practice) may be relevant considerations.
• If an employee who has reached or worked beyond the agreed or normal retirement age is dismissed for reasons unrelated to age, such as misconduct, incapacity, or the employer’s operational requirements, then the employer must ensure that the dismissal is both procedurally and substantively fair.
• Where an employee continues to work beyond the normal or agreed retirement age, his/her contract may be terminated at any stage thereafter, unless the parties had agreed to a fixed term of post- retirement employment in which case the employer should allow the employee to complete that term of employment.

When does a resignation amount to a constructive dismissal?

 

What is a constructive dismissal?

 

In terms of section 186(1) (e) of the Labour Relations Act 66 of 1995 (LRA), one form of dismissal is when the employee terminates the employment contract (with or without notice) because the employer made continued employment intolerable.

 

This is generally referred to as constructive dismissal or where the employee is forced to resign. At first glance, this does not look like a dismissal at all as it is the employee who resigns. However, it is because the employer makes the working environment so unpleasant and intolerable that the resignation is regarded as a dismissal.

 

What must the employee prove to claim that there has been a constructive dismissal?

 

According to the labour court there are three requirements that an employee must prove in order to claim constructive dismissal, namely:

(1) the employee ended the contract of employment;

(2) the continued employment had become intolerable for the employee; and

(3) the employer must have made continued employment intolerable.

According to the constitutional court, the test for constructive dismissal does not require that the employee has no choice but to resign, but only that the employer should have made continued employment intolerable.

 

The employee must prove that there was a dismissal

 

In terms of section 192 of the LRA, an employee has the duty of proving that there was a dismissal. This applies to equally to constructive dismissals. It means that the employee must prove (by presenting evidence) that s/he resigned because the employer made the employment relationship intolerable.

Objective approach

 

When considering whether there was a constructive dismissal, an objective approach is used. The focus is not on the employee’s (subjective) feelings and perceptions. The employee must introduce evidence to show that he or she reasonably believed that the employer’s actions made further employment impossible.

 

The fact that the employment relationship has become ‘inconvenient’ is not enough. While a single incident may lead the employee to believe that the employment relationship is at an end, it is more often the case that there is a pattern of conduct on the part of the employer.

Taking disciplinary action or incapacity steps against an employee are also not a grounds for constructive dismissal.

 

Resignation must be the last resort

 

An employee should give the employer sufficient time to address the situation or problem.

 

Resignation must be the last reasonable resort available to the employee.  All internal procedures to air the grievances should be followed, and the employee should make every attempt to alert the employer to the problems and not just walk out.  However, in specific circumstances this may not be possible and this would be taken into account in dealing with the matter. For example, an employee who has been seriously assaulted by the employer cannot be expected to remain at work pending a grievance procedure.

 

The resignation must not be voluntary

 

The employee’s resignation must not be voluntary. This means that the employee must not have intended to terminate the employment relationship of his/her free will. An employee who resigns and then later tries to retract the resignation cannot claim to have been constructively dismissed.

 

Examples of constructive dismissal

 

There are many instances where a resignation may constitute a constructive dismissal.  Past cases offer some useful guidance:

• If an employee has been sexually harassed by a co-employee, has reported this to management and yet nothing has been done about the matter, a resignation by the employee may constitute a constructive dismissal. The employer is expected to take action to protect the victim of the harassment.
• Where there was suspension of employees without pay after the employer experienced financial difficulties.
• Where employees were encouraged to resign or face unfair summary dismissal.
• Where management promoted an under-qualified employee and failed to promote an employee without furnishing adequate reasons and knowing that this would be offensive to the employee.
• Where an employee of a temporary employment service was employed on terms that were exploitative and did not comply with the Basic Conditions of Employment Act 75 of 1997.

 

In the following cases the employee did not succeed in proving that there was a constructive dismissal:

• An employee resigned because the employer refused to provide the employee with salary-related information in terms of its existing policy. This was not conduct that (objectively) rendered the employment relationship intolerable.
• The employee failed to use the grievance procedure in circumstances in which there was no basis to conclude that the employer would not in good faith seek to resolve the grievance. The resignation was considered to be premature.
• An employee resigned, claiming unfair targeting for poor performance. The arbitrator found that, if an employer advises an employee of its required performance standards and gives the employee fair opportunity to meet them, the employee cannot terminate a performance review process by resigning and claiming constructive dismissal.

 

Constructive dismissal and section 197 transfers

 

Section 186(1) (f) of the LRA provides that a dismissal occurs where –

If an employee resigns after the transfer of the business, in order to claim constructive dismissal s/he must demonstrate that the terms and conditions or circumstances of work are substantially less favourable than with the previous employer. The new employer is entitled to place transferred employees on new pension and medical schemes, provided the benefits overall are not substantially less favourable. That will be determined by the facts of the case.

What happens when an employee resigns?

 

What is resignation?

 

Resignation is when the employee decides to end the employment relationship. It should be noted that the employer does not need to accept the resignation for it to be valid, as a resignation is a unilateral act giving rise to the end of the employment relationship.

 

Resignation and notice period

 

An employee is required to give an employer notice that s/he intends to resign. The purpose of giving notice is to advise the employer in advance of the date on which the employee will officially cease to work.

 

Resignations should ideally be in writing. However, a verbal resignation still has the effect of ending the employment relationship. Section 37(1) of the Basic Conditions of Employment Act 75 of 1997 (BCEA) requires an employee to serve the following notice periods:

• One (1) weeks’ notice, if the employee has been employed for six (6) months or less.
• Two (2) weeks’ notice, if the employee has been employed for more than six (6) months, but not more than one year.
• Four (4) weeks’ notice, if an employee has been employed for one (1) year or more or is a domestic worker or a farm worker who has been employed for more than six (6) months.

 

The employee and employer may agree to a notice period which is longer than the notice period prescribed in the BCEA, however the employee may not be required to give a period of notice that is longer than that required of the employer.

If an employer decides that the employee need not work all or part of the notice period the employer must pay the employee for the notice period.

At times employees resign but do not work all or some of their notice period. Employers may apply for the court to issue an urgent order of “specific performance”, in other words, order the employee to work the required notice period. The employer could sue for damages, namely the loss the employer suffered as a result of the employee not working his/ her notice period. Pursuing these options may be difficult and costly and therefore employers seldom opt for them.

 

Voluntary resignation and UIF

 

A voluntary resignation is where the employee terminates the employment relationship of his/her free will. An employee who resigns voluntarily may not claim UIF benefits.

 

Withdrawal of notice

 

Because resignation is a unilateral act, the employer does not need to ‘accept’ or agree to an employee’s resignation. Should an employee decide to resign, perhaps in a moment of anger, and subsequently wish to withdraw the resignation, the employer is not obligated to grant such a request and can enforce the original resignation.

What is an automatically unfair dismissal?

 

Automatically unfair dismissals are covered by section 187 of the Labour Relations Act 66 of 1995 as amended (“LRA”).

 

An automatically unfair dismissal is different from an “ordinary” dismissal, in other words a dismissal for reasons relating to the employee’s conduct, capacity or the employer’s operational requirements. The essence of the unfairness in these situations comes from the reason for the dismissal. The reasons are regarded by the law as being so serious that such dismissals are automatically unfair.

 

Automatically unfair dismissals are often related to the infringement of a fundamental right. Freedom of association, for instance, is a fundamental right enshrined in section 23 of the Constitution of the Republic of South Africa, 1996. Where the reason for the dismissal relates to an infringement of that fundamental right, it is an automatically unfair dismissal. So too, the right to strike is a fundamental right; accordingly, a dismissal for participation in a protected strike (a strike which complies with the LRA) will be automatically unfair.

 

If a dispute relating to an automatically unfair dismissal remains unresolved after conciliation by the CCMA or bargaining council, the dismissed employee may refer the dispute to the Labour Court for adjudication. If the dismissal is found to be unfair the Labour Court may award the employee compensation of up to 24 months’ remuneration. The CCMA does not have the power to arbitrate disputes involving alleged automatically unfair dismissals unless the employee and employer agree, in writing, to arbitration by the CCMA.

 

Dismissing an employee for any of the following reasons could be an automatically unfair dismissal:

• exercising a right granted under the LRA;
• participating in any proceedings in terms of the LRA;
• participating in, supporting, or expressing an intention to participate in or support a protected strike or any protest action that complies with the LRA;
• refusing or indicating an intention to refuse to perform any work normally done by an employee participating in a protected strike or who was locked out, unless such work is essential to prevent immediate risk to life, personal safety, or health;
• refusing to accept the employer’s demand relating to any matter of mutual interest, for example dismissing an employee for refusing to accept the employer’s demand to reduce pay;
• pregnancy, planned pregnancy or any other reason related to pregnancy;
• belonging to or participating in the lawful activities of a trade union;
• direct or indirect discrimination on grounds, including (but not limited to) race, gender, sex, ethnic or social origin, colour, sexual orientation, age, disability, religion, conscience, political opinion, culture, language, marital status, family responsibility, or on any arbitrary ground;
• a transfer, or reasons related to a transfer where a business is transferred from the old employer to a new employer as a going concern or under circumstances outlined in section 197A of the LRA which relates to insolvency;
• making a protected disclosure as defined in the Protected Disclosures Act, 2000.

 

It is not unfair to terminate the services of an employee if the employee has reached the normal or agreed retirement age. If the employee challenges the dismissal the employer will need to prove that the age is the normal or agreed retirement age.

What is the meaning of the word “dismissal” as set out in section 186 of the Labour Relations Act 66 of 1995 (LRA)?

 

Section 186 of the LRA provides the meaning of dismissal by describing six types of circumstances which may be defined as a “dismissal”:

 

1. Where an employer terminates employment summarily, without notice or by conduct, or terminates employment by giving an employee notice. This form of dismissal covers almost all forms of termination of employment by the employer.
2. Where an employee works on a fixed-term contract and the fixed-term expires, the employment terminates automatically. This is not a dismissal unless the employee had a reasonable expectation that the employer would renew the fixed-term contract or retain him/her on an indefinite basis and can substantiate that expectation, e.g. by showing that the employer had previously renewed similar contracts or had represented to the employee that the contract would be renewed, etc. Where an employer does renew a fixed-term contract or retains an employee on an indefinite basis, but on substantially less favourable terms and conditions, this may also amount to a form of dismissal.
3. The Basic Conditions of Employment Act 75 of 1997 (BCEA) provides women employees with an entrenched right to “at least four months’ maternity leave”. Collective agreements and individual employment contracts may improve on this minimum right, but may not undermine it. An employee who takes maternity leave must be permitted to resume work at the end of her leave. An employer who does not allow an employee to return to work after this period of time is taken to have dismissed the employee.
4. Where an employer has dismissed a number of employees for the same or similar reason, such as collective misconduct, and later offers to re-employ some, but not others, the employees who are not included in the offer are taken to have been dismissed from the date they were not re-employed.
5. Where an employee terminates his/her employment by resigning, or simply walking out, because the employer made continued employment intolerable for the employee, this amounts to a dismissal and is referred to as a constructive dismissal.
6. After a business is transferred as a going concern or in circumstances of insolvency, the new employer replaces the old employer and employment of the employees continues. However, if the “transferred” employees are provided with conditions or circumstances of work that are substantially less favourable than had been provided by the old employer, an employee may resign, giving rise to a unique type of constructive dismissal.

An overview of how the employment relationship can come to an end (Part 2)

 

An employment relationship can end through dismissal in terms of the Labour Relations Act 66 of 1995 (LRA)

 

What are the different forms of dismissal in terms of the Labour Relations Act?

 

The concept of ‘dismissal’ in terms of the LRA is not the same as the lawful cancellation of a contract of employment in terms of the common law. It has a wide definition of ‘dismissal’ which encompasses much more and attempts to address any shortcomings in terms of the common law.

 

Dismissal can take on a number of different forms in terms of the LRA:

 

1. Section 186: The meaning of dismissal

Section 186(1) (a) to (f) provides the meaning of dismissal by describing six types of circumstances which may be defined as a “dismissal”.

 

The usual form of a dismissal is where the employer gives the employee notice of termination. The other forms of dismissal each deal with a specific problem that arises from the nature and effect of the employment contract itself, for example:

 

• Section 186(1) (b) deals with the renewal of a fixed-term contract;
• Section 186(1) (e) deals with what is known as a “constructive” dismissal.

2. Section 187: Automatically unfair dismissals

Automatically unfair dismissals are covered by Section 187 of the LRA. Automatically unfair dismissals are often related to the infringement of a fundamental right enshrined in section 23 of the Constitution. For example, automatically unfair dismissals take place when the reason for the dismissal is where the employee was exercising a lawful right to strike, or was dismissed for whistle blowing, or being pregnant, or on a ground of unfair discrimination. An automatically unfair dismissal may be conciliated by the CCMA or a bargaining council with jurisdiction.  If the dispute is not resolved at the conciliation hearing, the matter may be referred to the Labour Court for adjudication. The maximum compensation payable to an employee for such a dispute is 24 months’ remuneration.

3. Section 188: Other unfair dismissals

Section 188 recognises three grounds on which a termination of employment may be unfair if the employer fails to prove the fairness of the dismissal related to:

 

• The conduct or behaviour of an employee;
• The capacity of an employee to undertake the work due to ill health, injury or poor performance; and
• The operational requirements of the employer due to economic, structural or technical reasons (retrenchment).

If an employee is dismissed without a valid reason and not according to a fair procedure, then the dismissal will be unfair.

 

The following Codes of Good Practice need to be taken into account when dealing with various forms of dismissal in terms of section 188 of the LRA:

• The Code of Good Practice: Dismissal
• The Code of Good Practice on dismissal based on operational requirements
• The Code of Good Practice: Employment of people with disabilities

4. Section 67 (5): Dismissal where employees go on a protected strike

An employer may not dismiss an employee for participating in a protected strike. A protected strike is one that complies with the requirements of the Labour Relations Act.  However, in terms of section 67 (5) of the Labour Relations Act, an employer can dismiss an employee who is participating in a protected strike for reasons based on the employees conduct or for reasons based on the employer’s operational requirements. Such a dismissal will be fair provided it is for a fair reason and in accordance with a fair procedure.

5. Section 68 (5): Dismissal where employees go on an unprotected strike

 

In terms of section 68(5) participating in an unprotected strike, in other words a strike that does not comply with the law, may be a fair reason for dismissing an employee. In determining whether or not such a dismissal is fair, the guidelines in the applicable Codes of Good Practice must be taken into account.

6. 6. Section 198A: Dismissal related to a Temporary Employment Services (TES)

 

This type of dismissal is specific to situations where an employee of a Temporary Service (TES) Provider is placed with a client company. An employee of the TES can refer an unfair dismissal dispute against the client or the TES if his/her services with a client are terminated in order to avoid being deemed to be an employee of the client, or because the employee exercised a right in terms of the LRA. In this instance the nature of the dismissal is linked to specific provisions in section 198A and not to grounds relating to conduct, capacity and operational requirements.

 

7. Dismissal of an employee who is on probation

 

In terms of item 8 of the Code of Good Practice: Dismissal, the reason for dismissing an employee who is on probation for poor performance can “be less compelling than would be the case in dismissals effected after the completion of the probationary period”. In such a case, a fair procedure must still be followed. Should it become necessary to dismiss a probationary employee for a reason other than poor performance (for example conduct, capacity or operational requirements), it must be for a fair reason and in accordance with a fair procedure.

An overview of how the employment relationship can come to an end (Part 1)

 

An employment relationship is based on an agreement between the employer and the employee. When the agreement ends, we say that the contract of employment terminates.

Contracts of employment can terminate in terms of the common law or through ‘dismissal’ in terms of the Labour Relations Act 66 of 1995 (LRA).

 

An employment relationship terminates naturally in terms of the common law, in the following ways:

 

1. By mutual agreement

The start of the employment relationship is based on agreement and therefore the parties can also agree to terminate the contract. Termination of an employment contract by mutual agreement does not constitute a dismissal, but there must be genuine agreement to terminate.

 

2. Upon completion of the specific task or expiry of a fixed-term period

At the time an employer and employee enter into a contract of employment, they can agree that the employment relationship will be for a fixed period or upon completion of a specific task. For example, if an employee agrees to a two-year contract, when the two years are complete, the contract comes to an end.  In terms of the LRA, where an employee earns below the threshold of payment as stipulated in the Basic Conditions of Employment Act 75 of 1997 (BCEA), and the employer employees less than 10 employees (or less than 50 employees if the business has been in operation for less than two years under certain conditions) such agreement must be in writing.

 

This type of termination does not amount to dismissal, unless:

• The employee expected the employer to renew the contract on the same or similar terms but the employer offered to renew it on less favourable terms, or did not renew it; or

The employee expected the employer to retain the employee in employment on an indefinite basis, but on the same or similar terms and conditions of employment, but the employer offered to retain the employee on less favourable terms or did not offer to retain the employee.

3. By the death of either party

If an employee dies the employment contract comes to an end. If an employer is a natural person, and he/she dies then the employment contract comes to an end (for example, in the situation of an employer who employees a housekeeper in his/her personal home). However, if the employer is a juristic person, like a company, the death of one of its members, directors or office bearers will not terminate the contract of employment.

 

4. By supervening impossibility of performance

When there is some factor outside the employment relationship that prevents a party from performing its duties for an unreasonable period, the other party is entitled to terminate the contract on the grounds of supervening impossibility of performance.

 

This may happen in the case of a war, natural disaster, or as a result of state action. For example, if an employee is sentenced to a prolonged period of imprisonment, the employer could terminate his or her contract.

 

5. By Insolvency / liquidation

If an employer is sequestrated or liquidated, an employee’s contract would be automatically terminated on the date of the sequestration or liquidation. The employee would have a right to claim common law damages for losses caused by the termination, but these must be claimed from the insolvent estate (individuals) or liquidated estate (juristic persons).

6. Upon retirement

 

Where an employee has reached the normal or agreed retirement age applicable in the employer’s business, a contract of employment terminates by agreement and is not a dismissal. However, where an employee is dismissed on an arbitrary ground based on his or her age, it could amount to an automatically unfair dismissal in terms of section 187 of the LRA. This could happen if one employee is required to retire at a certain age, yet this is not generally applicable to other employees.

7. By resignation

Resignation is when the employee decides to end the employment relationship. An employee is required to give an employer notice that s/he intends to resign. A voluntary resignation is where the employee intends to terminate the employment relationship of his/her free will. Where an employee is forced to resign because the employer made continued employment intolerable, this could amount to a dismissal in terms of section 186 of the LRA. This is known as a constructive dismissal.

What is a dispute of right and what is a dispute of interest?

 

Labour disputes can be broadly classified into disputes of right and disputes of interest. Each involves a different procedure to process the dispute.

A right is something a person is entitled to (or has the right to) in terms of the common law, a collective agreement, a contract of employment, or labour legislation. Depending on the nature of the dispute, a dispute that is declared as a result of the infringement of a right has to be determined by arbitration (CCMA or Bargaining Council),  or by  adjudication (Labour Court) if no agreement is reached to resolve the matter in a conciliation hearing.

An interest is something, which a person wants, but is not entitled to yet. Interest disputes involve negotiation. In some instances, if agreement is not reached the parties involved may resort to power play in the form of strikes and lock-outs to achieve their interests.

Examples of issues that are disputes of right:

• Unfair dismissal disputes;
• unfair discrimination disputes;
• Unfair labour practice disputes; and
• Severance pay disputes.

(In terms of the Constitution of the Republic of South Africa, 1996 and the Labour Relations Act 66 of 1995, employees have the right not to be unfairly dismissed and not to be subjected to unfair labour practices.)

Examples of issues that are disputes of interest:

• wage disputes – for example, a wage demand for a 10% increase; and
• a dispute over a change to terms and conditions of employment.

 

The LRA also includes a number of disputes where the dispute resolution procedures allow the applicants to elect to either refer their unresolved dispute to arbitration (or adjudication by the Labour Court in some instances) or to embark on industrial action.

Examples of disputes that may allow for either industrial action or arbitration/adjudication subject to certain conditions being in place:

• Large-scale retrenchments (substantively unfair); and
• Organisational rights disputes.

If an organisational rights dispute cannot be settled in conciliation, the dispute may be referred to arbitration. However, although an organisational rights dispute may be processed as a rights dispute, a union may instead choose to pursue it as an interest dispute. In other words, a union may choose to strike over an organisational rights claim.