By Greg Palmer and Duncan Wild on 12 April 2014

This case concerns an appeal by the National Union of Public Service & Allied Workers Union (“NUPSAWU“) against the decision of the Labour Court in terms of which the dismissal of ten employees of the National Lotteries Board (“NLB“) was found to be procedurally and substantively fair. Reinstatement of the employees was sought by NUPSAWU.  The Constitutional Court, in a majority decision by Zondo J, overturned the decision of the Supreme Court of Appeal and ordered that the employees be re-instated

The factual background is as follows.  Various employees of the NLB were dissatisfied with the CEO of the NLB. Three shop stewards of NUPSAWU addressed a letter to the Manager of Human Resources of NLB in which they said they were “no longer prepared to bear his style of leadership…” and demanded sight of his contract of employment. Because the shop stewards had not been invited to attend the interviews for the appointment of a new COO, a separate letter stated that the relevant employees: would not recognize the appointment of the COO; would “isolate” the new appointee; and would “ensure that he or she does not feel welcome”.

In his letters in reply, the Human Resources Manager: denied the request for a copy of the CEO’s employment contract; requested the employees to follow the grievance procedure set out in the Staff Policy document; advised NUPSAWU that it had no right to attend the interview for the position of COO; and warned NUPSAWU that it faced the risk of disciplinary action taken against its members for insubordination.

NUPSAWU then referred a dispute to the CCMA over the claim to the CEO’s contract of employment. This dispute was referred to arbitration and an award was ultimately issued in favour of the NLB. During the conciliation phase, however, on 3 June 2008 the shop stewards and other employees addressed a further letter to the Human Resources Manager in which they claimed to have submitted a “vote of no confidence” in the CEO, and that they were “no longer prepared to spend a day with [the CEO] in the same building with him…”

On 25 August 2008, after an internal disciplinary enquiry, the NLB dismissed ten employees for misconduct amounting to insubordination.  In finding that the employees were guilty of ‘insubordination’ the chairperson emphasised that neither the CEO’s conduct nor his performance was a relevant issue.  The chairperson relied on the statements in the 3 June 2008 letter (quoted from above), and the manner in which the employees associated themselves with a campaign designed to bring the Board and its CEO into disrepute.  The chairperson offered all employees the opportunity to sign a formal acknowledgment and undertaking in terms of which they dissociated themselves from the letters, accepted their wrongdoings, and apologised to the CEO.  The ten employees who were ultimately dismissed were those who did not sign the undertaking.

The chairperson’s decision was reconsidered in an internal appeal by the employees, which was dismissed on 19 September 2008.

On behalf of the employees NUPSAWU referred a dispute to the CCMA on 23 September 2008.  After an unsuccessful conciliation process at the CCMA, NUPSAWU referred the dispute directly to the Labour Court in terms of s 191(5)(b)(i) of the Labour Relations Act 66 of 1995 (“LRA“). The dismissal was alleged to be “automatically unfair” because the employees were said to be participating in lawful union activities in supporting NUPSAWU’s petition for the removal from office of the CEO of NLB. In the alternative, NUPSAWU argued that the dismissal was inappropriately severe as there had been no irretrievable breakdown in the employment relationship.

Because the dispute had not been referred to arbitration before the CCMA, the parties consented (in terms of s 158(2)(b) of the LRA) to the jurisdiction of the Labour Court to determine whether the dismissal had been “ordinarily unfair” (in addition to “automatically unfair”).

The Labour Court agreed with the chairperson in his findings in respect of the misconduct charges. It found the dismissal to be substantively and procedurally fair.  An application for leave to appeal and a petition to the Labour Appeal Court were unsuccessful.

In a further appeal heard by the SCA, NUPSAWU persisted in its submission that the employees had been dismissed because they had joined in petitioning the NLB, which was a legitimate trade union activity.

In the unanimous judgment by Willis AJA (as he then was) in which the appeal was dismissed with costs, the SCA disagreed with NUPSAWU’s submission.  It found that the employees were not dismissed by reason of their supporting a petition, but that the cause of their dismissal was what was said in the petition, and this amounted to insubordination.

The majority of the Constitutional Court, in a decision authored by Zondo J with Moseneke ACJ, Jafta J, Madlanga J, Mhlantla AJ and Nkabinde J concurring, found that the statements made were made in pursuit of an ongoing stautory conciliation process and so in the exercise of their right to collective bargaining. The dismissals therefore, based on lawful activities of a union, were found to be automatically unfair. In addition, failing to use the statutory dispute resolution mechanisms did not amount to insurbordination.  As a result the Majority ordered that employees be reinstated.

In a separate judgment, Dambuza J, agreed that the employees should be reinstated, but for different reasons. Dambuza J did not consider requesting an employer to dismiss another employee as lawful activity of a Union, and so not protected. However, as the Board had not been willing to engage in good faith negotiations, the threats to defy authority did not amount to insurbordination. As a result, although not automatically unfair they were substantively unfair.

Froneman J wrote a minority opinion, with which Skweyiya ADCJ and Cameron J concurred, disagreed with the order of the Majority. Froneman J considered the contents of the statement to objectively amount to insurbordination. Further, although parallel process to the statutory dispute resolution mechanisms may be utilised, those could not be used in a manner that undermined the statutory mechanisms. As this communication had undermined those processes, the dismissals were not substantively unfair.

Download the judgment here.