25 April 2016 by Employment Alert

Demands from unions - a dangerous territory for employers

The recent Labour Appeal Court (LAC) judgment of RP Logistix (Pty) Ltd v TAWUSA and others highlights the risks that an employer may face when complying with a demand from a union.

In this case, the employer wanted to relocate one of its depots approximately 25 kilometres, from Alrode to Isando. The union demanded that its members be paid a travel allowance, failing this, the union proposed that its members be retrenched.

After several meetings with the union where it insisted that the employer either:

  • pay extra money for travelling costs to the employees; or
  • retrench all of the employees; or
  • the union will have a dispute on all the issues,

the employer commenced with a retrenchment process.

The union approached the Labour Court (LC) alleging substantial and procedural unfairness.

The LC considered whether the parties concluded a binding agreement regarding the retrenchment of the employees. The LC found that although the demand was made, it was still subject to discussion and could be withdrawn at any point. The LC noted that the union did withdraw its demand, but only after the employer had accepted it.

The matter was taken on appeal. The LAC found that there were telling actions by the shop steward (Mr Madolo) who made the demands which was indicative that he was “postulating an exaggerating response to a possible refusal to reimburse the drivers for their travelling expenses”.

The LAC found that the employer knew that the proposal was not a serious offer and the employer “snatched at a bargain” when it accepted the proposal from the union to retrench its members.

The LAC ordered retrospective reinstatement of all the retrenched employees. The LAC did not order the employees to repay the severance pay they received.

Employers should at all times record in detail their understanding of a union’s proposal and if the employer accepts the proposal, it must state unconditional acceptance thereof. More importantly the union should be invited to confirm the employer’s understanding of any agreements reached. The employer should also ensure, insofar as it is possible, that the union’s official is properly mandated and authorised to enter into any agreement.

Written by Hugo Pienaar and Elizabeth Sonnekus

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