SEIFSA

Disciplinary procedures

Level One: verbal warning

If the immediate supervisor is of the opinion that the behaviour or performance of an employee is unsatisfactory, but does not warrant a written warning, final written warning or dismissal, then a verbal warning will be given.

The verbal warning shall be given to the employee in the presence of a shop steward or employee representative and the reason for issuing the warning should be explained to the employee and representative. A record of the warning should be placed in the employee’s personal file. A verbal warning shall remain valid for three months.

Level Two: written warning

If, subsequent to issuing a verbal warning, the supervisor or manager is still not satisfied with the performance or behaviour of the employee, or if the employee commits another offence which requires a written warning, the supervisor and the immediate superior shall discuss the nature of the transgression, the corrective action and the disciplinary steps with the employee in the presence of a shop steward or employee representative and a management witness.

The supervisor must complete a Disciplinary Report Form. The employee and the shop steward or employee representative must sign the form to acknowledge receipt of the written warning, even though the employee may not necessarily agree with the disciplinary action applied. If the employee refuses to sign the warning, then the supervisor should merely note that fact on the form.

The disciplinary warning should be placed in the employee’s personal file and a copy of the warning should be given to the employee. This written warning shall remain valid for nine months from the date of issue.

Level three: final written warning

If, subsequent to issuing a written warning, the supervisor is still not satisfied with the performance or behaviour of the employee or if the employee commits another offence within the prescribed period of nine months or commits any offence which warrants a final written warning, then the same procedure as detailed in level two shall be followed – except that a final written warning shall be issued. The final written warning shall remain valid for 12 months from the date of issue.

The supervisor shall ensure that the employee and the shop steward or employee representative are made aware that should the employee commit a further offence within the 12-month period following the issuing of the final written warning, then that offence may result in dismissal, pending a final decision at a formal disciplinary enquiry.

Level four: formal disciplinary enquiry

If, subsequent to issuing a final written warning, the supervisor is still not satisfied with the performance or behaviour of the employee or if the employee commits a further offence within the prescribed 12-month period or commits any offence which may justify dismissal, then the supervisor shall request a formal disciplinary enquiry.

The supervisor shall complete the Disciplinary Report Form stating the grounds for the enquiry. The supervisor will report the matter to the Human Resources Manager and hand over the disciplinary report. In the absence of a Human Resources Manager in the department concerned, the supervisor may hand the disciplinary report to any Designated Manager.

The Manager shall inform the employee and the shop steward or employee representative in writing, by way of the Formal Disciplinary Enquiry Notification Form, of the following:

• The reason for the enquiry;
• The date, time and venue of the enquiry;
• The rights of the employee at the enquiry, namely:
• the right to timeous notification of the intention to convene the disciplinary enquiry and the grounds for enquiry;
• the right to be represented by a shop steward or employee representative;
• the right to translation, if required;
• the right to call and cross-examine witnesses;
• the right to a fair and proper hearing.

The employee shall be given 48 hours’ notice to appear before an independent Chairperson of the enquiry to conduct a formal disciplinary enquiry.

The enquiry is held in the presence of the employee, the shop steward or employee representative and the supervisor.

The independent Chairperson shall:

• Ensure that a record of the proceeding is kept;
• Ensure that the enquiry is conducted in a fair and proper manner;
• Give a decision on the matter, wherever possible, within two working days of the enquiry. The decision shall be recorded on the disciplinary report and a copy, signed by all parties, shall be made available to the employee and the shop steward or employee representative.
• Ensure that the employee and the shop steward or representative are made aware of the right of the employee to appeal against any disciplinary action so implemented.

Level Five: appeal hearing

Any employee disciplined in terms of this procedure, but not dismissed, may appeal, in writing, to the next level of management, i.e. to the more senior supervisor or Manager than the one who implemented the disciplinary action.

In terms of the disciplinary procedure, any employee shall have the right of appeal to the company Director or his duly nominated representative.

The grounds of appeal against dismissal or disciplinary action shall be submitted in writing to the Manager or Director concerned within three clear working days of the disciplinary action.

The Manager concerned shall, as soon as possible, but within three working days of receipt of the appeal application, appoint a Chairperson to conduct a formal appeal hearing. The appeal hearing shall be conducted along similar lines to the disciplinary enquiry. The Chairperson shall, wherever possible within one working day of the appeal hearing, give a decision which will be final.

The disciplinary procedure and the grievance procedures fulfil different functions. Therefore, employee grievances against disciplinary action taken in terms of the disciplinary procedure cannot be channelled through the grievance procedure. Employees who have any enquires regarding the content of this procedure should approach their immediate supervisors or any senior Manager for advice and assistance.

These are complicated procedures to remember, and if companies do not have a specialised Human Resources or Legal representative, the company might find itself on the wrong end of the law and open itself up to legal action. A simple call to the SEIFSA Industrial Relations & Legal Services Division – which has the relevant expertise and experience – can resolve this situation.

SEIFSA Legal Services Protecting Companies from the repercussions of unfair dismissals.

One of the most important changes introduced by the Labour Relation Act 66 of 1995 relates to procedural fairness in dismissal. The unfair dismissal provision of the Act (Chapter VIII) and the code of Good Practice on Dismissal found in Schedule 8 to the Act (the Code) has attempted to provide greater clarity on unfair dismissals and has provided employers with a clear set of guidelines on procedural fairness.

The aim of this blog is to highlight the pre-dismissal procedure in the Code and showcase how SEIFSA assists employers to comply with these pre-dismissal disciplinary procedures when conducting disciplinary enquiries.

Labour Relations Act 66 of 1995: Unfair Dismissal

Section 185 in chapter VIII of the Act states that “every employee has the right not to be unfairly dismissed.”

The right not to be unfairly dismissed is supported by section 23(1) of the Constitution of South Africa. A dismissal will be unfair (section 188 of the Act) if the employer cannot prove that the reason for the dismissal was a fair reason and “that the dismissal was effected in accordance with fair procedure.”

Certain dismissals (section 187) are deemed by the Act to be automatically unfair, and should an employer dismiss an employee for any one of these reasons, the employee will not have to prove that the dismissal was unfair and the employer will not be provided the opportunity to prove that the dismissal was, in fact, fair. These would include an employee participating in a protected strike, reasons related to pregnancy and unfair discrimination.

Although Chapter VIII requires a dismissal to be effected in accordance with a fair procedure, it does not provide any definition of what constitutes a fair procedure and ultimately this is left to the guidance in the Code.

The Code of Good Practice: Dismissal

In an intentionally general manner, the Code of Good Practice on Dismissals provides a set of guidelines that requires employers to “take it [the Code] into account” (section 188[2] of the Act) rather than prescriptively to apply it. This has created the mistaken impression that there is no duty to follow these guidelines.  Management must exercise caution before departing from the norms set out in the Code and be prepared to justify fully any deviation.

Section 188 (2) of the Act clearly states that “any person considering whether or not the reason for dismissal is a fair reason or whether or not the dismissal was effected in accordance with a fair procedure must take into account any relevant code of practice issued in terms of this Act.” This means that an arbitrator will be required to determine the procedural fairness of a dismissal against the norms provided by the Code.

In any dispute arising from an alleged unfair dismissal, the onus will always rest with management to prove the fairness of any procedure that has been followed.

Pre-dismissal disciplinary procedure

The Code of Good Practice on Dismissal (paragraph 4[1]) requires that under normal circumstances an investigation should be conducted to determine whether there are grounds for dismissal, and that this “does not need to be a formal enquiry.” What the Code envisages is an investigatory fact-finding – rather than an adjudicatory –  process.

The purpose of this process is two-fold. Firstly, it aims to ensure that employers make their decisions with the best possible information at hand. Secondly, it gives affected parties the opportunity to participate in the process, thus legitimising the outcome. Unlike an adjudicative process, it does not guarantee a correct decision, but what it does do is ensure a fair decision,  one made upon an objective consideration of all the information at management’s disposal.

Conducting a disciplinary investigation

According to paragraph 4(1) of the Code, management is required to conduct an investigation to determine whether or not there are grounds for disciplinary action.

This preliminary investigation is not the disciplinary enquiry. The investigative stage of the disciplinary process is an opportunity for management to determine what misconduct, if any, has been committed. If the investigation reveals a breach of rules, the next step is to compile a list of objective facts and evidence that will be presented at the enquiry.

It is recommended that management conduct a PRE-DISMISSAL INVESTIGATION along the following lines:

• Determine if there are any witnesses to the alleged misconduct;
• Question each witness separately to obtain as much information as possible;
• Request witnesses to make signed written statements;
• Differentiate between factual evidence and evidence based on opinion or hearsay;
• Decide whether sufficient factual evidence has been collected to proceed with a disciplinary enquiry; and

NOTE: This is not tantamount to finding the employee guilty. It simply enables management to make a decision on whether to convene a disciplinary enquiry or not.

• Decide whether or not to proceed with a disciplinary enquiry.

This is a technical procedure, and that is why SEIFSA has two Admitted Attorneys to guide companies through this difficult process.

Management is required to notify the employee of the allegation using a form and language that the employee can reasonably understand. Employees are entitled to sufficient particulars to enable them to answer the case against them. Fairness requires that an employee be informed of the facts supporting the allegation, the alleged offence with which they are being charged and, importantly, the sanction that might be imposed.

How to use Labour Brokers – risk free for companies in the metals and engineering industry

The following guidelines have been prepared by SEIFSA in an attempt to assist management to avoid potential risks.

Income Tax Liability

The Income Tax Act places the responsibility and onus on the client company to make the necessary income tax deductions from the earnings paid to the workers supplied by a labour broker. However, in terms of paragraph 2(5) of the Fourth Schedule, the Act permits the Receiver of Revenue to issue an exemption to a labour broker, thereby removing this obligation from Client Company and placing the onus for the income tax deductions on the labour broker.

The tax exemption certificate is commonly referred to as an IRP 30 certificate and is only valid from date of issue to the labour broker until the end of the year of assessment, after which time the broker must apply for another exemption certificate.

The IRP 30 exemption certificate will only remain valid if:

• It has not expired;
• It bears a labour broker reference number beginning with a 7;
• It has been computer printed;
• The labour broker is able to produce the original certificate; and
• It has not been altered in any way.

When contracting with a labour broker, management should ensure that the broker is in possession of a valid IRP 30 tax exemption certificate. Under these circumstances, no liability whatsoever is incurred by the client company, should the broker subsequently fail to deduct income tax from the earnings of the persons supplied to the company.

Where a company chooses to utilise the services of a labour broker who is not in possession of an IRP 30 tax exemption certificate or the certificate does not meet all the criteria detailed above, then the client company must deduct employee tax from the earnings of the persons supplied by the broker.

Professional Indemnity Insurance

The Labour Relations Act (LRA) prescribes that the client company and the broker may be held jointly and severally liable for any contravention of the collective agreements of  Metal and Engineering Industries Bargaining Council (hereafter called the “Bargaining Council” or the “Council”). This means, for example, that if the broker has not made the necessary contributions to the industry provident fund, then the Bargaining Council may claim the outstanding amounts from either the broker or the client company, whichever option is easier to pursue. This, obviously, has serious potential financial obligations for the client company since it has no knowledge or control over what payments or deductions are being made by the broker from employees’ earnings.

A way of dealing appropriately with this potential financial liability is for companies to:

• Seek a guarantee from the labour broker that it is observing all the provisions of the bargaining council agreements; and
• Ensure that the broker has adequate professional indemnity insurance cover to protect the client against any subsequent claims from the bargaining council.

Professional indemnity insurance is available to the labour broker who meets certain qualification standards and this, in itself, is an important safeguard to client companies.

The Main Agreement Employer Obligations

The MEIBC Main Agreement imposes the following obligations on companies’ intent on utilising the services of labour brokers.

No employer should utilise the services of workers supplied by a labour broker unless the broker provides proof of:

• Registration with the Unemployment Insurance Fund;.
• Registration with the Compensation Commissioner in terms of the Compensation for Occupational Injuries and Diseases Act; and
• Registration with the bargaining council.

The employer is required to complete a form to notify the Bargaining Council of the business name and physical address of the labour broker within seven days from the date on which the services of the broker are utilised.

The employer is required to complete a form in respect of each person supplied by the broker, detailing the following particulars:

• The name, telephone number, residential address and identity number of the worker;
• The business name, telephone number and business address of the labour broker;
• The date from which the services of the worker will be utilised and the expected termination date;
• The site or workshop address where the worker will be located;
• The anticipated normal hours and overtime to be worked by the worker;
• Whether the worker will be engaged on Rate A work; and
• The scheduled occupation applicable to the worker.

Management should also ensure that employees supplied by the broker are members and contributors to either the Engineering Industries Pension Fund or the Metal Industries Provident Fund. A special dispensation is available to a labour broker’s employees permitting coverage only in respect of the death and disability components of these Funds. Management should request adequate proof of the existence of an appropriate exemption issued by the Bargaining Council where this arrangement is observed by the broker.

Bargaining Council Accreditation of Labour Brokers

The Bargaining Council has in place an accreditation process to enable individual labour broker companies, on a voluntary basis, to request a six-monthly audit and inspection to certify their compliance with the council’s agreements. The Bargaining Council, SEIFSA and the industry trade unions recognise and promote those broker companies which have been accredited.

The objectives of this comprehensive labour broker accreditation system are to:

• Provide some protection to client companies against financial risks associated with the use of labour brokers who fail to comply with bargaining council agreements;
• Ensure that employees of labour brokers benefit from all the negotiated provisions of the council’s agreement;
• Promote the utilisation of accredited labour broker companies in the industry; and
• Attempt to regulate the labour broker sector in more a positive and effective manner.

Management should utilise the services of these accredited broker companies. SEIFSA will keep members informed of the names of these accredited companies.

Recommended Management Action

SEIFSA believes that proper use of the Federation’s services will help to ensure that:

• Management satisfies itself that the labour broker is in possession of a valid tax exemption certificate;
• The client company does not become liable for arrear income tax deductions;
• The broker is in possession of appropriate professional indemnity insurance cover; and
• Management has ensured that the broker has complied with the requirements of the Main Agreement, including, but not limited to, proof that the broker is registered with the bargaining council and is observing its various agreements.

Casual Employment

Casual employees are generally employed on a daily basis or for a very limited number of days per week. The Basic Conditions of Employment Act (BCEA) defines a casual employee as “…employees who work for less than 24 hour a month.” Previously this was three days per week.

As this is the only definition of a casual employee in our labour legislation, a great deal of emphasis will be placed on this definition in making a distinction between a casual employee who works less than 24 hours per month and a temporary employee whose contract is terminated on a specific date or upon completion of a specific task.

Nevertheless, management should be aware that casual employees are covered by the definition of employee in the Labour Relations Act (LRA) and are thus entitled to all the protections and rights under it. This is a point often overlooked by management who believe that employees employed on a casual basis may be treated differently in terms of the laws of equity and fairness. Management should be aware that casual workers may join unions, go on strikes, are protected against being unfairly dismissed and may approach the Council, the CCMA or the Labour Court for relief on the same basis as any other employee.

In a manufacturing environment where activities are governed by the MEIBC, management must ensure that all work being performed is in terms of the minimum rates of pay as set out in the Main Agreement.  On the other hand, where casuals are employed to perform work falling outside of the scope of jurisdiction of the Bargaining Council and the Main Agreement, management is free to free to pay casuals any amount mutually agreed upon.

In summary, then, casual workers should not be employed for more than 24 hours per month and their employment must automatically terminate when a particular job or task has been completed. In cases where management has employed the same casual worker every month, the casual worker may, after a reasonable period of time, have an expectation of continued casual employment. In other words, the casual may argue that he/she has become a permanent temporary employee.

Recommended Management Action

Where management needs to terminate the services of casual employees who have worked for a reasonably long period, it would be advisable not to do so unilaterally, but to follow the procedures as would be the case for any other employee.

Conclusion

The use of temporary or fixed-term contracts of employment, casuals and persons provided by labour brokers to regulate the relationship between employer and employee in order to maximise flexible working arrangements is not unique to South-Africa.

With the increased reliance by management on non-standard forms of employment, the workforce of the future consists of two distinct categories of employees, all of whom will fall under the ambit and protection of the LRA, the BCEA and/or the Main Agreement.

At one level, there will be a core group of employees, employed for an indefinite period of time on a traditional and full-time basis fully integrated into the company. At the next level will be persons employed on a casual or temporary basis or via a labour broker who enjoy the protection of our labour system, but are not fully integrated into the organisation.

Non-standard or temporary forms of employment, when utilised correctly as a means of cost-effective manning in an attempt to keep wages and the costs of doing business in line with increasingly competitive markets, is an entirely acceptable and beneficial arrangement for both parties.

From a management point of view, the importance of observing the provisions relating to different employment relationships correctly cannot be overstressed.

It is strongly recommended that all contracts of employment –  be they permanent, temporary, casual or on the basis of persons provided by labour brokers – must be in writing, setting out the terms and conditions of employment, no matter how short the employment period may be. There is far more certainly when the contract has been recorded in writing, is compliant with relevant laws, rules and regulations and has been entered into knowingly and willingly by the parties.

Ends