GENERAL NEWSLETTER NORMAL- & GROSS NEGLIGENCE

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1 HEAD OFFICE - JHB 2 ND Floor, Pin Oak House, Ballyoaks Office Park, 35 Ballyclare Drive, Bryanston, Johannesburg, 2191 T: F: PRETORIA BRANCH 11 Drummorgan, 580 Jan Bantjies Street Montana, Pretoria, 0182 T: CAPE TOWN BRANCH 68Centurion, 13 Kasteelberg Road, The Crest, Durbanville, 7550 T: DURBAN BRANCH 135 BribleRoad,Forrest Hill, Kloof Durban, 3610 T: NEWSLETTER us on facebook (search for Invictus Johannesburg) or visit us at POSTAL ADDRESSPO Box 1127, Cresta, 2118 Reg. No: 2001/006142/07 VAT No: GENERAL NORMAL- & GROSS NEGLIGENCE - NOT SIMPLY ORDERS OF MAGNITUDE - It is easy, when disciplining employees, to impose an objective assessment of the seriousness of the misconduct. In fact, one is invited to do so by the Code of Good Practice: Dismissal at section 3(3) [...] Repeated misconduct will warrant warnings, which themselves may be graded according to degrees of severity. More serious infringements [...] may call for a final warning [...]. Dismissal should be reserved for cases of serious misconduct [...] In other words, offences should be graded based on severity into those termed as serious misconduct and those termed as lesser misconduct. only be found guilty of (normal or lesser) misconduct. This is a fairly standard practice and the difference between misconduct and gross misconduct or between insolence and gross insolence (for example) is often seen as no more than a matter of degrees of severity. This is reasonable, seeing as how the test for the presence (or not) of insolence does not change according to the severity of the insolence. The difference might be as simple as swearing at your superior, versus swearing at your superior in front of other staff. By undermining your superior s authority publicly, you increase the severity of the offence without changing the species of the offence. In contrast, negligence and gross negligence (as opposed to serious negligence) are two different species of offences, each with its own unique test. This is why an employee may be charged with gross misconduct but, after an evaluation of the evidence and consequence of the misconduct has been made, might The test for (normal or lesser) negligence is whether or not the employee should reasonably have foreseen the consequences of his actions, whether he should have acted

2 to avoid those consequences and whether he did so. In simpler terms, whether the employee acted in a way that a reasonable employee (with that level of skill and experience and in that same position) would have. If the answer is no, the employee is guilty of negligence. For example, an employee who forgets to set the parking brake of the company vehicle, causing it to roll off a cliff and be lost, would be guilty of negligence because a reasonable driver with years of experience would not have forgotten to set the parking brake. However, if that same runaway vehicle collided with a tanker truck, causing an explosion and massive loss of life and property, does it necessarily follow that the employee is now guilty of gross negligence, simply because the consequence of his or her actions are that much greater or more severe? The test, as we will see here below, relies only partly on the consequences of the employee s actions and a lot of emphasis is placed on the employee s state of mind. The test for gross negligence differs substantially from that of (normal or lesser) negligence. In National Union of Metal Workers of South Africa obo Selepe v ORAWAB Investments (Pty) Ltd t/a Bergview Engen One-Stop [2013] 5 BALR 481 (MIBC) the learned judge highlighted the difference between the two. The carelessness or mere failure which constitutes ordinary negligence, changes in gross negligence to an indifference to, and blatant violation of a workplace duty. Gross negligence can be described as a conscious and voluntary disregard of the need to use reasonable care, which has or is likely to cause foreseeable grave injury or harm to persons, property or both. It is conduct that is extreme when compared to ordinary negligence. Gross negligence also focuses on the magnitude of the risks involved, such that, if more than ordinary care is not taken, a serious mishap is likely to occur. He then goes on to say that [o]rdinary negligence and gross negligence accordingly differ in degree of consciousness or inattention; and both differ from wilful misconduct, which is conduct that is reasonable calculated to cause damage or injury. In other words, if the employee in our runaway vehicle example were to realise that he could not remember whether or not he d engaged the parking brake (which means he can foresee the possibility of loss or injury) and he is indifferent to that possibility, then he would be guilty of gross negligence. Similarly, to use another example, a forecourt attendant who lights a cigarette safely inside the break room but then

3 forgets he is smoking and walks across the forecourt, where petrol is being dispensed, with the lit cigarette on his lip, would be guilty of negligence. A reasonable forecourt attendant would foresee the danger and act to avoid it. Failure to do either one of the two amounts to negligence. But a forecourt attendant who is conscious of the risks and wilfully lights a cigarette while standing next to a petrol pump would be guilty of gross negligence. He has foreseen the danger, has recognized the mishap likely to occur and has disregarded same. In short, employers should be wary of convicting employees of gross negligence based solely on the perceived importance of the rule or of the damage caused without first applying the test for gross negligence. Failure to do so may lead a CCMA commissioner (or similar) to finding that the employee s guilt had not been proven, wherefore the finding was substantively unfair. This being said, the courts have shown great leniency and willingness to substitute the common law definition of gross negligence with the company s own definition of gross negligence as provided in its disciplinary code, policies and procedures. HUMAN RESOURCES PAIA MANUAL SUBMISSIONS 31 DECEMBER DEADLINE The Promotion of Access to Information Act 2 of 2000 (PAIA) was called into being to give effect to the right of freedom of information guaranteed in section 32 of the Constitution of the Republic of South Africa. The Act intends to promote transparency and allows ordinary people (requesters) to claim access to information held by private or public entities. It also requires that such private or public entities (businesses in general) register certain information with the South African Human Rights Commission. This required information is circumscribed in section 51 of PAIA, the so-called Section 51 Manual (the Manual). The business must appoint a head who is (sometimes the CEO or, more often) an appointed Information Officer who s duty it is to compile this Manual. The Manual has previously been referred to as a roadmap and provides an index of the information held by the company in enough detail that a requester can accurately identify such information as may be necessary for the exercise or protection of any rights. The

4 manual also includes an index of such information as is readily available without the necessity of a formal request. While private companies in certain sectors were initially exempted from complying with section 51, the (extended) deadline of 31 December 2015 is rapidly approaching. A government notice (number 34914) identifies a number of sectors wherein private companies will still have to comply with section 51 if they employ more than 50 people or have an annual turnover in excess of the specified amount (between R2m and R25m, depending on the sector). These sectors include but are not limited to Mining and Quarrying; Manufacturing; Construction; Retail, Motor Trade, Commercial Agents and Allied Services; Catering, Accommodation and other Trade; Financial and Business Services. If your business falls into any of these categories or you intend to submit a Manual and you require assistance in terms of section 51, contact Invictus of you regular service provider. INDUSTRIAL RELATIONS SECURITY INDUSTRY OVERHAUL NO MORE SELF-EMPLOYED SECURITY On the 17 th of October 2014 the Director of the Private Security Industry Regulatory Authority sent out an industry wide circular to highlight the improper use by security providers of what is termed self-employed or independent contractor security personnel. This impropriety has now been addressed in the newly minted Sectoral Determination 6: Private Security Sector, published on the 1 st of September It is not in dispute that the Labour Relations Act 66 of 1995 (the LRA) as amended provides for the legitimate use of temporary employment services, labour brokers and independent contractors and that the new Sectoral Determinationalso specifically makes these applicable to the industry in the newly added section 20(1), thereby allowing security providers to appoint independent contractors (as opposed to employing security officers in the capacity of traditional employees). The attraction of doing so is obvious: the security provider does not become the employer of the independent contractor, thereby relieving the security provider of all the onerous administration

5 requirement and obligations inherent in an employer-employee relationship. It should be noted that while the law allows for so-called one-man or self-employed independent contractors, the preferred form of independent contractor is a third party employer (in this case) in the business of providing its own employees as security personnel to other employers for a fee. The one-man or self-employed independent contractor will be open to judicial scrutiny to establish whether or not he or she may indeed be termed an independent contractor, failing which he or she may be found to be an employee. This business model (utilising self employed contractors), improperly utilisied, previously came under heavy fire in the Labour Court in FMW Admin Services CC v Stander and Others (J2126/2014). The judge characterised the business model as a sham and went on to say that it was nothing more than a shameless attempt to circumvent minimum employment protection for what is really employees [58] and concluded that the applicant s independent contracting model [...] is unlawful and at odds with the constitutional values of fair labour practices and just and fair play. It seeks to avoid the protections afforded by employment legislation such as the LRA and BCEA. It directly undermines security of employment, and in any event flies directly in the face of the minimum terms and conditions for individual security guards specifically imposed on the private security services sector in Sectoral Determination 6 [62]. This judgment in part provided the impetus for the new Sectoral Determination (section 18(2)) which mirrors the LRA (section 200A(1)) in providing a list of factors for determining whether a person should be presumed to be and employee, despite any contract they may have stating otherwise. The most inescapable of these include whether the manner and hours of work are subject to the control of the security provider, whether the person has worked for the provider on average at least 40 hours per week and whether that person is financially dependent on the provider. (The list goes on.) If any one of these factors are met, it is up the security provider to prove that the security officer is NOT an employee an all but impossible task. Within the framework of the new Sectoral Determination and the amended LRA, it would seem as if the self-employed security officer has become a thing of the past, and rightly so. Security Providers who still use this business model expose themselves to litigation and heavy losses and it is advised that these systems be

6 overhauled and made compliant within the new statutory framework. LEGAL For aid in affecting such an overhaul, contact Invictus or your normal service provider. S198A UNRAVELLING LABOUR COURT IN FAVOUR OF TES The Labour Court on 8 September 2015 handed down the long awaited judgment in Assign v CCMA and Others (JR1230/15) 2015 ZALCJHB 283. In his comprehensive judgment, Judge Brassey reviewed and set aside an earlier judgment wherein the CCMA opted to interpret the newly added section 198A of the LRA as creating (what has been referred to as) a sole employer relationship. To review, section 198A of the LRA (the Labour Relations Act 65 of 1997, as amended) was aimed specifically at the tripartite relationship between the Temporary Employment Service (TES) and its client, with the focus on the former s employee (the assignee), who renders service to the latter. Section 198A(3)(b) entails that if that assignee earned less than the annual earnings threshold and worked at the client for longer than 3 months, the client would be deemed to be that assignee s employer. The sole employer interpretation, as championed by NUMSA, intended to deprive the TES of its employment relationship with

7 its assignee and create, by operation of law and without recourse to a new contract, a new employment relationship between the assignee and the client. In contrast the dual employer interpretation, as championed by Assign (the TES), would leave the contractual employment relationship between the TES and the assignee unchanged and merely add the rights and obligations that, by operation of the LRA, cleave to an employer to the relationship between the client and the assignee. Judge Brassey found that neither of these interpretations accurately reflects the intentions of the legislature, nor do they take into account the wider consequences of their application. However, he did grant clarity on some crucial issues, as reported here below. Firstly, the sole employer relationship cannot be the correct interpretation. The contract of employment between the TES and the assignee survives the operation of section 198A(3)(b) intact and continues to govern the relationship between the TES and the assignee. Secondly, the client does not become a party to the contract between the TES and the assignee. Thirdly, section 198A(3)(b) creates the rights and obligations of an employer and its employee between the client and the assignee. This relationship exists simultaneously with the contractual relationship between the TES and the assignee. Fourthly, the deemed employment relationship between the client and the assigneeoperates for the purposes of the LRA only. In other words, unless specifically stated in the LRA, the client is not bound by those rights afforded an employee under any other act, such as the Basic Conditions of Employment Act (75 of 1997). Although Judge Brassey speculated on many related matters (such as whether the deemed employment relationship between the client and assignee survives the termination of the contractual relationship between the TES and the assignee) no firm rulings were made in this regard. It is likely that this position will further evolve in future. Important to note for now is that assignees may bring legal action against the TES, its client (or both) equally, based on violations under the LRA. It is imperative that the client and the TES agree on important matters such as who bears the onus to discipline. Reputable and responsible TES will make provision for

8 these and related matters in their Service Level Agreements with their clients, ensuring that the client is properly indemnified.