The reason for a dismissal can make a huge difference in a dismissed employee’s life. If the reason is misconduct – the prospects of future employment are bleak. But if the reason is retrenchment – the prospects are more promising without the stigma and it comes with severance pay and UIF benefits. Faced with these stark options – an employee has a strong incentive to classify the reason for dismissal as retrenchment and not misconduct.
A case in point went to the CCMA and then on review to the Labour Court[1]. The employer had legitimately dismissed the employee for misconduct. It then got a call from a union official requesting the company to change the reason for termination to “retrenchment” on the employee’s certificate of service and UIF form. If it did not agree, the union would refer an unfair dismissal dispute to the CCMA.
When the employer refused, the employee promptly referred an unfair labour practice dispute to the CCMA with the union’s assistance. The CCMA decided to deal with the case as a retrenchment dispute – not a misconduct dispute. The commissioner found against the employer who then referred it to the Labour Court for review on the ground that the employee had in fact resigned and that it had not been a retrenchment.
The employer’s attorney told the court there was no retrenchment and that the “retrenchment” was merely an agreement to allow the employee to qualify for UIF. The attorney conceded that the employer did not disclose this to the commissioner in the arbitration. This was an admission that the employer committed a fraud on the CCMA by allowing it to deal with the case as a retrenchment when it was in fact a resignation by agreement. Despite this, the employer now wanted the Labour Court to interfere with the CCMA award on the basis that it was in fact a resignation.
The Labour Court was not impressed and dismissed the review. It strongly criticised the parties and their attorneys for their dishonest connivance as follows:
“[18] The court turns its face against any fraud, particularly fraud perpetrated in respect of the processes that bear on the administration of justice. The applicant knowingly got the first respondent to deal with the matter as if it were a retrenchment when, according to the applicant, there was no retrenchment but a resignation. The applicant now wishes the court to disturb the award because the arbitrator dealt with the dispute on the basis that the third respondent’s services were terminated on account of her being retrenched.
[19] It is remarkable that the applicant has the temerity to seek recourse from a court of law in the light of its admitted fraud. The conduct of the applicant is a perversion of the administration of justice. It is also puzzling that an officer of this court would forge ahead and argue the cause for the applicant with full knowledge of the fraud by the applicant”.
TIP: The union effectively blackmailed the employer to lie about the reason for the dismissal. The employer succumbed to the “threat” of going to the CCMA to avoid the waste of time and money which that would involve. This was clearly a bad decision which came at a much greater cost and damage to its reputation. The moral of the story – don’t lie to the CCMA or the Labour Court!!
[1] KLM Consulting (Pty) Ltd v CCMA and Others (JR1256/2005) [2014] ZALCJHB 377 (3 October 2014)
Source: SA Guide to Labour Law July 2011
