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June 2012

/June 2012

June 2012


We acted on behalf of Ms Arbuthnot who was employed by the South African Municipal Workers’ Union Provident Fund . The Provident Fund was established using funds from the South African Municipal Workers’ Union members. The proceeds of the funds were invested in a Trust controlled by Fidentia which suffered a significant loss, the details of which are very public.
Our client was concerned that the trustees were not discharging their duties to the detriment of dependants and beneficiaries of the fund. It turned out that she was correct and that there was a potential liability of over R 150 million to those poor members and dependants. When she raised these concerns with the Union her employment was terminated by the Fund.

She approached the Labour Court for relief which undertook a detailed examination of the Protected Disclosures Act and the requirement set out in the Act.The Court found that the disclosure made by our client was protected and that her dismissal was automatically unfair. The Court awarded our client the equivalent of 12 months remuneration ( over R280 000.00). The Fund was also ordered to pay a contribution to her legal costs.

The determination as to who is an employee

The Courts have in a long line of cases indicated that 3 criteria would be used to determine whether or not an employment relationship existed as defined in the Labour Relations Act, these are :
The extent of supervision and control over the employee by the proposed employer, whether the employee formed a part of the organization and to what extent the employee was economically dependent on the employer. The Court again reaffirmed the principle that substance would take precedence over form i.e the court would determine the actual relationship which existed between the parties regardless of the labels which were given to define this relationship by the parties themselves.

Termination on desertion

The labour court re-affirmed the principle that even when an employee has been absent from work for a long period of time the employer must go through the pre-dismissal procedures which include calling for a disciplinary hearing etc. and cannot simply rely on the employee’s absence as a repudiation of a contract of employment.


In most temporary employment service (“TES”) or labour broking agreements there is a clause in the employment contract which exists between the labour broker / TES and the employee which states that if the client of the labour broker / TES terminates the contract between itself and the labour broker / TES then the employment relationship will automatically be terminated . The Court considered this provision and stated that it is unfair and that it is contrary to Section 5 of the Labour Relations Act. In effect, it stated that the employer is forcing the employee to waive all protections granted to him or her by the Labour Relations Act.
In order for the termination to be procedurally and substantially fair, an investigation into the operational requirements of the labour broker / TES must be undertaken and those procedures followed.


Where the employer wants to terminate the employment of a probationary employee, the performance must still be assessed and the employee has a right to reasonable evaluation and if necessary training guidance, etc. If this is not done then the failure to confirm the appointment could constitute an unfair dismissal.

2018-10-28T14:40:00+02:00March 13th, 2018|