‘Labour laws favour the one who knows’

THERE is understandably mass hysteria in the job market, as employers, wielding the recent Supreme Court judgment of July 17, 2015 allowing employers to terminate a contract of employment on notice, are actively cutting jobs. Many workers are now living under the spectre of losing their jobs without any package, except the terminal benefits. Job security is now expensive. But the Supreme Court judgment merely reinforced a provision that already existed. How distressed companies were not aware of such an avenue is still puzzling to this day. Last week, The Sunday Mail Business Editor Darlington Musarurwa sought the views of expert Advocate Arthur Marara on the latest development and its implications on the local job market.

Q: What is the meaning of the Supreme Court ruling?

A: The importance of the ruling is simply to re-assert the long existing position that an employer has a right at Common Law to terminate a contract of employment on notice.

The notice periods are the ones that are governed in terms of Section 12(4) of the Labour Act. There is nothing new about the ruling of the Court, because the position has always been there that an employer can terminate the contract of employment on notice.

The hype is a result of the fear that the employers had before to terminate on notice either due to ignorance of the law, or availability of other options. The trend prior to the judgment had been to terminate contracts as per Section 12B of the Labour Act.

This of course entailed in some instances actual abuse of the system.

The ruling is a blessing to the companies that were struggling to pay salaries over a long period of time. It is terrible news to employees who had served for years and are being shown the door with practically nothing except the terminal benefits in terms of Section 13 of the Labour Act.

There are obvious mixed feelings about the judgment, but one thing must not be forgotten: the Supreme Court did not make any law, it simply stated the legal position.

The fairness or otherwise of the law, is entirely about to the lawmakers to interrogate. Definitely the noise that has been happening will certainly prompt the lawmakers to think about this.

The Labour Act comes against the background of the Common law, which gave an employer enormous powers in the employment relationship. The provisions are therefore meant to mitigate and protect employees who are often perceived as a weaker party.

Section 12(4) was not addressed, and it still remains open. The ruling also means that all the parties to the relationship must view the judgment objectively.

An employee cannot terminate a contract as and when they want, while an employer cannot be allowed to terminate the contract as and when it wants.

A contract of employment is like any other contract, it has rights and obligations and it also has to have a provision for termination. There is no sane employer who would dismiss a competent employee.

There has been general laxity at work by many employees. So we need to expect more productivity at the workplace. The mass terminations are not going to go on for long. There is no employer who hires an employee for the sake of firing them.

Q: Was business not aware of such provisions before?

A: This now stands to be answered by individual businesses, but from the conduct of business, it appears to be a case of ignorance.

It’s not a secret that several companies have always wanted to lay off several employees, but they were stuck because they could not afford the retrenchment packages.

If they were actually aware of this, they could have utilised this provision earlier.

Q: What then happens to the provisions of 12C and 12D of the Labour Act as read with the Labour Relations (Retrenchment) Regulations, 2003, which govern retrenchment?

A: Retrenchment is a form of termination of a contract of employment. Dismissal, termination for incapacity, mutual termination and termination by death are forms of termination. With a definitive ruling, the Labour Act has been temporarily suspended.

Employers will not have to deal with many grievances as employees will really think twice before deciding to challenge an employer in the Courts as they might come back to find their contracts terminated on notice.

Why conduct a disciplinary hearing when you can simply give notice and terminate the contract, why go through the Retrenchment Board when you can simply give notice to terminate individual employees’ contracts? The employer has an option of terminating a contract on notice regardless of the numbers.

Section 12C and 12D do not outlaw termination on notice, because they are providing for different methods of termination.

There is no limit on the number of employees who can be charged and dismissed in terms of Section 12B.

Q: It is generally thought that the country’s Labour laws are pro-labour. In view of the latest developments, is this assertion not just a myth?

A: The Labour laws favour the one who knows and can use the provisions. I do not think they favour the employees or employers.

If asked to choose, I think the laws are titled in the favour of the employer.

I have had the opportunity of representing both corporates, and individual employees in labour matters; so, I have seen the best of both worlds.

The common law is still present in the labour laws on dismissal. It is very easy to dismiss an employee once the conduct complained of goes to the root of the contract of employment.

The question of the value of the conduct falls away.

There is a long line of cases by the Supreme Court that has confirmed this position. With termination on notice being at the employer’s disposal, clearly there is no way that one can say the law favours the employees.