Although the service relationship between an employer and an employee intermingles with certain statutory regulations, the foundation thereof remains the service contract based on the law of contract. The employment relationship is therefore regulated by the contract. A fundamental principle of the law of contract is that the parties must adhere to the agreed conditions and that it cannot summarily be amended without consensus (approval).
However, the dilemma is that employers can amend or adapt the employment conditions unilaterally because of the position of power they hold rank of and if the employees (or the law) do not allow it. When an employer, for example, closes the business temporarily due to operational reasons and/or send the employees temporarily home, it can boil down to the amendment of service conditions.
The reasons for the amendments are not usually without merit. Changing and often unpredictable economic, operational and related factors (such as power outages) mostly requires quick decision-taking and adaptations of service practices, as well as amendments to service conditions. In most cases, it is achieved most effectively by amending the service contract immediately and unilaterally.
Employers also accept that when employees do not object or just keep quiet, it comes down to implied agreement. How far must employers go to obtain approval for an amendment and may employers always implement it unilaterally (because of emergency operational reasons) when employees refuse to accept the amendment?
If employers want to amend employment conditions, they must negotiate to obtain approval. Where approval is not obtained, employers must, among other, prove or explain the following:
- The amendments were necessary because of operational demands.
- The employees have been consulted in a fair and inclusive way.
- The employees had the opportunity to state their side of the case and the objections, reasons and possible alternatives have been considered.
Employers must be able to state which alternative measures have been considered instead of the amendments and they must indicate if the amendments can be put in place on a temporary basis.
The regulations of a service contract may also have its own clause to implement amendments. It can, for example, determine that some employment conditions may be amended unilaterally in certain circumstances, provided they are fair (See Erasmus & Others v Senwes Ltd & Others (2006) 27 ILJ 259 (T)).
The best solution for the limitations the regulations in a service contract aim for, is reaching consensus by means of negotiations with employees affected by the amendments. In this regard, Judge Zondo’s ruling in Monyela & Others v Bruce Jacobs t/a LV Construction (1998) 19 ILJ 75 (LC) is important. In this ruling, he emphasises that the agreement of employees should first be obtained. He provided two options for employers when employees do not accept the amendments, namely protected lock-outs, or to terminate the contracts of the employees who do not accept the amendments and to ensure that the new employees appointed accept these amendments as service conditions (See Fry’s Metals (Pty) Ltd v National Union of Metalworkers of SA (2003) 24 ILJ 133 (LAC).
However, please note that the second option now, arising from the amendment to the Labour Relations Act (Nr. 66 of 1995) (LRA) in 2014, wil result in automatic unfair dismissal. The amended section 187(1)(c) determines that a dismissal is automatically unfair if the employees’ refusal to accept a demand regarding any issue of interdependence interest between them and the employer is the reason for the dismissal. The emphasis is not on the employer’s intentions or motives, but on the employees’ refusal to accept the employer’s new conditions.
If the amendments are not accepted and dismissal is unavoidable due to operational reasons, it is compulsory for employers to follow the statutory procedure, as determined in section 189 or 189A of the LRA.
Where employers want to amend service conditions collectively, they must, where applicable, negotiate at the correct bargaining council or forum to obtain approval. If a trade union act as a recognised bargaining agent on behalf of the relevant employees, negotiations or consultation will have to be organised with that trade union if applicable.
Author: Phil Davel