The remedy for a substantively unfair dismissal is typically reinstatement. However, there are situations where reinstatement is unsuitable, and one of the exceptions to reinstatement in Section 193(2) of the Labour Relations Act No 66 of 1995 (LRA) must rather be applied. The judgement of the Labour Court in the matter of Sulzer Pumps (Pty) Ltd v Nomxhanya, Case number JR 455/2020 (Sulzer Judgement) which was delivered on 15 July 2024, illustrates the court’s stance on this.
Background
Ms Samela Nomxhanya (Employee) was employed as a Safety, Health and Environment (SHE) Manager by Sulzer South Africa Holdings South Africa (Sulzer), a multinational company that manufactures pumps and rotating machinery.
The Employee was responsible for the management and administration of the Safety, Health and Environment system for Sulzer. Her responsibilities included preparing policy statements, emergency plans, and risk assessments, including managing risk assessment strategies and providing recommendations on how they were to be implemented. The Employee was also responsible for monitoring working areas and the availability of risk assessments where necessary, as well as ensuring safe working practices and procedures.
During 2018 six lost time injuries (“LTIs”) were recorded. A lost time injury occurs when an injury that takes place at work (occupational injury) results in the affected employee(s) having to take time off work. As a result, an LTI is by its nature, serious. Some of the LTIs also resulted in trauma for some of the employees.
Following the LTIs the Employee prepared reports which identified causes. In particular, the Employee prepared a report following an LTI involving a lathe (a machine that has a rotating component) (“the lathe incident”). Mr Arnott, the Managing Director to whom the Employee reported, was not satisfied with the report relating to the lathe incident and therefore brought in a Sulzer expert from overseas, Mr Woodward, to investigate the matter further.
Mr Woodward identified flaws and safety issues at the Sulzer premises in Elandsfontein, which led to Sulzer appointing a foreign consultant, Mr Finnie, to identify all safety related deficiencies and recommend remedial actions.
In February 2019, the Employee was issued with a notice of a disciplinary enquiry, alleging misconduct on her part, namely dereliction of duty based on three grounds namely that no risk assessments had been conducted to cover routine and non – routine tasks, no corrective and preventative action procedure to rectify non – conformances were in place and the Employee had not complied with the KPIs set for her role as SHE Manager as reflected in the six LTIs that occurred in 2018.
The foreign consultant, appointed to identify all the safety issues, prepared an extensive health and safety survey report highlighting various ‘shortcomings’ and major risks to the company and employees from a health and safety perspective. In this report, the consultant expressed the view that the Employee had grossly neglected her duties as the SHE Manager.
The consultant highlighted two specific areas that were particularly high risk, namely: (a) the static test bed area; and (b) the pump test area, which were considered very high risk because this is where high-pressure testing was conducted.
During the disciplinary enquiry, the Employee’s argument was that she had identified the risks in question and taken precautionary steps, even if they were ‘insufficient’. She further stated that she did not, or was not afforded an opportunity to, dispute the findings made by Mr Finnie because the expert report was only made available to her when she was facing the disciplinary enquiry.
Arbitration
The arbitrator was required to determine whether there was neglect or an omission on the part of the Employee and particularly her responsibilities, which may have led to the LTIs occurring and the safety of the employees being placed in jeopardy.
In 2020 the arbitrator handed down an arbitration award in favour of the Employee finding that her dismissal was procedurally fair but substantively unfair. The arbitrator reinstated the Employee with full retrospective effect to the date of her dismissal.
LRA on Unfair Dismissal
Section 185 of the LRA provides that every employee has the right not to be (a) unfairly dismissed; and (b) subjected to unfair labour practice.
Labour Court Review
The employer, Sulzer took the matter on review to the Labour Court. One of the key aspects that the Labour Court was required to consider, within the context of the review criteria, was whether the dismissal was unfair, and if substantively unfair, whether reinstatement was the appropriate remedy in the circumstances.
The Labour Court set aside the award of the arbitrator and substituted the award, but still found that the dismissal of the Employee was substantively unfair (primarily because the employer had not pointed out the shortcomings to the Employee before initiating disciplinary action against her).
The Labour Court carefully considered whether reinstatement was the appropriate remedy for unfair dismissal taking into account the circumstances surrounding the disciplinary action, and the consequences of the Employee’s actions, within the context of the requirements of Section 193(2) of the LRA. .
The Labour Court held that continued employment would be intolerable and that it was not reasonably practicable for the employer to reinstate the Employee and the Labour Court ordered the payment of compensation.
The Sulzer Judgement has highlighted many aspects including the importance of leading good evidence on the impact of conduct on the working relationship – in the case the evidence resulted in an order for payment of compensation rather than reinstatement.
The finding in this matter reiterates the importance of employers following fair procedural and substantive processes. Very importantly in this case, it also illustrates that the courts take a practical view of the employee’s situation, deciding whether reinstatement or compensation is more appropriate based on the facts of the case and whether the working relationship has become intolerable.