Simplified disciplinary enquiries

The process that should be followed during a disciplinary enquiry is normally set out in an Employer’s disciplinary code.

Labour Court judgment BEMAWU & Others v SABC & Others  2 March 2016

Application brought by BEMAWU (Broadcasting Electronic Media & Allied Workers Union), obo 35 of its members.

Sought to interdict a disciplinary process in which the SABC intended to take disciplinary action against approximately 100 employees. Process stems from allegations of fraud on a massive scale perpetrated against the SABC Medical Aid Scheme.

SABC’s disciplinary code, which forms part of its employment contracts, provides for individual hearings presided over by a panel of three chairpersons with viva voce evidence and the opportunity to cross-examine. This process is very much in line with a criminal justice model, which do not form part of the Labour Relations Act 66 of 1995.

In light of the disciplinary process being against approximately 100 employees, the SABC instead adopted a process where-

  • individual employees are presented with the allegations against them in writing.
  • they will then have the opportunity to make written representations that will be considered by a chairperson from a panel appointed by an independent Dispute Resolutions Agency.
  • that chairperson will take into account the allegations as well as the representations and will then make a decision whether or not the employee in question has or has not committed the misconduct he/she is accused of.
  • if the employee is found to have committed the misconduct, that employee will be given the opportunity to make further representations with regard to sanction. After this, the chairperson will make a recommendation on sanction to the SABC.

Various communication regarding the adopted process the SABC intended on following was sent back and forth between the parties between March 2015 and 19 October 2016, when BEMAWU was informed that no further extension would be granted. The employees received letters from the SABC on 17 September 2015 detailing allegations of misconduct against each of them and inviting them to respond to the allegations.

On 8 November 2015 the Applicants delivered an application on an expedited, but not urgent, basis. No Set Down was served. On 6 January 2016 the independent Dispute Resolution Agency sent notices to the employees informing them that findings in respect of those employees would be made on 18 January 2016.

On 11 January 2016 BEMAWU brought an urgent application on an amended Notice of Motion to be heard on 14 January 2016. The Respondent (SABC & others) objected to the matter being heard on urgent basis.

BEMAWU argued that this departure from the disciplinary code is unfair and should be interdicted.

The Court was not convinced that the matter was in fact urgent and the matter was accordingly struck from the roll. The Court held that the urgency was self-created by the Applicants as they had known for many months that the Respondent refuses suspend the process.

The Court nevertheless made certain observations with regard to the disciplinary process followed by the SABC, as the parties’ legal representatives had addressed the Court fully on the merits during argument.

The Court held that, as the SABC had to deal with similar allegations of misconduct against more than 100 employees, it would be unworkable to adopt a process where each employee must be heard individually, call witnesses and present evidence.

The Court looked at the following relevant clauses of the Disciplinary Code of the SABC, namely:

“Discipline will be maintained through a system of verbal and formal written warnings, hearings and inquiries that will be conducted in such a way as to ensure that discipline is exercised fairly in accordance with the rules of natural justice.”  

“For misconduct or offences which in the opinion of management warrant a stronger disciplinary measure than a warning… a formal disciplinary hearing must be held.”

“The following procedure is recommended for the conducting of a disciplinary hearing”  

It was found that the process adopted by the SABC envisaged a formal disciplinary hearing, albeit on paper without hearing oral evidence or argument. The Court was of the view that the adopted process ensured that discipline would be exercised fairly and in accordance with the rules of natural justice, and especially the principle of audi alteram partem. The process satisfied the requirements set out in the case of Avril Elizabeth Home for the Mentally Handicapped v CCMA (2006) 27 ILJ 1644 (LC) where the Labour Court found as follows:

“…The continued application of the criminal justice model of workplace procedure therefore results in a duplication of process, with no tangible benefit to either employer or employee.”

It is clear from this judgment, as well as from previous judgments, that the Labour Court favours simplicity over technical or elaborate disciplinary proceedings.

It is therefor recommended that Employers adopt these simplified principles when drafting or amending their disciplinary codes and when preparing for disciplinary enquiries.

By Lizelle Marx
lizelle@dyason.co.za

Is there a limit to the powers of trustees to determine the mode of payment of a death benefit to a major beneficiary?

In the Mahomed v Argus Provident Fund case the Pension fund adjudicator’s decision relates to the dissatisfaction of the allocation and distribution of a death benefit. The primary issue was whether or not the intended payment of a major dependents benefit in the form of the purchase of an annuity was lawful.

Background on the deceased

The deceased worked at a newspaper for many years and when she passed away she was survived by her two major daughters. The eldest daughter was very ill and was unable to look after herself. She had a tendency to disappear for long periods of time and required constant monitoring. Her finances were to be managed by the executrix of the estate. The youngest daughter of the deceased lived with her husband and three children.

Trustee’s decision

The board decided that the deceased’s tax free contribution of R141 678-81 should be distributed equally between the two daughters. R70 839-41 to be deposited into a trust which will be managed by the executrix for the eldest daughter and R70 839-41 was to be awarded to the younger daughter for her to make a donation to a charity on her mother’s behalf and the remainder to spend as she wished.

The board further agreed that the amount of R1 840 829-27 will be transferred to an annuity to provide a monthly income payable to the trust managed by the executrix to cover the eldest daughter’s monthly expenses.

The amount of R446 621-81 would be transferred to an annuity to provide monthly income to the youngest daughter to cover the costs of her medical aid contributions.

The complainant (youngest daughter) argued that it was unacceptable that the fund be allowed to purchase an annuity at its own discretion and requested the adjudicator to review the inequitable decision.

Determination

The issue before the adjudicator was whether or not the respondent allocated the benefit in terms of Section 37C of the Pension Funds Act 24 of 1956 (“the act”) which regulates the payment of a benefit.

Section 37 states the following:

(2) (a) For the purposes of this section, a payment by a registered fund for the benefit of a dependent or nominee contemplated in this section shall be deemed to be a payment to such dependant or nominee, if payment is made to-

(i) a trustee contemplated in the Trust Property Control Act, 1988, nominated by- (aa) the member;

(bb) a major dependant or nominee, subject to subparagraph (cc); or

(cc) a person recognized in law or appointed by a Court as the person responsible for managing the affairs or meeting the daily care needs of a minor dependant or nominee, or a major dependant or nominee not able to manage his or her affairs or meet his or her daily care needs;

(ii) a person recognized in law or appointed by a Court as the person responsible for managing the affairs or meeting the daily care needs of a dependant or nominee; or

(iii) a beneficiary fund.

From this section we can see that the purchasing an annuity is not included here.

Another important section to note is Sec 37(C)(4), which stipulates that a benefit to a major beneficiary may be paid in more than one payment, only if the major has consented to this in writing. The younger sister did not consent to multiple payments in writing.

Based on the above subsections of Section 37(C), the adjudicator held that the fund should have acquired prior consent from Ms Mahommed to enable them to purchase the annuity.

if an investigation into the affairs of the of the major shows an inability to manage his affairs then the board can look into investing in an annuity, however the trustees must first apply the principles of Section 37.

The adjudicator concluded to say that the death benefit was not properly allocated to the dependants and set aside the board’s decision in allocating the death benefit and the mode of intended payment.

Trustee’s must be careful when choosing a mode of payment and must ensure that the method of payment in the best interest of the deceased’s beneficiaries. Further, that the consent from the major beneficiaries are obtained if the fund is not paying out a lump sum to the beneficiaries.

By Nicole Naidoo
nicole@dyason.co.za