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Dear Reader

Communication with your employees is the key

You want to avoid disputes with your employees, right? Then you must communicate with them properly. You’re not always legally required to do so, but it’s common sense nevertheless. This case proves it…

The employer parties in a recent Labour Court case were reminded of this when they failed to communicate effectively with employees who transferred from one employer to the other when part of the business transferred.

BP South Africa transferred its warehouse and distribution business as a going concern to Unitrans. All its employees went with the business (Section 197 of the LRA).

Now, you remember that when a business transfers as a going concern the employer’s not obliged to consult with its employees. Their contracts transfer with the business by operation of the law.

But, this doesn’t mean you shouldn’t at least communicate effectively with your employees about what’s happening.

BP told the union that the transfer was going to happen on 1 May 2006. On 20 April, Unitrans gave a slide show to employees about its business. And the employees transferred on 1 May without further ado.

Then, on 17 May, some of the staff became concerned when they didn't get payslips from BP… and they realised they weren’t covered by medical aid anymore because they hadn't signed the option form Discovery needed (Discovery was Unitrans’ medical aid of choice for its staff). No one had bothered to tell the employees they needed to sign these forms. And, generally, the staff were unhappy about the way the transfer had been done.

So, the unhappy employees gathered in the Unitrans canteen to discuss their problems and then refused to go back to work. Several attempts to persuade them to go back to work failed. When they refused to work the following morning, Unitrans issued them with notices to attend disciplinary enquiries and subsequently dismissed them.

Yes, the employees had engaged in an unprotected strike. But, the Court held that dismissal was too harsh a sanction because BOTH parties had contributed to the breakdown.

Both BP and Unitrans had an obligation to tell employees before the date of transfer about what was going to happen with their terms and conditions of employment. That included any medical aid requirements. It was the employers’ failure to do this that brought about the standoff on 17 May.

BP owed its former employees better communication about the transfer to Unitrans. And Unitrans also should have communicated effectively to establish a relationship of trust. The employees should’ve been reassured of their job security.

The Court found the dismissals to be substantively unfair and ordered Unitrans to pay each employee four months remuneration as compensation (the employees didn’t make a case for reinstatement so the court didn’t consider this as an option). Unitrans also had to pay the employees' costs.

This was all in all an expensive exercise for Unitrans. One they could have avoided if only they (and BP) had simply communicated better. Make sure you communicate effectively with your employees when you need to.

Until next month...

Susan Stelzner
Editor-in-chief
Labour Law for Managers Practical Handbook