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A quandary for employers: the unilateral changes to terms and conditions of employment

A quandary for employers: the unilateral changes to terms and conditions of employment

Business owners and managers, who comprise the ‘employer’ component of any workplace are often in the best position to make decisions to suit the profitability of the enterprise concerned. Employers may want to change business operations regularly to ensure growth and sustainability. In practice, organisational change goes against the grain of the terms and conditions of employment.

This article aims to explore the concept of “unilateral change to terms and conditions of employment” and will show that the recourse for employees and employers are less than clear.

Consider, for example, an employer who deems it operationally necessary to introduce a new night shift that will require existing employees to avail themselves accordingly. Whereas in the past employees only worked a dayshift for many years. In response to change, employers are generally met with fierce resistance. What is an employer left to do?

If an employer proceeds to unilaterally change the terms and conditions of employment, employees may undertake strike action in order to address their resistance to change. Employees who choose to strike, are protected by section 64 of the Labour Relations Act 66 of 1995. The Labour Relations Act makes the dismissal of employees who strike against the unilateral change to terms and conditions of employment automatically unfair. The Labour Court may impose a compensation order of twenty-four (24) months pay in respect of an automatically unfair dismissal.

An employer may also lock out employees who refuse to accept the change. However, an employer may not dismiss employees for their refusal to accept the unilateral change. This has been construed by the courts to be an automatically unfair dismissal.

If an employer can demonstrate that the proposed unilateral change to terms and conditions of employment are necessary to the operational requirements of a business, then the employer may embark on a retrenchment exercise in terms of section 189 of the Labour Relations Act, provided that all the criteria implicit in section 189 are satisfied.

If employees are aggrieved by their retrenchments and depending on the size of the concern, the employees may have recourse at the CCMA, bargaining councils or the Labour Court. Lastly, if employees accept the proposed changes, but refuse to comply, this is treated as misconduct, which may lead to a dismissal. Dismissals are normally challenged at the CCMA or bargaining councils.

As is evident, changing the terms and conditions of employment contracts are fraught with complexities. The consistent idea of avoiding these difficulties is to engage thoroughly, through consultation with the affected employees. Employers must beware, that if unilateral changes to the terms and conditions of employment are not approached with caution, this may have a crippling effect on business and potential risk in terms of a strike, or cases in the CCMA or Labour Court.

Article by: Shakti Jainarain – Senior Dispute Resolution Official – Durban



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Originally appeared on ceosa.org.za on 19-07-2019. The views expressed herein are those of the author and do not necessarily reflect those of estome. estome accepts no responsibility for the accuracy, completeness or fairness of the article, nor does the information contained herein constitute advice, legal or otherwise.

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