21 November 2024
The terms and conditions of employment described in a contract of employment usually include a myriad of items such as: the type of work expected to be performed by the employee, the place and hours of work, the salary or wages of the employee as well as leave and bonus entitlement. These are to be submitted to the employee in writing in the form of a contract of employment or in the form of written particulars. As soon as the terms and conditions of employment have been reduced to writing, employers often wonder whether they would need their employees’ consent before making alterations or changes to these terms and conditions in future.
Legal Background:
In terms of the Common Law, certain Collective Bargaining Agreements, as well as the National Minimum Wage Act, an employer may not unilaterally make changes to an employee’s terms and conditions of employment and the employee will need to agree to any amendments thereto. Since a contract of employment is an agreement between two parties, it follows that neither party can change any terms or conditions of the agreement without consent of the other party, as this would be considered as a breach of contract. According to section 64(4) of the Labour Relations Act, an employee can refer a dispute to the CCMA or relevant Bargaining Council if an employee unilaterally changes any terms or conditions of employment. This may result in the employees engaging in strike action and due to the unilateral change being a breach of contract, civil litigation could ensue for damages or due performance.
It is not uncommon for companies to face financial difficulties and need to consider the reduction of wages and hours worked, known as short-time, to assist the company during such a time. In order to consider these changes to the terms and conditions of employment, the employer is to consult with the employees or union representative to fully consider the company’s position, the length of time that these certain changes will occur for and the extent of the said changes. This is to allow the employees to voice any concerns, ask any questions or provide any alternatives to the implementation of any changes to the terms and conditions of employment prior to consenting to such.
In instances where employees refuse to agree to the relevant changes to the terms and conditions of employment, the employer may exercise its right to consult with the employees regarding possible retrenchment whereby the implementation of short-time will be an alternative to said retrenchment and a measure that can be taken to avoid the retrenchment of staff, which is ultimately seen as a last resort.
Case Study:
In the case of Hartley v SMD Trading Group CC (D138/21) [2024] ZALCD 16 (26 June 2024), Mr. Hartley brought his matter before the Labour Court as his employer reduced his salary in February 2019 by 67% due to financial constraints, without proper consultation or consent from the employee. Other senior members of the company also received reduced remuneration during this time, however, on a much smaller scale of between 10% and 30%.
The company submitted that the reduction in salary was agreed to verbally which Judge Snyman advised that, in terms of the Basic Conditions of Employment Act, the duty is squarely upon the company to keep and maintain proper records pertaining to the salaries of employees, which includes any increases or reductions thereof. Section 29(1) states that an employer must supply an employee with a number of particulars in writing, and section 29(2) states that when any matter pertaining to the written particulars in subsection (1) changes, the written particulars must be revised to reflect the change, and the employee must be supplied with a copy of the document reflecting such change.
Judge Snyman further submitted that the company, by unilaterally reducing Mr. Hartley’s salary by 67%, breached his contract of employment, which entitled the employee to resign and claim damages, which amounted to R460 500.00 for the difference in his salary for the months of February, March and April 2019. The lack of documentary evidence of any such agreement to the reduction resulted in the company being liable for the above amount which was to be paid to the employee.
Conclusion
Employers need to consult with their employees if they wish to make any changes to the terms and conditions of employment. If employees do not agree to said changes, there are other processes in law thar can be legally followed to avoid any adverse impact at the CCMA and Labour Court, such as retrenchment and short-time. For any assistance with the implementation of short-time or any other changes to the terms and conditions of employment as well as the consultation process to be held with employees, contact Invictus Group.
Contact Invictus for guidance and assistance in navigating changing employment terms. Get in touch with our office at 086 173 7263 or email us at admin@invictusgroup.co.za
