Edcon Ltd v CCMA (PR09/15) [2016] ZALCPE 25 ; [2017] 4 BLLR 391 (LC) (9 December 2016) per A van Niekerk J.

LexisNetwork BLLR headnote
“Contract of employment – Tacit term arising from long-standing practice – Employee who worked at particular site not acquiring contractual right to do so indefinitely because employer not intending to waive contractual right to transfer him for operational reasons.
Dismissal – Misconduct – Insubordination – Reinstated “casual” employee disobeying instruction to resume work at particular site on ground that he had acquired contractual right to work at site from which he was dismissed – Refusal constituting insubordination. ‘zero-hours contract’”

The former employee worked for some 8 years as a store assistant but on a ‘casual contract’, also referred to as a ‘zero-hours contract’.  This meant  he could be placed at any site in terms of the ‘operational requirements’ of Edcon.  The contractual term of the agreement read:

“Due to the inherent flexible nature of this type of employment contract, Edcon reserves the right to schedule you in accordance with business requirements.  This may mean that you may be required to work in different departments within the store.  You will also be asked to fulfil the tasks of the different positions that you are competent in.  This means that you will be expected to work in any department for which you are competent as business needs require”.

“In summary, the third respondent was contractually bound to render services as required by the applicant in accordance with its operational needs.  The arbitration award issued in September 2012 required him to report for duty on these terms.  It was not open to the third respondent to elect not to work simply because he preferred to work at the warehouse rather than the store.  The commissioner’s findings that a refusal to work in the circumstances could not constitute an act of gross insubordination ignored basic legal principles and the evidence that served before him, and that the consequence of an unreasonable outcome.  The award under review therefore stands to be set aside”. [para 16 of the judgment]

Excerpts without footnotes

Factual background

[4]        The material facts are not in dispute and are set out in some detail in the award under review.  The arbitrator records that the applicant is a retailer and has a store at the Greenacres centre in Port Elizabeth, as well as a warehouse located in Kensington in the same city.  There is also a stockroom in the Greenacres store from which goods are dispatched to the shop floor.

[5]        The third respondent was employed by the applicant for some eight years as a store assistant.  He was employed on what was termed a ‘casual contract’ (referred to in some jurisdictions as a ‘zero-hours contract’), an integral term of which was that the third respondent could be placed at any site as operational needs dictated.  The relevant term of the contract reads as follows:

Due to the inherent flexible nature of this type of employment contract, Edcon reserves the right to schedule you in accordance with business requirements.  This may mean that you may be required to work in different departments within the store.  You will also be asked to fulfil the tasks of the different positions that you are competent in.  This means that you will be expected to work in any department for which you are competent as business needs require.

[6]        In other words, the contract permitted the applicant to hire the third respondent with no guarantee of work, other than when needed by the applicant.  The third respondent had rendered services on this basis for some 8 years, mostly at the warehouse, but now and then at the Greenacres store.  During his employment, the third respondent was dismissed on two occasions.  The first was in May 2012 when the third respondent was dismissed for gross insubordination.  The third respondent disputed the fairness of his dismissal and referred the matter to the CCMA.  After an arbitration hearing, the presiding commissioner directed as follows:

The respondent must reinstate the applicant on the same terms and conditions as governed at the date of dismissal.  The applicant, Ranley Prince must report for duty on 25 September 2012.

[7]        The third respondent did not report for work on 25 September 2012.  At the end of October 2012 the third respondent was contacted and informed that he was required to report to the Greenacres store and that he would be working in the stockroom.  This decision, according to the applicant, wars driven by its current operational needs.  The third respondent did not report for work.  He formed the view that the terms of the award issued in his favour required him to be placed at the warehouse, we he had been working at the time of his dismissal.  He was also concerned that there would be fewer hours of work available to him at the store.  Various discussions took place between the parties, but on 30 May 2013, the applicant wrote a letter to the third respondent instructing him to report to the store.  The applicant did not report for duty.  On 15 June 2013, the applicant wrote another letter requiring the third respondent to report at the store on 20 June 2013, and that a failure to do so many result in disciplinary action being taken against him.  It is not disputed that the third respondent again failed to report for duty.

[8]        The third respondent was then called to attend a disciplinary hearing on a charge that he was grossly insubordinate when on 25 September 2012 and 20 June 2013 he refused to comply with an instruction to report for duty.  The third respondent was found guilty of this charge and dismissed on 23 August 2013.

. . . . . .

Analysis

[12]      I deal first with the arbitrator’s conclusions regarding the place of work and in particular, the conclusion that the applicant failed to comply with the September 2012 award by failing to reinstate the third respondent on the same terms and conditions.  It is clear to me from the third respondent’s affidavit that his perceived right to refuse the instruction to work at the Greenacres store room arose from the first award given in his favour.  The arbitrator accepted the submission on the basis of a finding that the third respondent working in the warehouse had become a term and condition of his employment by custom and practice.  There was no basis on the evidence before the arbitrator to come to this conclusion.

Although there is authority to support the proposition that a long-standing practice can give rise to a desert term of the contract of employment, the regularity of an occurrence (for example, the provision of the benefit) does not in itself constitute or give rise to a contractual term, unless the parties are becoming intention [sic- have a common intention?] of creating a contractual right (see CEPPWAWU obo Konstable & others v Safcol [2003] 3 BLLR 250 (LC) [per Pillay J]).

[13]      There was no evidence before the arbitrator that the applicant had agreed or intended to agree to a term that would afford the third respondent the right to be employed only at the warehouse, or that it ever waived the right to transfer the third respondent from the warehouse to the store should the need have risen.  What the commissioner did by finding that the third respondent had a contractual right to work in the warehouse, was effectively to rewrite the contract between the parties, now making it mandatory for the applicant to continue to employ the third respondent in the warehouse.  In doing so, the arbitrator not only made a material error of law (by misconceived the nature on which custom and practice may give rise to contractual terms), but he exceeded his powers.

The terms of the contract, which were before the arbitrator, were clearly to the effect that the applicant was entitled to place the third respondent on any site if there was an operational need to do so.  Despite the September 2012 arbitration award, the third respondent remained employed on the initial contract – the award did not give him a right that extended beyond the terms of that contract; it merely confirmed that he was entitled to be reinstated in terms of that contract.  The arbitrator did not reject evidence proffered on behalf of the applicant that the operational needs at the time of the third respondent’s reinstatement were to the effect that there was a need for an employee to work in the Greenacres store, since the staff complement at the warehouse was full.

[14]      The second ground for review in which the applicant relies is that of the arbitrator’s analysis of the nature of gross insubordination.  Even if I grant that the commissioner was correct in his view that in the circumstances of the present case, the third respondent had an inherent right to decide whether he wished to attend work or not, it does not follow that any instruction to report for duty is unreasonable or unlawful, or both.

The commissioner’s view that if an employee does not attend work (which he or she is entitled to do) that the consequences are limited to charges of absence without leave or desertion, this is a fundamental misunderstanding of the nature of the contract of employment.

The primary obligation of an employee is to work.  A refusal to work might will [sic] result in a charge of desertion and/or absenteeism, but there is no reason were it ought not, particularly where an instruction to report for duty is given in clear terms and understood by the employee, do constitute an act of insubordination.  The analogy was slavery is entirely inapposite – in the present instance, the third respondent was not being forced to work.  He wished to work, but only on his terms and without consideration for his contractual obligation to render work according to the applicant’s operational needs.