Reasonableness Review — The Quest for Consistency

by | Oct 19, 2024 | ILJ, ILJ V45 I3

Reasonableness Review — The Quest for Consistency

Author Anton Myburgh

ISSN: 2413-9874
Affiliations: Senior Counsel, Johannesburg Bar (Sandton); Adjunct Professor of Law, Nelson Mandela University
Source: Industrial Law Journal, Volume 45 Issue 3, 2024, p. 1377 – 1394
https://doi.org/10.47348/ILJ/v45/i3a1

Abstract

Reasonableness reviews in the Labour Court are something of a lottery because different judges have different thresholds for unreasonableness. This article discusses three things that the labour courts can do with a view to achieving a measure of consistency in decision-making: firstly, by determining the intensity with which reasonableness reviews should be undertaken, particularly in relation to dismissal for misconduct awards; secondly, by setting uniform standards for the threshold for unreasonableness; and, thirdly, by adopting a uniform approach to the methodology involved in testing for reasonableness on review.

Barriers to the Making or Breaking of Severance Pay

by | Oct 19, 2024 | ILJ, ILJ V45 I3

Barriers to the Making or Breaking of Severance Pay

Authors Rochelle le Roux & Euraeffie Oppon

ISSN: 2413-9874
Affiliations: Professor, Faculty of Law, University of Cape Town; PhD candidate, Faculty of Law, University of Cape Town
Source: Industrial Law Journal, Volume 45 Issue 3, 2024, p. 1395 – 1423
https://doi.org/10.47348/ILJ/v45/i3a2

Abstract

The retrenchment and severance pay provisions in the Labour Relations Act 66 of 1995 (LRA) cannot be reviewed without analysing the supporting provisions of s 41 of the Basic Conditions of Employment Act 75 of 1997 (BCEA), specifically the relationship between s 41(4) and s 84(2) of the BCEA and the jurisprudence on these provisions to date. Ultimately, the courts’ reasoning is that s 41(4) of the BCEA ensures employment security by deterring employers from retrenching employees by paying severance pay, and conversely by ensuring that employees do not unreasonably refuse alternative employment in an effort to frustrate the retrenchment process or to secure a severance payment instead. Further focal discussion points in this article are the determination of the reasonableness of rejecting alternative employment, the length of the interruption(s) in the employment period, and the calculation of severance pay that is due to affected employees (taking into account any prior payments already made to the employees). Additionally, the impact of contractually agreed severance pay on the BCEA statutory provisions is considered and recent jurisprudence in this regard is critiqued.

Discourse on Menstrual Leave in a South African Context

by | Oct 19, 2024 | ILJ, ILJ V45 I3

Discourse on Menstrual Leave in a South African Context

Authors Annalise Thulapersad & Janine Hicks

ISSN: 2413-9874
Affiliations: LLB (KwaZulu-Natal), LLM (KwaZulu-Natal); Senior Lecturer in Law, University of KwaZulu-Natal, LLB (KwaZulu-Natal), MA (University of Sussex), PhD (KwaZulu-Natal)
Source: Industrial Law Journal, Volume 45 Issue 3, 2024, p. 1424 – 1453
https://doi.org/10.47348/ILJ/v45/i3a3

Abstract

The notion of menstrual leave as a workplace leave entitlement has begun gaining global traction, with Spain recently becoming the first European country to implement a specific menstrual leave policy. South Africa’s labour law does not include a provision entitling female employees to menstrual leave. Consequently, women are forced to utilise their sick leave if they are unable to attend work due to menstrual pain and discomfort. Should the South African government respond to calls for the inclusion of menstrual leave in labour law, there are several factors which lawmakers and employers in South Africa would need to consider. This article examines relevant South African labour legislation and state obligations in terms of international, regional and constitutional law with a view to the introduction of menstrual leave in South Africa. It further assesses global best practice and provides an analysis of possible policy measures, practical implementation considerations and legislative amendments to the Basic Conditions of Employment Act 75 of 1997, while also examining the application of existing provisions within the Employment Equity Act 55 of 1998 in order to contribute to this discourse.

Termination of Employment by the Employer without Giving Reasons in Uganda and Art 4 of the ILO Termination of Employment Convention

by | Oct 19, 2024 | ILJ, ILJ V45 I3

Termination of Employment by the Employer without Giving Reasons in Uganda and Art 4 of the ILO Termination of Employment Convention

Author Jamil Ddamulira Mujuzi

ISSN: 2413-9874
Affiliations: Professor, University of the Western Cape
Source: Industrial Law Journal, Volume 45 Issue 3, 2024, p. 1453 – 1474
https://doi.org/10.47348/ILJ/v45/i3a4

Abstract

Uganda ratified the International Labour Organisation (ILO) Termination of Employment Convention 1982 without reservations. Article 4 of the convention provides that ‘[t]he employment of a worker shall not be terminated unless there is a valid reason for such termination connected with the capacity or conduct of the worker or based on the operational requirements of the undertaking, establishment or service’. Uganda has not yet domesticated the whole convention and art 4 in particular. Section 65(1)(a) of the Employment Act 2006 provides that termination of a contract of employment or service is deemed to take place ‘where the contract or service is ended by the employer with notice’. It is silent on whether the employer has to give reasons for the termination. There are many cases in which the Industrial Court has relied on art 4 of the convention to hold that s 65(1)(a) of the Act requires an employer to give reasons for the termination of employment. However, these decisions have been set aside by the Court of Appeal on the grounds that s 65(1)(a) does not require an employer to give reasons and that art 4 has not been domesticated. In this article, the author relies on the drafting history of the Employment Act to argue that it was an oversight on the part of Parliament to omit the requirement for an employer to give reasons for terminating employment under s 65(1)(a). It is also argued, inter alia, that s 65(1)(a), as interpreted by the Court of Appeal, is unconstitutional and contrary to Uganda’s international treaty obligations. The conclusion of this article is that s 65(1)(a) should be interpreted as requiring an employer to give reasons for termination of employment. Reliance may be placed on legislation from countries such as Ghana, Malawi, the Seychelles and Zambia to suggest ways in which Uganda could expressly domesticate art 4 of the convention. The author also argues that the Supreme Court’s decision in DFCU Bank Ltd v Kamuli (2020) to the effect that the Court of Appeal is the apex court in labour matters is contrary to the drafting history of the Constitution.

Note: Systemic Delays and Penalty Reviews: Govender & others v CCMA & others (2024) 45 ILJ 1197 (LAC)

by | Oct 19, 2024 | ILJ, ILJ V45 I3

Note: Systemic Delays and Penalty Reviews: Govender & others v CCMA & others (2024) 45 ILJ 1197 (LAC)

Author Craig Bosch & Anton Myburgh

ISSN: 2413-9874
Affiliations: Advocate, Cape Bar; Senior Counsel, Johannesburg Bar
Source: Industrial Law Journal, Volume 45 Issue 3, 2024, p. 1475 – 1490
https://doi.org/10.47348/ILJ/v45/i3a5

Abstract

This judgment is important for two main reasons. Firstly, it highlights that systemic delays in the determination of review applications remain the norm, and it is a case study in the Labour Appeal Court (LAC) attempting to combat the consequences by way of creative decision‑making. Secondly, it is another example of the LAC having engaged in a high-intensity penalty review, but arguably having gone too far and not having applied the test for reasonableness correctly.

The risk of personal liability for money damages under the South African Companies Act, 2008 and the possible impact on nonexecutive directors

by | Oct 16, 2024 | JCCL, JCCL V9 I2

The risk of personal liability for money damages under the South African Companies Act, 2008 and the possible impact on nonexecutive directors

Author: Amukelani Baloyi

ISSN: 2521-2575
Affiliations: Legal Commercial Manager, Rand Water
Source: Journal of Corporate and Commercial Law & Practice, Volume 9 Issue 2, 2023, p. 1 – 15
https://doi.org/10.47348/JCCL/V9/i2a1

Abstract

This article considers, critically, the risks associated with imposing personal liability for money damages under the South African Companies Act and the risks of willingness by non-executive directors to serve on the board of companies due to risks associated thereto. The article considers the legal position relating to liability as it is known under common law and as it was applied by the South African courts over the years. Further consideration is given to the legal positions of similar provisions in other jurisdictions practicing similar company law practices. The introduction of the provisions requiring imposition of monetary damages on directors in South Africa followed on a comparable practice globally, specifically, on those countries which share company law practices. However, it will be discussed what South African policymakers may possibly have not considered following the deliberations during the drafting stage – as was advised by the advisors who were appointed to carry out the drafting exercise. The impact of imposing money damages will be discussed and the use of other mechanisms to mitigate against the potential effect of the statutory provisions will be discussed. Through a detailed analysis of the rights associated with money damages, recommendations will be made on how to best deal with the effects of these provisions.

Exemption of disposals of all or greater part of the company’s assets or undertaking from shareholder approval within the corporate group context

by | Oct 16, 2024 | JCCL, JCCL V9 I2

Exemption of disposals of all or greater part of the company’s assets or undertaking from shareholder approval within the corporate group context

Author: Khathutshelo Neluheni

ISSN: 2521-2575
Affiliations: Director: Corporate Mergers & Acquisitions, Property Law and Real Estate, Werksmans Attorneys
Source: Journal of Corporate and Commercial Law & Practice, Volume 9 Issue 2, 2023, p. 16 – 34
https://doi.org/10.47348/JCCL/V9/i2a2

Abstract

Section 112(1) of the Companies Act 71 of 2008 exempts a whollyowned subsidiary of a company from obtaining shareholder approval from its holding company to authorise the disposal of all or the greater part of the subsidiary’s assets or undertakings. This exemption exposes the shareholder to abuses including the subsequent onward disposal of its newly acquired assets to a third party, which diminishes the value of the group as a whole, as well as the dilution of the holding company’s shareholding. In light of these threats, the shareholder vote exemption provisions of the Companies Act may need to be re-examined for purposes of guarding against the aforementioned abuses.

The bottle has popped – how the Companies Act 71 of 2008 has incorporated derivative actions for stakeholders in South African law

by | Oct 16, 2024 | JCCL, JCCL V9 I2

The bottle has popped – how the Companies Act 71 of 2008 has incorporated derivative actions for stakeholders in South African law

Author: Emshareed Botes

ISSN: 2521-2575
Affiliations: Admitted Advocate of the High Court of South Africa
Source: Journal of Corporate and Commercial Law & Practice, Volume 9 Issue 2, 2023, p. 35 – 56
https://doi.org/10.47348/JCCL/V9/i2a3

Abstract

The legal position established in the famous case of Foss v Harbottle (Foss v Harbottle) is no longer applicable under the new corporate legal framework of the Companies Act 71 of 2008 (‘the Act’). The principle in Foss v Harbottle, stated simply, is that where a wrong is done to a company, only the company may sue for damages caused to it. I argue that the derivative actions established through the Act, along with South Africa’s new corporate governance principles, negates the outdated notion that a company alone may sue for damages caused to it. Through the assessment of the case of Hlumisa Investment Holdings (RF) and Another v Kirkinis and Others (‘Hlumisa’), along with ss 218(2), 165, 157, 20(4) and 162(2) of the Act, it will be established that stakeholders of a company have the intrinsic legal standing to institute derivate actions on behalf of companies, in South African Company Law.

The sustainability of the proper plaintiff principle under the Companies Act 71 of 2008

by | Oct 16, 2024 | JCCL, JCCL V9 I2

The sustainability of the proper plaintiff principle under the Companies Act 71 of 2008

Author: Siphokazi Walaza

ISSN: 2521-2575
Affiliations: Candidate Attorney at Mdyesha Ndema Attorneys
Source: Journal of Corporate and Commercial Law & Practice, Volume 9 Issue 2, 2023, p. 57 – 70
https://doi.org/10.47348/JCCL/V9/i2a4

Abstract

The proper plaintiff principle was developed under common law in recognition of the separate personality of a company as one of the fundamental rules of company law. However, the concentration of the decision-making power in shareholding groups and the directors of the company eventually led to the realisation that the unconditional application of the principle threatened the rights of minority shareholders, creditors and the company itself. Corporate governance policies placing greater focus on the enlightened shareholder approach, have resulted in a corporate legal enforcement framework in the Companies Act 71 of 2008 that provides remedies extending legal standing to a larger class of persons. The inclusion of these remedies appears to put the proper plaintiff principle at risk as its relevance under the Act has now been put into question. This article examines the proper plaintiff principle and the remedies now available in the Companies Act. It also considers the reasoning behind the court’s interpretation of the proper plaintiff principle and certain remedies regarding claims for reflective loss in Hlumisa Investment Holdings (RF) Ltd v Kirkinis, to illustrate that the principle remains relevant despite the inclusion of the corporate legal enforcement framework that is now embodied in the Companies Act 74 of 2008.

Changes to Maryland General Corporation Law and Maryland Reit Law effective October 1, 2024

by | Oct 14, 2024 | JCCL, JCCL V9 I2

Changes to Maryland General Corporation Law and Maryland Reit Law effective October 1, 2024

Authors: James J Hanks Jr, Patsy McGowan, Michael A Leber

ISSN: 2521-2575
Affiliations: Partner, Venable LLP
Source: Journal of Corporate and Commercial Law & Practice, Volume 9 Issue 2, 2023, p. 71 – 74
https://doi.org/10.47348/JCCL/V9/i2a5

Abstract

During its 2024 session, the General Assembly of Maryland approved Senate Bill 400 and House Bill 749, amending several provisions of the Maryland General Corporation Law (the ‘MGCL’) and the Maryland REIT Law (the ‘MRL’), which are now codified as Chapters 609 and 608 of the Laws of Maryland 2024, respectively. The General Assembly also approved House Bill 888 and Senate Bill 544, amending certain provisions of Title 2, Subtitle 7, of the MGCL relating to the ratification of defective corporate acts, which are now codified as Chapters 605 and 604 of the Laws of Maryland 2024, respectively. The legislation will take effect on 1 October 2024. Here are the key provisions (all section references are to the MGCL unless otherwise noted).