Can my employer change my terms and conditions of employment?

By Johanette Rheeder

Employees often refuse to perform tasks that are not included in their terms and conditions of employment. In such cases, employees are at a disadvantage if their employment contracts are silent on certain tasks they are required to perform, or if they do not have a written employment contract setting out their duties at all. It also often happens that an employer wants to change the operations of his business or even his employees’ terms and conditions of employment. In such cases the question arises whether an employer is entitled to change the terms and conditions of employees’ employment and, if so, how it has to be done and whether the changes the employer wants to effect are indeed changes to the terms and conditions of employees’ employment.

The Labour Court was called upon in 2012 to determine whether a collective agreement excluded an employer’s power to change his operations and whether this change created terms and conditions of employment in the case of Apollo Tyres South Africa (Pty) Ltd v National Union of Metalworkers of South Africa (“NUMSA”) & others (2012) 21 LC 4.3.1 and [2012] 6 BLLR 544 (LC). The parties entered into a collective agreement in 2004 regarding the implementation of a 12-hour, three-shift system in respect of those employees employed in the Durban factories. It is common cause that at a later stage the parties orally agreed to extend the shift system to the rest of the applicant’s factory. The employer commenced a consultation process with the union to amend the shift patterns set out in the agreement of 2004. The union maintained that these amendments constituted unilateral changes to the employees’ terms and conditions of employment (as created by the collective agreement) and the employer maintained that the changes fell within his managerial prerogative and did not constitute changes to the employees’ terms and conditions. The union informed the employer that the employees would continue to work according to the existing shift rosters and referred a dispute concerning a ‘matter of mutual interest’ to the bargaining council. The employer sought orders declaring that the change in shift patterns did not constitute a change to his employees’ terms and conditions of employment, alternatively, restraining the employees from engaging in a strike to prevent him from introducing the new shifts. The respondent contended that the employees’ right to work the current shifts flowed from a collective agreement which, they said, remained in force.

 

The court found the crux of the issue simply to be: did the employer’s proposed changes to a shift system constitute a unilateral change to terms and conditions of employment, or did they fall within the realm of a work practice and accordingly within management’s prerogative to effect the change? In other words, did the shift pattern recorded in the collective agreement in the specific circumstances of this matter constitute a term and condition of employment?

 

The court confirmed the first principle which had been decided on by the Labour Court on numerous previous occasions, namely that changing a shift system, in itself, does not constitute a change to terms and conditions of employment, but a change to the operations of an employer does not have to be negotiated with the employees, as it falls within the managerial prerogative of an employer. Changes to a shift system will only constitute changes to terms and conditions if it can be established that the right to work according to a specific shift is a contractual right to work.

 

Secondly, the court looked at the definition of a collective agreement, especially the requirement that it has to be in writing, and found that the oral amendment to the agreement to cover the rest of the employees did not constitute a collective agreement and the determination of the shift patterns of the rest of the employees remained within the applicant’s prerogative as a work practice.

 

The next question, according to the court, considering the definitions of a collective agreement as per the provisions of the Labour Relations Act (LRA), to be answered was whether the agreement ‘regulated terms and conditions of employment’ and, therefore, satisfied section 23(3) and whether the applicant was entitled to change the shift patterns in accordance with the agreement (for the truck and tyre employees). The respondents argued that the collective agreement had established this contractual right to work the agreed shift patterns change and accordingly they formed part of all the employees’ terms and conditions of employment.

 

The court then looked at the wording of the collective agreement and found the collective agreement only bound the employees in the truck and tyre department. With regard to the effect of the collective agreement on the terms and conditions of the employees in the applicant’s truck and radial (tyre) department, the court found it was clear from the wording of the agreement that it was always the intention of the parties that it should regulate the terms and conditions of their employment. Upon further scrutiny of the collective agreement, the court found that the collective agreement also contractually entitled the employer, after consultation, to ‘discontinue or modify’ the shift pattern to ‘achieve its operational requirements’. The only requirement being consultation, the employer had complied with the collective agreement and could proceed to change the shift system. The court found it trite that the requirement of consultation did not involve the requirement that the parties had to agree. The applicant in this matter had therefore simply been required to engage the respondents in consultation before he changed the shift pattern. The court was therefore of the view that, while the shift patterns that were the subject of the collective agreement were terms and conditions of employment in respect of the employees in the applicant’s truck and radial (tyre) department, so too did the collective agreement regulate the employer’s right to discontinue or to modify the shift patterns to achieve his operational requirements. The import of this clause of the agreement was no more than a record of the applicant’s right to change shift patterns, which were terms and conditions of employment, after consultation. Therefore, by virtue of clause 12 of the collective agreement, the employer was entitled to change the shift patterns, although they constituted terms and conditions of employment. The court confirmed that this did not, however, preclude the union and the employees pursuing the dispute regarding the imposition of the new shift patterns as a dispute of interest in accordance with the provisions of section 64(1) of the LRA.

In Cape Clothing Association v Southern African Clothing and Textile Workers Union & another (2012) 21 LC 9.5.1 and [2012] 6 BLLR 552 (LC) the interpretation of a collective agreement relating to terms and conditions of employment also came under scrutiny, especially in the context of section 64(4) of the LRA. After the parties had disagreed over the meaning of a collective agreement regulating annual leave and the quantum of annual leave pay, the union referred a dispute to the bargaining council, contending that the applicant had unilaterally amended the terms and conditions of his members’ employment, and threatened to strike if the applicant did not grant the leave to which the union’s members claimed to be entitled. The union referred a dispute in terms of section 64(4) and demanded that the changes be reversed as required by the section, failing which it would embark on strike action. The applicant contended that the strike would be unprotected, because the dispute concerned the interpretation and application of a collective agreement, which was a dispute which must be referred for arbitration under the LRA. The court found that, properly characterised, the dispute between the parties in this instance concerned the application and interpretation of the collective agreement between them. The appropriate remedy in this instance was to invoke the provisions of section 24 and to refer the case to the Commission for Conciliation, Mediation and Arbitration (CCMA).

 

The court subsequently looked at the employees’ referral in terms of section 64(4) and ruled that it was not persuaded that the provisions of section 64(4) gave rise to a right to strike in the present circumstances. This section concerns preserving the status quo, pending the outcome of the conciliation process prescribed by the Act. To invoke the remedy established by section 64, it is necessary to establish both an existing term and condition of employment and the fact of a variation of that term and condition by the employer, in circumstances where the employee has not consented to the variation. The court found that for this section to apply, there must have been an overt act by the employer that constituted the act of variation. This element was not present in this instance. The status quo relied on by the union is its interpretation of the main agreement was part of the dispute between the parties and did not relate to a unilateral change. Secondly, the court found the temporary nature of the status quo relief was a clear indication that it was not intended to apply in circumstances such as the present. In Du Toit et al in Labour Relations Law: A Comprehensive Guide (5ed), it was observed that section 64(4) does not apply to changes that may be referred to arbitration or adjudication in terms of the Act, because such disputes are excluded altogether from the ambit of protected industrial action. Therefore, a union is not entitled to rely on section 64(4) to give notice of a strike without the time periods established by section 64 being exhausted.

 

While it is clear that an employer cannot unilaterally change the terms and conditions of employees’ employment, the employer does retain some managerial prerogative in respect of aspects that are not entrenched in the contractual relationship. The employer retains the power to change shifts in terms of his managerial prerogative. Consultation will suffice in such an instance. Terms and conditions can be regulated or created by means of collective agreements and parties should carefully note the wording of the collective agreements they enter into. Changes to terms and conditions of employment must be negotiated (as opposed to consultation) with employees and agreement must be reached to effect those changes.

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