Seethal / SGMH Cartridge Supplies (Pty) Ltd  9 BALR 955 (CCMA)
As set out in our first Friday question for the month of November, everyone is entitled to fair labour practices. I reiterate that while section 186(2) of the Labour Relations Act 66 of 1995 (LRA) defines an unfair labour practice, the Constitutional Court has held that this is not an exhaustive list as section 23(1) of the Constitution creates a protective umbrella.
Where an employer reduces or deducts from an employee’s salary without prior consultation or agreement, even if the employer has a valid reason for wishing to make the reduction/deduction, this could fall within the ambit of an unfair labour practice. The employee would be within their right to challenge such a reduction/deduction. In the aforementioned matter, the CCMA dealt with, inter alia, an unfair labour practice and a reduction in salary which was referred as a section 73A dispute.
Ms. Seethal was employed during March 2010 by SGMH as a sales representative. She earned R12 000.00 per month with a commission incentive of 10% per sale. As a result of the pandemic and various lockdown levels in South Africa, SGMH reduced her salary, without prior notification or consultation, for the period November 2020 to July 2021. In a desperate attempt to demonstrate her unhappiness of the salary reduction, Ms. Seethal resigned on 3 August 2021 but commenced employment again on 11 August 2021. It was only at this stage that SGMH informed her that it would be further reducing her salary to half. She did not agree thereto and referred a dispute to the CCMA on the basis of, inter alia, an unfair labour practice and also claimed the outstanding salary payments for the period of November 2020 until July 2021.
SGMH held that the original reduction in salaries was applicable to everyone and that before reducing the salaries in August 2021, it did notify the staff and Ms. Seethal agreed thereto.
The CCMA Commissioner held that while the pandemic and lockdown had been a drastic and unexpected event, it did not detract from the employer’s legal obligations and responsibilities towards its employees. The Commissioner had to decide two issues, namely –
- Was Ms. Seethal consulted regarding the salary reduction; and
- Did she consent to the salary cut?
During testimony, SGMH’s witness confirmed that at the time of the salary cut for the period of November 2020 until July 2021, Ms. Seethal was on maternity leave and not present at work. Hence she had not been notified or consulted on this aspect. SGMH could also not provide evidence/proof that it had prior to the salary reductions consulted with Ms. Seethal. The Commissioner noted that only in August 2021 when Ms. Seethal resigned and came back, was it only then agreed that the salary could be reduced. The tacit acceptance of the reduction in August 2021 was more probable for the Commissioner.
The Commissioner finally held that SGMH was liable to pay Ms. Seethal her full salary for the period of November 2020 until July 2021 as the employer failed to (1) notify her of the reduction of her salary and (2) obtain her consent in order to implement the reduction.
In conclusion, where a reduction in salary or short time has not been agreed with an employee upfront (preferably in a written document), the employer is to obliged to inform the employee of the proposed salary reduction and thereafter gain the employee’s consent to reduce the salary for a definitive/limited period of time. Salary amounts are after all a material aspect of the employment relationship. In the event no such an agreement is reached between the employer and employee, the employer would have the option to initiate a retrenchment exercise with a view to reducing the salary as an alternative to retrenchment. Bearing in mind that the employer must be conscious of and not fall foul of section 187(1)(c) of the LRA.
Candace Bachmann – Associate Attorney
Justine Del Monte & Associates Incorporated