SECTION B: Magazine Articles Select and Read the articles from the folder on BB Introduction and overview to Section B Title of Magazine Article Name / Student Number Summary of article not more than one typed paged Identify the Employment Laws and briefly explain the main legal issues related to the article you selected. Comment on the author's perspective of the article that is you must critically evaluate the article. (one/ two typed pages only) Does it provide a fair perspective of the matter/issue to the various role-players in the employment relationship? CCMA warning for businesses in South Africa Employers have been warned that defying a CCMA judgement can cost millions. In a recent Johannesburg Labour Court case, a director at a Spar in Johannesburg was fined R1 million for contempt of Court after refusing to reinstate an unfairly dismissed worker. \"The worker had won an arbitration award ordering his reinstatement. However, despite the arbitration award being enforced as if it were an order of the Labour Court in terms of section 143 of the Labour Relations Act, Spar failed to rehire him,\" said Tertius Wessels, Legal Director at Strata-g Labour Solutions. \"This blatant disregard for the law prompted the worker's union, ECCAWUSA, to file a contempt application against Spar and the employer.\" The Labour Court found the employer personally liable for the contempt, remarking that employers generally treat arbitration awards with respect. The Court also criticised Spar for trying to advance technical arguments in court\" to avoid complying with the order. The Court said that there are four elements that are necessary for a contempt order: Existence of the order: The arbitration award ordering the employee's reinstatement was clear and valid. Service of the order: Spar acknowledged receiving the order, and the employer's email address was included in the communication. Non-compliance with the order: Despite the order, the employee was not reinstated. Wilful and mala fide non-compliance: The Court found the employer's actions to be deliberate and in bad faith. Although the employer's lawyer tried to argue that the application failed to address how the order was served, the Court said that this defence was technical and flimsy, with additional evidence showing that the employer, as the responsible director, was aware of the order via an email sent to Spar. In addition, the Court said that the employer''s refusal to reinstate the employee was driven by \"harassment\" and \"fatigued and flimsy reasons.\" This behaviour and the attempts to delay compliance via technicalities were deemed enough for a significant penalty. Wessels said that the R1 million fine serves as a strong deterrent against future contempt cases, with the Court also ruling that the employee had to be reinstated within 30 days. \"This case has important implications for both employers and employees. It sends a clear message to employers that ignoring court orders will not be tolerated and could result in severe financial penalties. For employees, it reinforces the principle that they have recourse to legal mechanisms to address unfair treatment,\" he added. 'Beyond the legal implications, the case also highlights the human cost of unfair dismissal. The employee was deprived of his job and livelihood, and it took significant legal effort to secure his reinstatement. This underscores the importance of fair labour practices and the need for employers to treat their employees with dignity and respect.\" Rising Tides: The National Minimum Wage & Keeping Your Business Buoyant The recent announcement by the Department of Employment and Labour to increase the Mational Minimum Wage (MMW) from R25.42 to R27.58 per hour, effective from 1 March 2024, marks a critical juncture for South Africa's labour market. This legislative change is aimed at addressing longstanding issues of living wages and economic disparity, seeking to uplift the standard of living for countless workers across the country. However, while the intentions behind this increase are commendable, it undeniably brings forth significant challenges for employers, particularly for those operating small to medium-sized enterprises {SMEs) that are vital to the economic fabric of South Africa. Understanding the Impact The adjustment in the NMW is a reflection of a broader effort to combat income ineguality and foster a more equitable economic environment. For workers, this increase represents a much- needed upliftment in their earning potential, enabling better living conditions and financial stability. However, for employers, especially those leading SMEs, the rise in wage costs is a considerable concern. These businesses often operate on slim margins and have been particularly vulnerable to the economic fluctuations and uncertainties of recent years, including the global pandemic's aftermath. Increased payroll expenses can strain operational budgets, necessitating a review of current financial strategies and, possibly, adjustments to business models and pricing mechanisms. The challenge is to balance the higher costs with the need to remain competitive in the market, a task that requires careful planning and strategic foresight. How to Keep Buoyant: Financial Planning and Analysis: Employers should begin by conducting a thorough financial analysis to understand the full impact of the wage increase on their operations. This involves revisiting budget allocations, forecasting future expenses, and adjusting financial medels to account for the higher payroll costs. It may also be prudent to explore cost-saving measures in other areas of the business to offset the wage increase. Operational Efficiency: Enhancing operational efficiency is more crucial than ever. Employers should assess their current processes and identify areas where improvements can be made. This could involve adopting new technologies to automate tasks, streamlining workflows, or re- evaluating supplier contracts for better terms. Improving efficiency can help mitigate the impact of rising labour costs by reducing waste and maximising productivity. Workforce Management: Another critical strategy is to focus on workforce management, ensuring that each employee's contribution is maximised. This might mean redefining job roles to ensure that staff are deployed in areas where they can add the most value, investing in training and development to enhance skills and productivity, and considering flexible work arrangements to optimise staffing levels without compromising output. Reviewal of Pricing Strategies: With increased operational costs, businesses may need to review their pricing strategies. While raising prices is a sensitive matter, especially in a competitive market, it may be necessary to ensure the sustainability of the business. Any changes to pricing should be carefully considered, taking into account customer/client loyalty and market demand. Transparent communication with customers or clients about the reasons for price adjustments can also help mitigate any potential backlash. The increase in the National Minimum Wage is a significant development for South Africa's labour market, bringing both challenges and opportunities for employers. By adopting a strategic approach that includes careful financial planning, operational efficiencies and proper worlforce management, businesses can navigate these changes successfully and continue to thrive in a changing economic environment. Article By Wesley Field Bettlement agreement in mass retrenchments In GB Engineering (Pty) Ltd v Mbongo and Others [2024] 1 BLLR 14 (LAC) there was a large- scale retrenchment governed by s 189A of the Labour Relations Act 66 of 1995, which involved a facilitated consultation with the union, National Union of Metalworkers of South Africa (NUMSA). As part of the consultation process certain employees concluded voluntary severance packages. In addition, a settlement agreement was concluded between the employer and NUMSA in respect of those employees who did not opt for voluntary severance packages. In this regard, it was agreed that the employer would pay severance packages to those who took early retirement or were retrenched, and the employer paid those packages. The settlement agreement was to the effect that the employees whose names were reflected in the annexure to the agreement had agreed to be retrenched and were paid a ''sweetener'. This sweetener was never paid back by the employees nor was the settlement agreement set aside. The employees then referred unfair dismissal claims to the Labour Court (LC). The employer argued that the LC did not have jurisdiction to determine the dispute because a settlement agreement had been concluded and the settlement agreement was in full and final settlement of all claims. The employees argued that they did not give NUMSA a mandate to agree to the settlement agreement and that they were no longer members of the union but there was no evidence that they were not members at the time that the settlement agreement was concluded. It was held by the Labour Appeal Court (LAC) that the employees were bound by the settlement agreement as a settlement agreement resolves an underlying dispute unless there was misrepresentation or duress, which was not found to be the case. Therefore, the settlement agreement was in full and final settlement of the s 189A large scale retrenchment process. It was remarked that it weighs against duress if the party to the settlement agreement fails to repay the settlement amount. Reference was also made to the fact that the Constitutional Court has held when parties reach a full and final settlement the courts have a powerful interest in enforcing the agreement and parties should not be lightly released from such agreements. The LAC also found that the settlement agreement was a collective agreement and therefore the LC had erred in determining an unfair dismissal dispute, which had already been settled. It was accordingly held that the LC did not have jurisdiction to determine a dispute over the fairness of the dismissals and the LAC substituted the LC's order with an order that it did not have jurisdiction to determine the disputes referred to it. Monique Jefferson BA [Wits) LLB (Rhodes) is a legal practitioner at DLA Piper in Johanneshurg. This article was first published in De Rebus in 2024 (March) DR 46