A recent Labour Court judgment in Mqikela v Pristo Response Trading demonstrates how attempting to disguise the true reason for an employee’s dismissal can backfire — both financially and reputationally. In this key case, the court’s message was clear: Retaliation against employees for asserting their statutory rights will not be tolerated.
The key facts
An HR Manager at Pristo Response Trading, Ms Mqikela (‘the Plaintiff’) was dismissed shortly after referring an unfair labour practice to the CCMA. Although the company (‘the Defendant’) claimed the dismissal was part of a retrenchment process linked to outsourcing, the timing and inconsistencies in their explanation revealed a different story.
The Plaintiff had raised a grievance internally regarding bonuses and salary disparities, which remained unresolved for over a year. In January 2022, she referred an unfair labour practice to the CCMA. The following day, she was informed of a potential retrenchment – allegedly due to operational requirements. A formal notice followed, which pinpointed financial strain and outsourcing as the basis for the retrenchment. Crucially, only the Plaintiff was targeted. She was dismissed in April 2022.
The Labour Court’s findings
In assessing the evidence, the Labour Court focused on the true reason for dismissal. Ultimately, it found significant contradictions in the employer’s version of events, including inconsistent dates and unsubstantiated claims. Indeed, the retrenchment appeared to be a smokescreen, and the dismissal was ultimately triggered by the Plaintiff’s referral to the CCMA.
According to section 187(1)(d) of the Labour Relations Act (‘the Act’), a dismissal is automatically unfair if the employee took action – by exercising their statutory rights – against their employer. In line with the precepts of this provision, which is designed to allow employees to challenge their employer’s conduct in the appropriate forum, the court deemed the Plaintiff’s dismissal to have been automatically unfair.
Consequently, the Plaintiff was awarded 20 months’ compensation, namely R300 000.00, and the Defendant was ordered to pay the costs of suit. In formulating the order, the Labour Court emphasised that the Defendant’s conduct – knowingly advancing a false reason – warranted a serious response. In addition, it criticised the employer for approaching it ‘with dirty hands’, a term reserved for particularly disingenuous litigants.
A lesson to employers
The outcome of the case highlights the obvious riskiness of deceptive dismissals that attempt to mask retaliation as retrenchment, as well as the clear protections for employees established by the Act, including reinstatement and compensation. Ultimately, dismissals must be both procedurally and substantively fair – and those closely followed by the exercise of a clear statutory right, namely referring a purportedly unfair labour practice to the CCMA, will undoubtedly attract additional scrutiny.
Poorly handled dismissals can result in large payouts, reputational damage, and adverse cost orders. Don’t get caught out. Contact our labour law specialists at labour@stbb.co.za for expert legal guidance.
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