Understanding the use of an Ultimatum and Reservation of a right to dismiss employees

Understanding the use of an Ultimatum and Reservation of a right to dismiss employees

It is generally accepted that an ultimatum serves as a final peremptory demand or statement of terms, the rejection of which may result in stringent measures being taken or the breakdown of a relationship.

Where an ultimatum is issued and subsequently results in compliance by employees, the employer would have achieved its purpose, which would normally be that employees cease participating in an unprotected strike.

 

A question may arise as to whether an employer can reserve a right to dismiss employees who participated in an unprotected strike, notwithstanding their compliance with such ultimatum issued by an employer. In this blog we will explain the importance of using the correct wording in an ultimatum by using a caselaw example.

Caselaw AMCU obo Rantho and others v Samancor Western Chrome Mines (2021) (LAC)

This issue was a subject for determination in the Labour Appeal Court (LAC) in the case of AMCU obo Rantho and others v Samancor Western Chrome Mines (2021) (LAC). Briefly, the background to this case is that Samancor issued an ultimatum to employees, AMCU members, who had embarked on an unprotected strike.

  • The employees were required to report for duty, failure of which would result in a final ultimatum being issued advising them that they would face disciplinary action if they failed to comply again. Samancor stipulated in the ultimatum that it reserves the right to discipline or dismiss the employees for participating in an unprotected strike.
  • The employees complied with the ultimatum but were nonetheless charged for misconduct and dismissed. In dismissing the employees, Samancor also relied on the fact that the employees had received final written warnings for the same misconduct.
  • AMCU then took the matter to the Labour Court which found the dismissals to be substantively fair, mainly because Samancor had reserved its right to dismiss the employees when it issued the ultimatum.  
  • At the Labour Appeal Court, the dismissals were found to be substantively unfair. The Labour Appeal Court reaffirmed the settled legal position that an ultimatum is a waiver of a right to dismiss. The court placed emphasis on Item 6(2) of the Code of Good Practice: Dismissal and held that “reservation of a right to dismiss would impermissibly undercut the purpose of an ultimatum”. Notably, the wording of the ultimatum was such that the employees were only to face dismissal if they failed to comply with a final ultimatum. Their compliance with the first ultimatum shut the door for the employer to dismiss them. This seems to indicate that an ultimatum should be worded clearly to avoid ambiguity and for it to be in line with the Code of Good Practice for Dismissal.

In conclusion

Employers should always bear in mind the need for clarity when drafting ultimatums. A poorly drafted ultimatum may be interpreted as defeating the very purpose it ought to achieve, and somehow create room for employees to rely on ambiguity to succeed in litigation. Another crucial feature to be considered in an ultimatum is the reasonableness of the period of time within which employees are expected to comply. Reasonableness may be established by considering a number of factors, for example: the nature of the business of the employer, the distance that employees need to travel to get to the workplace, etc.

SERR Synergy guides and assists businesses in proactive and supportive ways with regard to the required processes and procedures to ensure compliance with labour legislation and to mitigate the risks to which businesses are exposed in relation to employment issues.

About the Author: Phumlani Nyawo is an admitted attorney of the High Court of South Africa and a Legal Advisor at SERR Synergy’s Labour Department in Durban where he advises clients on all labour matters. He obtained his LLB degree with Dean’s Merit from the University of Zululand in 2016. He then completed his articles at a law firm over a period of two years and spent another two years in practice after being admitted. He believes that there is not the so called “extra-mile” when serving clients but rather an “all-round” commitment with no known measurements.”

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