“Laid off” or suspended? Why it matters.

What is the difference between the two words “suspension” and “layoff”? And if they are used in the context of a labour dispute, does this change their meaning? A labour court judge has had to deal with these language issues as he tries to sort out conflict between a company and an employee who was “laid off” because there was no work in the early days of the Covid-19 pandemic. In the course of his judgment, he pointed out that the legislature had not defined “layoff” and “suspension” when they were imposed for a “non-disciplinary reason,” and that this made things even more complicated.

Read judgment

http://www.saflii.org/za/cases/ZALCJHB/2023/55.html

Though the Covid-19 pandemic seems largely over, at least in South Africa, it keeps surfacing in judgments via questions raised in its wake.

Most recently, it featured in a labour court case where the employer, Aminto Precast and Civil Engineering (Aminto), had laid off an employee, heavy-duty driver Cukelo Mgokolo, because there was no work for him during the initial lockdown phase of the pandemic.

Aminto faced a serious slump, and with no work available, Mqokolo could have been lawfully dismissed on the grounds that it was necessary for the company’s operational requirements.

As the pandemic eased

The company decided, however, not to dismiss him “for operational requirements,” but to lay him off instead, obviously in the hope that Aminto would soon get more work as the pandemic eased.

Mqokolo was therefore given written notice of being laid off, with effect from 12 November 2021. His layoff was to be reviewed two months later. Unhappy about the situation, Mqokolo asked the Commission for Conciliation, Mediation, and Arbitration (CCMA) to consider the matter. Initially, he complained about what he said had been an “unfair dismissal”. Later, his complaint was changed, and he said there had been “an unfair labour practice relating to suspension.”

At the CCMA, the arbitrator handling the matter, Maputle Mohlala, found that the layoff of Mqokolo amounted to a “suspension” in terms of the Labour Relations Act.

The arbitrator ordered the company to reinstate Mqokolo in his previous position, on the same salary and with the same benefits as he had enjoyed at the time he was “dismissed”, via his “suspension”, and also ordered that Aminto should backpay him some money.

No jurisdiction to hear the matter

Aminto decided to challenge this outcome and took the matter to the labour court, which has now delivered its decision.

The company argued that the arbitrator made a mistake about whether a layoff amounted to a “suspension.” According to Aminto, the kind of “suspension” referred to in the Labour Relations Act was “suspension” involving disciplinary measures. But Mqokolo was not subject to a “suspension” of this kind. He was laid off for a period because there was no work, argued Aminto, and he was thus not ‘suspended’.

They added that a layoff was not a step involving disciplinary measures. As the CCMA was empowered to deal with disputes resulting from disciplinary measures, the arbitrator had no jurisdiction to hear Mqokolo’s matter in the first place.

The judge hearing the matter, Graham Moshoana, agreed that, in principle, the CCMA would only have jurisdiction to hear a matter involving suspension if that suspension involved disciplinary measures. He therefore needed to examine what kind of suspension was involved in this case.

Unfortunate that the LRA did not define the word

He said it was “unfortunate” that the Labour Relations Act didn’t define the word “suspension.” This meant that the court had to give the word its “ordinary grammatical meaning,” namely “a temporary cessation or prevention.”

In an employment context, it would be a temporary stoppage of work. “When an employee is placed on  suspension, such an employee would be without work for the duration of the suspension,” he said.

What did “layoff” mean? Grammatically, it meant discharging an employee permanently or temporarily, usually due to a shortage of work, said the judge. There were similarities between a suspension and a layoff. In both cases, an employee would be without work for a period, but while a layoff only happens where there is a shortage of work, a suspension could happen even when there is no shortage of work.

Due to operational reasons

In South Africa’s employment context, when there was a shortage of work, this would be the basis for dismissing an employee “due to operational reasons.” An employer, faced with a shortage of work, had a fair reason to dismiss an employee affected by the shortage, but the law compelled the employer to consider alternatives before opting to dismiss an employee for operational reasons. One of these alternatives would be a “layoff.”

The judge then considered Aminto’s letter to Mqokolo, which  clearly stated that he was not suspended but had been laid off given the shortage of work. Judge Moshoana repeated how “unfortunate” it was that the legislature had not defined the term ‘suspension’, let alone “unfair suspension.”

It was, however, clear that what happened to Mqokolo was not a “suspension.”

Arbitrator had confused the distinction

It was also clear that the arbitrator had confused the distinction between “suspension” and “layoff” and had assumed that a layoff amounted to a suspension associated with a disciplinary dispute.

On top of this, the CCMA could only deal with matters involving a certain list of issues considered as conduct amounting to unfair labour practice. Layoffs were not included in that list. A commissioner would not be allowed to arbitrate in a matter that wasn’t an unfair labour practice, as defined in the law. If a commissioner did so, it would be “a nullity and unenforceable in law.”

Though the commissioner assumed jurisdiction to hear this matter, in fact Mohlala had no right to do so.

Lasting solution to the dispute

Having found that the original order in favour of Mqokolo and against Aminto was “a nullity in law,” the judge went back to the problem of the gap in the legislation.

“There may be a need for the legislature to expand the meaning of an unfair labour practice to include a layoff that is not disciplinary in nature,” he said. Otherwise, the confusion seen in the Mqokolo case would continue.

The court thus held that the commissioner’s award was “unjustifiable in law and a nullity.” He set it aside, saying that the company had not committed an unfair labour practice against Mqokolo, and urged the parties to continue searching for a “lasting solution” to the dispute.

Had Mr Mqokolo approached the matter differently, perhaps the outcome would have been different. There are many main collective agreements in bargaining councils that have the concept of “short time” as a part of the employer’s rights. Although “layoff” as a concept is closer aligned with short time, had Mr Mqolo approached the matter as enforcing his contract of employment under circumstances where he had tendered his services, perhaps the outcome would have been different.

In other jurisdictions, most notably the UK, provision is made in their laws for a “furlough,” which is the closest concept to the layoff discussed in this matter. As a concept, however, it does not form part of our law unless it is being discussed as an alternative to retrenchment in terms of S189 of the LRA.