Local government transfers

All employees enjoy the protection of the Labour Relations Act of 1995 — irrespective of who they work for. Before 1995, a number of labour laws covered different categories of employees. No more — irrespective of who the employer is, an employee (as defined in the LRA) is an employee and therefore protected against, for instance, unfair dismissal. But while the rules set out in terms of the LRA apply to everyone, some exceptional provisions may apply in some sectors — local government, for instance. There are a number of specific pieces of legislation that apply in the context of local government; for the purposes of this comment, the focus is on the Local Government: Municipal Structures Act 117 of 1998.

Just as employees may be transferred from one employer to another if the business is sold, employees of a municipality may be transferred from one municipality (the old employer) to a new municipal employer: this often happened in the context of municipal re-organisation or the consolidation of smaller municipalities into larger ones. And it is when employees are transferred from one municipality to another that some interesting issues arise. There are special rules in this regard: sections 12 and 14 of the Municipal Structures Act empower the MEC for local government in a province to establish a municipality by notice. If a new municipality is established in the place of the old municipality, the section 12 notice, as it is commonly called, will regulate the transfer of employees from one municipality to the next. While a section 12 notice gives the MEC a relatively wide power, there are some limitations: an employee may not be transferred on less favourable conditions of service and the transfer must be in accordance with the LRA.

But what happens if an employee refuses to be transferred, or requests a severance package in stead of being transferred? This is one of the issues raised in Pretorius v Rustenburg Local Municipality & others (2005) 14 LC 5.4.1. This case is unusual: the relief the employee asked the Court for was to be retrenched and to receive a severance package. The MEC’s section 12 notice contained a clause that stated that no employee acquires a right to retire or to a severance or retrenchment package as a result of the transfer: in other words, the transfer from the (disestablished) municipalities to the new did not confer on the employees the right to demand severance pay. The employee in question had refused an offer of alternative employment — indeed, his skills were needed by the new municipality (he also sought an order of Court declaring that his post had become redundant).

The employee found himself in a virtual no-man’s land of employment: he was in a “corporate pool” of employees( this term is usually applied to employees who have not yet been finally allocated to a post in the new municipal organisation). His old post had been abolished and these functions incorporated into a new post — a post the employee did not occupy. Instead, swimming around disconsolately in this “corporate pool” the employee merely did what the municipal manager told him to.

The Labour Court came to the conclusion, on the facts, that the employee had never accepted the position in question, but that he did indeed report for work: the employer should have dealt with his position a lot sooner. The Labour Court also expressed some concern at the fact that an employee’s getting out of the pool depended on a job evaluation to be done by a job evaluation committee — but there was no committee to be found.

On the facts of the case, the provisions of the section 12 notice superseded the other applicable agreements, and the employee was therefore not entitled to a Court order retrenching him.

Frankly, this is the first decision we’ve ever seen in which an employee head for the Labour Court for an order retrenching him.