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RETRENCHMENT AND THE PREGNANT EMPLOYEE

In Article Archive, Article Archive - Home, Article Archive - Teazer by Jan Truter3 Comments

When an employee goes on maternity leave, others almost inevitably have to fill in for her. During her absence the question may arise whether she is really needed and whether her position has become redundant. May the employer retrench her in these circumstances? Our courts have repeatedly come to the assistance of pregnant employees who have been discriminated against. But how far does that protection go?

SUMMARY

Our law protects employees against dismissal on the basis of pregnancy, intended pregnancy, or any reason related to pregnancy.

Our courts acknowledge that employers may have to bear a considerable burden to make arrangements to keep the position of the woman on maternity leave open, but state that it “is a price that has to be paid as part of the social and legal recognition of the equal status of women in the workplace”.

It is possible for an employer to retrench a pregnant employee whose position is redundant if the employer can prove that there are ‘genuine operational reasons’ to do so. The employer will also have to strictly comply with the procedural requirements prescribed by section 189 of the Labour Relations Act (LRA).

Attitude and the demonstration of an understanding of the rights of pregnant employees can play an important part in the outcome of an unfair discrimination dispute.

 

The law

Section 187(1)(e) of the Labour Relations Act states that a dismissal is automatically unfair if the reason for the dismissal is the employee’s pregnancy, intended pregnancy, or any reason related to her pregnancy.

While broad, how far does the protection of pregnant employees actually go? If, for example, an employer discovers during an employee’s absence due to maternity leave that her functions can genuinely be absorbed by others at a significant saving for the employer, may the employer legitimately make the employee redundant?

For a better understanding of how to approach such situations, it may be useful to have a better understanding of the underlying principles of the legislation.

Underlying principles

Earlier decisions of the Labour Courts have made it clear that the prohibition of discrimination relating to pregnancy should be interpreted broadly because it is part of social legislation passed for the specific protection of women and to put them on an equal footing with men. Accordingly, the fact that a woman’s absence due to maternity leave or complications arising from her pregnancy creates some hardship for an employer – e.g., having to make alternative arrangements to keep a position open until she returns to work – “is a price that has to be paid as part of the social and legal recognition of the equal status of women in the workplace”.

An employer will also not be able to justify a dismissal related to pregnancy on the basis that the reason is economic; e.g., as a result of additional expenses it must incur to provide temporary cover for the absent employee.

The Quoin Rock case

The question about redundancy arose in the recent judgment of the Labour Court in the case between Brandt and Quoin Rock Wines. Brandt was employed as the company’s financial manager. She fell pregnant after receiving IVF (in vitro fertilisation) treatment. She informed the company of this as well as of her expected due date, but because of complications, her child was born prematurely. This required the hospitalisation of the child for a number of weeks. During this time, Brandt continued to fulfil some of her functions. The court found that she had, in fact, gone the extra mile to ensure that things would run as smoothly as possible while she remained at the hospital to be with her child.

She subsequently submitted a plan for her maternity leave to the employer’s chief executive officer (CEO) but still continued during this period (during the Covid pandemic) to hand over some functions to a colleague. In the meantime, however, the CEO had also started taking over some of her functions and employed an external accountant to assist with tax-related matters that would otherwise have been dealt with by Brandt.

At some point the CEO decided to retrench Brandt, alleging that with the alternative arrangements that had been made to complete Brandt’s tasks and the cost savings that could be made, her job had become redundant. Brandt argued that her job could not have become redundant as her functions were still being performed by the CEO and others.

The court’s findings

On the facts of the matter, the court had little difficulty in finding that Brandt had proven that her dismissal was linked to her pregnancy and, therefore, automatically unfair. This meant that the burden of proof shifted to the employer to prove that the dismissal was justified for operational reasons, as it had alleged. The court found that the employer had not provided ‘genuine operational requirements’ for the dismissal and that her pregnancy and issues related to it were the true reasons for it. She was awarded 16 months’ salary as compensation.

What does this mean in practice?

The case caused quite a stir in the media and the impression may have been created that a woman may never be dismissed if she is pregnant or is absent from work because of pregnancy-related reasons. However, this is not the thrust of the decision.

While the court confirmed that whether a dismissal is ‘related to’ pregnancy must be decided on a case-by-case basis, it left the door open for dismissal in such circumstances provided an employer can show ‘genuine operational reasons’ for dismissal. While the court did not provide any guidelines in this regard, a close reading of the judgment suggests that –

  • the provisions of section 189 of the LRA dealing with dismissals for operational reasons must be strictly complied with. For example, adequate prior notice of possible retrenchment should be given together with reasons for it. An employee’s extended absence, for example, could result in her position genuinely becoming redundant. If the reasons are financial, the necessary information to support them must be provided to the employee.
  • time must be allowed for consultation with the emphasis on all reasonable efforts to accommodate the employee. The employee’s input must be sought and considered, and written reasons must be provided if the employer disagrees with the employee’s proposals. This did not happen in the present case.
  • the decision to retrench may only be finalised once the consultation process has run its course. In the present case, the decision had been made prematurely and although the employee was offered an alternative position in an associated company, it was done as an afterthought and would have resulted in her salary being almost halved if she had accepted it.

Attitude and understanding

One of the factors that counted against the employer was its CEO’s attitude towards the employee from the moment she informed him of her pregnancy. He displayed disappointment, frustration and even anger at having been ‘let down’ by her. While he testified that this was simply because she had unilaterally imposed a maternity leave plan on him, the court found that his attitude displayed a lack of understanding of the rights of pregnant employees.

Employers would therefore be well advised to approach a pregnancy-related matter calmly and rationally and not utter remarks that could reflect negatively on their attitude towards it.

Barney Jordaan and Jan Truter for www.labourwise.co.za

Comments

  1. Good article That said With respect to your reference, to section 189 (1) (e)in the first para, I think you will find this to be a typo as:
    – section 189(1) only goes as far as d and
    – automatically unfair dismissals are dealt with in 187

    1. Author

      Thanks for the feedback, Richard. The typo has been corrected.

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