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A contracting company provides maintenance support services to a large manufacturer. The contractors’ employees, who all have 5-year fixed-term employment contracts, are based full-time at the manufacturer’s premises and work on a shift system. Six months after the contractor hires its employees the manufacturer decides to move to short time which results in the operational need for the contractor to reduce the number of daily work shifts. The employment contracts of the contractor’s staff contain no provisions regarding the changing of shift systems or working conditions but do have a clause allowing for termination of employment prior to the end of the 5-year period. The contractor merely informs its employees that it has changed the shift system due to the client’s 4-day week and disciplines any employees who do not work their new shifts. Has the contractor acted within the law? If not, what ought it to have done?
No, the contractor has not acted within the law.
The change in the shift system is an operational requirement. The law requires an employer to consult with their employees about how an operational change will affect their conditions of employment. The purpose is to take whatever reasonable measures or alternatives may be available to preserve the employees’ existing conditions.
The contractor can’t simply change the conditions unilaterally. Nor can they threaten disciplinary action if the employees don’t accept the change. If there are no reasonable alternatives or other jobs available for the affected employees after genuine consultation, the contractor may only then be able to terminate the employees for operational reasons.
This would be possible regardless of the 5-year fixed term contracts and the absence of any reference to the contractor’s right to change the shift system.
A change to the terms and conditions of a contract must be done after consultation and after the exhaustion of the discussions. If it is not acceptable to an individual employee then the employer would be obliged to go through a retrenchment exercise. In this particular instance it looks like this was unilaterally done and therefore unfair.
I agree with Michael save to add that the wording of the contract a between contractor and its employees will be decisive as to whether this is a change in work practice or a change to terms and conditions of employment. (Per Apollo Tyres South Africa (Pty) Ltd v National Union of Metalworkers of South Africa (“NUMSA”) & others) [2012] 6 BLLR 544 (LC))
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