Labour Law News…May 2017

Labour Law in a Nutshell: DISCIPLINING A DIRECTOR

How employees can turn the tables and discipline a Director  

A union and workers can effectively discipline a Director for misconduct by applying to Court to have him or her declared “delinquent” – or put on “probation“. The misconduct includes gross abuse of his or her position, taking personal advantage of an opportunity or causing harm to the employer’s business. And it can be used if the Director does something which breaks the relationship of trust.

This is a potentially powerful legal right which Section 162(2) of the Companies Act gives to unions. They could use it to exert significant influence in its relationship with employers – and also to keep Directors firmly in check.

The wording is broad enough to cover acts of corruption, nepotism, discrimination, negligence, incompetence and even decisions based on poor judgement. And it could even cover a Director’s personal style or offensive manner which has the effect of undermining the relationship of trust between the employer and its employees.

TIP: Directors and Senior Management who have a penchant for authoritarian “my way or the highway” leadership style should be aware that their road ahead is not as clear as they’d wish. Functional relationships are never one-sided – they only work if all parties have a fair say – regardless of their rank. Two-way communication based on honesty, mutual respect, ethical conduct and produces better outcomes.

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