About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: South Gauteng High Court, Johannesburg
SAFLII
>>
Databases
>>
South Africa: South Gauteng High Court, Johannesburg
>>
2022
>>
[2022] ZAGPJHC 74
|

|

Yeko v Red Mining South Deep (Pty) Ltd (JS 633/18) [2022] ZAGPJHC 74 (25 March 2022)

THE
LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG
Not
Reportable
case
No:
JS
633/18
In
the matter between:
DUMISANI
YEKO

Applicant
and
RED
MINING SOUTH DEEP (PTY)
LTD
Respondent
Heard
:
22 March 2022
Delivered
:
25 March 2022
Summary:
A referral in terms of
section 191
of the
Labour Relations Act,
1995
. Where a fixed term contract ends – there is no dismissal
– unless the provisions of
section 186(1)(b)(i)
or (ii) of the
LRA are shown to exist. Undergoing a retrenchment process was
unnecessary in the circumstances where a fixed term
contract of
employment would have ended on its own terms.
Having
terminated employment due to operational requirements, the employer
was obliged to justify the fairness of that dismissal.
Where a
contract with a client ends, an employer has a commercial rationale
to dismiss for operational requirements. Dismissal
being a measure of
last resort and a selection criterion being agreed upon, a dismissal
is substantively fair. Where
section 189A
of the LRA applies,
section
189A
(18) prevents this Court from enquiring into the procedural
fairness of the dismissal. Held (1): The dismissal of the applicant

is substantively fair. Held (2): The applicant’s claim is
dismissed. Held (3): There is no order as to costs.
JUDGMENT
MOSHOANA,
J
Introduction
[1]
This is a referral in terms of
section 191
[1]
of the Labour Relations Act
[2]
(LRA). The respondent, Red Mining South Deep (Pty) Ltd (Red Mining),
dismissed the applicant following a loss of the rail maintenance
and
upgrading contract (rail contract) with South Deep Joint Venture and
Gold Fields Operations (Pty) Ltd. The applicant, Mr Dumisani
Yeko
(Yeko) was employed in the position of artisan assistant with effect
from 14 May 2015. He was appointed to service the rail
contract. His
employment was for a fixed term and was to end when the rail contract
was terminated by the client or had come to
an end. On 1 March 2017,
Red Mining terminated the employment of Yeko and termed that a
“retrenchment”.
[2]
Aggrieved by the termination, Yeko referred a dispute to the
Commission
for Conciliation, Mediation and Arbitration (CCMA) and
alleged an unfair dismissal. Conciliation failed to resolve the
dispute.
On or about 18 September 2018, Yeko referred the dispute to
this Court for adjudication.
Background
facts and evidence
[3]
Red Mining provides various mining services to
mines. During 2015, Red Mining was awarded a two-year contract to do
rail maintenance
and upgrade for a joint venture inside the
Goldfields Fields Operations mine. Resultantly, Yeko was employed as
an artisan assistant
for that rail contract. As indicated earlier,
his employment was for a fixed period tied to a happening of an
event.  As required
by the rail contract, on 3 November 2016,
the joint venture gave Red Mining a 60 days termination notice. The
contract was to terminate
on 3 January 2017.
[4]
On 9 November 2016, Red Mining issued a section
189(3) of the LRA notice, advising the National Union of Mineworkers
(NUM) that
it shall be engaging in a section 189A process. Yeko was
not a member of the NUM. He received an individual notice to the
section
189A process. On that same day, a meeting was held between
NUM and Red Mining.
Ex facie
the consultation minutes, it is not apparent that
Yeko was part of that meeting. Nevertheless, it was agreed that on 10
November
2016 there would be a mass meeting. It was further agreed
that all rail maintenance employees, which included Yeko, should be
given
a 30 days termination notice with effect from 11 November 2016.
[5]
An entity known as Flint Construction (Flint) was
awarded the rail contract in December 2017. As a result, Flint
interviewed employees
of Red Mining who applied for positions,
including Yeko. Yeko was unsuccessful. On 12 November 2016, Yeko was
notified that his
employment would end on 15 December 2016, owing to
the termination of the rail contract. Yeko refused to sign in
acknowledgement
of receipt of the termination notice. Later on, he
relented and signed the notice. In view of the fact that there was a
need to
clear the haulage and load the mud, Yeko was verbally
informed that his employment would be extended for clearing purposes.
[6]
On 28 February 2017, Yeko was notified that
effective 1 March 2017, he would be stopped from entering the mine
premises. Yeko considered
that his dismissal.
[7]
In justifying the dismissal, Red Mining tendered
the testimony of Mr Werner Prinsloo (Prinsloo) who is the operations
manager of
Red Mining. He entered employment with Red Mining in 2009.
He confirmed the fixed term employment of Yeko, and the fact that his

employment was linked to the rail contract. He further confirmed that
the rail contract ended on 3 January 2017 after Red Mining
was given
a 60 days’ notice of termination. He testified that about 120
employees were affected by the loss of the rail contract.
Flint, the
successful tenderer employed almost 43 of the affected employees.
Yeko was interviewed by Flint and was not successful.
In
cross-examination, he disputed an assertion by Yeko that Red Mining
employed about 53 of the affected employees. He testified
that as and
when positions became available in the other production contract, in
liaison with the trade union, some of the affected
employees were
re-employed for that contract, which was mainly a mining contract as
opposed to the rail contract, which was more
of an engineering
contract.
[8]
Yeko
testified in his own case and did not call any witnesses
[3]
.
His main gripe-giving rise to the alleged unfairness is that new
employees were hired within the three months of his termination
and
he was overlooked. In addition, he contended that Red Mining retained
employees with lesser service and he was terminated.
He persisted
that it was only 14 of them out of the 120 affected employees that
were terminated. About 53 employees remained in
employment despite
the termination of the rail contract. His testimony was strenuously
disputed. With regard to the new employees,
the position of Red
Mining, as set out in the pre-trial minute, is that there was a
labour compliment increase in another project
and the retrenched
employees were contacted by it together with the trade union. With
regard to employees with lesser service,
the position is that those
employees were working on the other shafts that were not affected by
the termination of the rail contract.
The
applicable legal principles and evaluation
[9]
There is no dispute in this matter that the
employment contract of Yeko was fixed. It was linked to the existence
and continuation
of the rail contract. It is common cause that on 3
January 2017, the rail contract was terminated. The termination of
the rail
contract spelled the automatic termination of Yeko’s
employment with Red Mining. The employment contract provided that
“
Your fixed term contract
will
be ended
when RED Mining
Services South Deep
contract for
which you have been appointed
,
comes to an end or is terminated by the client
”
.
[10]
In law, a fixed term contract terminates either by
effluxion of time or by a happening of an event. The termination is
automatic
and does not require a notice of termination by any of the
parties. Such automatic termination does not amount to a dismissal
within
the meaning of section 186(1) of the LRA. It is not Yeko’s
case that he reasonably expected Red Mining to renew the contract
or
retain him in employment on an indefinite basis (section 186(1)(b)(i)
or (ii) of the LRA). If that was his case, section 191(5)(a)(iii)
of
the LRA requires that that type of a dismissal, since he will not
know the reason for his termination, be arbitrated by the
CCMA.
[11]
On application of the law as espoused above, it
was not necessary for Red Mining to have given a section 189(3) of
the LRA notice
nor to have followed the section 189A process. By 3
January 2017, the employment of Yeko would have terminated, which
termination
does not constitute a dismissal within the meaning of
section 186 of the LRA. However, the actions of Red Mining sought to
terminate
the contract prematurely. By 12 November 2016, it notified
Yeko that on 15 December 2016, the employment would cease. This
amounts
to a dismissal within the meaning of section 186(1)(a) of the
LRA.
[12]
However, it is apparent on the facts of this case
that on 15 December 2016, the dismissal did not take effect. In terms
of section
190(1)(a) of the LRA, a date of dismissal is the date on
which the contract of employment terminated or the date on which the
employee
left the services of the employer. On 15 December 2016, Red
Mining terminated the employment contract; however, Yeko left the
services
of Red Mining on 1 March 2017. Therefore, the date of
dismissal of Yeko is 1 March 2017. By that date, had Red Mining not
terminated
the contract prematurely, the employment contract would
have terminated on its own terms.
[13]
The conclusion this Court reaches is that Yeko was
dismissed. In any event, dismissal was never placed in dispute. In
terms of section
192 of the LRA, once a dismissal is established, the
onus
is on
an employer to prove that the dismissal is fair. In demonstrating the
fairness of the dismissal, Red Mining relied on its
operational
requirements. Yeko admitted that there was a general need to retrench
because the rail contract was terminated. Axiomatically,
Red Mining
had shown a commercial rationale to terminate employment – loss
of a service contract or business. Regard being
had to the testimony
of Yeko and his case as outlined in the pre-trial minute, his case is
that there was no need to retrench him
specifically because (a) Red
Mining still had vacancies where he could have been placed in order
to avoid his dismissal due to
termination of the rail contract; or
(b) on application of
last in, first out
(
LIFO)
selection criterion, he should not have been
dismissed. Instead, other employees with lesser service should have
been dismissed.
[14]
With regard to those contentions, Red Mining made
it clear in the consensual document – pre-trial minute - that
the vacancies
arose in another department after the dismissal of
Yeko. Inasmuch as the
onus
lies with an employer to justify the dismissal,
where an employee alleges that vacancies existed before a dismissal
happens, the
evidentiary burden lies with an employee to demonstrate
the existence of such vacancies. Prinsloo testified that at the time
of
dismissal, the only available vacancies in the rail maintenance
contract were those created by Flint after it was awarded the rail

contract. Red Mining did not have control over those vacancies and
could not have used them to avoid the dismissal of Yeko. In
order to
avoid a dismissal, those vacancies must be in the control of the
employer effecting a dismissal due to operational requirements.
Yeko
speculated that 53 vacancies existed and those vacancies were filled
without considering him. Prinsloo in rebuttal of that
speculative
evidence clearly testified that Red Mining did not have those 53
vacancies. This Court is not satisfied that there
were vacancies that
could have avoided the dismissal of Yeko. The rail contract on which
he was appointed in the first place was
awarded to Flint. He was
interviewed by Flint and he failed to secure employment.
[15]
This is not a case where section 197 of the LRA
could have been employed. Red Mining lost a contract. It did not
transfer its rail
contract to Flint as a going concern. Of course,
Flint was not obliged to take Yeko into employment once it was
awarded the rail
contract. There seems to be a
lacuna
in the LRA. In my view, technically Flint took
over the business or service of Red Mining. Unfortunately, section
197(1) defines
“transfer” to mean the transfer of a
business by one employer (old employer) to another employer (the new
employer).
I have no doubt in my mind that the rail contract is a
business or service. However, it moved from the hands of Red Mining
not
by a typical transfer but by Red Mining losing a contract that
employed Yeko and others. Actually, where short term services
vacillate
from one business to another by way of tenders being won
and lost, such, in my considered view, is not materially different
from
one business selling its business or part thereof to another
business. If section 197 were to be expanded to situations, where a

client awards a business or service to another company, much to the
chagrin of another company, social justice will, in my view,
be
served. One of the stated purposes of the LRA, in section 1, is,
amongst others to advance economic development and social justice.

The purpose of section 197 is to protect individual contracts of
employment and ultimately job security. A
lacuna
I spot creates an opportunity for companies like
Gold Fields joint venture to weaken the job security of employees. At
the end of
the day, Gold Fields is the consumer of the services on
the rail maintenance. It is the main benefactor. The fact that it can
use
companies through a tendering system to achieve its labour needs,
without it being affected, as an old or new employer is worrying.
It
is no different to the labour brokerage situation in substance. They
only differ in form. In fact, there was nothing to have
prevented
Gold Fields to directly hire Yeko and others to work on the rail
maintenance or upgrade, even if it is for a limited
duration. Section
198B (3) of the LRA makes provision for a limited duration
employment. The fact that Gold Fields opted for outsourcing,
places
it on the same footing as temporary employment services situation.
This Court is acutely aware of the raging debate that
the so-called
second-generation outsourcing being brought under the wing of section
197 somewhat stifles outsourcing as a legitimate
business method.
However, it may be ideal for the legislature to find means and ways
to curb the apparent defeat of the LRA.
[16]
Strictly
speaking, if the tender was re-awarded to Red Mining, there would not
have been a need to dismiss Yeko and others. It may
well be the case
that Gold Fields joint venture realized that there was a big head
count on the rail contract and such makes the
rail contract to be
expensive. The only solution was to terminate the contract of Red
Mining and recall the tender for a more lean
and frugal labour
component. The issue I am raising troubled the Labour Court in the
matter of
SVA
Security (Pty) Ltd v Makro (Pty) Ltd and others
[4]
.
The Labour Court relying on the judgment of
Aviation
Union of South Africa & Another v South African Airways (Pty) Ltd
and Others
[5]
reached
the following conclusion:
“
[29]
To reiterate, only the service contract was taken over in this case,
and not the applicant’s business. The applicant is at liberty
to continue with its business by providing similar services
to other
potential clients. The fact that some of the applicant’s
employees were taken over as a consequences of the intervention
of
Makro in this case cannot be indicative of a transfer. To hold
otherwise would lead to untenable results in that if every time
a
mere contract of service is taken over by a new service provider, and
the latter would be required to take over all the employees
from the
old service provider on the basis that a section 197 transfer has
taken place, this would then imply that the old service
provider can
simply wash its hands off its employees after losing a contract.
Clearly this scenario could not have been anticipated
by the drafters
of section 197 of the LRA, in view of its purpose, which is to
safeguard security of employment.”
[17]
I
fully agree with the view that the drafters did not anticipate the
scenario of loss of contracts. However, I do not agree that
untenable
results will ensue. In my view, all that is required is to extend the
scope of section 197 of the LRA. Courts have not
been able to give
the section an interpretation that will encapsulate the scenario.
Thus, legislative intervention may be a solution.
The Courts in
Canada seem to have taken a similar approach as the one taken in
Aviation
Union
and
SVA
Security
.
In an arbitration matter of
SNC
Lavalin O&M Logistics Inc v Unite Hire Local 47
[6]
,
Arbitrator Lyle observed as follows:
“
[59]
…The only connection between SNC and Civeo is that Civeo hired
69 employees that SNC terminated.
These employees were not “sold,
leased, transferred or merged”. No other aspect of SNC’s
operations passed to
Civeo
. If Alberta legislature intended to
deem employment continuous whenever a new contractor hired employees
of the previous contractor,
it could have passed a provision similar
to s. 10 of the Ontario Act. It did not do that. I am unable to
stretch the language of
s. 5 to capture these circumstances.”
[18]
The
only instance where the LRA seem to curb the practice outlined
earlier occurs in section 200B of the LRA. In terms of the section,

an employer includes one or more persons who carry on associated or
related activity or business by or through an employer if the
intent
or effect of their doing so is or has been to directly or indirectly
defeat the purpose of the LRA. Unfortunately, in this
matter, the
provisions of this section have not been raised by Yeko to bring into
the fold Gold Fields joint venture as an employer
as well.
[7]
Had
section 200B been raised by Yeko, an opportunity would have arisen
for this Court to firstly consider whether Gold Fields Joint
Venture
was an employer and secondly, to consider whether it is jointly and
severally liable for any failure to comply with the
obligations of an
employer, in this instance, Flint.
[19]
If
prior to the termination of the rail contract, the contract was
appropriately manned, by the employed labour component, this
Court
fails to understand the reason and logic why Flint did not rehire
everyone including Yeko. This being an atypical section
197 scenario,
in my view, Flint would have concluded an agreement contemplated in
section 197(2) read with (6) of the LRA to deal
with whatever
operational challenges it would face by rehiring the terminated
employees. This would not have left Red Mining out
of the occasion if
section 197(8) is considered. I take a view
en
passant
that
Flint should have employed Yeko as well. Its failure may constitute
some form of discrimination in terms of the Employment
Equity Act
[8]
(EEA)
[9]
.
Sadly, Flint was not joined in these proceedings. The interests of
justice would have been better served if Flint was joined as
well as
Gold Filed joint venture.
[20]
Having said that, of relevance in this matter is
that Red Mining was faced with operational requirements (loss of
business), which
justifies the fairness of the dismissal of Yeko and
others. It can only justify the dismissal of Yeko using those
operational requirements.
There was nothing that would have saved the
dismissal of Yeko. The rail contract ended, inevitably, the
employment of Yeko had
to end.
[21]
With regard to the selection of Yeko and the
application of
LIFO
,
the contention of Red Mining is that the employees that Yeko compares
himself with were employed in another shaft, which was unrelated
to
the rail contract. That project required different skills and at the
time of the dismissal of Yeko, there were no vacancies
in that
project. It would not have been possible to apply
LIFO
in respect of the rail contract because everyone
was terminated. Yeko was employed in that contract and not the other
contract that
required mining skills as opposed to engineering
skills.
[22]
On the conspectus of the evidence before Court,
bumping, which is what Yeko is effectively suggesting was not going
to be possible.
Section 189(2)(b) of the LRA requires the consulting
parties to attempt consensus on the method for selecting the employee
to be
dismissed. This imperative allows a consulting party to suggest
amongst others vertical or horizontal bumping. It is apparent from

the consultation minutes that NUM, probably a majority union, was
happy with the non-application of
LIFO
given the termination of the rail contract.
Section 189(7) of the LRA obligates an employer to select the
employees to be dismissed
according to selection criteria that have
been agreed to by the consulting parties. Only when there is no
agreed criteria, would
a Court consider whether the selection
criterion is objective and fair. The undisputed consultation minutes
reflect the following:
“
NUM: How many
people are going?
Man:
All the people on Rail Maintenance as this is the contract
notice we have received. We are not successful on the tender.
NUM:
All people
on Secondary and Rail Maintenance are Red Mining people so need to
look at
LIFO
etc.
Man:    It
is the
rail maintenance contract has been stopped
and these
are the people that are affected.
NUM: …
Man: …
NUM:  Requested a
caucus
Thank you for the
caucus. …We are happy. No problems.
Agreed…
All Rail Maintenance
employees will be given their 30 days’ notice as from 11
November 2016…
” (Own Emphasis)
[23]
It
is apparent from the undisputed minutes that an agreement was reached
that
LIFO
shall
not be applied to secondary maintenance employees but all rail
contract employees shall be selected for dismissal. The technicality

abound in this matter is that at the meeting where an agreed
selection criterion was reached, Yeko was not present. It is common

cause that Yeko was not a member of NUM. It is also common cause that
it was only in January 2017 that Yeko attended a consultation

meeting. It is also common cause that in that meeting all employees
were sent to Flint for interviews. It is undisputed that a
section
189A process was undertaken. Section 189(1)(a)-(d) of the LRA spells
out in a pecking order who has to be consulted. It
has been resolved
that where a majority trade union has been consulted, there is no
need to consult with the individual employees
or minority trade
unions
[10]
.
[24]
On application of the majoritarian principle, the
agreement reached by NUM binds Yeko. Accordingly, the agreed
selection criterion
was that of selecting all the rail contract
employees. The version by Yeko that only 14 employees were selected
for dismissal is
rejected as being false. It is inconsistent with
other uncontested objective evidence. For instance, the interview
list demonstrates
that about 74 employees were interviewed by Flint.
If only 14 employees were to be dismissed, it would be nonsensical
for Flint
to interview almost 74 employees.
[25]
To
the extent that Yeko suggests that he was not properly consulted over
the selection criterion, the unfortunate part for him is
that in
terms of section 189A(18)
[11]
of
the LRA, this Court is prevented from determining a procedural
fairness dispute in these proceedings.
[26]
For all the above reasons, Yeko must fail in his
quest. His dismissal is substantively fair. His claim must be
dismissed
[27]
In the results the following order is made:
Order
1.
The dismissal of Yeko is substantively fair.
2.
The claim of Yeko is dismissed.
3.
There is no order as to costs.
G. N. Moshoana
Judge
of the Labour Court of South Africa
Appearances:
For the
Applicant:
Mr D Yeko in Person.
For the
Respondent:
Mr J Nel
Instructed
by:

Keet Attorneys, Potchefstroom.
[1]
Section 191(5)(b)(ii) – “
the
employee may refer the dispute to the Labour Court for adjudication
if the employee has alleged that the reason for dismissal
is-based
on the employer’s operational requirements.”
[2]
Act No. 66 of 1995, as amended.
[3]
He claimed that some of the potential witnesses were still employed
by Red Mining and they feared reprisal if they were to testify.

Although Yeko continued unrepresented in the trial, he was duly
assisted by the
pro
bono
office until the last minute when a
pro
bono
attorney
withdrew due to lack of instructions. That being the case, Yeko
should have sought assistance with regard to the subpoena
of those
potential witnesses.
[4]
(J720/17) dated 3 May 2017.
[5]
[2012] 3 BLLR 211 (CC).
[6]
2020 CanLii 26916.
[7]
See:
Masoga
and another v Pick n Pay Retailers (Pty) Ltd
(2019) 40 ILJ 2707 (LAC).
[8]
Act No, 55 of 1998, as amended.
[9]
See Para 30 of
SVA
Security.
[10]
See:
Association
of Mineworkers and Construction Union and others v Royal Bafokeng
Platinum Ltd and others
(2020) 41 ILJ 555 (CC).
[11]
Section 189A (18) “
The
Labour Court may not adjudicate a dispute about procedural fairness
of a dismissal based on the employer’s operational

requirements in any dispute referred to it in terms of section 191
(5) (b) (ii)”.