Ngcobo and Another v Food and Allied Workers Union (13501/04, 13502/04) [2012] ZAKZDHC 18; [2012] 10 BLLR 1035 (KZD); (2012) 33 ILJ 1337 (KZD) (3 April 2012)

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[2012] ZAKZDHC 18
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Ngcobo and Another v Food and Allied Workers Union (13501/04, 13502/04) [2012] ZAKZDHC 18; [2012] 10 BLLR 1035 (KZD); (2012) 33 ILJ 1337 (KZD) (3 April 2012)

IN THE KWAZULU-NATAL
HIGH COURT, DURBAN
REPUBLIC OF SOUTH
AFRICA
CASE NO. 13501/04
CASE NO. 13502/04
In the matter between:
L. NGCOBO N.O. (M.
NDLELA)
….............................
FIRST
PLAINTIFF
M. MKHIZE
…........................................................
SECOND
PLAINTIFF
and
FOOD AND ALLIED
WORKERS UNION
…......................
DEFENDANT
JUDGMENT
Delivered
on 03 April 2012
SWAIN J
[1] The case before me,
reduced to its essentials, is a claim for the payment of damages by
the defendant, allegedly suffered by
the plaintiffs, as a consequence
of an alleged failure by the defendant to refer a claim by the
plaintiffs, against their erstwhile
employer Nestle South (Pty)
Limited (Nestle) for their alleged unlawful dismissal, to the Labour
Court for determination. Separate
actions were instituted by both
plaintiffs against the defendant based upon the same cause of action.
The actions however served
before me, as a consolidated action with
the plaintiffs being reflected as first and second plaintiffs
respectively.
[2] It should be noted
that as a consequence of the death of the first plaintiff (the
deceased) before the matter came to trial
one Lungi Ngcobo, the duly
appointed
executrix
in the estate of the deceased, was
substituted for the deceased, as the first plaintiff, in terms of
Rule 15 (3). I will however
for the sake of convenience in this
Judgment, refer to the plaintiffs, and the first plaintiff in
particular, as if the deceased
was still a party to the present
litigation.
[3] A determination of
the claim of the plaintiffs, requires a resolution of the following
issues:
[3.1] Were the plaintiffs
members of the defendant Trade Union at all material times?
[3.2] Was an agreement of
mandate concluded between the plaintiffs and the defendant, for the
defendant,
inter alia
, to refer the plaintiff’s claim
against Nestle for unlawful dismissal, to the Labour Court?
[3.3] If such an
agreement of mandate was concluded, what were its express,
alternatively, implied terms?
[3.4] Did the defendant
breach the agreement of mandate?
[3.5] If the defendant
did breach the agreement of mandate, does such breach render the
defendant liable to compensate the plaintiffs
for any damages
suffered by the plaintiffs, regard being had to the following further
issues.
[3.5.1] Was the defendant
entitled to resile from and renounce the agreement of mandate? If so,
what effect does such a right, have
upon any previous breach of the
agreement of mandate by the defendant?
[3.5.2] Is the action by
the plaintiffs premature, as a consequence of the plaintiffs’
failure to advance their claim themselves,
in the Labour Court?
[3.5.3] Do the plaintiffs
lack
locus standi
to sue the defendant?
[3.5.4] Is it against
public policy to hold the defendant liable in damages to the
plaintiffs?
[3.5.5] Would the
plaintiffs have succeeded in the Labour Court in their claim for
unlawful dismissal against Nestle?
[3.6] Whether the
plaintiffs have proved the quantum of their damages?
[4]
Were the
plaintiffs members of the defendant trade union at all material
times?
[4.1] The second
plaintiff gave evidence that after he and the first plaintiff formed
the view that Nestle may want to dismiss them
in February/March 2002,
they decided to approach the defendant, with a view to re-instating
their membership. They both went to
the offices of the defendant in
the Nedbank Building in Albert Street, Durban and met one Mike
Masondo who gave them documents
to complete which were membership
forms, similar to the form appearing at page 172 of Bundle “D”.
They completed the
forms together using the same table at the offices
of the defendant and gave the forms to Mike Masondo. Mike Masondo
then told
them that they were full union members and that monies
would be deducted from their salaries. When asked whether the forms
that
they had completed, contained a similar provision to that
appearing in the Bundle, authorising Nestle to deduct the monthly
subscription
from their salaries, he said he could not remember the
precise terms but would say yes to the question, because they both
had in
their possession their payslips with their employee numbers.
When deductions were not made from their salaries at the end of the

month they went back to the defendant’s office, where they were
assured that since they had completed the forms, the Constitution
of
the defendant guaranteed them membership.
[4.2] When cross-examined
Mr. Pillemer, who appeared for the defendant, put it to the second
plaintiff that the defendant accepted
that the second plaintiff had
come to the union office, but contended that the deceased and the
second plaintiff had been chased
away. He also put to the second
plaintiff that he was chased away for two reasons:
(a) the correct procedure
of approaching a shop-steward to apply for membership had not been
followed and
(b) at that stage he had
already been dismissed.
[4.3] What was put by Mr.
Pillemer, namely that this occurred after the plaintiff’s
dismissal, resulted in an objection by
M/s Nel, who appeared for the
plaintiffs. The objection was that this was inconsistent with an
admission the defendant had made
in response to a request for further
particulars at a Rule 37 Conference. The plaintiffs had asked the
defendant, whether it was
the defendant’s contention, that each
plaintiff was never a member of the defendant. The answer given was
“yes”
and it was alleged that
“the
plaintiffs were not members and definitely not paid up members. In
amplification the plaintiffs applied for union membership
shortly
before being dismissed”.
A further question asked
was
“why does the defendant deny that each plaintiff was
a member of good standing”
to which the reply was
“plaintiffs never paid Union subscription fees”.
[4.4] Mr. Pillemer’s
response was initially to ask for leave to withdraw the admission
that the application for membership
was made by the plaintiffs
“shortly before being dismissed”.
When
I pointed out to him that such an application would have to be
motivated properly, he agreed to give the matter further
consideration.
He then put to the second plaintiff, that there would
be evidence that the said Mike Masondo’s name had changed to
Mike Nala
and that he had chased the plaintiffs away, because they
were not following the correct procedure to apply for membership and
it
was disputed that he had accepted their application forms for
membership. This then elicited a further objection from M/s Nel, that

the basis upon which the defendant denied that the plaintiffs were
members in good standing, was solely on the basis that they
had not
paid subscription fees. After a great deal of debate between Mr.
Pillemer and myself as to the meaning of these admissions,
Mr.
Pillemer indicated he would not be bringing an application to
withdraw the admissions. At a later stage he then put to the
second
plaintiff, that because the defendant was bound by the admission, he
put to the second plaintiff that he was chased away
by Mike Nala
before he was dismissed. He then put to the second plaintiff that he
had thereafter managed to get the relevant application
forms, which
were delivered to the defendant’s offices at a later date.
[4.5] Under cross
examination the second plaintiff agreed that he had never paid any
subscription fees and that there should have
been three deductions of
monthly subscriptions after he said they had become members. When he
received his payslip he noticed that
the deduction had not been made
and went to the defendant’s office, to find out why. He did not
make any attempt to pay the
subscription, because he was told by the
defendant not to worry and once the paperwork was in order, the
deductions would be made.
Mr. Dlomo was the representative of the
Union, who had assured them that they were members and they should
not worry that the deductions
had not been made. He agreed that he
did not do anything further, when the deductions were not made for
the second and third months,
because of the assurance he had
received. He believed that when the deductions were made, they would
include the arrear deductions
and said it was always his intention to
pay the subscription fees. He agreed that he realised once he had
been dismissed by Nestle,
that no subscription fees could be deducted
from his salary, but said he had gone to the defendant’s office
after he had
been dismissed, but he was never told he had to pay the
arrear subscription fees. If he had been told, he would have paid
them.
[4.6] It was put to the
second plaintiff that the defendant’s version was that after he
had been sent away from the offices
of the defendant, because he had
not followed the correct procedure, the second plaintiff must have
obtained the application forms
from somewhere else, because they were
placed in Mr. Dlomo’s pigeon hole. The second plaintiff
disputed this and said
“Dlomo never said that he
suddenly discovered the forms”
.
[4.7] Mr. Pillemer then
put the following to the second plaintiff
“there will be
evidence that these were not going to be accepted, as you were not
employed - let me re-phrase that; there
will be evidence that these
were not going to be accepted, partly because it was at that time the
wrong procedure to have brought
it to the Union’s office”.
The second plaintiff disputed this.
[4.8] Mr. Pillemer then
put it to the second plaintiff, that there would be evidence that Mr.
Sam Mashiloane, the national negotiator
at the time, put pressure on
the regional representatives to argue that the plaintiffs were
members, even though the regional representatives
were of the view
that they were not. The second plaintiff’s response was that
the regional office should have advised them
of what Mashiloane had
said, because they were dealing with the regional office throughout.
[4.9] Mr. Pillemer also
put it to the second plaintiff that under pressure from Sam
Mashiloane, Mr. Dlomo argued before the CCMA
that the plaintiff’s
were members of the Union. There would be evidence that Mr. Dlomo
under pressure from Sam Mashiloane
had also been told to back-date
the application forms, to support the application in the CCMA, that
the plaintiffs were members
of the Union at that date. The second
plaintiff replied that the plaintiffs did not know anything about
that.
[4.10] When Mr. Dlomo
gave evidence he agreed when M/s Nel put it to him, that he had been
sitting in Court throughout the previous
proceedings and heard it
being put to the second plaintiff, that the plaintiffs had been
chased away because they came at a point
in time after their
dismissal. M/s Nel then asked him to comment on what was put to the
second plaintiff and what his version was
now. His reply was that he
had first seen the application forms, possibly a week before the
plaintiffs’ final date of employment.
[4.11] Because the answer
given did not explain the inconsistency in the two versions, I
explained to Mr. Dlomo what he he was being
asked to comment upon.
His answer was that it was wrong to say they were chased away because
they were already dismissed. It was
however correct to say that Mike
Nala had refused to give the application forms to the plaintiffs,
because it was clear that a
retrenchment was under way
“which
was very much near”.
He consequently offered no
explanation for the inconsistency.
[4.12] Mr. Dlomo agreed
that he had also heard it being put to the second plaintiff, that he
had been instructed to backdate the
forms. He said he had been told
to do this when they were to attend the hearing at the CCMA. He said
he had been told by Sam Mashiloane
that they had to assist the
plaintiffs, because he was fighting with Mashiloane and refusing to
assist the plaintiffs. He said
he was told by Sam Mashiloane
“Comrade
Dlomo, I told them not to put a date, please put a date on it”.
He said he could not
remember what date he had put on the forms, but that no date had been
filled in by the plaintiffs.
[4.13] However when the
second plaintiff had given evidence, he said that they had dated the
application forms, which evidence was
never disputed.
[5] In my view, the
following conclusions may be drawn from this evidence.
[5.1] Mr. Pillemer was
instructed by Mr. Dlomo that he had been told by Mr. Masondo/Nala
(who Dlomo said was since deceased) that
one of the reasons, that
Masondo had refused to accept the application for membership by the
plaintiffs, was because at that stage,
the plaintiffs had already
been dismissed. There would have been no reason for Mr. Pillemer to
clearly put such a version if that
was not his clear instruction,
which could only have emanated from Dlomo.
[5.2] While sitting in
Court Dlomo heard the exchange between Counsel and myself regarding
the admission that had previously been
made by the defendant, that
the plaintiffs had applied for membership, shortly before being
dismissed and the statement by Mr.
Pillemer that he would not seek a
withdrawal of the admission. When giving evidence Dlomo therefore
changed his version, in order
to make it consistent with what the
admission was.
[5.3] I find the
inference irresistible that this occurred, when regard is had to
Dlomo’s evidence that he had been told by
Sam Mashiloane to
back-date the application forms. A need to back-date the application
forms, could only be consistent with the
original version advanced,
namely that the plaintiffs had applied for membership after their
dismissal and to give credence to
such a version. That no back-dating
of the forms took place is supported by the evidence of the second
plaintiff that when the
application forms were signed by the
plaintiffs they dated them, which was never disputed. The evidence by
Mr. Dlomo that Sam Mashiloane
told the plaintiffs not to date the
application forms, was clearly a fabrication to deal with the
impossibility of back-dating
application forms, which had already
been dated by the plaintiffs.
[5.4] The significance of
the date placed upon the application forms, becomes apparent when
regard is had to Dlomo’s evidence
that
“it is the
date of joining when, you sign your signature and you put a date”.
[6] I therefore have no
hesitation in rejecting Dlomo’s evidence that he was told by
Mike Masondo that the plaintiffs’
applications for membership
had been rejected and in accepting the evidence of the second
plaintiff, that Mike Masondo accepted
the application forms and told
the plaintiffs that they were full members.
[7] In coming to this
conclusion, I do not overlook that during argument, Mr. Pillemer drew
my attention to a further Rule 37 Minute
dated 13 May 2009 in which
the following is recorded:
“
The
defendant declined to admit that both of the plaintiffs completed and
signed defendant’s membership application form during
February
2002 to the defendant’s satisfaction”.
As I understood his
argument it was that by virtue of the fact that it was common cause,
that the date of the plaintiffs’
dismissal was 15 May 2002, the
defendant’s refusal to make such an admission, indicated that
it made no admission that the
forms were received before dismissal.
This of course does not explain why on 23 November 2008 the defendant
made the positive assertion
that the plaintiffs applied for
membership shortly before being dismissed and why Mr. Pillemer put it
to the second plaintiff,
that the plaintiffs applied for membership
after they had been dismissed. I am therefore satisfied that this
additional statement,
has no bearing upon the conclusions I have
reached.
[8] I now turn to
consider whether the statement by Mike Masondo,
that the plaintiffs were
full members of the defendant, was justified in terms of the
defendant’s constitution, and whether
the non-payment of
subscriptions by the plaintiffs, had any bearing upon this issue.
[8.1] Clause 6.2.2 of the
Constitution of the defendant (Exhibit “F”) provides as
follows:
“
An applicant
shall be deemed to be a member of the Union on completion of the
application form accompanied by a signed stop order
form unless the
REC (Regional Executive Council) resolves to refuse membership to
such applicant. The REC shall consider such application
within a
reasonable time”.
[8.2] Clause 6.5.1 of the
Constitution provides
inter alia
that
“
Active
members shall pay weekly, fortnightly or monthly subscriptions fees”.
[8.3] Mr. Vusumuzi Landu,
who was employed by the defendant as the head of its legal
department, conceded under cross-examination
that in terms of Clause
6.2.2 of the Constitution of the defendant, when an individual
complies with the provisions of this clause
he/she is deemed to be a
member of the defendant. He also conceded that if the defendant
wished to refuse membership to an applicant,
it would have to advise
such an applicant in writing of the refusal, together with reasons
for such refusal, in accordance with
the provisions of Clause 6.2.3
of the Constitution, which provides as follows:
“
An applicant
to whom admission to membership is refused shall be notified in
writing together with reasons for such refusal and
shall be entitled
to a refund of
the membership fee paid by him/her
upon application”.
The need for such
notification is to enable the applicant to exercise a right of appeal
to the National Executive Council of the
defendant from the decision
of the Regional Executive Council, as provided for in Clause 6.2.4 of
the Constitution. No evidence
was led by the defendant that
membership by the plaintiffs was refused in such a manner.
[8.3] Landu agreed under
cross-examination that once the plaintiffs had been dismissed by
Nestle, they would not have to pay any
subscriptions to the
defendant. He also agreed that in terms of Clause 6.3.2.1 of the
Constitution of the defendant, if the member
concerned was more than
thirteen weeks in arrears with his/her subscriptions as result of
“any other reason which is beyond the member’s
control”
the member would nevertheless be deemed
to be a member in good standing.
[8.4] It is therefore
necessary to examine the evidence concerning the non-payment of
subscriptions by the plaintiffs, which I have
touched upon in
paragraph [4.5] above. The second plaintiff gave evidence that the
plaintiffs had applied for membership around
February/March 2002.
When cross-examined he said he would say it was between February and
March, but that he was not sure. Dlomo’s
version however was
that he was told by Mike Masondo that Mike Masondo had previously
chased the plaintiffs away (as dealt with
above) when Dlomo found the
application forms in his pigeon hole, in the offices of the
defendant. Dlomo said he put the forms
aside and a week later the
plaintiffs arrived at the defendant’s office with a letter of
termination, detailing the benefits
they would enjoy after the
retrenchment. According to Dlomo this was a week before the effective
date, which it is common cause
was 15 May 2002. Dlomo said that at
this meeting the plaintiffs told him that Sam Mashiloane, the
national negotiator for the defendant,
had told them to approach
Dlomo. Dlomo said he disputed that the plaintiffs were members and
tried to contact Mashiloane to confirm
what the plaintiffs had said,
without success. The plaintiffs then left the offices without
“a
common understanding on their message from Sam”
. A
few days later he got hold of Sam who confirmed he did speak to the
plaintiffs. Dlomo said he had a big fight with Mashiloane
because
Dlomo was of the view that the plaintiffs were only joining because
they were
“running away from the retrenchment”.
Dlomo said the plaintiffs returned to his office after
they had been retrenched, because Mashiloane had advised them to do
so, to
obtain his assistance in referring the matter to the CCMA. The
second plaintiff denied however having any contact with Mashiloane.

The second plaintiff agreed that on 06 May 2002, when the plaintiffs
were issued with the letters of retrenchment, they went to
the
offices of the Union where they met with Dlomo, who read the letters
of retrenchment and told them to come back after they
had been
retrenched, which they did. They spoke to Dlomo and he started
completing the referral forms to the CCMA.
[8.5] According to the
second plaintiff after the plaintiffs had been told by Mike Masondo
that they were members they had gone
back to the offices of the
defendant, because the subscriptions had not been deducted from their
salaries at the end of the month.
He said he could not remember who
they spoke to, but they were assured that since they had completed
the forms the Constitution
of the defendant guaranteed their
membership. When they met with Dlomo during May 2002 at no stage did
he say the defendant would
not act for the plaintiffs because they
had not paid their subscriptions. When cross-examined the second
plaintiff said that there
would have been three deductions from his
salary and because they were paid on the twenty-fifth of the month,
when he received
his payslip he noticed that it had not been
deducted. He therefore went into the offices of the defendant to find
out why the deductions
were not made. He did not make an attempt to
pay that amount to the defendant, because he was told by the
defendant not to worry
and once the paperwork was in order the
deductions would be made. When asked who at the defendant who had
told him that, he replied
that it was difficult to remember all the
defendant’s officials, but the person he was constantly in
touch with was Dlomo,
who assured the plaintiffs they were Union
members. Second plaintiff was then asked whether it was Dlomo who had
told him not to
worry about his subscriptions not being deducted, to
which he replied in the affirmative. He stated that after the second
deduction
was not made on the twenty-fifth of the following month he
did not do anything, because he expected that once the deductions
were
made they would include all of the arrear deductions. He said he
expected this because they said that he should not worry. After
the
third month when no deductions were made he did nothing for the same
reason. In cross-examination he was then asked whether
once he was
dismissed, he realised that no subscription fees would
be deducted from his
salary, to which he replied in the affirmative.
[8.6] In considering
where the truth lies in these competing versions, I have of course
already rejected Dlomo’s version that
the applications for
membership by the plaintiffs, were rejected by Mike Masondo. This
conclusion necessarily gives the lie to
Dlomo’s evidence that
the application forms were unexpectedly discovered by him in his
pigeon hole, linked as this discovery
was, to the contemporaneous
explanation by Mike Masondo, that he had previously chased the
plaintiffs away. Where the versions
are consistent however, is in the
fact that the plaintiffs met with Dlomo after they had been given
their retrenchment notices
and met with him again after they had been
retrenched. Of significance however is that on the defendant’s
version, the non-payment
of subscriptions by the plaintiffs could
have had no bearing upon their status as members, because it was only
after the plaintiffs’
dismissal that the defendant was prepared
to assist them, which gave rise to the alleged need to back-date the
application forms.
It is therefore inexplicable why the defendant
averred, as set out in paragraph 4.3 above, that the defendant denied
the plaintiffs
were members of good standing because they
“never
paid Union subscription fees”
. What this does
illustrate is the same lack of consistency in the defendant’s
version of events. I accordingly reject the
defendant’s version
of these events.
[8.7] The fact remains
however, that on the plaintiffs’ version, three monthly
subscriptions, each due on the twenty-fifth
day of each month, were
payable in February, March and April 2002. As at the date of
dismissal, being the 15 May 2002, none of
these subscriptions were
more than thirteen weeks in arrears, and the plaintiffs were
accordingly as at the date of dismissal,
members of the defendant in
good standing. By virtue of the fact that after their dismissal, they
were not obliged to pay any subscriptions,
their status as members
could not be affected by any subsequent non-payment of subscriptions.
[8.8] In any event, Landu
conceded that if what the second plaintiff had said was true, namely
that he had been assured that he
should not worry about the
non-deduction of subscriptions, as they were being processed, then
the plaintiffs could not be faulted.
Consequently, the non-payment of
the subscriptions was beyond the control of the plaintiffs within the
meaning of that clause,
as contained in Clause 6.3.2.1 of the
Constitution.
[9] I accordingly find
that the plaintiffs have discharged the
onus
of proving on a balance of probabilities, that they were
members of the defendant in good standing, at all material times.
[10]
Was an agreement
of mandate concluded between the plaintiffs and the defendant, for
the defendant
, inter alia
, to refer the
plaintiffs’ claim against Nestle for unlawful dismissal, to the
Labour Court.
[10.1] The second
plaintiff gave evidence that after the
plaintiffs had been
retrenched, they spoke to Dlomo, who completed the forms for the
referral of their matter to the CCMA. After
the matter remained
unresolved at the CCMA, Dlomo said that the matter would be referred
to the Labour Court, because the certificate
that was given to them
at the CCMA, entitled them to go to the Labour Court. Second
plaintiff said that after the CCMA hearing,
they went to the
defendant’s office where the legal advisor was. Whilst at the
office the legal advisor saw the letter that
had been written to the
second plaintiff dated 12 April 2002 by Nestle, thanking him for his
efforts and advising him of an increase
in his salary. The legal
advisor then offered to take over the case, saying that it was a very
easy case. The deceased had been
provided with a similar letter by
Nestle. The legal advisor offered to take over the case and continue
with it in Durban, but Dlomo
said he had been advised by Head Office
that these cases concerning Nestle had to be consolidated, because
there were some cases
in Johannesburg, that had not been referred to
the CCMA. Once the cases had been consolidated they would be referred
to the Labour
Court. During 2003 second plaintiff saw the document at
pages 15 – 17 in Exhibit “B”, which was a
consolidated
statement of case to the Labour Court under Case No. JS
1128/02.
[10.2] As pointed out
above, Dlomo’s version was that after the plaintiffs had been
retrenched they returned to the defendant’s
office as Sam
Mashiloane had advised them to return for assistance in having their
matter referred to the CCMA. If the matter was
not resolved at the
CCMA, Dlomo would have to forward to him a certificate of
non-resolution, for him to consolidate all the matters
from the
different provinces. Dlomo said this was told to him by the
plaintiffs. Dlomo then telephoned Sam Mashiloane who confirmed
what
the plaintiffs were telling him. After the matter was not resolved at
the CCMA and a certificate of non-resolution was issued
by the
Commissioner, he said to the plaintiffs that he would fax the
certificate to Sam Mashiloane according to his instructions.
Dlomo
then returned to his office, the plaintiffs did not accompany him and
he faxed a copy of the certificate of non-resolution
to Mashiloane.
Dlomo said that there was no legal officer employed by the defendant
in Durban at the time. After that he was no
longer dealing with the
matter, but the plaintiffs would come into his office to check on the
progress of the matter. He would
tell them that all that he knew was
that Sam Mashiloane was to consolidate the matters, assisted by the
legal officer stationed
at the Gauteng provincial office, by the name
of Tami Thukani.
[10.3] Despite the
contradictions in these versions, it is common cause that the
defendant agreed to assist the plaintiffs by providing
legal
assistance to them by timeously referring the plaintiffs’
dispute with Nestle concerning their dismissal, to the CCMA
and if
unresolved, thereafter timeously to the Labour Court for
determination.
[10.4] No challenge was
raised by the defendant as to the authority of either Dlomo or
Mashiloane, to agree to assist the plaintiffs
in this way. Landu said
that in this case Dlomo was the organiser and Tami Thukani according
to Dlomo, was the legal officer at
the Gauteng provincial office, who
would assist Sam Mashiloane to consolidated the matters and refer
them to the Labour Court.
[10.5] In this regard a
defence raised by the defendant was that the matter was referred to
the CCMA in error, due to a misapprehension
that the plaintiffs were
members of the defendant. In the light of my finding that the
plaintiffs were members of the defendant
at the relevant time, there
is no basis to the assertion that the referral was made in error.
[10.6] Mr. Pillemer
however submitted that it was the defendant’s case that it is
superficial to treat the relationship between
the plaintiffs and the
defendant, where the defendant provides legal assistance to members
on matters related to their employment
as
“a mere
contract of mandate and import the essentialia of such a contract as
being implied terms of the contract between member
and Union”.
In addition, he submitted that any actions done by the
defendant in this matter, derived from membership and did not amount
to a
contract of mandate but one governed by the defendant’s
Constitution. The ordinary rules of mandate or agency do not apply
to
the Union/member situation, where the Union has to take a view on the
membership as a whole, with the result that individual
members may be
prejudiced or benefited in the process, and by decisions made by the
Union from time to time. According to Mr. Pillemer
the Union has to
do what is best for the Union and its membership generally. The Union
official acting in such a situation has
as his first interest the
Union and its general membership, and not the interests of the
individual members, on whose behalf it
may be acting.
[10.7] The cause of
action as pleaded by the plaintiffs was that the plaintiffs were
members of the defendant and/or the defendant
agreed to act on behalf
of and in the interests of the plaintiffs, in accordance with Section
200 of the Labour Relations Act 66
of 1995 (LRA). It was further
alleged that
“express, implied and tacit terms of the
plaintiffs’ membership with the defendant alternatively the
agreement of mandate
pleaded in paragraph [4.2], were”;
and
a number of terms governing the relationship are then alleged. The
cause of action advanced by the plaintiffs, consequently
contemplates
the situation where the defendant acts on behalf of the plaintiffs as
members, where the terms governing this relationship
are determined
by the status of the plaintiffs as members.
[10.8] The legal
consequence of the registration of a trade Union in terms of Section
97 (1) of the LRA, as in the case of the defendant,
is that it is a
Body Corporate and acquires legal personality. It is an independent
legal subject distinct in law from its members
and officials
Lawsa Vol 13 Second
Edition para 343
The defendant cannot
perform anything legally which is not provided for in its
Constitution and the terms of the Constitution, determines
the nature
of the relationship between the defendant and its members.
Lawsa
supra
at 344
The function of the
Constitution of a Trade Union is to determine the
rights and obligations of
members of the Trade Union towards each
other and as regards
outsiders.
Lawsa
supra
at 347
[10.9] Clause 5.11 of the
Constitution of the defendant, provides as one of the aims and
objectives of the defendant
“to provide legal assistance
to members and/or officials where it deems it in the interests of the
Union to do so”.
Clause 9.8.9 of the
defendant’s Constitution, in the context of detailing the
duties of the Shop Stewards Committee provides
as follows:
“
To at the
request of an employee in the workplace, assist and represent an
employee in grievance and disciplinary proceedings as
well as at
bargaining councils and CCMA”.
Clause 20.6.12 of the
defendant’s Constitution, in the context of detailing the
powers of the National Executive Council,
provides as follows:
“
To provide
legal assistance to members on matters related to their employment”.
[10.10] Section 200 (1)
of the LRA provides as follows:
“
A registered
Trade Union or registered employers organisation may act in any one
or more of the following capacities in any dispute
to which any of
its members is a party
In its own interest.
On behalf of any of its members.
In the interest of any of its
members”.
[10.11] The defendant
consequently has the power in terms of its Constitution to provide
legal assistance to its members, on matters
related to their
employment. In providing such assistance it may act in any of the
ways specified in Section 200 (1) of the LRA.
However the capacity in
which it acts in any particular case, has to be determined by
reference to the particular facts of that
case.
[10.12] The facts that
are relevant to a consideration of this issue are as follows.
According to Landu, the officials at regional
level would have the
power to entertain such an application by a member for assistance,
and if they were of the view that there
was merit in the matter, to
refer the matter to the CCMA. The approval of a legal officer of the
defendant would then be necessary
to refer the matter to the Labour
Court. If the legal officer was of the view that he/she was competent
enough to deal with the
matter, he/she would do the referral. If
however the legal officer did not feel confident enough to deal with
it, the legal officer
would consult with the witness, to seek
permission for the matter to be referred to
“outside
lawyers”.
If the witness was satisfied that they
had a strong case and that he was not competent to deal with the
case, outside attorneys
would be instructed to deal with the matter.
The importance of determining the prospects of success in any matter
was dictated
by the fact that the defendant’s financial
resources were derived solely from subscriptions by members. As
regards litigation
for members, he agreed that it was primarily in
the interests of the member, but with the Union having a more general
interest.
The interests of the defendant in pursuing litigation on
behalf of a member lay not only in determining whether the member had
a good case, but also a broader public interest where a large number
of members were involved in a dispute with their employer.
In the
latter case, as long as the opinion that the defendant received from
its lawyers was a 50/50 chance of success, they would
proceed with
the case. The inference to be drawn is that a decision by the
defendant whether to commit financial resources to litigation
on
behalf of members, involves a consideration of the prospects of
success, as well as the number of members involved. He agreed
that
the referral to the CCMA was done as “
FAWU obo Michael
Mkhize and Mandla Ndlela”
and that in doing so the
defendant acted in its own interests and the plaintiffs’
interests. When referred to the provisions
of Section 200 (1) of the
LRA he was of the view that the defendant was acting in the interests
of the defendant and also on behalf
of the members.
[10.13] I find it
unnecessary for the just decision of this case to categorise the
relationship between the plaintiffs and the defendant
as one of
mandate and as a result of such categorisation, imply terms governing
their relationship, consistent with the legal concept
of mandate. It
is sufficient for present purposes, as I have already found, that the
defendant agreed to assist the plaintiffs,
by providing legal
assistance to them by timeously referring their dispute with Nestle
to the CCMA and thereafter timeously to
the Labour Court.
[11]
What
were the obligations of the defendant in agreeing to assist the
plaintiffs by providing legal assistance?
[11.1] Landu gave
evidence that once the defendant had decided to offer legal
assistance to a member in a dispute with an employer,
there could be
no expectation on the part of a member, that the defendant would
offer such assistance to its conclusion. This was
because the
defendant had to assess the case from time to time, and if the
defendant was advised that they did not have a case,
it would be
entitled to withdraw its assistance.
[11.2] Landu agreed that
the Regional Office and the National Office knew that a referral to
the Labour Court, would have to take
place within ninety days of the
certificate of non-resolution of the dispute, being issued by the
Commissioner in the CCMA, in
terms of Section 191 (11) (a) of the
LRA. He agreed that it would be a
“fair expectation”
of a member that where the defendant decided no longer
to give such assistance to a member, during this period, it would do
so at
a time when the member would be able to obtain an alternative
source of assistance, to comply with this time period. He agreed that

it appeared to be the case that nobody had told the plaintiffs during
this ninety day period that the defendant was no longer proceeding

with their case. He also agreed that if a member did not hear
anything from the defendant, it was fair for the member to expect,

that his case would be referred to the Labour Court within the period
of ninety days and that the defendant was proceeding with
the matter,
until they informed them otherwise. Landu agreed it would never be
fair if the defendant agreed to give legal assistance
to a member,
and when asked about progress, the member was told not to worry as
the Labour Court takes a long time, and after two
years, advised the
member that he had no case and the matter had never been referred to
the Labour Court. He also agreed that the
plaintiffs were entitled to
assume during the two year period, that the Union was referring their
matter to the Labour Court, if
they were told that their matter was
being handled at the Labour Court. In this regard second plaintiff
gave evidence that the
plaintiffs visited Dlomo at the defendant’s
offices for the whole of 2002 and 2003, at least twice a week to find
out the
progress of their case. They were told by Dlomo that the
Labour Court was full, but they must not panic as their case would be
dealt with. Dlomo agreed that the plaintiffs would come to the
defendant’s offices to check progress. At times they would
make
appointments, at other times they would simply arrive. The only
answer he said he gave them, was that all that he knew was
that Sam
Mashiloane was to consolidate the matters assisted by Tami Thukani,
the legal officer. He denied however telling them
that the matter was
being attended to, that the Labour Court takes a long time and that
they must not worry.
[11.3] As stated by Brand
J A in
City of Cape Town
(CMC Administration) v Bourbon-Leftley
2006 (3) SA 488
(SCA) at para 19
“
A proposed
tacit term can only be imported into a contract if the court is
satisfied that the parties would necessarily have agreed
upon such a
term if it had been suggested to them at the time ….”
Christie –
The Law of Contract in South Africa 6
th
Ed page 177
[11.4] In a well known
and oft quoted
dictum
Corbett AJA (as he then was) set out the
approach to the implication of a term in a contract in the case of
Alfred McAlpine &
Son (Pty) Ltd.
v
Transvaal
Provincial Administration
1974 (3) SA 506
(A)
531 – 532
in the following terms:
“…
..an
unexpressed provision of the contract which derives from the common
intention of the parties, as inferred by the Court from
the express
terms of the contract and the surrounding circumstances. In supplying
such an implied term the Court, in truth, declares
the whole contract
entered into by the parties”.
[11.5] When regard is had
to the duty of the defendant when acting on behalf of and in the
interests of the plaintiffs, to also
have regard to its own interests
and by extension the interests of other members of the defendant, I
am satisfied that if it had
been suggested to the parties at the time
the defendant agreed to afford legal assistance to the plaintiffs,
that the defendant
would be entitled to withdraw such assistance, if
advised that the plaintiffs did not have prospects of success, the
parties would
necessarily have agreed upon such a term. It is quite
clear on the evidence that the defendant has to consider the
interests of
all of its members, when allocating time and funds in
support of legal assistance, being offered to certain members. It
must accordingly
be entitled to resile from an undertaking to provide
legal assistance, where it is advised that there are no prospects of
success.
[11.6] I am equally
satisfied that the time at which the defendant is entitled to resile
must be opportune, regard being had to
the ability of the member to
prosecute his/her claim at that time, without being prejudiced. Such
an obligation would include the
obligation to rectify any omission by
the defendant in the interim in providing legal assistance, which
prejudiced the prosecution
by the plaintiffs of their claim. When
regard is had to the evidence that the plaintiffs are lay persons
seeking to advance a claim
for unfair dismissal against Nestle, a
large corporation with huge resources to marshal strong legal
representation, and without
legal assistance their prospects of
success would be extremely remote, I am satisfied that the parties
would necessarily have agreed
upon such a term. Equally, if at the
stage the defendant seeks to withdraw its assistance, it has failed
to perform its obligation
to timeously refer the plaintiffs’
matter to the Labour Court, it must take whatever steps are necessary
to discharge that
obligation. Of significance in this regard is that
by letter dated 20 November 2003 (Exhibit “B20”) a legal
officer
of the defendant, Lucky Makae, accepted that the defendant
was obliged to apply for condonation, on behalf of the plaintiffs, as

a consequence of the defendant’s failure to refer the
plaintiffs’ matter to the Labour Court.
[11.7] I have already
found that the plaintiffs have proved on a balance of probabilities
that the parties agreed that the defendant
would refer the
plaintiffs’ alleged unfair dispute timeously to the CCMA for
resolution and if the dispute remained unresolved,
timeously refer
the plaintiffs’ alleged unfair dismissal dispute to the Labour
Court for determination.
[11.8] I am also
satisfied that the implied term I have found established is
consistent with the defendant’s allegation in
paragraphs 17.3 –
17.7 of its plea, that a term of the agreement was that the defendant
would provide legal assistance to
members, where it deems it in the
interest of the defendant to do so and having been furnished with a
legal opinion that the plaintiffs
did not enjoy prospects of success
in the Labour Court, would be entitled to resile from the agreement,
if it was not in the interests
of the defendant to proceed with the
prosecution of the plaintiffs’ claim, in the Labour Court.
[11.9] I am also
satisfied that the further implied term I have found established is
consistent with the plaintiffs’ allegations
in paragraphs 4.1
and 4.2 of the plaintiff’s replication. Recognising that I have
explicitly not sought to imply terms in
the agreement between the
parties, which are consistent with those found in an agreement of
mandate, I am nevertheless fortified
in my finding that the implied
terms in question form part of the agreement, by the following common
law principles in the Law
of Agency. It is clear that the mandatory
is entitled to renounce the mandate and following renunciation
“
the mandator
has no claim for damages if he has suffered no loss, or if any loss
which he has suffered is attributable to his own
neglect to take
reasonable steps to protect himself”.
Kerr – The
Law of Agency 3
rd
Ed page 251
The learned author
quoting Pothier adds the following:
“
This is the
position when the mandatory renounces
res
integra
i.e. ‘at a time when the mandant still has the opportunity to
carry out the business forming the subject of the mandate himself,
or
easily to find another person who will agree to take it on’ “.
The business forming the
subject of
“the mandate”
by the
defendant was a timeous referral of the plaintiffs’ case to the
Labour Court. At the time of renunciation by the defendant
the
plaintiffs no longer had the opportunity to do that. Their ability to
carry out such business was therefore dependant upon
the consent of a
third party, being the Labour Court, as well as the assistance of the
defendant, for reasons which I will set
out below.
[11.10] I find it
unnecessary to consider whether the plaintiffs have established any
of the remaining terms alleged in plaintiffs’
particulars of
claim, except that I will in due course deal with the allegation that
it was a term of the agreement, that the defendant
would provide
proper legal advice regarding any settlement proposals by Nestle. The
issue of whether Nestle made a settlement proposal
at the CCMA
hearing, is pleaded as a distinct cause of action and I will deal
with it as such.
[12]
Did the defendant
breach the agreement to provide legal assistance to the plaintiffs,
to pursue their claim for unfair dismissal
against Nestle
?
[12.1] It is common cause
that the defendant never referred the plaintiffs’ case to the
Labour Court. In fact the evidence
is that between 18 June 2002,
being the date when the certificate of non-resolution of the dispute
before the CCMA was issued until
April 2004, when the defendant
advised the plaintiffs that the defendant was no longer prepared to
assist the plaintiffs, the only
step taken by the defendant to
advance the case of the plaintiffs was the drafting of a statement of
case in the Labour Court dated
22 October 2002 (Exhibit “B”
pgs 15 – 17). Landu agreed that this was in excess of the
ninety day period and
was consequently already out of time.
[12.2] The second
plaintiff stated by reference to a letter dated 20 November 2003
(Exhibit “B” pg 20) that the plaintiffs
had met with
Lucky Makae, a legal officer at the defendant on 19 November 2003,
who advised them that the matter had been assigned
to him on 02 June
2003, at which stage it was clearly out of time. Makae advised them
that it was imperative that an application
for condonation for the
late filing of the application for review in the Labour Court, be
brought. He also advised them that an
affidavit by Tami Thukani, the
former legal officer who was dealing with the matter, was
“central
and imperative”
to the application for
condonation. He said he had travelled to Bloemfontein to trace him,
but the said Thukani did not have any
medical reports to include in
the condonation application. He added that he was waiting for contact
from Thukani, before he would
proceed with the application for
condonation.
[12.3] Dlomo gave
evidence that Thami Thukani was sick and had been hospitalised for
many months and during this time no-one had
access to his office. The
files that were in his office were left unattended for a long time,
until attorney Jay Surju was asked
to check the files, and as a
consequence Surju produced an opinion (Exhibit “B” pgs 28
– 40) in April 2004, in
which he concluded that the
retrenchment of the plaintiffs was not unfair. He also concluded that
the defendant was not obliged
to
“pursue each and every
matter to the last court of recourse in South Africa”.
[12.4] As a consequence
of this view, the defendant advised the plaintiffs that it was not
prepared to continue with their case.
The plaintiffs consequently
consulted attorneys who wrote to the defendant on 04 June 2004,
advising that they intended instituting
an action for damages, as the
defendant had been negligent in dealing with the plaintiffs’
matter. In addition, the defendant
was afforded a period of two weeks
within which to file the necessary statement of case and bring an
application for condonation
“as quite clearly the
reasons for the failure to file the statement of case would be in
FAWU’s knowledge”.
No response was received
to this demand and by letter dated 07 June 2004, the plaintiffs’
attorneys again wrote to the defendant,
requesting a response as to
whether the defendant was going to file an application for
condonation. No response was received to
this letter, summons was
issued on 23 August 2004 and in response, attorney Surju alleged that
the plaintiffs were never members
of the defendant and the plaintiffs
were invited to withdraw the action.
[12.5] It is therefore
clear that the defendant breached the obligation to refer the
plaintiffs’ case timeously to the Labour
Court. In addition, it
breached the obligation to take whatever steps were necessary to
rectify its failure to carry out this obligation,
by bringing an
application for condonation, at the time when it became entitled to
resile from the agreement, by virtue of the
opinion it had received.
[13] Before dealing with
the issue of whether the plaintiffs are entitled to claim damages
from the defendant, as a consequence
of the defendant’s breach
of the agreement, it is necessary to deal with the plaintiff’s
claim that in breach of the
defendant’s obligations, the
defendant advised the plaintiffs not to accept an offer of
compensation, equivalent to twelve
months remuneration from Nestle in
settlement of the plaintiffs’ dispute. It is alleged that the
defendant acted negligently
in doing so, because a reasonable Trade
Union official, exercising the requisite degree of care and skill,
would have advised the
plaintiffs to accept the offer.
[14] There is a direct
dispute of fact between the evidence of the second plaintiff and
Dlomo, as to whether such an offer was made
by the representative of
Nestle at the CCMA hearing, one Berlin Nayager. However, Berlin
Nayager was called by the defendant and
denied that he had made any
such offer on behalf of Nestle. He said the making of such an offer
would be tantamount to his admitting
that the entire consultation
process had been flawed internally within Nestle, that they admitted
that they were wrong, that they
did not consult properly and sought
to make amends by offering the maximum compensation of twelve months.
He stated that he would
have been dismissed from Nestle if he had
made such an offer, because he did not have the authority to make
such an offer.
[15] As regards his lack
of authority he explained that Nestle was part of a multi-national
company and when it came to job losses
and employment practices,
because three hundred job losses were involved in the exercise, the
Head Office in Switzerland would
have to be satisfied that a proper
procedure was in place. His superior was in Australia and that
person’s superior was in
Switzerland and there was consequently
a chain of authority that had to be followed. He was consequently not
permitted to make
any such offer.
[16] I find Nayager’s
reasons why he did not make any such offer plausible and I
accordingly find that the plaintiffs have
failed to discharge the
onus
of proving that such an offer was made. It consequently
becomes unnecessary to consider the plea of prescription, that was
raised
by the defendant in this regard.
[17]
Is the
plaintiffs’ claim against the defendant premature on the ground
that the plaintiffs have at all material times been
able to the
necessary steps to pursue their claim against Nestle?
[17.1] The defendant
alleges that at all material times, it was open to the plaintiffs to
bring an application for condonation in
the Labour Court and unless
they do so and the application is refused, the plaintiffs do not have
a complete cause of action against
the defendant.
[17.2] The short answer
to this issue is that I have found that it was part of the
defendant’s obligation, to rectify any
default in the
performance of its obligations, which prejudiced the plaintiffs in
the referral of their case to the Labour Court,
existing at the time
when it became entitled to resile from the agreement, by bringing the
necessary application for condonation.
The need to bring an
unsuccessful application for condonation in the Labour Court,
consequently forms no part of the plaintiffs’
cause of action
against the defendant.
[17.3] In any event, it
is clear that in order to obtain condonation in the Labour Court, the
plaintiffs would have to show
“good cause”.
Premier Gauteng v
Ramabulana
2008 ILJ 1099 (LAC)
1111 para 15
In order to show
“good
cause”
the following factors would be considered:
[17.3.1] The degree of
lateness or non-compliance in relation to the prescribed time frame.
[17.3.2] The explanation
for the lateness or the failure to comply with the time frame.
[17.3.3] Prospects of
success or
bona fide
defence in the main case.
[17.3.4] The importance
of the case.
[17.3.5] The respondent’s
interest in the finality of the Judgment.
[17.3.6] The convenience
of the Court.
[17.3.7] Avoidance of
unnecessary delay in the administration of Justice.
Academic and
Professional Staff Association
v
Pretorious
2008 ILJ 318 (LC)
322 paragraphs 17 - 22
[17.4] These factors are
not individually decisive but are interrelated and must be weighed
against each other. In weighing these
factors a good explanation for
the lateness may assist the applicant in compensating for weak
prospects of success. Strong prospects
of success may compensate for
the inadequate explanation and long delay. The Court could decline
the granting of condonation, if
it appears the default was wilful, or
was due to gross negligence on the part of the applicant. The
prospects of success or
bone fide
defence on the other hand,
mean that all that needs to be determined is the likelihood or chance
of success when the main case
is heard. Without a reasonable and
acceptable explanation for the delay, the prospects of success are
immaterial, and without prospects
of success, no matter how good the
explanation for the delay, an application for condonation should be
refused.
Lawsa Vol 13 Part 1
2
nd
Edition para 973 note 3
[17.5] What is striking
about the present case is the inordinate delay on the part of the
defendant in dealing with the plaintiffs’
case. The certificate
of non-resolution was issued in the CCMA on 18 June 2002 and
consequently the defendant was obliged to refer
the plaintiffs’
case to the Labour Court, within ninety days of this date. Nothing
however was done to advance the plaintiffs’
case and the only
explanation advanced by Dlomo, was that the legal officer assigned to
deal with the matter, Thami Thukani, was
ill in hospital and the
files he was dealing with, including the plaintiffs’, were
locked in Thukani’s office, to which
nobody had access. It is
clear that Lucky Makae, a legal officer of the defendant, appreciated
the need in November 2003 for an
application for condonation to be
brought and that medical evidence to explain the failure of Thukani
to deal with plaintiffs’
matter was necessary. He regarded an
explanation by Thukani for the delay as
“central and
imperative”,
to the application. Despite this
however no application was brought and the plaintiffs were advised in
April 2004, that the defendant
was no longer prepared to proceed with
their case.
[17.6] It is clear that
the Labour Court would require a reasonable and acceptable
explanation for the delay, particularly where
the delay is two years,
as in the present case. Mr. Pillemer submitted that the plaintiffs
were in possession of all the facts
as to why their case was not
referred within the requisite time period, on the basis that they
were justifiably under the belief
that the defendant was dealing with
their case and it was only in 2004, that they were advised to the
contrary. I disagree. The
inordinate delay could not be
satisfactorily explained by the plaintiffs simply saying the
defendant did nothing. As pointed out
above, the defendant’s
own legal officer Makae was of the view that the evidence of Thukani
to explain the delay was
“central and imperative”.
It is clear that any application for condonation would
be opposed by Nestle, who could justifiably argue that in the absence
of
any explanation for the inaction of the defendant over a period of
two years, Nestle would be prejudiced in having to defend a claim
for
dismissal, which occurred two years earlier.
[17.7] The plaintiffs’
ability to demonstrate prospects of success in any action against
Nestle, would accordingly, in the
absence of any reasonable
explanation for the inordinate delay, be of crucial importance. Mr.
Pillemer submits that much of the
evidence in this regard was within
the knowledge of the plaintiffs, as was demonstrated by the evidence
of the second plaintiff.
In my view however, the evidence as a whole,
which I will demonstrate in due course, shows that the plaintiffs
were ignorant of
the dealings between the defendant and Nestle
concerning the retrenchment process. Nestle again would have disputed
that the plaintiffs
had prospects of success and would have utilised
such evidence which the plaintiffs in the absence of co-operation
from the defendant,
would not have had access to.
[17.8] I am accordingly
satisfied that on a balance of probabilities, the plaintiffs would
not have been successful in an application
for condonation to the
Labour Court, in the absence of information from the defendant, which
lay exclusively within the defendant’s
knowledge.
[17.9] Although the
defendant did not plead a failure on the part of the plaintiffs to
mitigate their damages, and the defence was
couched on the basis I
have dealt with, i.e. that the plaintiffs’ claim is premature,
the plaintiffs in their particulars
of claim, somewhat surprisingly
allege the following:
“
As a
consequence of the plaintiffs’ dismissal and hence
unemployment, the plaintiff was unable to mitigate his damages by

instituting proceedings in his own name, and applying for condonation
for the late referral of the dispute, when it came to his
attention,
during 2004”.
I should add in fairness
to M/s Nel, that she was not the pleader of the plaintiffs’
particulars of claim and ignorance of
the rule that a failure to
mitigate is a defence to be raised and proved by the defendant,
should not be laid at her feet. Be that
as it may, the plea to this
averment was a denial, together with an allegation that the plaintiff
was in a position to bring an
application for condonation himself. It
was also alleged that failing an application for condonation having
been instituted and
refused, the plaintiff did not have a complete
cause of action against the defendant. This defence was reiterated in
a further
pleading by the defendant styled
“Additional
Special Pleas”.
[17.10] However, in so
far as the plaintiffs’ alleged that they were unable to
mitigate their damages by applying for condonation
because of
financial reasons, this is an issue on the pleadings requiring
determination. Mr. Pillemer when cross-examining the
second plaintiff
asked him where he had obtained the finance to pursue the present
action. The second plaintiff said they had taken
loans to do so, they
were in debt and still owed money. Second plaintiff said that he,
together with the deceased, had borrowed
money from loan sharks.
Second plaintiff also said he did not know that they
“
needed
to pay any money for this word ‘condonation’ and nobody
had told them they ‘needed to pay for the condonation

application’
”.
[17.11] The demand by the
plaintiffs’ attorneys that the defendant bring an application
for condonation was made on 04 June
2004. When regard is had to the
fact that summons was issued on 23 August 2004, which the plaintiffs
were able to finance with
loans from loan sharks, it is reasonable to
infer that they would have been able to raise the finance to pay
their attorneys to
bring a condonation application, if advised by the
attorneys to do so. I accordingly find that the plaintiffs have
failed to prove
that they were precluded from bringing a condonation
application because of financial constraints. Such a conclusion can
of course
have no bearing upon the conclusion I have reached in
regard to the plaintiffs not being obliged to bring such an
application,
and their lack of prospects of success if they attempted
to do so, without the co-operation of the defendant. Although these
conclusions
were reached in the context of the defendant’s plea
that the plaintiffs’ action was premature, my finding that the
plaintiffs lacked prospects of success, in any such application,
would equally apply to the issue of a failure on the part of the

plaintiffs to mitigate their damages.
[18]
Do
the plaintiffs lack
locus
standi
to
sue the defendant?
[18.1] The special plea
raised by the defendant is as follows:
[18.1.1] As members of
the defendant, the plaintiffs and the defendant have an identity of
interest, with the result that the plaintiffs
cannot in law sue the
defendant unless this is expressly provided in the Constitution
governing their relationship.
[18.1.2] The Constitution
of the defendant makes no provision for a member to sue the defendant
in the circumstances giving rise
to the plaintiffs’ claims.
[18.1.3] In the
circumstances the plaintiffs do not have the necessary
locus
standi
to pursue their claims against the defendant.
[18.2] In amplification
of the defendant’s special plea, Mr. Pillemer made the
following submissions:
[18.2.1] Section 213 of
the LRA defines a Trade Union as
“
an
association of employees whose principal purpose is to regulate
relations between employees and employers, including any employers’

organisations”.
[18.2.2] Although on
registration in terms of Section 97 (1) of the LRA, a Trade Union
acquires legal personality and becomes a
body corporate, it is also
an association of employees who make up the membership of the
association and therefore
viz-a-viz
the membership, it has to
be treated as their association. As members of the same association,
all the members have an identity
of interest with their Trade Union,
their association, and since nobody can sue himself, none of the
members may sue their Union.
[18.2.3] As a consequence
of such
“identity of interest”
, the
plaintiffs cannot sue the defendant, unless this is provided for in
the Constitution governing their relationship. The Constitution
would
have to embody the agreement of all the other members, to be liable
in certain circumstances to compensate the wronged member,
by
rendering their association liable to such wronged member. Without
their agreement it is not legally possible to achieve this
result.
[18.2.4] The Constitution
of the defendant (as set out above) provides that one of the aims and
objectives of the defendant is
“
To provide
legal assistance to members and/or officials where it deems it in the
interest of the Union to do so”.
The Constitution of the
defendant makes no provision for a member to sue the defendant in the
circumstances giving rise to the plaintiffs’
claims.
[18.2.5] The provisions
of Section 200 (1) of the LRA (as set out in para [10.10] above)
supports the notion that there is an
“identity of
interest”
as it permits a registered Trade Union
to act on behalf of and in the interest of any of its members.
[18.3] Central to the
special plea is the concept of an
“identity of interest”
existing between the members and their Union, which has
the effect of precluding any claim by a member, whether couched in
contract
or
delict
,
against the Union, unless expressly permitted in terms of the
Constitution.
[18.4] In the present
case, in the light of the finding I have made that the defendant
breached the contractual undertaking given
to the plaintiffs, I am
not concerned with the enquiry as to whether a
delictual
claim may be advanced by a member against his/her Union.
By virtue of the fact that the claim advanced by the plaintiffs,
include
an allegation that the defendant in acting on behalf of the
plaintiff, would do so
“without negligence”
and
in breach of the defendant’s obligations, the defendant
“acted
negligently”
, Counsel were accordingly required to
deal with both causes of action in the submissions they made.
[18.5] In support of his
contentions, Mr. Pillemer referred me to the decision in
S A Municipal
Workers Union v Jada & Others
2003 (6) SA 294
(W)
where the term
“identity
of interest”
was formulated. In this case the
claim was
delictual
,
but I understood that Mr. Pillemer relied upon certain
dicta
in this case, as support for his argument, that the
plaintiffs could not sue the defendant, whether in contract or
delict
without specific provision for such an action
in the Constitution of the defendant.
In Jada’s case the
appellant was a Trade Union and the respondents members of the
appellant. The respondents (plaintiffs)
had been successful in a
delictual
claim for
damages against the appellant (the defendant) in a Magistrates’
Court. The members had been dismissed for embarking
on an illegal
strike. They alleged that an official of the Union has instigated
them to strike and their claim for damages was
based upon the
allegations that:
[18.5.1] The defendant
owed them a duty of care which flowed from the special relationship
between them, which existed by virtue
of the defendant’s
Constitution, to ensure that they did not do anything which would
result in their being dismissed.
[18.5.2] The defendant
breached this duty in that they were dismissed as a result of their
embarking on the illegal strike action.
[18.5.3] In consequence
of such breach they suffered damage for which the defendant was
liable to compensate them.
[18.6] Horwitz A J, in
whose Judgment Schabort J concurred, upheld the appeal, set aside the
order of the Magistrate and substituted
therefore an order absolving
the Union from the instance,
inter alia,
on the ground that
the plaintiffs had failed to establish that the defendant owed them a
duty of care.
[18.7] Of significance
however for present purposes are certain
dicta
of the learned
Acting Judge, which however were
obiter,
regard being had to
his statement that notwithstanding his concerns, he would for the
purpose of the Judgment, accept that there
were no legal impediments
which stood in the way of the plaintiffs suing the defendant.
[18.8] The learned Acting
Judge’s concerns were as follows:
[18.8.1] In terms of the
definition in Section 1 of the Labour Relations Act No. 28 of 1956,
which was still in force at the time
of the events in question, the
definition of a Trade Union was
“
any number
of employees in any particular undertaking, industry, trade or
occupation associated together for the purpose, whether
by itself or
with other purposes, of regulating relations in that undertaking,
industry, trade or occupation between themselves
or some of them and
their employers or some of their employers”.
Section 5 (1) of that
Act, provided that a Trade Union was a body corporate, capable in law
of suing or being sued. The learned
Acting Judge then had the
following to say at pages 297 G – 298 A
“
Despite its
being accorded a personality of its own under s 5 (1), however, I
have a notional difficulty conceptualising a trade
union in the same
light, for instance, as a company incorporated under the Companies
Act 61 of 1973. Clearly, in the case of the
latter, the interests of
the company and the persons who hold shares therein may diverge, with
the consequence that there is no
problem with the shareholders (who
themselves may be corporate entities) suing the corporation in which
they hold shares, as if
the latter were just another person. The same
does not appear to hold true in the case of a trade union. There is a
clear identity
of interest between a trade union and its members.
Members of a trade union are not ‘members’ in the same
sense as
shareholders in a company are ‘members’ of the
latter. Trade union members do not merely hold a financial stake in
the trade union of which they are members. They have a collective
interest which they pursue
via
the medium of the trade union structure, but not in the same way as
members of a company incorporated under the Companies Act”.
and the following at 301
F to 302 E
“
What lies at
the heart of Mr.
Helberg’s
submission is that there existed the type of relationship between the
plaintiffs and the defendant which imposed on the defendant
certain
obligations towards the plaintiffs such that, if the defendant
breached them, it could potentially find itself saddled
with
liability to the plaintiffs for damages. His putting to witnesses
that there was a ‘relationship’ between the
plaintiffs
and the defendant begged the question, however, whether there was
indeed a duty on the defendant to act. Before one
can determine
whether there was such a duty, as suggested by Mr.
Helberg,
one
must identify the nature of the relationship between the plaintiffs
and the defendant. It cannot be equated, for example, to
the
relationship between a client and his attorney whom he consults for
advice and whom he pays for that advice. I have difficulty
with the
notion that a number of persons co-operate to form a body as a
negotiating forum, which is then alleged to stand in relation
to its
members in a similar relationship to them as does, for example, the
attorney. The terms ‘relationship’ and ‘special

relationship’ were bandied about as it if were axiomatic that a
relationship which would give rise to a delictual action
of the
nature in issue, existed. It was erroneous to take what, in my view,
was a conclusion and make it the starting point.
I referred above to the plaintiffs’
allegation at the pre-trial conference that the relationship stemmed
from the defendant’s
Constitution, which contained contractual
provisions which obliged the defendant to see to its members’
interests in the
field of their employment. Whilst I can conceive of
a contractual relationship between two unrelated parties (such as an
attorney
and his client) bringing into being a situation in which the
one becomes obliged to display a duty of care towards the other, I

have difficulty contemplating how that occurs in a situation in which
one party (
in casu
, the defendant) comes into existence at the
behest of other parties (employees), who are responsible for
chartering the course
which it takes, or is a party to whom others
(future employees) ally themselves and take part in its
decision-making process. In
most cases in which a special
relationship between two parties is alleged to exist, the party
claiming that the other owed the
former a duty of care would usually
have no control over how the latter acted, for otherwise it would be
inappropriate to speak
of a breach of duty. In a case such as the
present, in which a trade union exists as the medium through which
its members can bargain
and negotiate with their employer, I fail to
perceive how it can be said that the defendant owed the plaintiffs a
duty of care,
especially where, as in the present case, the
plaintiffs embarked on industrial action beyond the scope of their
union’s
collective bargaining process”.
[18.8.2] What is
immediately apparent is that the learned Acting Judge was solely
concerned with the issue of whether a duty of
care, could be found to
exist in the relationship between a Union and its members. The
concerns expressed with regard to the implication
of a duty of care
in a contractual setting, where the parties are related and the one
party has a degree of control over the other,
do not arise in the
present case.
[18.3] The defendant is a
body corporate and has legal personality in terms of Section 97 (1)
of the LRA. As pointed out above,
it is an independent legal subject,
distinct in law from its members and officials. In addition, the
Constitution of the defendant
determines the nature of the
relationship between the defendant and its members, as well as their
rights and obligations
inter se
.
The Constitution also accords to the defendant the power to provide
legal assistance to its members and/or officials, when it
deems to be
in the interests of the Union to do so. It also provides that the
National Executive Council has the power to provide
legal assistance
to members on matters related to their employment and a Shop
Stewards’ Committee, at the request of an employee
in the
workplace has the power to assist and represent an employee,
inter
alia,
before the CCMA .
[18.4] It is therefore
clear that the defendant had the necessary authority in terms of its
Constitution, to conclude the said agreement
to provide legal
assistance to the plaintiffs, by referring their grievance against
Nestle to the CCMA, and thereafter to the Labour
Court.
[18.5] As pointed out
above, Landu was of the view that the defendant was acting in the
interests of the defendant and also on behalf
of the plaintiffs, by
reference to the provisions of Section 200 (1) of the LRA. In so far
as this may constitute an
“identity of interest”,
between the parties, this cannot stand as a bar to the
conclusion of an agreement of the type which is in issue in these
proceedings.
There is no need to draw a comparison between the
relationship of an attorney and client on the one hand and the
relationship between
the defendant and the plaintiffs, as a
consequence of the agreement concluded, on the other and infer that
the conduct of the defendant
could never be expected to be that of an
attorney. This is because all that is required of the defendant, was
to refer the plaintiffs’
case to the Labour Court.
Sophisticated levels of legal knowledge and expertise, were not
required of the defendant and its officials
to achieve this
straightforward task, or any subsequent application.
[18.6] I therefore
disagree with Mr. Pillemer’s submission that a pre-condition
for the ability of the plaintiffs to sue the
defendant, would be a
provision in the Constitution of the defendant, permitting them to do
so. Such a requirement would be an
effective bar to any member
seeking to enforce any contract concluded with the defendant, which
cannot be the case.
[18.7] I am accordingly
satisfied that the plaintiffs have the necessary
locus
standi
to institute the present action
against the defendant.
[19]
Is it against
public policy to hold the defendant liable to compensate the
plaintiffs in damages?
[19.1] The defence as
pleaded was that regard being had to the Constitutional roll played
by Trade Unions in society, as embodied
in Section 23 of the
Constitution and the LRA, it is against public policy for a member of
a Trade Union to be able to sue his/her
Trade Union for damages,
suffered by reason of actions taken by the Trade Union in furtherance
of the interests of the Union and
its members on his/her behalf,
unless this is expressly provided for in the Constitution of the
Trade Union as this:
[19.1.1] Would place
Trade Unions at huge financial risk, which in turn would require
Trade Unions to carry professional indemnity
insurance, where the
premiums would be astronomical and where the need to pay such
premiums, would be to the prejudice of the general
body of members,
that it represents.
[19.1.2] Could
potentially result in the destruction or significant weakening of the
Trade Union and its ability to represent its
members in its core
function of collective bargaining, as recognised and provided for in
the Constitution and the LRA.
[19.1.3] Would
potentially undermine the Union’s ability to fulfil its mandate
to its members.
[19.1.4] Would be against
the interests of the general body of members that it represents
(which includes the plaintiffs).
[19.1.5] The defendant
received advice from its attorney that the case of the plaintiffs had
no reasonable prospects of success.
It is against public policy for
the defendant as a Trade Union to be compelled, against the possible
claim for damages from the
plaintiffs as the members concerned, to
pursue a claim on their behalf which it has been advised has poor
prospects, irrespective
of whether the advice is sound or not.
[19.1.6] Accordingly, a
claim based upon a failure to so pursue that claim is against public
policy and does not in law establish
a cause of action against the
defendant.
[19.2] In light of the
conclusion I have reached, that it was an implied term of the
agreement between the parties, that the defendant
would be entitled
to withdraw legal assistance to the plaintiffs, if advised that the
plaintiffs did not have prospects of success,
it becomes unnecessary
to consider the question whether it would be against public policy,
if the defendant were obliged to do
so.
[19.3] As I understand
the defence as pleaded, it is based upon the financial consequences
for a Union, if a member was entitled
to sue the Union for damages
the member may have suffered, as a result of actions taken by the
Union on the member’s behalf.
[19.4] Landu was asked to
comment upon this defence and stated that if the Union was flooded by
law suits
“they would be failing in their role as
embodied in the Constitution of South Africa”
.
When asked whether the answer was to obtain professional indemnity
insurance against such claims, his reply was that this would
not
assist the Trade Unions because they were dealing with
“workers
who earn petty salaries”
. If they had to increase
the subscriptions for this purpose, this would result in individuals
not joining the Union. Members of
the defendant were resistant to any
increase in their subscriptions. He had not however been able to
obtain any quote from an insurance
company, as to what it would cost
the defendant to obtain professional indemnity insurance. He was
accordingly unable to say what
the cost would be to the defendant.
[19.5] There is
consequently no evidence before me as to what increase would be
demanded of individual members of the defendant
if indemnity
insurance was obtained by the defendant. I am consequently unable to
determine whether the views of Landu, of the
consequences for the
defendant if indemnity insurance was obtained, are valid or not. The
concept of public policy
“is a question of fact not law
and changes with ‘the general sense of justice of the
community, the
boni mores
, manifested in public opinion’
“.
Christie Law of
Contract in South Africa 5
th
Edition
Page 345 notes 42
and 43 and authorities there cited
[19.6] The defendant was
obliged to place before this Court clear evidence that the factual
consequences to the defendant of obtaining
professional indemnity
insurance, would be as described by Landu. Only once such
consequences to the defendant were established,
would it be possible
to determine whether it was against public policy, to hold the
defendant liable to compensate the plaintiffs
in damages. In any
event I have grave reservations whether public policy would preclude
the advancement of the plaintiffs’
claim against the defendant,
where the omission of the defendant, consists of a gross failure to
do that which it had undertaken
to do, on behalf of the plaintiffs.
[20]
Would the
plaintiffs have succeeded in the Labour Court in their claim for
unlawful dismissal against Nestle?
[20.1] The evidence of
second plaintiff was that at the time when the deceased and himself
were dismissed for alleged operational
requirements, they were both
employed by Nestle as sales representatives. The first they heard of
the proposed restructuring of
the Grocery Division in which they were
employed, was in January 2002 when a Keith Green of Nestle, told them
they were going to
be converted to trade specialists. He stated that
they never heard of such a restructuring as set out in a letter dated
19 November
2001, from Nestle to the defendant (Bundle “D”
page 53).
[20.2] Green assured them
that everybody would be provided with adequate training which would
involve the initial training and a
further assessment. Each
individual would be given an opportunity to undergo three training
programmes. If the individual did not
meet the requirements on the
first programme he would be referred to the second and third
programmes, failing which he would be
considered for an alternative
position. All of the sales representatives were told this at a
meeting in Nestle’s boardroom
in New Germany.
[20.3] Neither he nor the
deceased went for any training. Whilst they were still employed at
Nestle none of the sales representatives
went for any training.
[20.4] They were then
told by Green that they would be interviewed to assess where they
fell short, before they were appointed as
trade specialists, so that
they could be given the appropriate training relevant to that
specific area. They were never told that
if they did not pass the
initial assessment, they could face retrenchment.
[20.5] By reference to
the document headed
“Trade Specialist Interviews”
(Bundle “D” page 60) he said that they were
never told how the assessments were to be done, how to prepare or
anything
about the interview.
[20.6] They were never
told what the results of the assessment were and the first sight he
had of the document was at Court. It
appears that second plaintiff
had also never been shown a document headed
“Targeted
selection score sheet – Trade Specialist Interviews”
with
the candidates classified as
“suitable candidates”,
“not suitable”,
or
“possibly
suitable”.
It appears this document reflects the
outcome of the
“interviews”
that were
conducted by Nestle.
[20.7] The first that he
heard about the possibility of retrenchment, was when he was told by
a colleague, that the colleague had
heard that the second plaintiff
and the deceased, had taken a voluntary retrenchment package.
[20.8] He made enquiries
from David Levuna, his line manager, who told him he must forget
about it and get back to work.
[20.9] He however feared
that Nestle wanted to dismiss them, but his fears were allayed when
he received the letter dated 12 April
2002 referred to above, from
Nestle giving them both an increment and saying they were good
workers (Bundle “B” page
6).
[20.10] On 06 May 2002
they received letters from Nestle dated 03 May 2002 headed
“Retrenchment of Grocery Staff”
in
which they were informed that in a meeting held with the defendant,
Nestle formally informed the second plaintiff and the deceased
“that
your services as per Section 189 of the LRA will be terminated from
15 May 2002” (Bundle “C” page
57).
[20.11] After receiving
these letters they went to the defendant and saw Dlomo, who told them
to return after they were retrenched,
which they did, as set out
above.
[21] Second plaintiff
said that nobody from Nestle had ever spoken to them about the
restructuring exercise, retrenchments or about
the reduction in the
Grocery Division of the six sub-divisions to three. He also denied
that the function of sales representatives
had changed. He stated
that he had never seen any notice on the notice board, stating that
trade specialists whose jobs were made
redundant, due to the
restructuring exercise, would be permitted to apply for jobs in other
divisions of Nestle, should vacancies
exist. He was never given a
list of vacancies, or asked to apply for any vacancies and was never
offered any alternative to staying
on as a sales representative, or
trade specialist.
[22] To counter the
assertions of the second plaintiff, the defendant called Brian
Nayager, who was at the relevant time the Group
Employee Relations
Manager for the South East Africa
Region of Nestle. His duties
encompassed industrial relations and retrenchment matters concerning
the restructuring of the organisation.
He recalled the retrenchment
exercise at Nestle, which is in issue in the present case. He
explained that his function was to implement
the process when the
Board of Nestle took a decision to restructure the company. He would
convey the decision to the unit managers
in Nestle and they would
have to start the process in terms of the collective agreements with
the Unions.
[22.1] He confirmed that
he started the process by writing to the defendant, by way of his
letter dated 19 November 2001 (Bundle
“C” page 6), where
he advised that the Grocery Sales Division was divided into six
geographical areas. He advised that
Nestle
“has now
resolved to rationalise and restructure the Grocery Sales Division”
by
“creating only three business areas of
the six mentioned above”.
He then went on to say
“
There will
be an amended staffing level required in the new business areas. This
restructuring could affect the job security of
some of your members
who are employed as sales representatives and admin personnel”.
He stated that
“we
envisage the proposed set up being in place by 01 March 2002”
and concluded by saying
“
You are
therefore invited to consult with us in terms of the procedural
agreement and Section 189 of the LRA”.
[22.2] Nayager said that
the reason for the restructuring was that Nestle found that they
“had
a duplication of services”
which meant that they
“employed too many people doing the same job”.
[22.3] Nestle
consequently started interacting with the defendant to advance the
process. As regards employees who were not members
of the defendant,
he would send out a notice to all the operating unit managers,
stating that they were in the process of restructuring.
Operating
unit managers were instructed to put up the notice on the notice
board. Operating unit managers were advised that line
managers should
consult with such employees and advise them of the progress being
made. As regards the defendant he would head
up the discussions with
the defendant. He said that this process was followed in the present
case.
[22.4] Nayager confirmed
that he had written the letter dated 05 March 2002 to the defendant
(Bundle “C” page 16), setting
out the agreement that had
been reached between Nestle and the defendant. He had stated in the
letter
“trade specialists whose jobs are made redundant
due to the restructuring exercise, would be permitted to apply for
jobs in
other divisions of the company, should vacancies exist”
and added
“Regional Sales Offices are to
place this memo on the notice board and to communicate its contents
to all trade specialists”.
[22.5] Nayager said that
if this notice had not been placed upon the notice boards, the
defendant would have immediately complained.
[22.6] Regarding the
vacancies that were advertised which the plaintiffs applied for and
were not given (Bundle “D”
page 155), he explained that
the job functions of the posts advertised differed from that of the
posts the plaintiffs had occupied.
[23] Before dealing with
the evidence that emerged during the cross-examination of Nayager, it
is necessary to deal with the status
of the minutes of various
meetings which appeared to have been held between the defendant and
Nestle, concerning the restructuring
exercise. The minutes were
discovered by the defendant, who however declined to admit their
accuracy. Mr. Pillemer stated that
there was no available witness who
was able to say whether they were accurate or not. The minutes were
part of the documents received
from the defendant.
[24] During the
cross-examination of Nayager, the following emerged:
[24.1] He conceded that
the letter referred to above (Bundle “C” page 6) did not
constitute compliance with the written
notice requirements of Section
189 (3) of the LRA, stating that
“the provisions of 189
(3) would have been addressed at the meeting that we set up with the
Union”.
When asked whether he had written a letter
setting out the requisite information in terms of Section 189 (3) of
the LRA, to the
defendant, he said he could not remember. He was
referred to the minutes of a meeting held on 08 April 2002, at which
he was recorded
as being present (Bundle “D” page 102) at
which the following was minuted:
“
It’s
difficult why Union wants the information in writing. They have dealt
with the Union previously in the same way. Only
prepared to talk
about this information in the meeting”
as
well as the following
“
Management
want for a caucus – note that the Union is not fully equipped
with facts – but will give information verbally
today 08 April
2002”.
He said he could not
remember this, and could not say whether he disputed it or not, but
if there was any information that the defendant
required, they would
have supplied it. When asked by M/s Nel, whether Nestle’s
attitude was that the request for information
was not going to be
complied with in writing and they would deal with it at the meeting,
he replied
“I cannot say what would have been the
Company’s attitude”.
When he was reminded of
his previous statement that the provisions of Section 189 (3) would
be addressed at the meeting, he said
that he had also said he could
not remember where the Section 189 (3) letter was, so he did not know
whether there had been a Section
189 (3) letter or not, but conceded
that he was in charge at the time.
[24.2] He stated that
there were numerous meetings held with the defendant concerning the
proposed restructuring, and asking for
the defendant’s input on
whether it should be changed from six to three divisions etc. He
conceded that in order for the
defendant to participate meaningfully
in such discussions, the information required by Section 189 (3) of
the LRA, would have to
have been given to the defendant. He
maintained that there was lots of information, that was not in the
defendant’s bundle,
particularly minutes of meetings with the
defendant. He conceded that there was a complaint by the defendant
that there was no
information, but said that Nestle had corrected
this.
[24.3] When asked what
steps were taken to send a letter in terms of Section 189 (3) of the
LRA to non-Union employees, in November
2001, he referred to the
letter dated 19 November 2001 (referred to in paragraph [22.1]
above), but then referred to a letter dated
05 March 2002, (referred
to in paragraph [22.4] above) saying it could possibly be that
letter. When asked by M/s Nel again where
the letter in terms of
Section 189 (3) was, he replied that he did not see it in the bundle
and could not say there was or wasn’t
one
“at this
stage”.
He maintained however that Nestle had
complied with the Act, in their restructuring process and “
therefore
there had been no challenge”
but then conceded
“there was a challenge about information, but there was
no challenge about the process”.
[24.4] In the light of
his statement that the non-Union employees were going to be consulted
by the line managers, Nayager was asked
what information was given to
the line managers to carry out this task. His reply was simply that
“we train all our line managers on the soft skills that
are required”.
[24.5] Such consultation
would happen after Nestle had consulted with the defendant and he
conceded that any employee who was not
a Union member, would have to
be consulted with directly. He said that he did not engage directly
with non-Union employees, but
this would have been done by Keith
Rossiter-Green (the Keith Green referred to by the second plaintiff)
and his managers. If he
had not done this, Nayager maintained that he
would have heard about it. He said he would have told Bruce Loubser
(who was the
sub-ordinate of Keith Rossiter-Green) that the
non-members of the Union
“need to be kept abreast of the
developments and what’s taking place”.
[24.6] When it was put to
Nayager that the evidence of the
second plaintiff was that
neither he, nor the deceased, had been communicated with, or
consulted in any manner before February 2002,
he stated that this was
impossible. The date of February 2002 was erroneous because the
evidence of the second plaintiff was that
they had heard from Keith
Rossiter-Green in January 2002, about a proposed restructuring of the
Grocery Division. Be that as it
may, Nayager said unit managers would
have to have reported to Head Office on the progress being made and
discussions with
“non-Union members”.
[24.7] As regards the
assessment, or interview process the second plaintiff and the
deceased were subjected to, he was unable to
comment upon this
process, as it fell outside his function. He was also unable to
explain why two employees had to be made redundant,
because of the
reduction of six divisions to three divisions, in the Grocery Sales
Division.
[24.8] Nayager was
referred to the minutes of a meeting
headed “Grocery
Division Restructuring Meeting 29 November 2001”
(Bundle
“D” page 59) where it was recorded
“Management
noted that the Union had raised the problem that the meeting being
held without representatives from the Grocery
Division, because of
the urgency of the matter they felt the meeting was necessary”.
It was also recorded
“looking at 01 March
2002 being implementation date”.
It was also
recorded
“Disclosure of information. Number of people in
this Division that are in affected areas and who would be affected”.
M/s Nel then put it to Nayager, that the Union wanted
this information, to which he replied
“and that would
have been supplied to them”.
[24.9] M/s Nel then
referred Nayager to the minutes of a meeting held on 26 February 2002
(Bundle “D” page 70) which
appeared to be the next
meeting held, and asked whether there was any other profiling
exercise undertaken in the interim other
than the one 25 February
2002, to which he replied
“I wouldn’t be able to
tell you”.
Nayager was then asked when between 29
November 2001 (being the first meeting) and the 26 February 2002
(being the second meeting)
was the issue of the selection criteria
put to the Union or non-Union members, what it would entail and how
it would be implemented.
He replied that he was not able to say as
there were numerous minutes of meetings not in the bundle. He said
there could have been
a series of meetings.
[24.10] When asked who
negotiated with the Union or non-Union employees about the selection
criteria to be used, he replied
“it would have been part
of my negotiations”.
He said that he had
negotiated with Sam Mashiloane and put their proposal to him. When
asked what the proposal was, he said he could
not recall exactly what
it was. He said the profiling exercise would have been developed by
the Human Resources Services and he
was not an expert in profiling.
When asked how he was then able to negotiate this aspect with the
Union, he said that after the
criteria had been developed he would
negotiate it with the Union. He was then asked whether he recalled
the Union saying the criteria
were subjective and unfair, to which he
replied
“It could have been. Could have been yes”
.
He was then asked whether he was not saying that the selection
criteria were agreed and he replied
“I am not saying it
was unfair”.
When M/s Nel put to him
“the
question is you are not suggesting that it was agreed”
he
did not reply. When I asked him whether it was agreed or not, he said
he could not vouch that it had been agreed, in the absence
of the
documents in the bundle. When I asked him whether he therefore had no
recollection of whether it was agreed or not, he replied
that his
view was that it had been agreed with the Union,
“but
the fact that there had been a challenge by the Union at a later
stage indicates that it could not have been agreed”.
[24.11] By reference to
the minutes of the meeting held on 01 March 2002 (Bundle “D”
page 71) Nayager was referred to
the following:
“
Company has
moved beyond information disclosure. Keith had gone to unit to make
presentation”.
M/s Nel then put to
Nayager that the only presentation there had been, was when Keith
Green had told the plaintiffs they were going
to be assessed and
retrained, and there was no question of retrenchments, to which he
replied
“I cannot vouch for his presentation”.
[24.12] In the same
minute the following is recorded:
“
Interviews.
Was to see if the process fits the profile of the new description. If
he doesn’t fit the profile the process would
decide. If he does
fit it the process will decide”.
Nayager agreed that what
this meant, was that people were going to be selected solely on the
basis that they would be profiled against
the job description. When
asked how this related to the need to reduce the number of workers,
he replied that the available staff
were profiled against the job
description and the number of workers needed. He was unable to
explain however, how the number of
workers needed was determined, as
he was not involved in operations.
[24.13] The minutes of a
meeting held on 15 April 2002 (Bundle “D” page 105) were
referred to, where the following is
recorded:
“
Profiling
was used by the Company to get the people they wanted. Certain
individuals have been shown by the process to be unable
to meet the
demands. Due to this reason the current number is not needed. Some
would be retrenched”.
M/s Nel put to Nayager
that this indicated that Nestle profiled people and those who they
perceived were not as efficient or effective,
were retrenched and it
had nothing to do with reducing the regions from six to three.
Nayager agreed that was what it said, but
denied that was the
process, and said the profiling was done and this was then negotiated
with the defendant. M/s Nel then put
to him that the selection
criteria were made into the operational requirement, which determined
the need to get rid of the plaintiffs,
which he said he did not agree
with.
[24.14] The following was
recorded in these minutes:
“
Does it mean
profiling was objective? The selection was based on targeted
selections”
and
the following:
“
Profiling
was not agreed. Union requests list of all the trade specialists plus
their years of service”.
Nayager agreed that the
minute recorded that after the profiling exercise had already taken
place, the defendant was saying they
had not agreed, but he disputed
that this was the case.
[24.15] Nayager said by
reference to a list of vacancies (Bundle “D” page 125) at
Nestle that the fact that this list
was produced at the time, was to
make such vacancies available to the affected employees, as positions
they could apply for. He
agreed that Nestle were obliged to offer
such vacancies to affected employees and not to make employees apply
for such jobs. He
believed that this had been done, and this would
have been done by Bruce Loubser at Nestle. M/s Nel then put to
Nayager, that the
plaintiffs had never seen this list of vacancies
and they were never told about it. To this he replied that he could
not vouch
for this, as it was a function of Human Resources Service.
[24.16] Nayager was also
referred to a letter written by the defendant to Nestle dated 13 May
2010 (Bundle “D” page
135) in which the defendant
complained of the fact that the profiling exercise was not fair and
objective, and the defendant was
not consulted about it, prior to
applying it to the defendant’s members. Nestle had refused to
consult with the defendant
about this. Nayager said that he was
unable to comment because he was no longer employed at Human
Relations at Nestle at the time.
[25] In assessing whether
the plaintiffs would have succeeded in their claim for unfair
dismissal before the Labour Court, it has
to be borne in mind that
the
onus
would rest
upon Nestle to establish that the dismissal of the plaintiffs, was
both substantively and procedurally fair
Section 192 (2) of
the LRA
[26]
Procedural
fairness
[26.1] Nestle was obliged
to give written notice to the plaintiffs in terms of Section 189 (3)
of the LRA of the proposed retrenchments,
before the termination of
their employment. This notice had to set out the information
specified in the Section. The second plaintiff
had never been given
such a notice and said he had never seen any notice on the notice
board. To the contrary, he had been told
by Keith Green that they
would be interviewed to assess where they fell short and would be
retrained to rectify this. Nayager conceded
that he did not know
whether there had been a Section 189 (3) letter or not. When asked
about such a letter in respect of non-Union
employees, he replied he
could not see it in the bundle. It is clear that Nestle sought to
satisfy compliance with the information
to be furnished, in terms of
Section 189 (3), by doing so orally at meetings with the defendant.
[26.2] Nestle was obliged
when contemplating the retrenchment of employees first to consult
with the other parties
before making a final
decision.
Lawsa Vol 13 Part 1
2
nd
Edition paragraph 789
[26.2.1] When regard is
had to the letter written by Nayager dated 19 November 2011 (Bundle
“C” page 6) it is difficult
to see how what was being
conveyed was not a
fait accompli
,
that a restructuring was to take place. This is particularly so when
regard is had to the statement that it was envisaged, that
the
“proposed”
set up would be in place
by 01 March 2002, despite the emphasis placed by Nayager upon the
word
“proposed”.
[26.2.2] As regards the
assertion of the second plaintiff that he and the deceased were never
consulted about the possibility of
retrenchment, all that Nayager
could say was that line managers were instructed to consult with
non-Union employees. As regards
the information that was furnished to
line managers to enable them to do this, all he could say was that
they were trained on the
“soft skills”
required.
That he regarded the likelihood of non-Union employees not having
been consulted with as
“impossible”
I
find unconvincing, particularly in light of the letters that were
furnished to the plaintiffs by Nestle dated 12 April 2002, giving

them an increment and saying they were good workers. This is hardly
the conduct of an employer actively engaged in a consultation
process
with the plaintiffs, because of a possible retrenchment of their
positions.
[26.2.3] It is clear that
an employer has to consult with the Union and individual non-Union
employees, in an attempt to reach consensus
on the selection criteria
to be adopted, to decide which employees should be retrenched.
Lawsa
supra
at para 793
If no agreement on
selection criteria is reached, then the employer must adopt and
implement fair and objective criteria, in identifying
the employees
to be retrenched.
Lawsa
supra
at para 793
The criteria of fairness
and objectivity are applicable to both the criteria and the way in
which they are applied.
Lawsa
supra
at para 793
It is clear that no
proper consultation was held with the defendant, or the plaintiffs,
concerning the selection criteria to be
applied to employees. Nayager
stated that he would have negotiated this issue with the defendant,
but was unable to say what
“the proposal”
was
that he had put to Sam Mashiloane. His explanation that the profiling
exercise was developed by the Human Resources Services
at Nestle and
he was not an expert on profiling, starkly illustrates Nayager’s
inability to meaningfully negotiate these
issues with the defendant.
In addition he conceded that the defendant had complained that the
selection criteria were subjective
and unfair. He also could not
vouch that they had been agreed, but conceded that the fact the
defendant raised a challenge in this
regard, indicated that they
could not have been agreed. As regards the manner in which the
selection criteria were applied, it
is clear that employees were to
be selected solely on the basis that they would be profiled against
the job description. Nayager
was unable to explain how this related
to the need to reduce the number of workers. In my view, it is clear
that the selection
criteria were used by Nestle to decide who Nestle
regarded as not being effective or efficient. These workers were
retrenched and
this had nothing to do with reducing the regions from
six to three.
[26.2.4] I am therefore
satisfied that Nestle would not have discharged the onus of
establishing in the Labour Court, that the dismissal
of the
plaintiffs was procedurally fair.
[27]
Substantive
fairness
[27.1] Retrenchment must
be substantively fair towards the employees affected. This means that
valid and fair, or
bona fide
and reasonable reasons, must
exist for the termination of the employment of an employee, on
account of operational reasons and
the dismissal was a measure of
last resort.
Lawsa
supra
at para 778
[27.2] Courts are
entitled to scrutinise the reasons for the retrenchment, particularly
the
bona fides
and fairness thereof, but not the commercial
rationale of the decision.
Lawsa
supra
at para 778
The retrenchment must be
based upon operational reasons
LRA Section 213
which includes economic
or financial reasons, technological reasons and structural reasons
Lawsa
supra
para 779
[27.3] According to
Nayager the reason for the restructuring was that Nestle had a
duplication of services in that they employed
too many people doing
the same job. It was directed at the efficient operation of the
business. On this basis Nestle was entitled
to restructure based upon
financial reasons.
[27.4] As regards
technological reasons, second plaintiff disputed that he and the
deceased would not have been able to carry out
the functions demanded
of the new posts of sales representatives. Be that as it may, the
uncontradicted evidence is that they were
told they would be assessed
and where they were found to be lacking in skills, they would be
trained to enable them to fill the
new posts of trade specialists. If
after training they were not suitable for the new posts, they would
be considered for alternative
positions. The uncontradicted evidence
however is that although they were both assessed, neither were given
any training. On the
evidence before me, there would consequently be
no basis upon which the defendant would be able to contend, that the
plaintiffs
were retrenched because they did not have the necessary
skills to fill the posts of
“trade specialists”.
[27.5] As regards the
issue of structural reasons, it is clear on the evidence that the
plaintiffs would have been prepared to accept
posts wherever situated
within the Republic. There was accordingly no question that the
plaintiffs, because of such restructuring,
were not prepared to
accept changes to their terms of employment. In addition, Nayager was
unable to explain why it was necessary
for two posts to become
redundant, because of the reduction in areas from six to three, in
the Grocery Sales Division. He said
that the operating unit in
KwaZulu-Natal would have determined its manning levels, which he knew
nothing about.
[27.6] It is clear that
even though reasons to retrench employees may exist, they will only
be accepted as valid, if the employer
can show that alternative steps
have been considered and taken to prevent the retrenchments, limit
the dismissals to a minimum
and mitigate the adverse effects of the
dismissals.
Lawsa
supra
at para 781
In addition, it must be
shown that the alternatives are fair and reasonable, that the
employer resorted to dismissal as a last resort,
and the alternatives
were properly offered or communicated to the employees.
Lawsa
supra
at para 781
[27.7] Second plaintiff
said he had never seen any notice on the notice board, stating that
trade specialists whose jobs were made
redundant, due to the
restructuring exercise, would be permitted to apply for jobs in other
divisions of Nestle, should vacancies
exist. He said he was never
given a list of vacancies, or asked to apply for any vacancies and
was never offered any alternative,
to staying on as a sales
representative or trade specialist. When it was put to Nayager that
the list of vacancies (Bundle “D”
page 125) had never
been seen by the plaintiffs and they were never told about it, he
replied he could not vouch for this as it
was a function of Human
Resources Service. I am therefore satisfied that such vacancies were
never offered to the second plaintiff
and the deceased, as Nestle was
obliged to do.
[27.8] I am therefore
satisfied that Nestle would not have discharged the
onus
of
establishing in the Labour Court that the dismissal of the plaintiffs
was substantively fair.
[27.9] In the light of
the aforegoing the plaintiffs have established that they would have
been successful, in their claim for unfair
dismissal before the
Labour Court.
[28]
Have the
plaintiffs proved their quantum of damages?
[28.1] The claims
advanced by the plaintiffs as a consequence of their unlawful
dismissal, were compensation in the form of retrospective

re-instatement, alternatively payment equivalent to the sum of twelve
months’ compensation, calculated at the rate of the
plaintiffs’
remuneration as at the date of the termination of their services with
Nestle, being the sum of R7,436.00 per
month. The damages allegedly
suffered were accordingly R178,464.00 (being twenty-four months’
compensation calculated for
the period May 2002 to June to 2004 when
the matter would have been finalised in the Labour Court),
alternatively R89,232.00 (being
the sum equivalent to twelve months
remuneration).
[28.2] When giving
evidence the second plaintiff said that the
amount of R7,436.00 per
month, did not include the commission he was paid, which varied
between R1,500.00 and R2,000.00 per month
and was sometimes above
this amount. He said he had never earned less than R1,500.00 a month
in commission. In addition, neither
he nor the deceased were able to
secure employment after they were dismissed. He said that the
deceased and himself had discussed
the relief they would seek before
the Labour Court and their first choice would have been
re-instatement.
[28.3] As regards the
deceased, Mr. Pillemer put to the second plaintiff, whether he was
aware that the deceased, after his retrenchment,
had offered the
services of his taxi business to the defendant, should there be a
need to transport members. Second plaintiff replied
that he had no
knowledge that the deceased possessed taxis. As a consequence of
this, the widow of the deceased was called and
she confirmed that the
deceased had operated two taxis before his retrenchment. However,
before his retrenchment he was experiencing
problems with his taxis,
because they were old and he had problems with the drivers. His taxis
were then taken off the road and
the deceased was supposed to have
followed the Government’s taxi re-capitalisation programme. The
deceased however did not
have enough money to do so, and therefore
ended up not operating at all. Both taxis ended being sold. She said
that despite his
efforts the deceased was unable to obtain
employment. She confirmed his salary of R7,436.00 per month and that
he used to earn
commission of between R1,500.00 and R2,000.00 per
month and above.
[28.4] As a consequence
of the evidence of the second plaintiff and the widow of the
deceased, the plaintiffs applied to amend the
plaintiffs’ claim
by increasing their monthly income to an amount of R8,936.00 per
month. The total amounts claimed were
also increased respectively to
R214,464.00 and R107,232.00.
[28.5] In terms of
Sections 193 and 194 of the LRA in the case of an unfair
retrenchment, the Court may order the re-instatement
of the employee,
or the payment of compensation to the employee, where the reason for
the dismissal was unfair, or a fair procedure
was not followed, or
both. The amount of compensation must be just and equitable, but may
not be more than twelve months remuneration.
Lawsa
supra
at page 806
[28.6] As regards the
quantum of plaintiffs’ damages, Mr. Pillemer submitted that the
plaintiffs had failed to prove the quantum
of their damages, because
the plaintiffs had failed to prove what amounts they were paid in
respect of their severance packages.
It is common cause that the
plaintiffs received severance packages, but no evidence was led as to
the amount paid.
[28.7] M/s Nel’s
answer to this was to submit that because the plaintiffs, in their
claim for re-instatement had limited the
amount claimed to
twenty-four months salary, without seeking payment for any future
loss of earnings, or pension benefits, the
amount paid in respect of
severance pay should not be taken into account. I disagree. The claim
is one for payment of the money
equivalent of two years of salary
after such a period of re-instatement. The claim was limited to a
period of two years, on the
basis that by reference to a number of
decided cases in the Labour Court, to which I was referred, by
reference in each case to
the date of dismissal and the date when
Judgment was handed down, a period of two years was reasonable. The
fact remains however
that on re-instatement an employee is bound to
repay the amount of any severance package received. The plaintiffs
cannot be excused
from making such a deduction, simply because they
have chosen not to include claims for future loss of earnings and
pension benefits.
That the plaintiffs seek remuneration,
in lieu
of actual re-instatement does not alter the fact that the claim is
based upon re-instatement. I accordingly agree that the plaintiffs

have failed to prove the quantum of their damages based on a claim
for re-instatement.
[28.8] However, as
regards the claim for twelve months’ remuneration, M/s Nel
referred me to
Section 41
(5) of the
Basic Conditions of Employment
Act No. 75 of 1997
, which provides that
“
The payment
of severance pay in compliance with this Section does not affect an
employees right to any other amount payable according
to law”.
It is therefore clear
that that severance pay is not to be taken into account on this
alternative claim. As regards the claim for
twelve months’
compensation, at the rate of the plaintiffs’ remuneration, it
appears that the compensation to be awarded
for the unfair procedure,
is not based upon patrimonial or actual loss, but is in the nature of
a
solatium
, for the
loss of the right to a fair procedure.
Lawsa
supra
at paragraph 806
Regard being had to the
unfair procedure, to which the plaintiffs were subjected, I am
satisfied that the payment of the equivalent
of twelve months’
remuneration, is justified and reasonable in all of the
circumstances.
[29] Turning to the issue
of the interest payable on the amount awarded. The plaintiffs sought
the payment of
mora
interest in their particulars of claim, on
the amounts claimed. M/s Nel submitted that interest should run from
the date of service
of summons, which is 28 August 2004. This would
be on the basis that a demand for payment was made on this date. It
is clear that
the purpose of
mora
interest, is to place the
creditor in the position he would have been, if the debtor had
performed in terms of the undertaking.
Bellairs v Hodnett
1978 (1) SA 1109
(A) at 1145 D – G
Regard being had to the
list of Labour Court cases, to which I have referred in paragraph
[28.7] above, I am satisfied that it would
be reasonable to assume a
two year delay, in the finalisation of the plaintiffs’ cases by
that Court, if the defendant had
performed its obligation and
referred their cases timeously to that Court. Regard being had to the
date of the plaintiffs’
dismissal being 15 May 2002, the
termination of the proceedings before the CCMA on 18 June 2002 and
the obligation of the defendant
to thereafter refer the plaintiffs’
cases to the Labour Court, within ninety days of that date in terms
of
Section 191
(11) (a) of the LRA, the date by which the cases of
the plaintiff should have been lodged in the Labour Court, would have
been
no later than 16 September 2002. A two year delay from this
date, produces a date by which the claims of the plaintiffs ought
reasonably
to have been finalised, which is sufficiently close to the
date of service of summons, that I am satisfied this is an
appropriate
date from which interest should run on the facts of this
case.
[30] The only remaining
issue is a determination of the liability of the parties to pay a
number of costs orders, which were reserved
during the course of the
present proceedings. Having considered the arguments advanced by
Counsel, I am satisfied that the defendant
should be ordered to pay
the plaintiffs’ costs, save and except for the costs of the
adjournment of the matter before Van
Zyl J on 20 May 2009. That
adjournment was granted because the plaintiffs amended their
particulars of claim.
I accordingly grant the
following orders:
In Case 13501/2004 –
L. Ngcobo N.O. (Ndlela) v Food & Allied Workers Union Judgment
is granted in favour of the plaintiff
as follows:
Payment of the sum of
R107,232.00.
Interest on the sum of
R107,232.00 at the rate
of 15.5 percent per annum
from date of service of summons, being 28 August 2004, to date of
payment.
B. In Case 13502/2004 –
Mkhize v Food & Allied Workers Union
Judgment is granted in
favour of the plaintiff as follows:
Payment of the sum of
R107,232.00.
Interest on the sum of
R107,232.00 at the rate
of 15.5 percent per annum
from date of service of summons, being the 28 August 2004, to date of
payment.
C. The defendant is
ordered to pay the plaintiffs’ costs in both cases, save and
except for the wasted costs occasioned by
the adjournment of the
matter on 20 May 2009, which the plaintiffs are ordered to pay
jointly and severally to the defendant.
_____________
K. Swain J
Appearances
/..
Appearances /…
Appearances:
For the Applicant :
M/s C. Nel
Instructed
by :
MacGregor Erasmus
Durban
For the Defendant
:
Mr. R. Pillemer
Instructed
by :
Brett Purdon Attorneys Durban
Dates
of Hearing
:
16 February 2011
13
May 2011 (Chambers)
27
May 2011
14,
17 November 2011
06, 07 and 13 February
2012
Date of Filing of
Judgment :
03 April 2012