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[2024] ZALCJHB 133
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Nacbawu obo Manana and Others v Roadlab (Pty) Ltd (JS394/18) [2024] ZALCJHB 133 (11 March 2024)
FLYNOTES:
LABOUR – Dismissal –
Operational
requirements
–
Procedural
and substantive fairness of retrenchments – Whether
retrenchment was the only reasonable option under circumstances
–
Respondent through investigations identified loss-making branches
– Circumstances necessitated re-evaluation
to limit
operational costs – Selection of certain individuals unfair
due to failure to adopt objective selection criteria
–
Relief limited to compensation rather than reinstatement.
IN
THE LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG
Not
reportable
Case
No: JS 394/18
In
the matter between:
NACBAWU
obo MANANA & 11 OTHERS
Applicant
and
ROADLAB
(PTY) LTD
Respondent
Heard: 3
– 6 March 2021; 22 – 23 March 2023
& 12 – 13
June 2023
Delivered: This
judgment was handed down electronically by circulation to the
parties'
legal representatives by email and publication on the Labour
Court’s website. The date and time for hand-down is deemed to
be on 11 March 2024.
JUDGMENT
TLHOTLHALEMAJE,
J
Introduction
:
[1] In
this opposed claim, the union, NACBAWU, seeks an order of behalf of
its members (the individual
applicants), declaring their dismissal on
account of the respondent’s operational requirements to have
been procedurally
and substantively unfair. The individual applicants
seek retrospective reinstatement or in the alternative, compensation
equivalent
to 12 months’ remuneration.
Background
:
[2] The
respondent renders professional materials laboratory and testing
services to the civil engineering,
construction and mining
industries. It serves private, government and municipal sectors with
a focus on rendering civil engineering
testing services. In essence,
it is concerned with the sourcing and testing of raw material, road
infrastructure control and quality
control. It has 13 branches across
the Republic, with its head office in Germiston, Gauteng.
[3] NACBAWU
had entered into a recognition agreement with the respondent on 23
May 2017. In accordance
with that agreement, NACBAWU had majority
membership in the respondent’s Germiston Head Office and
Centurion branches. The
individual applicants were employed by the
respondent in various capacities.
[4]
On
3 October 2017, the respondent issued notices in terms of section
189(3) of the Labour Relations Act
[1]
(LRA). The notice set out
inter
alia,
the
reasons for possible retrenchment, the alternatives to be considered
such as voluntary retrenchment (with other alternatives
to be
considered during consultations); and the proposed selection
criteria. It was further indicated that in the last twelve months,
the respondent had retrenched 10 employees. At the time that the
notice was issued, the respondent had a staff complement of 680
permanent employees throughout its branches. The reason for possible
retrenchments and/or restructuring was ‘to optimize
efficiency
and to ensure operational effectiveness’.
[5]
The
notices were forwarded to all employees in the East London,
Bloemfontein and Germiston branches. The following departments in
the
identified branches to be affected were
viz
,
Soils, Site Investigation; Maintenance; Occupational Health and
Safety; and Stores. The respondent’s other departments such
as
Commercial Facilities, Concrete Ashfield, Data Capture, Human
Resources, Finance and Fleet were not affected. Other than indicating
the branches and departments likely to be affected, the respondent
did not state the actual number of employees that were likely
to be
affected. It was however indicated that the number to be affected
would be discussed in consultations. It was further envisaged
that
the process was to be completed by no later than 31 October 2017.
The
common cause facts:
[6] On
4 October 2017, NACBAWU sent an email to the respondent indicating
that its members had made
it aware of the notices issued to them, and
that a copy was however not forwarded to it. It also requested
information pertaining
to the list and details of
all
the employees of the respondent in its branches, and further enquired
what steps were taken to avoid the retrenchments. On 5 October 2017,
NACBAWU sent further correspondence to the respondent’s HR
Officer/Practitioner, Mr Shriven Rooplall, requesting other
information
before a consultation meeting could be scheduled.
[7]
On
9 October 2017, Rooplall provided NACBAWU with a list of the union
members to be affected, their details and departments, and
lamented
the fact that the Union had not provided dates for the consultations
to commence. He further invited NACBAWU for consultations,
enquired
what further information was needed, and indicated that all
alternatives to avoid retrenchments would be discussed at
consultations. He also indicated that only union members will be
discussed and that non-union employees would be consulted with
directly. On 11 October 2017, Rooplall sought to obtain a
commitment from NACBAWU that it would attend a consultation
meeting
to be convened.
[8] Not
much progress was made at the first consultation meeting convened on
13 October 2017.
NACBAWU’s position in that meeting
was that it would not discuss the merits or engage in any
discussions, because it was
not formally furnished with a copy of the
section 189(3) notice.
[9] On
15 October 2017 Rooplall sent an updated list of affected employees,
and a letter explaining
the respondent’s financial position.
NACBAWU in response complained that the updated list was not
sufficient as it only covered
the Germiston and Bloemfontein
branches.
[10] On
16 October 2017, Rooplall sent to NACBAWU, a copy of the notice in
terms of section 189(3)
of the LRA that was previously issued to
individual employees. He further requested NACBAWU to provide three
dates on which consultations
could be held. In its response on 17
October 2017, NACBAWU again complained about not being provided with
information regarding
the names, dates of engagement and the job
categories of
all
the employees in the workplace. It pointed out that the respondent
did not indicate the number of employees to be affected in the
notice, and further requested facilitation by the CCMA in terms of
section 189A of the LRA.
[11] Rooplall
responded on 18 October 2017, and indicated that all the necessary
and relevant information
required for the consultation meetings was
furnished, and further indicated that there was a possibility of a
retrenchment of 25
employees. Rooplall also indicated that NACBAWU
had refused to deal with the merits when the parties met on 13
October 2017, and
that the information of all employees as sought was
private and confidential, and not relevant for consultations. He
proposed that
the parties should meet on 20 October 2017.
[12] In
response to Rooplall’s email of 18 October 2017, NACBAWU denied
that it was provided
with all the relevant information or that it had
refused to participate in the consultation process as alleged by the
respondent.
It suggested that a consultation meeting should be
scheduled for 23 and/or 24 October 2017 at it was not available on 20
October
2017. It further indicated that the respondent still had to
make proposals in regards to the Provident Fund. Consultations did
not however take place on the suggested dates.
[13] On
31 October 2017, Rooplall sent an email to NACBAWU with an attachment
of a list of employees
identified for possible retrenchment in
various departments. He again requested proposed dates for
consultations. NACBAWU’s
response was that it was still not
satisfied with the information furnished but had suggested 9, 10 or
13 November 2017 for consultations.
Rooplall confirmed a meeting for
9 November 2017.
[14] NACBAWU
had attended the meeting on 9 November 2017 (second consultation
meeting). The respondent
contends that all the issues for
consultations were dealt with at that meeting.
[15] On
11 November 2017, Rooplall sent an email to NACBAWU with an updated
list regarding the proposed
selection criteria in the specific
departments, and further requested dates to commence with the
consultations. On 13 November 2017,
a third consultation
meeting was held where LIFO as a selection criterion was discussed.
NACBAWU also proposed a lay-off scheme,
short-time, and placements at
other departments as an alternative.
[16] On
15 November 2017, the respondent in correspondence to NACBAWU had
explained its financial position
and the reasons for restructuring,
and further provided an updated list of possible retrenchments, and
further outlined the steps
and alternatives it had considered leading
to the consultation process. In the correspondence, it was explained
why it was not
possible to move employees around different sections
due to the nature of testing and breakdown of specific task, the
skills level
of some of the employees and the mundane nature of their
tasks at the time.
[17] NACBAWU’s
response was to again complain that the updated list only related to
the Germiston
and Bloemfontein branches, and stated that it would be
difficult to apply LIFO fairly without the information of all
employees
especially pertaining to other branches such as Centurion
and Lephalale.
[18] On
22 November 2017, Rooplall indicated that the respondent had
considered the applicants’
proposal for the implementation of a
lay-off scheme. He agreed that the scheme could work until June 2018.
Rooplall however indicated
that the respondent remained of the view
that retrenchment packages were a better option.
[19] Rooplall
in his correspondence further indicated that LIFO was only applied to
departments and
sites where employees would be affected. He
reiterated that any further information requested would be of no
assistance as the
proposed retrenchments were limited to specific
departments such as Maintenance, Stores and Lab Hire), OHS,
Site Personnel,
Investigations, and specific workplaces and
laboratories in the Bloemfontein and East London branches.
[20] On
28 November 2017, the respondent received correspondence from the
applicant’s attorneys
of record wherein it was stated that the
respondent could not retrench without complying with section 189 or
189A of the LRA. The
attorneys further enquired whether alternative
measures were considered, and requested written information in that
regard.
[21] The
respondent’s legal representatives responded on 29 November
2017 and outlined the history
of the consultation process since
October 2017 and indicated NACBAWU’s resistance to
consultations despite meetings having
been held on 13 October, 9 and
13 November 2017. It was stated that all relevant information was
provided to NACBAWU; that LIFO
was not the only criteria applied;
that alternatives such as lay-off, short-time, and placements at
other laboratories were considered,
including approaching clients for
work. It was further explained how LIFO was applied. It was further
indicated that from a financial
point of view, the respondent could
no longer delay the retrenchments and NACBAWU’s legal
representatives were requested
to indicate which employees were
willing to accept a voluntary retrenchment package, and to respond by
6 December 2017.
[22] When
there was no response to the above correspondence, and since the
respondent held the view
that the consultation had reached a
dead-end, it had on 13 December 2017, issued notices terminating the
individual applicants’
employment on account of its operational
requirements.
The
dispute:
[23] NACBAWU
alleged that the retrenchments were procedurally and substantively
unfair. NACBAWU relied
on the evidence of Mr Lesiba Kekana, its
full-time official who had corresponded with Rooplall and was
involved in the consultation
process. It also called its shop
steward, Mr Shadrack Mabaso.
[24] The
respondent disputed all allegations of unfairness as claimed by
NACBAWU, and relied on the
evidence of its Operations Director:
Commercial Facilities, Mr Deon Juckers. Mr Rooplall, who had since
left the employ of the
respondent as at the time of the hearing of
this matter was subpoenaed
The
legal framework:
[25] Section
189(2) of the LRA requires the employer and other consulting parties
(the trade union
and its members) to engage in a meaningful joint
consensus-seeking process and attempt to reach consensus on the
issues specified
in section 189(2)(a) - (c). These include
appropriate measures to avoid dismissals; to minimise the number of
dismissals; to change
the timing of dismissals, and to mitigate the
adverse effects of the dismissals. The parties must consult over the
method of selecting
employees for retrenchment. The employer is also
required to disclose relevant information and provide meaningful
reasons for rejecting
the employees representations or proposals.
[26]
Flowing
from the approach in
SACTWU
& others v Discreto ( A Division of Trump & Springbok
Holdings)
[2]
,
the
fairness of a dismissal under section 189 of the LRA is found in the
requirement of consultation prior to a final decision on
retrenchment. This approach was buttressed in
National
Union of Metal Workers of South Africa and Others v Aveng Trident
Steel (a division of Aveng Africa (Pty) Ltd) and Another
[3]
where
it was held;
‘
Retrenchments
should not be resorted to until “certain procedural
requirements intended to minimise the impact on employees”
have
been complied with. When employers contemplate dismissing their
employees for operational requirements, they are required
to consult
in terms of section 189(1) of the LRA. The nature of such a
consultation process, including “its objective and
agenda”,
is prescribed by section 189(2) of the LRA. This consultation
“requires engagement by all the consulting parties
with the
purpose of reaching consensus”. It is important to note that
the approach to this consultation must not merely be
a checklist
approach – that is, it must not be purely formalistic. There is
both a procedural and substantive aspect to this
consultation
process...’
[27]
In
Solidarity
obo Members v Barloworld Equipment Southern Africa and Others
[4]
(Solidarity),
it
was held that for a consultation process to be meaningful, in the
context of section 189, the employer must keep an open mind,
disclose
sufficient information to enable consulting parties to make informed
representations, and seriously consider their representations.
This
entails that the employer must furnish reasons for rejecting
representations made by the consulting party.
[28]
The
Court in
Solidarity
further
added that approaching the consultation with a pre-determined outcome
and failure to provide reasons for rejecting representations
will
render the consultation process not meaningful. Equally so, it was
held that the purpose of consultations is to seek consensus
and there
is no requirement that the parties should reach agreement
[5]
.
Thus, the failure to reach consensus or agreement did not necessarily
translate to there not being any meaningful consultation
process
[6]
.
Procedural
fairness:
[29]
The
Court accepts flowing from
Mbekela
v Airvantage Pty Ltd
[7]
as
correctly pointed out on behalf of the applicants, that substantive
and procedural unfairness with regards to retrenchments overlap
and
should not be considered in silos. It is trite that the line between
procedural and substantive fairness is often blurred,
and it is
accepted that procedural unfairness may result in substantive
unfairness. In the majority decision in
Association
of Mineworkers and Construction and Others v Royal Bafokeng Platinum
Limited and Others
[8]
,
it was accepted that compliance with section 189(1) procedural
fairness does not mean that the outcome may not be challenged on
the
basis of substantive unfairness. The Court however in
South
African Commercial, Catering and Allied Workers Union and Others v
Woolworths (Pty) Limited
[9]
had
held that the question of procedural unfairness only arises in the
event that it is found that the dismissals were not substantively
fair.
[30] In
the light of the above principles, I intent to consider the overall
fairness of the procedure
adopted in ultimately dismissing the
individual applicants, within the context and evaluation of the
consideration of substantive
fairness, more particularly to the
extent that it may be found that the dismissals were substantively
unfair.
Substantive
fairness:
[31]
An
enquiry into the substantive fairness of retrenchments involves a
consideration of what in
Chemical
Workers Industrial Union and Others v Latex Surgical Products (Pty)
Ltd
[10]
was
referred to as a general question and a specific question. In this
regard, the LAC held that;
‘…
The
general question is whether or not there was a fair reason for the
dismissal of any employees. The specific one is whether there
was a
fair reason for the dismissal of the specific employees who were
dismissed, which in this case, happened to be the individual
appellants. The question of a fair reason to dismiss the specific
employees who were dismissed goes to the question of the basis
upon
which they were selected for dismissal whereas the other question
relates to whether or not there was a reason to dismiss
any employees
in the first place.’
[11]
(i)
Commercial
rationale:
[32]
In
regard to the general question, NACBAWU’s contentions were that
there was no need for retrenchments. Implicit in the fairness
requirement is that it is upon the employer to demonstrate that the
ultimate decision is properly and genuinely justifiable by
operational requirements (a commercial or business rationale). It has
also been stated that fairness in this context goes further
than a
bona
fide
and
commercial justification for the decision to retrench, and that
ultimately, the enquiry is whether the termination of employment
was
the only reasonable option in the circumstances
[12]
.
[33]
The
function of a court in scrutinising the consultation process is
however not to second-guess the commercial or business efficacy
of
the employer’s ultimate decision, but to pass judgement on
whether the ultimate decision to retrench was genuine and not
merely
a sham. It is thus not for the Courts to decide whether it was the
best decision under the circumstances, but only whether
it was a
rational commercial or operational decision, taking into account what
emerged during the consultation process
[13]
.
[34] As
a starting point, it needs to be reiterated that it is not sufficient
for the applicants as
in this case, to merely allege that there was
in general, no need to retrench. Against NACBAWU’s contentions,
Juckers’
evidence was that the retrenchment exercise which
affected certain departments, resulting in the ultimate retrenchment
of the 12
individual applicants, was necessitated by the financial
difficulties the respondent faced at the time, which were caused by a
variety of factors.
[35] These
factors included that over 2016/2017, the civil engineering industry
as a whole had experienced
severe financial strain due to a lack of
projects and long term contracts combined with a reduction in
construction work,. This
necessitated that costs reduction and saving
measures be initiated. There was further overstaffing in various
departments, and
a major contributing factor was that the major
contractor, South African National Road Agency (SOC) Ltd (SANRAL) at
the material
time (between 2016 – 2018), was not issuing out
tenders, and that these tenders were only advertised in 2021.
[36] The
respondent had following investigations, identified loss-making
branches, the sections and
functions which could be outsourced in
future. This meant that there were departments which were not
generating an income, whilst
others produced costs exceeding the
income generated. These circumstances necessitated a re-evaluation of
the operations in order
to limit the operational costs.
[37] A
re-evaluation of the respondent’s operations revealed that the
East London branch also
faced problems as it had to compete with
other businesses. The Bloemfontein branch was originally very active
but then the activities
slowed down, necessitating that employees be
moved around. In respect of the Head Office in Germiston, the office
required a manager
which then resulted in the position of
Administrator being rendered redundant. Those functions were
subsequently outsourced.
[38] The
decline also caused the reduction of work in the Stores department
which resulted in fewer
individual being required to perform tests
and/or sampling. This was also equally applicable to the Site
Investigators. The Building
Maintenance Department was a non-core
function which was also affected by the decline and this resulted in
the retrenchment of
employees, especially carpenters.
[39]
Against
Juckers’ evidence in regards to the need to retrench, it needs
to be said that very little or nothing came through
cross-examination
of the respondent’s witnesses that was meant to challenge the
commercial rationale for the decision to
embark on the retrenchment
exercise. Significantly, Rooplall had on 15 October sent
correspondence to NACBAWU and
inter
alia
further
explained the respondent’s financial position. NACBAWU’s
response was to complain about the failure to disclose
information
requested regarding the list. However, nothing was said to suggest
that the respondent’s financial position at
the time was
disputed.
[40] Equally
without merit was Mabasa’s contentions that there was no need
to retrench on the
basis that the positions of the individual
applicants were filled in January 2018 by new trainees. Mabasa made
his conclusions
on the basis that as a shop steward, he knew the
employees he represented and thus could see who the new trainees were
during tea
or lunch breaks. I have difficulties in accepting Mabasa’s
evidence when he could not provide any details in regards to the
identity of these new trainees, or any details regarding which of the
individual applicants’ positions were filled. The Court
should
reject Mabasa’s contentions if he could not place reliance on
anything beyond merely looking at employees’ faces
to know who
was new or not. Accordingly, the Court accepts that the ultimate
decision to retrench was informed, and was properly
and genuinely
justifiable by the respondent’s operational requirements.
[41]
Even
on the stringent test set out in
Black
Mountain Mining
[14]
,
there is no basis for a conclusion to be reached that the decision to
retrench was merely a sham, or that it was not operationally
justifiable on rational grounds. The decision was suitably linked to
the achievement of the end goal, which in this case as stated
in the
notice issued under section 189(3), was to optimize efficiency and to
ensure operational effectiveness of the respondent’s
operations.
(ii)
The
selection criteria and disclosure of information:
[42] The
second aspect of substantive fairness is a specific question, which
is whether there was a
fair reason for the dismissal of the specific
employees. NACBAWU alleged that the selection criteria adopted by the
respondent
was unfair; that the respondent applied LIFO principle
incorrectly in that employees with longer service were retrenched
instead
of those with less service; and that the respondent failed to
negotiate in good faith thus making the retrenchments a foregone
conclusion.
[43] Section
189(2)(
b
)
of the LRA requires the consulting parties to attempt to reach
consensus on the method for selecting the employees to be retrenched.
Where there is a dispute on whether the information requested is
relevant or not, the onus under section 189(4)(
b
)
is on the employer to prove that the information it refuses to
disclose is not relevant for the purposes for which it is sought.
[44]
Section
189(7)(
a
)
and (
b
)
of the LRA gives substantive content to this requirement by
stipulating that the employer must select the employees to be
retrenched
according to a selection criteria that was agreed or, in
the absence of the agreed criteria, the employer must apply a fair
and
objective criteria
[15]
.
[45] Fair
and objective criteria implies that the selection of employees must
be on some justifiable
objective grounds. Thus, an employer in
selecting employees for retrenchment should not be influenced by mere
preferences, or by
some other nefarious reasons to prejudice
employees who would otherwise not have been targeted for
retrenchment. Fairness equally
implies that the choice for selection
will be in line with the finding that there was indeed a need to
retrench, and that in the
circumstances, the choice of one employee
over the other was less unfair.
[46] In
the notice issued on 3 October 2017, the respondent had outlined the
criteria it proposed implementing,
which included skill levels and
critical job requirements, the retention of employees with specific
work experience and/or specific
knowledge or skills, LIFO; and
financial and operational efficiency.
[47] The
respondent’s approach to the mixed criteria was informed by the
nature of its operations,
and the highly specialised and technical
services it provided to its clients. Juckers further testified that
the respondent’s
operations are labour intensive which required
a wide range of skills
albeit
it
was not a requirement that all employees be in possession of tertiary
qualifications. It was against these factors that selection
of
employees had to be in accordance with whether they were
multi-skilled, competent, and had supervisory skills. These factors
took precedence over LIFO.
[48] In
applying LIFO in conjunction with a combination of other criteria,
Juckers and Rooplall testified
in regards to the needs of each
branch, department or section that was affected. Evidence was led in
regards to how employees were
moved around departments where
vacancies were available, before each of the individual applicants
from affected departments were
selected, according to the mixed
criteria. Juckers testified that all of this information and a list
of employees was provided
to NACBAWU. After he and responsible
section managers in the affected areas had compiled that list.
[49] In
regards to specific departments, in the Lab Hire/Stores department,
two employees were selected
taking into account their competency and
the functions that needed to be fulfilled. The respondent’s
approach was that the
Stores was a non-core function. Another
employee Mr Maharaj, was selected on the basis that he was not in
good health and could
not lift heavy equipment, whilst a more younger
and able bodied employee who was a trainee, was retained, even though
he had less
service.
[50] The
Building Maintenance department was also considered as part of
non-core business and not costs
effective to maintain. The respondent
intended to outsource its functions. Two of the individual applicants
(Messrs Davies Chitsime
and John Meleme) who were a builder and
carpenter were said to be not multi-skilled, and thus could not be
retained as they were
not optimally utilised. The respondent
contended that the two could not be retained since they further could
not be placed in any
other position.
[51] Three
employees were selected on the basis of LIFO in the Site
Investigation Department since
there was not enough work and was
deemed unsustainable. The three could not be placed at any other
department, and only members
of the core team were retained.
[52]
The
technician section was also found to be overstaffed when there was
not enough work. LIFO was equally applied in the Investigations
department. In the Health and Safety department, one admin person as
already indicated was found to be redundant and also not having
been
registered as per the OHS Act
[16]
.
[53]
It
is apparent from the consultations and correspondence exchanged
between the parties that the respondent had explained its stance
on
LIFO and given reasons why a mixed criteria was more suitable to its
operational needs.
Central to
NACBAWU’s complaints is that the respondent failed to
meaningfully consult on the selection criteria as it did
not provide
the relevant information requested. This is in circumstances where
the respondent had refused to provide the information
in respect of
all of its employees on the basis that only some departments and
branches were affected, and also since NACBAWU was
only recognised at
the Germiston Head Office and in Centurion.
[54]
What
was apparent from the evidence was that NACBAWU was more concerned
with the implementation of LIFO over anything else, hence
it sought
all the information of employees, inclusive of those who were not in
the areas that were affected. Inasmuch as it is
accepted that the
application of LIFO is generally deemed to be fair and objective, it
is however trite that its application ought
not be the be all and end
all, as other factors such as retention of special skills need to be
taken into account, especially where
such skills are crucial for the
sustainability of the employer’s business
[17]
.
In essence, and to the extent that the parties could not agree on the
selection criteria, there is nothing that statutorily prevents
an
employer from applying LIFO with a combination of criteria such as
skills, experience, adaptability, performance, personal circumstances
and family commitments
[18]
.
[55]
To
the extent that NACBAWU complained about non-disclosure of
information, is accepted that this is an important component to a
joint consensus seeking process.
In
Solidarity
,
it was held
that
during the consultation process, the obligation of an employer to
disclose sufficient information does not extend to information
that
is not of relevance to the consultation process, is not available,
and/or could harm the employer’s business interests
if
disclosed, such as trade secrets and other confidential
information
[19]
.
[56]
On
Kekana’s version, NACBAWU was reluctant to consult without the
information it had requested,
especially to the extent that LIFO was
applied. The respondent on the other hand held the view that the
information requested was
not relevant in the light of only a few
branches being targeted, and also since it was of the view that the
information requested
was confidential.
[57]
A
worrying feature of NACBAWU’s approach to consultations was
that there was nothing further
that it did in obtaining the
information it sought, and had on the contrary, attended
consultations without the information it
had requested.
To
the extent that the notice was issued in terms of section 189 of the
LRA, and further to the extent that the respondent had persistently
refused to provide the information that NACBAWU had requested, it is
trite that section 189(4)(
a
)
refers to disclosure of information stipulated in section 189(3). It
provides that the provisions of section 16, read with the
changes
required by the context, apply to the disclosure of information in
terms of that sub-section.
Section
16(6) of the LRA provides a self-contained process for compelling an
employer to disclose relevant information. This entails
a referral of
a dispute to the CCMA, which will attempt to resolve the dispute and
when conciliation fails, the dispute may be
referred for arbitration.
[58]
NACBAWU
despite its complaints since 5 October 2017, omitted to refer a
dispute to the CCMA under section 16 of the LRA. The same
conclusions
equally apply to the extent that NACBAWU contended that it was
entitled to the information in accordance with the provisions
of the
Recognition Agreement.
Equally
so,
to
show commitment and good faith towards the consultations, NACBAWU
could have referred the section 16 of the LRA dispute, and
conditionally consulted on the other substantive issues while it
simultaneously fought the issue of disclosure at the CCMA
[20]
.
In these circumstances, nothing much turns on the applicants’
persistent complaints that the respondent refused to provide
information when they had throughout the process remained supine in
relation to their rights.
[59]
On
the opposite scale, there is merit in the respondent’s
contention that the applicants not
merely intended to adopt an
obstructionist approach to the consultation process, but also sought
to prolong it as possible as they
could. Kekana had conceded that the
respondent had made four requests to the union for a consultation
meeting, but that there was
always an outstanding issue of disclosure
of information.
[60]
Other
than the issue of the disclosure of information, significant with the
applicants’ case
is that notwithstanding the contention that
they were not afforded an opportunity to engage meaningfully in the
aspects of selection
criteria, this is not borne out by their
pleadings. In the statement of case, NACBAWU specifically
raised concerns with the
implementation of LIFO as it was not
properly applied. This was in view of some of the individual
applicants with long service
having been selected whilst other
employees with less service were not affected. On these grounds,
inclusive of the evidence on
behalf of the respondent, the Court can
accept that consultations were held in regard to the implementation
of LIFO as NACBAWU
had proposed, and which the respondent had
considered, and furnished reasons why that criteria could not be the
only one to be
applied. Furthermore, under section 189(6)(b) of the
LRA, if consulting parties make representations in writing the
employer must
respond in writing. This is what the respondent had
done in in this case in the light of the various correspondence
referred to
elsewhere in this judgment, pertaining to the
implementation of the selection criteria.
[61]
It
follows that even on the common cause facts as outlined elsewhere in
this judgment, combined with
the documentation and an exchange of
emails and other correspondence between the parties, there is no
basis for a finding that
there was no consultation on the mixed
selection criteria as adopted by the respondent. The Court accepts
that given NACBAWU’s
posture to the consultation process, on
the whole, the respondent was entitled to implement the mixed
selection criteria.
[62]
Notwithstanding
my conclusions as above, it needs however be pointed out that the
mere fact that proper
consultations were held in regards to the
criteria does not imply that it necessarily follows that the criteria
was fair or objective,
especially in circumstances such as these,
where there was no agreement. This is so in that it can only be
reiterated that fair
and objective criteria implies that the
selection of employees must be on some justifiable objective grounds.
[63]
The
above issue is raised in view of a
n
essential consideration when faced with retrenchments, which is that
if there is work available which the affected employee can
perform,
then fairness would require the employer to offer such a position to
the affected employee. In a case where a position
is available but
the employee lacks skills to perform in that position, the employer
is obliged to consider any additional training
that may assist the
employee in achieving the level of performance required
[21]
.
This approach is premised on the trite principle that a retrenchment
should be a measure of the last resort.
[64]
Equally
so, where an employee is selected on the basis that he/she is
physically unable to perform the tasks due to ill-health or
similar
considerations, there is an obligation to accommodate that employee.
Thus, a retrenchment cannot be justified when clearly
the provisions
of items 10 and 11 of the Code of Good Practice in Schedule 8 of the
LRA would ordinarily have found application
in the circumstances.
[65]
In
this regard, Mr
Maharaj, one of
the individual applicants, was selected from the Lab Hire/Stores
department simply on the basis that he was not
in good health and
could not lift heavy equipment, whilst a younger and able-bodied
employee who was a trainee, was retained. Other
than this
consideration, it is not known what else was done in merely selecting
Maharaj, i.e., whether an assessment was done if
he could be
accommodated somewhere else; or whether his health might have
improved over time. There does not seem to be any evidence
indicating
what else was considered other than dismissing him.
Prima
facie
, this cannot amount to an
objective selection criteria having been adopted. Thus his selection
was unfair.
[66]
It
was further the evidence of the respondent that at least four of the
individual applicants, viz,
Dloko, Chitsime, Meme, and Shayi, were
dismissed on account of lack or insufficient skills to
cross-function. Again, the issue
is whether prior to ultimately
dismissing them, the respondent had in accordance with the above
principles,
considered
any additional training that may assist the four in achieving the
level of performance, skills or cross-functionality
required. This
was in circumstances where the respondent’s testimony was that
it had ABET programmes at its head office to
assist employees grow
and upgrade their skills. If any of the mentioned did in fact benefit
from this programme is however unknown.
Clearly where there is no
evidence in that regard, it cannot be said that the selection of the
individuals mentioned was on the
whole fair.
Issue
of lay-off scheme:
[67] Lay-off
schemes may be used as an alternative to retrenchments where there is
an agreement in
that regard. The implementation of lay-offs is
suitable in instances when the employer is temporarily unable to
provide work for
the employees. The concept of lay-off contemplates
that work would become available in the short term. It does not
suggest as contended
for by Kekana, that employees would be allowed
to work on a rotational basis, rather than being dismissed. It simply
means that
the employees would not be dismissed because there is no
work to be allocated to them. The employees would remain employed
without
rendering any service, or receiving remuneration, until work
was available.
[68] The
applicants contended that the respondent failed to honour an
agreement of November 2017 that
it would implement a lay-off scheme
until June 2018.
Kekana’s
testimony was that at
a meeting
with the respondent on 23 November 2017, bumping was never discussed
as an alternative as NACBAWU took the view that there
was an
agreement with Rooplall on the issue of the lay-off scheme.
[69] It
is correct that in one of the consultations, NACBAWU had proposed to
the respondent that a
lay off scheme should be implemented. On 22
November 2017, Rooplall in an email to Kekana had confirmed
discussions in that regard,
and indicated
inter
alia
that the respondent agreed that
the scheme could work until June 2018 to see whether more work was
received. In the same email,
Rooplall’s view was that
retrenchment packages were a better option.
[70] Juckers
and Roopall however testified that the alternative of lay-off scheme
was not viable in
that it was difficult to lay off employees with an
undertaking that they would be recalled in the near future, and when
it was
uncertain whether the business would improve. This was so in
that it was uncertain whether in particular, work could be received
from SANRAL and other contractors.
[71] Both
Juckers and Roopall denied that there was an agreement on the issue
of lay-offs as an alternative.
To the extent that NACBAWU relied on
Roopall’s email of 22 November 2017 as constituting an
agreement, that email ought to
be read in context. Its plain reading
does not lead to a conclusion that Rooplall’s response
constituted an agreement to
have the scheme implemented. The email
merely indicated that the scheme
could
work. Furthermore, in circumstances where as already indicated the
applicants could not dispute the need in general to retrench,
and
where Rooplall’s response to lay-off scheme was not definitive,
there could not have been any binding agreement to implement
the
scheme.
[72] In
the end, the lay-off-scheme as proposed by the applicants was
considered, and was not found
viable in the light of uncertainties
whether the respondent could obtain more work in the near future.
This conclusion is further
premised on the respondent’s
uncontested evidence that it had retrenched 10 employees in the past
12 months before the retrenchments,
and also where it was not in
dispute that the respondent also embarked on a similar exercise after
the individual applicants were
dismissed. The mere fact that the
scheme was not agreed to does not imply that it was not considered,
nor can an inference be drawn
that that the respondent merely paid
lip service to overall consultations in that regard.
‘
Bumping’:
[73]
The
principles applicable to bumping as an alternative to retrenchments
were considered in
Porter
Motor Group v Karachi
[22]
and
reiterated in
Mtshali
v Bell Equipment
[23]
.
Bumping is based on the LIFO principle. It is ideal that in adopting
this criteria, an employer should first attempt to bump employees
horizontally before bumping them vertically, in that the latter
criteria should only take place where there is no suitable candidate
to bump horizontally into another position.
[74]
Further
considerations in adopting this criteria as pointed out in
Karachi
and
Mtshali
include
inter alia
,
geographical
limitations; the mobility and status of the employees involved;
prejudice to employees; the grades, status of employees,
competence,
technical or professional knowledge or experience, skills and
specialised services needed; the independence of departments
or
branches, and general feasibility of interdepartmental bumping.
Crucially however is that the employer retains managerial prerogative
to ‘bump’ employees, depending on the reasons for
restructuring and its operational needs.
[75]
It
however needs to be pointed out that in
Mtshali
[24]
,
the LAC in reliance on
General
Food Industries Ltd t/a Blue Ribbon Bakeries v FAWU and Others
,
accepted that if employees had not explored the possibility of
bumping during consultations, this did not mean that they were
precluded from challenging the fairness of their selection during the
trial. It equally needs to be appreciated as stated in
Karachi,
that
since
the
LRA requires both parties to attempt to reach consensus on
alternative measures to retrenchment, there is also a duty on
employees
to raise bumping as an alternative.
[76]
NACBAWU
as already indicated, relied on a non-existing agreement in respect
of the lay-off scheme,
and thus failed to pursue any discussions in
regards to the alternative of bumping. However, the duty was still on
the respondent
to consider bumping as an alternative in the course of
applying LIFO.
[77]
Juckers
under cross-examination when asked whether bumping was considered did
not even know what the
concept meant. Upon it having been explained
to him, his response in not considering it was that even though all
the branches of
the respondent had a similar structure and
departments, positions could only be offered as and when they became
available. This
response however does not address the essence of
bumping, which is not only dependent on available vacancies but on
whether incumbents
of posts can be bumped off when applying LIFO.
This was particularly so since on Jucker’s version, the
respondent’s
commercial facilities had the same departments and
sections, with a few exceptions depending on the services and
products
.
Such
a scenario was clearly ideal for consideration of
interdepartmental
bumping, especially where LIFO was a consideration.
[78]
B
umping
is ordinarily intended to protect long serving employees where a
retrenchment process is ongoing, especially where there
are other
departments, branches or business areas of the employer that may not
be affected by the restructuring. There has to be
comparable
positions occupied by employees with substantially shorter service
.
Thus, to the extent that the respondent had applied LIFO in respect
of five of the individual applicants, viz, Michael Weymers,
Yvonne
Ndevu, Tshepo Mahlo, Xolani Tembo and Bongumusa Tibe without properly
considering bumping before deciding on a dismissal,
it is found that
their dismissals could not overall have been substantively fair. This
is so based on the principles articulated
in
Mtshali
v Bell Equipment
[25]
as follows;
‘
It
is clear from the authorities referred to above that bumping forms
part of LIFO as a method for selection of employees to be
retrenched.
It was therefore incumbent on the respondent to have consulted on its
application to determine whether its application
would have been
appropriate in the circumstances of this case. It was not for the
respondent to decide unilaterally that it would
not be appropriate to
apply bumping especially where it was not specifically prohibited in
the collective agreement. Reasons why
the respondent considered the
application of bumping inappropriate or unfair should have been
tabled for consideration by the consultation
parties before a final
decision could be taken.’
[79]
To
the extent that on the facts the respondent did not consider the
alternative of bumping, and further to the extent that it did,
but
had unilaterally decided that it was not feasible for reasons
unknown, it follows that the respondent was found wanting in
this
regard.
Summary:
[80]
It
was held in
National
Union of Mineworkers v Anglo American Platinum Ltd and Others
[26]
that
generally , it is not open to employees or their representatives to
claim unfairness in retrenchments, on
inter
alia
the
basis only that the employer consulting party rejected proposals made
by the employees.
Several
factors debunk NACBAWU’s contentions that the retrenchments
were pre-determined. In this regard, the notice in terms
of section
189(3) did not indicate the number of employees to be affected, as it
had stated that this was to be determined during
consultations. As
the consultations progressed,
25
employees or posts were identified, but in the end, only 12 were
retrenched. It will also be recalled that in the notice, the
respondent had contemplated that the consultation process will be
completed by 31 October 2017. Notices of termination were however
issued on 13 December 2017. From these factors, clearly an inference
cannot be drawn that the respondent had a pre-determined outcome
when
approaching the consultation process, or that it paid lip-service to
that process.
[81]
Furthermore,
there is no merit NACBAWU’s contentions that the respondent did
not overall, properly consult with it on any
of the issues for
consideration prior to the dismissals. The notice in terms of section
189(3) that was issued on 3 October 2017
was not forwarded to NACBAWU
on the same day. Notwithstanding, NACBAWU chose to engage the
respondent on the issues in that notice
from 4 October
albeit
it had complained
about not having been furnished with that notice until this was done
on 16 October 2017. At that time, it had
already engaged the
respondent on the issues for consultations. Even though it might be
argued that the failure to furnish NACBAWU
with a notice constituted
a procedural irregularity, this consideration on its own cannot in my
view render the overall consultation
process to be procedurally
unfair.
[82]
Equally
so, the respondent had considered the alternatives proposed by
NACBAWU and furnished reasons why the proposals were not
viable.
On the facts, it cannot be said on the whole that the respondent did
not meaningfully seek to engage NACBAWU in the consultation
process
inclusive of engaging it on the rationale behind the retrenchments
and the mixed selection criteria it had adopted.
[83]
NACBAWU
had adopted an obstructionist approach to the consultation process,
by repeatedly refusing
to engage meaningfully on the issues for
discussions based on repeated requests for information that was not
coming, and also in
circumstances where the remedies under section 16
of the LRA remained available to it. Its proposals regarding LIFO,
lay-off scheme,
short-time, transfers, and rotational work, were
considered by the respondent and reasons were given as to why they
were not feasible.
In the absence of an agreement on any of these
issues, and other than the unfairness related to the application of
the selection
criteria in regards to some of the individual
applicants, it ought to be concluded that the respondent had adopted
a criteria which
on the whole, was fair and objective, taking into
account its operational needs. I am therefore satisfied that with the
exceptions
pointed out, that the provisions of section 189 (1), (2),
(3), (5) and (6) of the LRA were complied with.
Relief:
[84] To
the extent that it was found that any unfairness related to the
selection of some of the individual
applicants, and the failure to
consider the alternative of bumping, it is my view that any relief
should be limited to compensation
rather than reinstatement. The
nature of the unfairness pointed out cannot by any stretch of
imagination call for the ultimate
remedy of reinstatement in the
light of the overall conclusions arrived at in this judgment, and in
particular, the fact that the
respondent had since implemented
another restructuring exercise after the dismissal of the individual
applicants.
[85] To
the extent that the Court accepts that the selection of the following
individual applicants,
Maharaj, Dloko, Chitsime, Meme, and Shayi,
Michael Wemers,
Yvonne Ndevu, Tshepo Mahlo, Xolani Tembo and Bongumusa Tibe was not
fair for reasons pointed out elsewhere in this
judgment,
it is deemed that compensation equivalent to three months’
salary to each of these individual applicants calculated at their
rates of pay as at the date of dismissal, would be fair and
appropriate.
[86] I
have further had regard to the requirements of law and fairness in
regards to the question of
costs. Having had regard to the facts and
circumstances of this case, I am of the view that each party must be
burdened with its
own costs.
[87] In
the premises, the following order is made:
Order:
1. The
dismissals of the following individual applicants,
viz
,
Devanand Maharaj, Zolisile Dloko, Davis Chitsime, John Meme,
Macdonald Shayi,
Michael
Wemers, Yvonne Ndevu, Tshepo Mahlo, Xolani Tembo and Bongumusa Tibe,
was unfair based solely on their
selection.
2. The
Respondent is ordered to pay to each of the individual applicants
identified above, compensation
equal to three months’ salary
calculated at their rate of pay as at the date of their dismissal.
3. The
dismissal of other individual applicants not mentioned above and as
listed in Annexure ‘A’
to the applicants’ Statement
of Case is deemed to have been procedurally and substantively fair.
4. Each
party is to pay its own costs
Edwin
Tlhotlhalemaje
Judge
of the Labour Court of South Africa
APPEARANCES:
For
the Applicant:
W. Coetzee, instructed by Geyser & Coetzee Attorneys.
For
the First Respondent:
C. Grant, instructed G.J. Brits Attorneys.
[1]
Act 66 of 1995, as amended.
[2]
[1998] ZALAC 9
(22 June 1998);
(1998)
12 BLLR 1228
(LAC);
(1998)
19 ILJ 1451 at para 8
[3]
[2020] ZACC 23
;
[2021] 1 BLLR 1
(CC); (2021) 42 ILJ 67 (CC);
2021
(2) BCLR 168
(CC) at para 40
[4]
[2022] ZACC 15
; (2022) 43 ILJ 1757 (CC);
[2022] 9 BLLR 779
(CC);
2023 (1) BCLR 51
(CC)
at
para 46.
[5]
At
para 49.
[6]
At
para 53.
[7]
[2021] ZALAC 47
(26 November 2021).
[8]
[2020] ZACC 1
; (2020) 41 ILJ 555 (CC);
2020 (4) BCLR 373
(CC);
[2020] 5 BLLR 441
(CC);
2020 (3) SA 1
(CC) at para 101.
[9]
[2018] ZACC 44
; (2019) 40 ILJ 87 (CC);
2019 (3) BCLR 412
(CC);
[2019] 4 BLLR 323
(CC);
2019 (3) SA 362
(CC)
at
para 42.
[10]
(2006) 27 ILJ 292 (LAC).
[11]
At para 55.
[12]
NUMSA v
Atlantis Diesel Engines
(1992)
13 ILJ 405 (IC) 409.
[13]
See
also
Kotze
v Rebel Discount Liquor Group (Pty) Ltd
(2000)
21 ILJ 129 (LAC) at para 18(h)-(i) where it was held;
“
The
final decision to retrench must be informed by what transpired
during consultation. That is why consultation must precede
the final
decision. The requirement of consultation is essentially a formal or
procedural one, but it also has a substantive
purpose. That purpose
is to ensure that such a decision is properly and genuinely
justifiable by the operational requirements
or by a commercial or
business rationale.”
And
“
The function of
the court in scrutinising the consultation process is not to
second-guess the commercial or business efficacy
of the employer’s
ultimate decision but to pass judgment on whether such a decision
was genuine and not merely a sham.
The court’s function is not
to decide whether the employer made the best decision under the
circumstances, but only whether
it was a rational commercial or
operational decision, properly taking into account what emerged
during the consultation process.”
See
also
BMD
Knitting Mills (Pty) Ltd v SACTWU
[2001]
7 BLLR
(LAC) at para 19, where it was held;
‘
The starting
point is whether there is a commercial rationale for the decision.
But, rather than take such justification at face
value, a court is
entitled to examine whether the particular decision has been taken
in a manner which is also fair to the affected
party, namely the
employees to be retrenched. To this extent the court is required to
enquire as to whether a reasonable basis
exists on which the
decision, including the proposed manner, to dismiss for operational
requirements is predicated. Viewed accordingly,
the test becomes
less deferential and the court is entitled to examine the content of
the reasons given by the employer, albeit
that the enquiry is not
directed to whether the reason offered is the one which would have
been chosen by the court. Fairness,
not correctness is the mandated
test’.
[14]
National
Union of Mineworkers and Another v Black Mountain Mining (Pty) Ltd
(CA22/2012)
[2014] ZALAC
78
(10 December 2014) at para 37, where under the then section
189A(19), it was held that;
‘
It does not
follow that just because an employer dismisses an employee due to
its ‘economical, technological, structural
or similar need’
that the [section 189A(19)] precondition has been met. An employer
must first establish on a balance of
probabilities that the
dismissal of the employee contributed in a meaningful way to the
realisation of that need. In my view,
dismissals for operational
requirements must be a measure of last resort, or at least fair
under all of the circumstances. A
dismissal can only be
operationally justifiable on rational grounds if the dismissal is
suitably linked to the achievement of
the end goal for rational
reasons. The selection of an employee for retrenchment can only be
fair if regard is had to the employee’s
personal circumstances
and the effect that the dismissal will have on him or her compared
to the benefit to the employer. This
takes into account the
principles that dismissal for an employee constitutes the proverbial
‘death sentence’.
[15]
Van
Rooyen and Others v Blue Financial Services (South Africa) (Pty) Ltd
[2010] ZALC 80
;
[2010]
10 BLLR 1119
(LC) ; (2010) 31 ILJ 2735 (LC) at para 16.
[16]
The
Occupational Health and Safety Act 85 of 1993
[17]
NUM &
others v Anglo American Research Laboratories
(Pty)
Ltd [2005] 2 BLLR 148 (LC).
[18]
National
Union of Metalworkers of South Africa and Others v Columbus
Stainless
(Pty)
Ltd [2016] ZALCJHB 344 (30 March 2016) at para 10.
[19]
At
para 43.
[20]
See
Association
of Mineworkers and Construction Union and Others v Shanduka Coal
(Pty) Ltd
(2013)
34 ILJ 1519 (LC).
[21]
See
Andre
Johan Oosthuizen v Telkom SA Ltd
(2007)
28 ILJ 2531 (LAC) at para 4.
[22]
[2002] 23 ILJ 348 (LAC) at para 16.
[23]
[2014] ZALAC 37
(22 July 2014) at para 22.
[24]
At
para 23.
[25]
At para 30.
[26]
[2013] ZALCJHB 262; (2014) 35 ILJ 1024 (LC);
[2013] 12 BLLR 1253
(LC) at para 24.