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2024
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[2024] ZALCJHB 143
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BIFAWU obo Hlahla and Others v South African Football Association (SAFA) (J 1305/2020) [2024] ZALCJHB 143 (27 March 2024)
IN
THE LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG
Not
reportable
Case
No: J 1305/2020
In
the matter between:
BIFAWU
obo HLAHLA JUSTICE & 4 OTHERS
Applicants
and
SOUTH
AFRICAN FOOTBALL ASSOCIATION (SAFA)
Respondent
Heard:
18 – 21 July 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 27 March 2024.
JUDGMENT
TLHOTLHALEMAJE,
J
Introduction
:
[1]
In this opposed claim, the union, BIFAWU, sought an order on behalf
of
its members (the individual applicants), declaring their dismissal
on account of the respondent’s (SAFA) operational requirements
to have been unfair. The individual applicants seek reinstatement.
[2]
The termination of the individual applicants’ services arose
from
SAFA having implemented measures to mitigate the effects and the
impact of Covid-19 pandemic from March 2020. SAFA in an effort
to
manage its sustainability and improve its financial position, had
implemented wage cuts, followed by offers of Voluntary Severance
Packages (VSPs) to its employees.
[3]
The individual applicants had applied for VSPs and their applications
were accepted by SAFA, leading to the conclusion of settlement
agreements in that regard. BIFAWU, which is the representative union
of the individual applicants however challenges the termination of
the services of the individual applicants. It contends that
SAFA
bypassed it when offering the individual applicants the VSPs and
failed to consult with it.
[4]
Principal
to BIFAWU’s further contentions is that SAFA had forced,
threatened, misrepresented and induced its members to accept
VSPs. It
is alleged that SAFA acted contrary to the provisions of clause 15(a)
of the parties’ collective agreement, read
with section 189(1)
of the Labour Relations Act
[1]
(LRA), and the provisions of Schedule 8 of the Code of Good Practice
for dismissals based on operational requirements.
[5]
In response, SAFA contended that the Court lacked jurisdiction to
adjudicate
the dispute as the individual applicants were not
dismissed, but that each one of them had elected to apply for VSPs,
which applications
were accepted. It further contends that the
individual applicants’ services were therefore terminated by
mutual consent.
SAFA further denied that it made any form of threats
or induced the individual applicants to accept VSPs.
Background:
[6]
SAFA is a voluntary association, and regulates the game of soccer at
both
amateur and professional levels. It does not receive any funding
from government and derives its revenue mainly from sponsorships
sourced from private and public companies. From this revenue, SAFA
must fund its operational costs, the national soccer teams,
the four
soccer leagues, and all football development in the country.
Sponsorships are not a steady source of revenue as sponsors
can pull
out or at most, reduce the amount of their sponsorship.
[7]
On 6 July 2012, SAFA and BIFAWU entered into a collective agreement.
In
March 2020, a National State of Disaster was declared by the
President of the Republic, which was also followed by a nation-wide
lockdown. As a result, SAFA’s then Acting COO, Mr Mokoena sent
a letter to all employees, advising them that most would be
required
to work from home. At that stage, nothing was mentioned by Mokoena
about staff reduction, cutting of salaries or implementation
of any
new structure that may necessitate retrenchments.
[8]
In April 2020, SAFA’s President, Mr Danny Jordaan raised
concerns
with Mokoena about the sustainability of paying employees in
full, whilst they were not at work. Following various meetings
between
the Chief Financial Officer of SAFA and other officials and
senior management, from April 2020, measures were considered
regarding
SAFA’s cash flow and how best to address
inter
alia
, payment of employees during the lock-down. Amongst measures
considered were a reduction of the head count and salaries in the
light of employment contracts in place. Other options considered were
VSPs or forced retrenchments.
[9]
On 22 April 2020, SAFA’s Management Committee recommended to
SAFA’s
National Executive Committee that in order to reduce the
salary annual costs by at least R20m, certain recommendations had to
be
adopted, including a 15% salary reduction across the board (for
all employees), effective from May 2020 until SAFA’s financial
position had improved. It was further recommended that month to month
contracts be terminated with immediate effect; and that the
extension
of fixed term contracts should be motivated by General Managers.
[10]
On 2 May 2020, an email was sent to all staff members informing them
about Covid-19 annual
leave and the costs of salaries as a result of
the unfavourable financial position SAFA found itself in. Staff was
informed that
management had agreed to implement the 15% salary
reductions across the board. Employees were also informed to
establish committees
that would participate in a consultation
process, including their input into how the R20m salary reduction
could be achieved.
[11]
BIFAWU opened its offices when the lockdown restrictions were eased
to level 3 in May 2020.
SAFA issued notices in terms of section
189(3) of the LRA on 10 June 2020. The Notice contained
inter
alia
, an offer of VSP. In the same month, SAFA addressed a letter
to BIFAWU and also attached a notice in terms of section 189(3) dated
18 June 2020. BIFAWU was also informed of the decisions already
taken, including the 15% reduction in salaries and offers of VSPs
to
employees.
[12]
BIFAWU and SAFA held a meeting on 24 June 2020. BIFAWU had raised
concerns about not being
involved in discussions surrounding SAFA’s
restructuring in view of parties’ collective agreement and the
defective
nature of the notice in terms of section 189(3) of the LRA.
[13]
Another meeting was held on 29 June 2020 where SAFA was to justify
the decision to implement
the 15% salary cut across the board and the
options given to the employees. It appears nothing of substance arose
out of the meetings
and engagements between the parties. BIFAWU had
on 27 August 2020 referred a dispute to the CCMA, and when
the dispute
could not be resolved, BIFAWU brought the claim before
the Court. One of the individual applicants, Ms Constance Twala has
since
withdrawn from this matter.
Preliminary points
raised by SAFA:
[14]
As already indicated, SAFA’s main contention was that the Court
lacked jurisdiction
to adjudicate the dispute on the basis that the
individual applicants were not dismissed but that they had elected to
apply for
VSPs. It further contends that to the extent that the
applicants have not taken any steps to set aside the settlement
agreements
in terms of which they had accepted VSPs, there was no
basis to conclude that they were dismissed.
[15]
It was further not in dispute that the VSPs were offered in the
notice issued in terms
of section 189(3) of the LRA on 10 June 2020.
Employees were advised that if they were interested in VSPs, they
were required to
submit their applications to the HR department
within 7 days from the date of the notice, as the period for
applications would
be closed with effect from 25 June 2020. It is not
in dispute that the individual applicants had applied for the VSPs in
June and
July 2020, and that their applications were accepted.
Standard settlement voluntary severance agreements were then prepared
and
given to the individual applicants, who had then signed them on
varying dates in July 2020. Copies of these agreements formed part
of
SAFA’s bundle of documents.
[16]
On 28 July 2020, BIFAWU was informed that about 19 applications from
employees were received
for VSPs, and that number included its
members. SAFA’s contention was that BIFAWU members applied for
VSPs without informing
their union. SAFA had nonetheless accepted
these applications resulting in the VSP settlement agreements.
[17]
BIFAWU’s case in the light of the jurisdictional point raised
by SAFA was that the
VSPs were accepted by the individual applicants
in circumstances where SAFA had threatened them after the national
lockdown was
announced, and after they were told to work from home.
The basis of the alleged threat was correspondence sent by SAFA to
all the
employees, informing them that due to its financial position,
it was unable to continue paying monthly salaries.
[18]
As I understand BIFAWU’s argument, it was this correspondence
to the employees that
gave rise to alleged fears and feelings of
being threatened, hence they signed the VSPs. Furthermore, BIFAWU
submitted that the
VSPs was a matter of consultations between parties
to a collective agreement in view of the fact that they arose from a
retrenchment
exercise, and that SAFA had unilaterally implemented
them contrary to the provisions of the LRA, and outside the
parameters of
the collective agreement.
[19]
The terms of the standard ‘
Voluntary Severance Agreement’
entered into between SAFA and the individual applicants made
provision for certain amounts of voluntary severance package in
certain
payments in full and final settlement. The package included
bonuses, leave pay, and two months’ notice pay. The
applicants
were to remain members of the Pension Fund of SAFA until
31 July 2020.
[20]
Of importance for the purposes of this dispute was that under clause
7 ‘
Full and final settlement’
, the parties
recorded that the signature of the agreement ‘
will result in
full and final settlement of any and all claims arising from the
employee’s employment by SAFA, whether such
claims arise from
delict, contract, operation of statute, fairness or otherwise’
[21]
As a
starting point, it is trite that agreements such as in this case, are
a product of compromise between two parties, and are
held up as
enforceable deals. Written agreements are ordinarily conclusive as to
the rights and obligations of the parties
[2]
.
In
Gbenga-Oluwatoye
v Reckitt Benckiser South Africa (Pty) Limited and Another,
it
was held that our courts, have a powerful interest in enforcing
agreements, and that the parties must be held bound to their
agreements. This was so in that where parties settle an existing
dispute in full and final settlement, none should be lightly released
from an undertaking seriously and willingly embraced, as the
intention is to finally settled the dispute
[3]
.
[22]
It is
accepted flowing from
Arend
and Another v Astra Furnishers (Pty) Ltd
[4]
,
that a contract or agreement may however be vitiated by duress,
misrepresentation, intimidation, or some other improper pressure,
as
this would render the consent of the party as not being true consent.
Even in such circumstances however, a party must still
demonstrate
such duress in order to have the settlement agreement set aside.
[23]
In
Goddard
v Metcash Trading Africa (Pty) Ltd
[5]
,
it was held that
if
an employee challenges the validity of a settlement agreement with
the employer, this Court will ordinarily have jurisdiction
to
adjudicate the matter and set it aside if a case is made therefor.
The proviso however is that the applicants must have sought
an order
setting aside such an agreement.
[24]
In this case,
inasmuch as the applicants
contend that they were induced into accepting the agreements, it is
further common cause that they were
indeed
paid
the amounts mentioned in the settlement agreements, and there is no
indication that they had tendered the repayment of the
amounts paid
to them.
[25]
Other than the above, from BIFAWU’s
pleadings and its position when the matter was heard, it argued its
case as if there was
an application to set aside the agreements, when
this was not the case. Its argument other than the issue of duress or
other factors
vitiating agreements, was in the same vein, directed at
lack of a consultation when the VSPs were offered.
[26]
The real picture however is that even if BIFAWU
may not have been formally aware of the offer of VSPs at least until
June 2020,
as of 18 July 2020, it was aware that its members had
accepted the VSPs. It is clear as contended for by SAFA, that its own
members
did not inform BIFAWU that they had applied and accepted the
VSPs. It is therefore non-suited for BIFAWU to further seek to argue
this case as if it is an ordinary retrenchment case when it is not,
especially in the light of the preliminary points raised. Once
however employees have been offered a VSP and had accepted by
entering into settlement agreements in that regard, based on the
authorities as cited above, the employees are bound by those
agreements. Thus, the question whether the employees were retrenched
or not does not feature at all, unless they are able to extricate
themselves from the binding nature of the agreements.
[27]
In the absence of any attempt to set aside
those agreements for whatever reason, and further in view of the
applicants not having
tendered to repay all amounts received
resulting from the agreements, the Court’s jurisdiction cannot
be engaged. This is
so in that, a dismissal as contemplated in
section 186(1)(
a
)
of the LRA would not have been established. Equally so, the
applicants cannot accept the benefits of settlement agreements and
yet simultaneously seek to be excused from those agreements. The
applicants cannot have it both ways, and the Court cannot countenance
such an approach.
[28]
Furthermore,
it has been said that
a
clause in a VSP in which the parties relinquished their rights to
approach any forum including this Court regarding any dispute
that
arises from the work relationship, is valid despite the provisions of
section 34 of the Constitution,
[6]
which grants every person the right to access to the courts. The
reason for this is that the parties agreed that the VSP is signed
in
full and final settlement of all disputes between the parties.
[29]
Added
to the applicants’ dilemma in this case is that
with
their signature of the agreements
to be
entered
into in full and final settlement of all claims, the intention of the
parties is apparent from the language of the agreement
in its
context, and it follows that the principle of
caveat
subscriptor,
should find application in this case
[7]
.
[30]
Against the above principles and observation, it ought to be
concluded that the applicant’s
claim before the Court ought to
fail, as in the absence of a dismissal having been established, the
Court lacks jurisdiction to
determine any claim of alleged unfair
retrenchment.
[31]
I have further had regard to the question of costs. Upon a
consideration of the requirements
of law and fairness, it is
concluded that a costs order is not warranted in this case.
[32]
Accordingly, the following order is made:
Order:
1.
The respondent’s preliminary points are upheld.
2.
The Court lacks jurisdiction to determine the applicant’s
claim.
3.
The applicants’ claim is struck off the roll.
4.
There is no order as to costs.
Edwin
Tlhotlhalemaje
Judge
of the Labour Court of South Africa
APPEARANCES:
For
the Applicants:
Mr
Nhlapo, Official of BIFAWU
For
the Respondent:
Mr P
Mosebo of Weksmans Attorneys.
[1]
Act 66 of 1995, as amended.
[2]
South
African Municipal Workers Union and others v City of Johannesburg
Metropolitan Municipality
(2013) 34 ILJ 1944 (LAC) at para 20.
[3]
Gbenga-Oluwatoye
v Reckitt Benckiser South Africa (Pty) Limited and Another
[2016] ZACC 33
; (2016) 37 ILJ 2723 (CC);
2016 (12) BCLR 1515
(CC);
[2017] 1 BLLR 1
(CC) at para 24.
[4]
1974 (1) 298 (C) at 306A – C.
[5]
(2010) 31 ILJ 104 (LC).
[6]
The Constitution of the Republic of South Africa, 1996 (Act 108 of
1996).
[7]
Gbenga-Oluwatoye
v Reckitt Benckiser South Africa (Pty) Ltd and Another
(JA95/2014)
[2016] ZALAC 4
; (2016) 37 ILJ 902 (LAC);
[2016] 5 BLLR
425
(LAC) at paras 24 - 26