Absa Bank Limited and Another v Mackay (CA8/99) [2000] ZALAC 18 (22 August 2000)

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[2000] ZALAC 18
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Absa Bank Limited and Another v Mackay (CA8/99) [2000] ZALAC 18 (22 August 2000)

IN
THE LABOUR APPEAL COURT OF SOUTH AFRICA
Held
in Cape Town
Case
No : CA8/99
In
the matter between:
ABSA
BANK LIMITED
1st
Appellant
CORTAL
DIRECT (Pty) LIMITED
2nd
Appellant
And
B.
H. G. MACKAY
Respondent
JUDGEMENT
ZONDO
JP
Introduction
[1] This
is an appeal against a judgment of the Labour Court, per Mlambo J,
handed down in a dispute between the appellants and the
respondent
about the fairness or otherwise of the dismissal of the respondent by
the appellants. The facts of this matter which
are relevant to this
appeal are set out below.
THE
FACTS
[2] The
first appellant is ABSA Bank Limited. The second appellant is Cortal
Direct (Pty)Limited, a subsidiary of the first appellant.
The
respondent was initially employed by the first appellant on the 1st
November 1994. He was based in Cape Town. In 1995 the respondent
was
promised a more senior position in Johannesburg which would have
given him a salary increase of at least R3000,00 per month.
He was
promised this by the then managing director of the first appellant,
one Mr Ben Solomon. Mr Solomon told the respondent in
April of 1995
that he could proceed to sell his house in Cape Town in preparation
for his relocation from Cape Town to Johannesburg.
It was agreed
between the respondent and Mr Solomon that the former would relocate
in July 1995. Mr Solomon relinquished his position
as managing
director of the first appellant in May 1995 and moved to another
position within the ABSA group. Mr Solomon informed
the respondent
that Mr Pope would finalize all outstanding arrangements with regard
to his relocation to Johannesburg. However, Mr
Pope subsequently
informed the respondent that the latter was no longer going to move
to Johannesburg.
[3] At
some stage either in 1996 or 1997 the respondent was awarded five
merit points for his work performance which was a very good
rating
and was nominated for the ABSA Management Awards for being the best
of all the first respondent’s unit trust consultants
countrywide.
On the 30th September 1997 the respondent was appointed as Manager:
Sales (Western Cape) of the second appellant. He
commenced his duties
on the 1st October 1997. The respondent's appointment to this
position followed upon an offer which Mr Solomon
had made to the
respondent after he had learnt that the respondent had been offered a
job by Metlife. As a result of Mr Solomon’s
offer, the respondent
turned down Metlife’s offer.
[4] At
the end of March 1998 the respondent received a fax from Mr Swart,
the successor to Mr Solomon, to the effect that he had been
awarded a
salary increase of 2,5% and three merit points. The respondent was
unhappy with this. His unhappiness was due to the fact
that this was
below what had been recommended for him, namely, five merit points.
The respondent asked Mr Swart to have this reconsidered
but Mr Swart
said it could not be reconsidered.
[5] The
respondent subsequently instituted a grievance in terms of the
appellants' grievance procedure about the matter of the merit
points
as well as the salary increase awarded to him. His complaints were:
(a) the
unilateral award to him of three merit points.
(b)
that the salary increase for job bands M and P (the respondent fell
within the M band) should be more than 90% and yet he was
awarded an
increase of only 2,5%.
(c) that
he had not been given sufficient resources to fulfil his task
efficiently.
[6] At
a meeting held on the 2nd April 1998 in Johannesburg to deal with the
respondent's grievance, Mr Solomon lost his temper with
the
respondent when the respondent asked him to revert to him by 17h00
the following Tuesday, the 7th April. According to the respondent
Mr
Solomon said:
"If
you put a gun to my head to get back to you by 17h00, I will keep a
gun to your head and close the Belville office at the
end of the
month if it is not profitable"
.
In their response to the respondent's statement of claim the
appellants admitted that Mr Solomon did say that the respondent
should
not put a gun to his head to get back to him by 17h00 on the
7th April. Not much came out of the grievance meeting of the 2nd
April.
Accordingly the respondent was unhappy and he processed his
grievance to the next stage which was phase 4. Later on, with the
respondent’s
consent, the grievance was moved to phase 5. A
grievance meeting was subsequently held on the 16th April 1998. The
meeting was chaired
by a Mr Grobbelaar. A Koos van der Merwe, who was
an industrial relations consultant, acted as a facilitator. The
respondent appeared
in person. However, there were two officials from
his union, SASBO, who attended the meeting as observers.
[7] On
the 17th April 1998 Mr Grobbelaar faxed to the respondent a copy of
his recommendations which he had faxed to Mr Griessel,
the head of
the Human Resources Department. In his report the chairperson was
critical of the appellants' management. He found the
respondent's
complaint about his salary justified. He found the appellants'
failure to give the respondent logistical support unjustified.
He
also found that there was no justification for the management's
having adopted an
"intransigent
and threatening attitude"
towards the respondent. He was of the opinion that it was impossible
in the circumstances for the Western Cape office of the appellants
to
break even - let alone to make profit, within the short time of its
existence. He made two recommendations. The one was that the
respondent's salary should be increased with effect from the 1st
April 1998. The other was that the respondent should be placed in
an
alternative position within his field of experience. He said such
position should preferably fall geographically within the
metropolitan
area of the Western Cape. The respondent’s terms and
conditions of appointment were to be maintained on post M or P. The
chairperson
also recommended that the respondent should be given two
alternative positions to choose from.
[8] On
the 20th April 1998 the respondent was informed of the decision taken
by Griessel in the light of the recommendations of the
chairperson of
the grievance proceedings. Mr Griessel's decision was that the
respondent be given a salary increase of 9.73% retrospective
to the
1st April 1998 and that the respondent and the first appellant would
identify another suitable position within the Western
Cape area for
the respondent; in this regard the respondent was required to contact
the Group General Manager, ABSA Human Resources,
Ms Laetitia van Dyk.
Mr Griessel’s decision was also to the effect that, if the efforts
to find a suitable position for the respondent
were unsuccessful
within three months, consideration would be given to the termination
of the respondent’s services in terms of
the first appellant’s
retrenchment policy. Subsequently the respondent sent his curriculum
vitae to a number of officials within
the first appellant and
attended a number of employment interviews. Included among those
officials of the first appellant to whom
the respondent sent his
curriculum vitae were Laetitia van Dyk, Hennie Geldenhuys, and Marie
Hamman, Marketing Manager of ABSA Investment
Management Services
(AIMS).
[9] On
the 22nd June 1998 the respondent had an interview with Ms Hamman.
That was for the vacancy of a consultant. Ms Hamman informed
the
respondent that the latter's remuneration package was too high for
that post and that people could be appointed from outside
the first
appellant for a lower package. The respondent was also told by Hamman
that, despite the fact that a vacancy had been advertised
for a
regional sales manager for ABSA Investment Management Services, no
appointment would be made to that vacancy. The following
day Hamman
telephoned the respondent and informed him that there was no position
available for him within ABSA Investment Management
Services.
[10] On
the 23rd June 1998 the respondent sent his curriculum vitae to Mr
Johan Swanepoel of the ABSA Trust for the position of an
offshore
consultant. The following day he received a reply to the effect that
his application had been unsuccessful. On the 6th July
1998 the
respondent was informed by Ms Elaine van der Toorn, employed as a
Human Resources consultant by the first appellant, that
she was
calculating his retrenchment package. The respondent replied that
that was premature as the first appellant was required
to place him
in an alternative position. She said she was going on leave on the
15th July and wanted to finalize the process before
then.
[11] On
the 15th July 1998 the respondent received a letter of the
termination of his services from Ms van der Toorn. The letter was
signed by Letitia van Dyk on behalf of Mr Griessel. The letter bore
the date of the 20th July 1998 but was already faxed through
to him
on the 15th July. On the 16
th
July the respondent sent a letter to a number of officials of the
first appellant advising them that he would be referring the matter
of his dismissal to the Commission for Conciliation, Mediation and
Arbitration (
"CCMA"
)
as a dispute. That was done. The dispute could not be resolved and it
was then referred to the Labour Court for adjudication.
Adjudication
of the matter in the Labour Court
[12] When
the dispute about the fairness or otherwise of the dismissal of the
respondent came before the Labour Court, the respondent's
case was
presented at two levels. The first was that the respondent's
dismissal was automatically unfair in that the reason for which
the
respondent was dismissed was that he had instituted a grievance
against the appellants which, so the argument went, had upset
them.
It was argued that a dismissal for such a reason was an automatically
unfair dismissal as contemplated in sec 187(1)(d) of
the Act. The
second was that, even if the dismissal did not constitute an
automatically unfair dismissal, it, nevertheless, remained
an unfair
dismissal both procedurally and substantively. The difference in
legal the effect between a dismissal that is automatically
unfair and
one that is ordinarily unfair is that the maximum payment for
compensation for an automatically unfair dismissal is 24
months’
remuneration whereas, for an ordinarily unfair dismissal, it is 12
months remuneration. The court a quo gave its judgment
in favour of
the respondent. It concluded that the respondent's dismissal was
automatically unfair. As the respondent was not seeking
reinstatement
but was seeking only compensation, the court a quo awarded him
compensation equal to 24 months' remuneration plus costs.
The
appeal
[13] Although
initially the appeal was against the whole judgment of the Labour
Court, this changed with the delivery of the appellants’
heads of
argument. In their heads of argument, the appellants conceded that
the dismissal of the respondent was procedurally unfair
in that they
had not consulted with the respondent in terms of sec 189 of the
Labour Relations Act, 1995 ( Act No 66 of 1995) (
"the
Act"
)
before they could dismiss him. However, the appellants persisted in
their contention that the court a quo erred in finding that
the
reason for the dismissal of the respondent was that he had lodged a
grievance against the appellants and, that, for that reason,
his
dismissal was automatically unfair. This was the finding that formed
the basis of the court a quo's order of compensation equal
to 24
months' remuneration. Accordingly, when the appeal was heard, the
appellants' appeal was limited to seeking the reversal of
the
declaration that the dismissal was automatically unfair - as opposed
to a declaration that it was unfair and an order reducing
the amount
of compensation from 24 months remuneration to 12 months remuneration
. The appellants also sought an order of costs on
appeal.
[14] In
the light of the above the first question we have to decide is
whether the finding of the court a quo that the reason for
the
respondent's dismissal was that he had lodged a grievance against the
appellants is correct. If we find that the court a quo
erred in
making this finding, we will have to reduce the compensation awarded
by the Labour Court from 24 months’ remuneration
to 12 months'
remuneration. If, however, we find that the court a quo was correct
in making that finding, then the next question
that we must decide is
whether that renders the dismissal automatically unfair as
contemplated by sec 187(1)(d) of the Act.
[15] There
are two questions which must be dealt with if we are to uphold the
finding that the respondent's dismissal was automatically
unfair. The
one is factual, the other legal. The factual one is whether the
reason why the respondent was dismissed is that he had
instituted a
grievance against the appellants. The legal one is whether, when an
employee uses an internal grievance procedure of
his employer, he
can be said to be
"exercising
a right conferred"
on him by the Act as contemplated by sec 187(1)(d)(i) of the Act.
However, if the answer to the factual question is in the negative,
the legal question will fall away.
WAS
THE RESPONDENT DISMISSED BECAUSE HE INSTITUTED A GRIEVANCE AGAINST
THE APPELLANTS?
[16] I
think it must be borne in mind that the respondent’s departure from
the appellants’ employment followed upon his position
with the
second appellant being redundant as well as the first appellant’s
failure to appoint him to anyone of a number of vacancies
which were
available at the time. In the light of this it seems to me that, if
we are to uphold the respondent’s contention that
he was dismissed
because he lodged a grievance against the appellants, we would have
to find that the closing down of the project
of the second appellant
that the respondent was in charge of was not genuine but was resorted
to in order to victimise the respondent
for instituting an internal
grievance against the appellants. I do not think that there is
sufficient evidence before us to support
such a finding. In any event
it was never put to the appellants’ witnesses during their cross
examination as part of the respondent’s
case that the reason why
the project was closed down was not because there was a genuine
reason for its failure but because there
was a stratagem to get rid
of the respondent. Mr Steenkamp conceded that this was never put to
the appellants’ witnesses. If it
had been put, the appellant would
have had an opportunity to deal with it. This might have entailed the
calling of certain witnesses
which were not called or the witnesses
who were called could have had a chance to deal with it in whatever
way they could. It would
not be permissible to make a finding based
on that submission. In the circumstances I would not be able to make
such a finding.
[17] Even
if the closing down of the second appellant’s project was a
stratagem to get rid of the respondent, the closing down of
the
project would not have been sufficient by itself to justify a finding
that the respondent lost his employment because he instituted
a
grievance against the appellants. I say this because, even if the
project was closed down as a stratagem to dismiss the respondent,
such stratagem would have failed if the respondent had been appointed
to one of the vacancies for which he was considered by various
officials of the first appellant. The position is that the respondent
had an opportunity of being appointed to anyone of the vacancies
that
he was considered for.
[18] In
order to sustain the submission that the respondent was dismissed
because he instituted an internal grievance against the
appellants,
it would be necessary to find that the reason why the various
officials of the first appellant who had occasion to consider
him for
positions decided not to appoint him to anyone of those vacancies was
not that they genuinely believed he was not the right
candidate to
appoint or that they genuinely believed he was not suitable for such
positions or that there were other more suitable
or more qualified
candidates for such positions, but, that it was because they were
part of a conspiracy to get rid of him. This
is no sufficient
evidence before us to sustain such a finding. There is not even
evidence that all those officials were aware that
the respondent had
instituted a grievance against the appellants. On the contrary there
is evidence suggesting lack of knowledge
of the respondent’s
grievance on the part of some of the officials of the first appellant
who had occasion to consider the respondent
for some vacancy or
another. In any event it was also never put to the appellants’
witnesses that they had been part of such conspiracy
and that that is
why they did not appoint the respondent. In those circumstances it
would not be permissible for us to base our judgement
on the
existence of such a conspiracy.
[19] Once
we are unable to make a finding of conspiracy by officials of the
appellants against the respondent, the position is that,
even after
the closure of the second appellant’s operation, the respondent
still had a chance to keep his employment or get employment,
with the
first appellant. Although the respondent probably should have been
appointed to the position for which he was interviewed
by Hamman, we
cannot say that the reason why he was not appointed was that he had
lodged a grievance against the appellants. In the
light of the
conclusion we have reached on the respondent’s reason for
dismissal, it follows that the court a quo’s finding
that the
respondent’s dismissal was automatically unfair cannot be upheld.
The same is also true of the award of compensation equal
to 24 moths’
remuneration.
[20] It
appears to us that the concession by the appellants that the
respondent’s dismissal was procedurally unfair was properly
made.
The compensation equal to 12 months’ remuneration is therefore
justified. With regard to costs, the position is that, although
the
appeal was noted against the whole judgment of the court a quo, the
appeal was later confined to only part of the judgement.
In respect
of that part of the judgment, the appellants have achieved success.
The respondent opposed the appeal throughout even
after the appeal
was limited. I think the result of the appeal as well as the decision
of the appellants to abandon their appeal
against the procedural
fairness of the dismissal means that in effect each party has
achieved partial success on appeal. In the light
of this I think an
appropriate order with regard to costs on appeal would be to make no
order as to costs. I can see no reason to
interfere with the costs
order made by the court a quo.
[21] In
the premises the order I make is the following:-
The
appeal succeeds in part and fails in part.
2. The
order of the court a quo is hereby set aside and replaced with the
following order:-
“
(a) The
dismissal of the applicant was procedurally unfair.
(b) The
respondents are ordered to pay to the applicant compensation equal to
12 months’ remuneration calculated at the applicant’s
rate of pay
at the time of his dismissal jointly and severally the one paying the
other to be absolved.
(c)
The respondents are ordered to pay the applicant’s costs jointly
and severally the one paying the other to be absolved.
”
There
is to be no order as to the costs of the appeal.
R.
M. M. ZONDO
JUDGE
PRESIDENT
I
concur
C.
R. NICHOLSON
JUDGE
OF APPEAL
I
concur
R.
NUGENT
ACTING
JUDGE OF APPEAL
Appearances:
For
the appellant: Adv P. Pretorius SC
Instructed
by : Edward Nathan & Friedland Inc
For
the Respondent: Mr A. Steenkamp
Instructed
by: Cheadle Thompson & Haysom
Date
of hearing: 14
th
June 2000
Date
of judgement: 22 August 2000