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[2001] ZALAC 22
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CEPPWAWU and Others v Price's Daelite (Pty) Ltd (JA39/00) [2001] ZALAC 22 (29 June 2001)
IN
THE LABOUR APPEAL COURT OF SOUTH AFRICA
HELD
AT JOHANNESBURG
Case
No: JA 39/00
In
the matter between
CEPPWAWU 1
ST
Appellant
SOLLY
MADISHA AND OTHERS 2
ND
to 54
th
Appellants
and
PRICEâS
DAELITE (PTY)LTD Respondent
_______________________________________________________________
JUDGEMENT
_______________________________________________________________
ZONDO
JP
Introduction
[1] The
respondent is involved in the business of manufacturing candles.
Prior to the 28
th
February 1997 it had three factories from which it operated. The one
factory was in Booysens in Johannesburg, another one in Newtown,
also
in Johannesburg and the last one in Glen-Annil in Durban. Of these
factories the one at Booysens was the oldest. The one at
Newtown was
the biggest in terms of its operations.
[2] The
second and further appellants were employed by the respondent in its
Booysens factory until the 28
th
February 1997 when they were dismissed. They were members of the
first appellant, a trade union. The respondent stated that the
dismissal
of the second and further appellants was for operational
requirements. In proceedings that ensued thereafter in the Labour
Court
the present appellants challenged the fairness of the dismissal
and sought reinstatement and other relief. The challenge to the
dismissal
was that it was both procedurally and substantively unfair.
[3]
The Labour Court, per Pillay J, found the dismissal substantively
unfair but procedurally fair. However, it decided, in the exercise
of
its discretion, not to award the second and further appellants any
relief. It is against this finding and the Court a quoâs
refusal to
award the second and further appellants any relief that the
appellants now appeal to this Court. The respondent has noted
a
cross-appeal against the finding that the dismissal was substantively
unfair. The result of this is that both the substantive fairness
as
well as the procedural fairness of the second and further appellantsâ
dismissal are in issue in this appeal. I consider it necessary,
in
the light of the issues in this appeal, to set out at some length the
events that preceded the dismissal of the second and further
appellants.
The
background
[4] On
the 22
nd
October 1996 the respondent wrote a letter to the union in which it
intimated the possible closure of the Booysens factory. It proposed
that the two parties hold a meeting on the 28
th
October 14h00 in this regard. The union accepted the proposal for a
meeting.
[5] A
meeting took place between the respondent and the union on the 28
th
October 1996. It was a short meeting. Not much occurred other than
that the respondent took the union through its reasons for the
proposed closure of the Booysens factory. On the 8
th
November 1996 the respondent addressed a letter to the union. It
informed the union that, due to the surplus and oversupply of goods,
it was forced to work short-time. In this regard it informed the
union that the factory would not operate on the 15
th
and 29
th
November. The respondent confirmed its availability for a meeting
with the union on the 13
th
November at 14h00 to have wage negotiations and to discuss the issue
of short time. On the 12
th
November 1996 the union replied to the respondentâs letter of the
8
th
November 1996 and confirmed its availability for the
proposed
meeting of the 13
th
November 1996.
[6] On
the 13
th
November 1996 a meeting took place between the respondent and the
union. At this meeting two of the matters that were discussed
were
the proposed closure of the Booysens factory and the proposed working
of short-time. With regard to the working of short-time
the union
complained that the respondent was not discussing the issue with it
but was simply informing it thereof. The union threatened
legal
action if the respondent proceeded with the implementation of
short-time without the agreement of the union. With regard to
the
possible closure of the Booysenâs factory the respondent stated
that it was at that stage considering four options. The options
were
given by the respondent as being:
(a) closing
the factory and opening a warehouse;
(b) taking
over the market from AC Kotaneâs business;
(d) closing
the factory until the second week in February to upgrade machinery
and hopefully get AC Kotaneâs business;
(e) opening
the factory in January 1997 and work Saturdays to upgrade machinery:
all employees would work on a roster basis and would
be paid
overtime.
[7] The
AC Kotane business was also a candle manufacturing business that was
based in
Kwa
Zulu -
Natal which the respondent was considering buying. The respondent
made it clear that, if the option of buying the AC Kotane business
did not materialise, the respondent would have no option but to close
the Booysens factory.
[8] Three
days after the meeting of the 13
th
November, namely on the 16
th
November, attorneys who had been instructed by the union wrote to the
respondent threatening legal action if the respondent proceeded
to
implement short-time. In their letter they also accused the
respondent of having failed to supply information that had been
requested.
Mr Taylor testified in the Court a quo that no information
had at that stage been requested from the respondent. He said that
the
union had made somewhat bald statements that they required
information but had failed to be specific about what information they
required.
[9] In
a letter dated 20 November 1996 addressed to the union the respondent
once again indicated that it believed that it would be
necessary to
close the Booysens factory. It attached to the letter a list of 63
employees with information of how it proposed they
should be dealt
with
âin
the futureâ
.
Four of these, it said, were pensioners. The respondent proposed: (a)
to transfer eighteen of the employees from the Booysens factory
to
the Newtown factory; (b) to retrench 38 of the employees, and (c) to
place two employees on early retirement. It proposed that
the union
place the closure of the Booysens factory on the agenda for a meeting
that was scheduled for the 26
th
November 1996. By agreement the respondent and the union subsequently
brought the date of that meeting forward from the 26
th
November 1996 to the 25
th
November 1996.
[10] On
the 25
th
November 1996 a meeting was held between the respondent and the
union. The discussion included the respondentâs proposal to close
the Booysens factory and to turn it into a warehouse. At the meeting
the respondent explained the reasons for the proposed closure
of the
factory. The union does not appear to have responded. Instead it
asked for certain information. The information which the
union
requested was:-
(a) the
reasons for the proposed closure of the factory;
(b) alternatives
considered by the company before closing the factory;
(c) number
of employees affected and their job categories;
(d) the
âcriteria
processâ
for retrenchees;
(e) time
and period for retrenchments to take place;
(f) proposed
severance package payable to retrenchees;
(g) possibility
of re-employment in future;
(h) the
kind of assistance the company is prepared to offer to retrenchees.
[11] On
the 26
th
November 1996 the respondent addressed a letter to the union in which
it gave all the information which the union had requested from
it at
the meeting of the previous day. Attached to such letter was the list
of employees which the respondent had previously given
to the union
with information of what it proposed should happen to them. This
included 18 employees that the respondent proposed
to transfer to the
Newtown factory. The respondent indicated that the retrenchment was
proposed to take effect on the 13
th
December 1996. On the 27
th
November 1996 the union wrote a letter to the respondent
acknowledging receipt of the respondentâs letter of the 26
th
November 1996. The union indicated that it was considering the
information and would
ârespond
to you in due courseâ
.
On the 29
th
November 1996 the respondent responded to the union and suggested
that a meeting be held on the 2
nd
December 1996.
[12] By
the 2
nd
December the union had not responded to the respondentâs proposal
for a meeting on the 2
nd
December. No meeting took place on that day. On the same day the
respondent sent a letter to the union complaining that the union
had
failed to arrive for a meeting. It then suggested the 4
th
December for a meeting
âin
order to finally resolve this matterâ.
That was the closure of the Booysens factory and wage negotiations.
This drew a sharp response from the union on the same day disputing
the suggestion that an arrangement had been made for the two parties
to meet. The union confirmed in the letter that it was available
for
a meeting on the 4
th
December. The parties could not agree on the time for the meeting. In
the end they agreed to shift the meeting to the 9
th
December 1996.
[13] A
meeting was held between the respondent and the union on the 9
th
December 1996. During this meeting the union indicated that it did
not agree with the timing of the retrenchments as the closure
of the
factory should not, according to the union, run concurrently with the
employeesâ leave. In this regard it needs to be remembered
that the
respondent had previously informed the union that it proposed to
effect the retrenchment on the 13
th
December 1996. The respondent replied that its calculations revealed
that the closure of the factory had already been necessary in
October. As the meeting progressed, the union and the respondent
expressed conflicting views on whether, in consultations, the
respondent
required the unionâs agreement or whether an attempt to
reach consensus was sufficient. The union insisted that agreement had
to
be reached whereas the respondent stated that an attempt to reach
consensus was sufficient if no consensus could be reached.
[14] The
union also expressed the view that, if the retrenchment was
necessary, it should be effected in January of the following
year.
The
union then proposed that rather than have a retrenchment, employees
should work short-time. The respondent rejected the short-time
proposal reminding the union that, when the respondent proposed
short-time before, the union had rejected the proposal and had
instructed
an attorney to send a letter threatening legal action. The
unionâs response to this was that the respondentâs proposal for
short-time
had had
âstrings
attachedâ
to it. The union then proposed a lay-off. The union raised the issue
of last in, first out to which the respondent agreed. The respondent
asked the union to keep open Friday the 13
th
December at 09h00 for a possible meeting. At the end of the meeting
Mr Taylor indicated that the respondent would respond to the
unionâs
proposals for alternatives on the 11
th
December. The meeting closed. Mr Taylor testified that, although at
the meeting of the 9
th
December, the union proposed a lay-off, it did not pursue this
proposal any further. He testified that in fact the union later
rejected
the notion of a lay-off completely.
[15] It
appears that, apart from the meeting of the 9
th
December, a meeting was held between that parties on the 10
th
December as well. This can be gathered from the unionâs letter of
the 13
th
December addressed to the respondent in which it purported to confirm
what had transpired at such meeting. That there was such a
meeting
also appears from a letter dated the 11
th
December which the respondent addressed to the union. In its letter
of the 13
th
December the union purported to confirm the following as having
occurred at the meeting of the 10
th
December:
â
1. Firstly,
consultation proper on this issue started
on 25/11/95
and not in October as claimed by your company.
Secondly,
we had agreed to have further consultations on this matter on 13
th
December 1996 (today), and your company failed to attend this
crucial meeting without any apology.
Lastly,
the writer hereof would be on leave on 13 January 1997 and therefore
not available for the proposed meeting. We, therefore,
propose to
put this matter in abeyance to the end of January.
In
conclusion your response to our proposals regarding the closure is
selective, you are therefore urged to forward a comprehensive
response in this regard.
Hoping
you shall find the above in order.
Yours
faithfully.
(Signed)
JD
SELLOâ
[16] On
the 11
th
December 1996 the respondent addressed a letter to the union in which
it responded to all but one of the proposals made by the union
on the
9
th
December. It agreed to ensure that the closure did not
ârun
concurrentlyâ
with the leave of employees which had been a proposal made by the
union. In this regard the respondent changed the proposed date
of
retrenchment to the 13
th
January in the new year . This meant that the closure of the
Booysensâ factory and the implemention of the retrenchment was put
off by a month.
[17] With
regard to the unionâs proposal of a lay-off, the respondent advised
the union in the letter that it was still considering
that proposal
and would respond on the 13
th
December. As to the working of short-time, the respondent replied
that the working of short-time was not economically viable. With
regard to transfers of employees to other branches and retraining,
the respondent replied that it had already agreed to transfer
a
percentage of the workforce to other operating units and to try and
retrain them where necessary. On the 12
th
December 1996 the respondent wrote to the union again and asked the
union to make itself available for a meeting on the 13
th
January 1997 at 16h00.
[18] The
respondent was not able to respond to the unionâs lay-off proposal
on the 13
th
December because it had not completed its investigation thereof. It
wrote to the union and advised it accordingly. It informed the
union
that it would be in a better position to respond to the lay-off
proposal at the meeting which was scheduled for the 13
th
January 1997. On the same day the union addressed to the respondent
the letter of the 13
th
December which has been referred to above. In the letter the union,
inter alia, stated that
âconsultations
properâ
on the closure of the factory had only begun on the 25
th
November 1996 and not in October as previously claimed by the
respondent. The union official also said in the letter that he would
be on leave and would therefore not be available for the meeting that
was proposed by the respondent on the 13
th
January.
[19] The
union further alleged in the letter that the respondent had failed to
attend a meeting which the parties had scheduled for
the 13
th
December. In a letter addressed to the union by the respondent on the
8
th
January 1997, the respondent maintained that negotiations had begun
in October 1996 and stated that no meeting had been scheduled
for the
13
th
December; it said all that the respondent had done was to ask the
union to hold itself available for a possible meeting on the 13
th
December.
[20] In
its letter of the 8
th
January the respondent stated that it had been agreed at the meeting
of the 9
th
December that a meeting would be held between the parties on the 13
th
January. In the light of the union officialâs statement that he
would not be available for a meeting on the 13
th
January as he would be on leave and suggesting that the next meeting
be held at the end of January, the respondent accused the union
of
seeking to stall the consultation process. In this regard it can be
mentioned that the minutes of the meeting of the 9
th
December do not reflect any agreement that a meeting would be held on
the 13
th
January between the respondent and the union.
[21] The
respondent also proposed that the union should designate another
official to represent the union in the consultation process
during
the absence on leave of Mr Sello who had thus far been the official
representing the union. The respondent proposed in the
letter of the
8
th
January that a meeting be then held on the 29
th
January
âin
order to continue and finalise
the
consultation processâ
On the 22
nd
January 1997 the union wrote to the respondent accepting the proposal
for a meeting on the 29
th
January. The union also undertook to respond to other issues raised
in the respondentâs letter of the 8
th
January at the meeting of the 29
th
January.
[22] On
the 29
th
January the respondent and the union held a meeting as arranged.
There are no minutes for that meeting. However, Mr Taylor testified
that a letter which he wrote to the union on the 10
th
February contained a brief summary of the discussion at the meeting
of the 29
th
January. In that letter the respondent stated, with regard to the
meeting of the 29
th
January, that the respondent informed the union that it proposed to
close the factory on the 28
th
February and that the union was asked
âto
consider a lay-off of employees for approximately three (3) months on
retrenchment package to be given
to
all employeesâ.
In
the letter it was recorded that the union indicated at the meeting of
the 29
th
January that it would respond to this at a meeting that the parties
scheduled for the 7
th
February. In this regard it needs to be borne in mind that, prior to
the meeting of the 29
th
January, the respondent had not yet reverted to the union on its
proposal that employees be laid off which the union had made at
the
meeting of the 9
th
December. Accordingly, when at the meeting of the 29
th
January the respondent proposed a lay- off, it should have said that
in principle it was accepting the unionâs proposal for a lay-off
and the parties could then have discussed the practical aspects of
the proposal and such details as were necessary. However, the
respondent put this as a proposal.
[23] The
union responded by saying it would discuss the lay-off proposal with
its members and would respond at the meeting of the
7
th
February. In the respondentâs letter of the 10
th
February the respondent said that the union had stated at the
meeting of the 7
th
February that the only mandate it had was to look at working
short-time which would commence in March 1997 on the basis of two
weeks
on and two weeks off. In that letter the respondent recorded
that at the meeting of the 7
th
February it had responded to the short-time proposal by stating that
the working of short-time would not be viable
â
as fixed costs would remain intact and the company would continue to
manufacture candles for stock the main factor (sic) the company
in
wishing to close the Booysens branchâ.
The respondent gave full reasons in the letter of the 10
th
February why the working of short-time was not a viable option. It
also reiterated that it believed that the only viable alternative
to
full retrenchments was a lay-off of three months. The respondent
proceeded to propose that
âa
set date is made to meet the union during the three months
period
to review the positionâ.
The respondent also made it clear that it was prepared to
âreviewâ
the three month period. It said it would keep the contact details of
all the employees so that they could be recalled at short notice
should there be a dramatic increase in sales. The respondent also
said that it was prepared to meet with the union on the 14
th
February at 09h00.
[24] On
the 13
th
February the union responded to the respondentâs letter of the 10
th
February but all it said was that it would not be able to meet the
respondent on the 14
th
February as on that date it would consult with its members on the
respondentâs letter of the 10
th
. Nevertheless, the union committed itself to reverting to the
respondent by close of business on Monday the 17
th
February with proposed dates for a meeting.
[25] On
the 14
th
February the respondent replied to the unionâs letter. It said that
the parties had agreed at the meeting of the 7
th
February that there would be a meeting on the 14
th
February. The respondent found it unacceptable that the union should
cancel a meeting that had been scheduled two weeks before at
such
short notice. The union responded to this letter by a letter dated
the 17
th
February. It disputed the allegation that at the meeting of the 7
th
February the parties had agreed to meet on the 14
th
February. In this regard the union drew the respondentâs attention
to the fact that in its letter of the 10
th
February the respondent had proposed a meeting for the 14
th
February
âshould
it be necessary to meetâ.
In
my judgement the unionâs version about whether or not the parties
had agreed on the 7
th
February 1997 to have a meeting on the 14
th
February is probably the true version.
[26] In
the same letter the union reverted to the respondent and rejected the
proposal of a lay-off as a viable option
âas your reasons for retrenching our members are opaque and
unconvincingâ.
It
then declared a dispute with the respondent
âfor
failing to have meaningful consultation on the intended retrenchments
and for unilaterally implementing lay offâ.
It seems that the allegation that the respondent was unilaterally
implementing a lay-off arose from information that had reached
the
union to the effect that the respondent
â
was going dragooning (sic) our members to give you their home
addresses so as to contact after a three (3) month lay-off which
is
effective on 28 February 1997".
The
unionâs basis for its rejection of the lay- off proposal is strange
because the union had itself previously proposed a lay-off.
[27] On
the 19
th
February the respondent replied to the unionâs letter of the 17
th
February. It persisted with its claim that a meeting had been
scheduled for the 14
th
February. The respondent insisted that the consultation process had
been going on since September and accused the union of dragging
the
consultations
âat
every conceivable opportunityâ.
In par 5 of the letter the respondent stated that it had given the
union
âeconomically
viable and sound reasons for âlay-offsâ at the Booysens Branchâ.
It
rejected the proposal of the working of short-time on the basis of
two weeks on and two weeks off as impractical and unworkable.
[28] The
respondent noted the unionâs declaration of dispute and disputed
the allegation that it had failed to have a meaningful
consultation
with the union. In par 7 of the letter the respondent stated that, in
view of the unionâs rejection of the lay-off
proposal, the
consultation process had been
â
exhaustedâ
and
that alternatives had been explored without success. It accordingly
informed the union that it intended to close the Booysens
branch and
to retrench the employees on the 28
th
February 1997. In the concluding paragraph of that letter, the
respondent informed the union that, should it wish to discuss a
retrenchment
package or any item raised in the letter, it would be
prepared to meet with the union the 28
th
February at 13h00. In a letter dated the 21
st
February the respondent advised the union that the 28
th
February should have read 21
st
February. It indicated that it could meet with the union on either
24,25,26 or 27 February at 15h00. It asked the union to confirm
which
of those dates the union wished to meet with it to discuss any of the
items raised in its letter of the 19
th
February 1997. The respondent did not hear from the union on the 22
nd
and 23
rd
February.
[29] Realising
that the union was not responding to its letters of the 19
th
and 21
st
February, the respondent wrote another letter to the union on the
24
th
February. The letter read thus:
â
In
assessing the current position, the company wishes to meet with you
to discuss your proposal of working short-time. As a matter
of
urgency, please meet with us at Booysens Factory at 15h00 on 25
February 1997".
[30] Pursuant
to this letter, the union and the respondent held a meeting on the
25
th
February. No minute was kept of the meeting. It is common cause
between the parties that at that meeting the respondent maintained
the stance that the Booysens factory would close on the 28
th
February and that the employees would be retrenched. The respondentâs
attitude was that the closure of the Booysens factory and
the
retrenchment of the employees would occur on the 28
th
February. The respondent proposed that, for two weeks after the
closure of the factory and the dismissal of the employees, the
employees
would be laid off. With effect from the 17
th
March 1997 all the retrenched employees would be employed (anew) at
the Newtown factory. Such employment would be on the basis that
the
employees would be new employees. This meant that their years of
service at the Booysens factory would not be recognised. They
would
be given such
positions
as were to be determined by the respondent and would not necessarily
be appointed to positions that they had occupied at
the Booysens
factory. The terms and conditions of employment which would apply to
the employees once at the Booysens factory would
be the minimum terms
and conditions of employment applicable at the Newtown factory. They
would, however, get their severance pay.
[31] For
most of the employees such terms and conditions would be an
improvement upon the terms and conditions of employment which
they
enjoyed at Booysens. This would be the case even in regard to the
wage rates. The unionâs response was as follows; as recorded
in its
letter of the 26
th
February addressed to the respondent;-
â
2.1 There
is dispute with the company regarding its intended retrenchments.
2.2 The
union views the placing of our members at Newtown as a means of
avoiding retrenchments and therefore welcomes it. However,
... this
should be done without break of service. The companyâs argument
that the Booysens staffâs length of service would not
result in
having a homogeneous workforce would make the integration impossible
was rejected in toto. It would not be for the first
time that the
employees of the two branches meet. In fact we have prove (sic) (in a
form of names) of the people who have been transferred
to the Newtown
branch with their lengths of service. The movement
of
employees from the Booysens factory to Newtown is common practice at
Prices Daelite and we do not understand why it should be made
an
issue at this stage. Your offer is, therefore, inconsistent with the
companyâs established practice.
2.3 ...
the transfer of our members to Newtown should not be on less
favourable conditions which they are presently enjoyingâ.
[32] Although
at the meeting the union took the stance outlined above, it indicated
that it, nevertheless, would need to consult with
its members and
revert. It reverted by way of a letter dated the 26
th
February and said that its position remained unchanged. It is
important to point out that, as is apparent from the unionâs letter
of the 26
th
February, the reasons which had been advanced by the respondent for
not agreeing to let the employees take
the
same positions in Newtown which they had occupied at the Booysens
factory were that it wanted a homogeneous workforce, and that
did not
want to have to engage in debates with the employees about which
positions they were suitable for. The respondent also said
that not
all the positions that the employees had occupied at Booysens were
available at Newtown. The respondent also believed that
to accede to
the unionâs demand would have created two workforces with different
terms and conditions of employment which would
have been a source of
tension within
the
same factory.
[33] On
the 27
th
February the respondent dismissed the employees at the Booysens
factory and closed the factory. In terms of the respondentâs
proposal,
which the union rejected, the employees retrenched at
Booysens were invited to take up employment at Newtown on the 17
th
March. Between the 28
th
February and the 27
th
March no meeting was held between the union and the respondent nor
were there letters exchanged between the parties. However, Mr
Taylor
gave evidence that on at least two occasions he telephoned the
unionâs Mr Sello. The discussions on both occasions related
to
whether the employees intended to take up employment at Newtown or
why they had not taken up employment at Newtown. He said that
the
response he got from the union was that it would consult the
employees and revert but it actually did not revert during this
period.
[34] On
the 27
th
March 1997 the respondent addressed a letter to the union on the
closure of the Booysens factory. In that letter the respondent
repeated
the offer it had made to the union at the meeting of the
25
th
February about the employment of the Booysens employees at Newtown.
It confirmed that, although the Booysens employees would have
been
employed on the minimum wage rate applicable at Newtown, that would
still have been an improvement on the salaries of most
of the
employees. The respondent also stated that as at the 27
th
March, which was
ten
days after the date on which the Booysens employees were to have
commenced employment at Newtown, only a few of the Booysens employees
had
âtendered
their services.â
In the letter the respondent extended the deadline for the Booysens
employees to take up employment at Newtown in terms of the
respondentâs
offer from the 17
th
March 1997 to 4 April 1997. It said it was extending this deadline
âin
the event that there might have been a misunderstanding or that for
some reason employees could not tender their servicesâ.
The last sentence in the letter reads thus:
âHowever
should employees not tender their services by the 04/04/97 deadline,
then the company reserves the right to fill any vacant
positions as
it chooses and will not keep positions open for Booysens
employeesâ.
[35] On
the 4
th
April 1997 the union replied to the respondentâs letter of the 27
th
March. The union pointed out that at the meeting of the 25
th
February there had been
âno
agreement on the question of services and the meeting ended in
deadlockâ.
It
further said as there had been no such agreement, the union found the
respondentâs claim that the employees should have reported
for duty
on the 17
th
of March as histrionic and unfounded in the extreme. It said further:
â
... our members are willing to take the employment offer at Newtownâ.
The
union further stated that in such a case,
âthis
will be at no less favourable conditions they had at Booysens and
that their services shall be recognisedâ.
[36] The
respondent responded to the union by a letter dated the 7
th
April. In that letter it, inter alia, informed the union that the
employees
had
initially
been
given an opportunity to report for employment at Newtown on the 17
th
March. It said that there was an extension of time to the 4
th
April to give the employees a further opportunity to present
themselves for employment but, once again, the employees had failed
to do so and the deadline had expired. The respondent then stated
that it no longer had
âneed
to employ additional peopleâ.
[37] Subsequent
to the above exchanges of correspondence between the union and the
respondent, the union referred the dispute about
the fairness of the
dismissal of the employees to the Commission for Conciliation
Mediation and Arbitration for conciliation (
âthe
CCMAâ)
.
Conciliation attempts failed and the dispute was referred to the
Labour Court for adjudication.
The
appeal
[38] The
Court a quo found that the dismissal of the second and further
appellants was substantively unfair. This finding revolved
around two
issues. The one was that the union had insisted that the respondent
should simply transfer the employees from the Booysens
factory to the
Newtown factory. This proposal by the union was on the basis that the
terms and conditions of employment of the employees
at Newtown should
be no less favourable than those they had enjoyed at the Booysens
factory. The union also wanted the respondent
to recognise the
service periods of the employees which they had accumulated at the
Booysens factory. The other issue was that the
respondent had
rejected the unionâs proposal. It had insisted, instead, that it
was only prepared to offer the employees employment
in the Newtown
factory as new employees on the terms and conditions applicable at
the Newtown factory and in such positions as it,
in its discretion,
could appoint them. It was also not prepared to recognise their
service periods at the Booysens factory.
[39] The
respondentâs opposition to the unionâs proposal had as its basis
the fact that the respondent wanted to create a homogeneous
work
force in Newtown. The respondent feared that, if the employees from
the Booysens factory continued to be governed by the same
terms and
conditions of employment even at the Newtown factory, this would
create problems because, in the same factory, one would
find
employees doing the same work but enjoying different terms and
conditions of employment. Mr Taylor also testified that the
respondent
did not have positions for all the 53 employees in the
Newtown factory which would be required if they were to be appointed
on terms
and conditions no less favourable to them than those that
had governed their employment at the Booysens factory.
[40] The
Court a quo rejected Mr Taylorâs evidence that the respondent never
proposed to transfer 18 of the Booysens employees to
the Newtown
factory and that the transfer of 18 as proposed in the respondentâs
letter of the 20
th
November 1996 to the union related to a transfer that was to have
been effected earlier in that year. The Court a quo was fully
justified
in rejecting this part of Mr Taylorâs evidence.
[41] The
Court a quo proceeded to consider the question of whether or not the
respondent was justified in rejecting the unionâs
proposal for the
transfer of the employees. It held that, because in November 1996 the
respondent had itself proposed to transfer
18 of the Booysens
employees to the Newtown factory, it should have in the end
transferred all the employees to the Newtown factory.
It said that
the respondent could do this because the problems which it feared
would arise relating to employees doing the same job
being governed
by different terms and conditions of employment, would still have
arisen even if only 18 of the employees were transferred.
It said
that, if all the employees were transferred, the difference would
only have been one of degree. The Court a quo suggested
that, because
in that event the difference would only have been one of degree and
scale, the respondent should have transferred all
of the employees.
[42] The
Court a quo seems to have thought that there was not going to be much
of a problem between a scenario where the respondent
transferred
18 employees and one where it transferred 53 employees. Eighteen is
almost a one third of fifty three. It is possible
that transferring
18 employees would have been done in such a way as not to create the
type of problems which the respondent was
concerned about later in
the consultation process. In this regard it must be recalled that Mr
Taylor made it clear in his evidence
that there were some of the
Booysens employees whose terms and conditions of employment at
Booysens were less favourable than the
minimum terms and conditions
at the Newtown factory. In fact an examination of the letter which
contained the proposal to transfer
18 of the Booysens employees
reveals that, except for one employee, who was a driver, all the
others were general assistants. If
that is so, it is clear that a
transfer of 18 employees would in all likelihood not have created the
problem of a dual work force
that the respondent wanted to avoid. In
this regard I am of the view that the respondentâs concern of a
dual workforce was a legitimate
concern.
[43] The
union and the respondent could not reach agreement on the terms on
which the employees could take up employment in the Newtown
factory.
The union seems to have seen the respondentâs proposal as a measure
âto
avoid the dismissalsâ
(see sec 189(2)(I) of the Act) whereas the respondent seems to have
seen it as a measure
âto
mitigate the adverse effects of the dismissalsâ
(see
sec 189 (2)(a)(iv)) of the Act. In either event sec 189 (2) of the
Act required both the union and the respondent to
âattempt
to reach consensusâ
on such an issue. They did not reach consensus. The reasons why the
union did not accept the respondentâs proposal was that it
insisted
that the employees had to be appointed on terms and conditions which
were no less favourable than those that governed their
employment at
the Booysens factory and that their service periods had to be
recognised even for the purpose of employment at the
Newtown factory.
[44] With
regard to the service periods of the employees, the respondent took
the attitude that through severance pay it was prepared
to recompense
them for their service periods. The union did not regard this as
sufficient. The Court a quo dealt with this aspect
of the
disagreement between the parties on the basis that the service
periods of employees were more important than the respondentâs
concerns. It put it thus in par 46:
â...
the interests of the [second and further appellants] in the security
of their tenure must be preferred over the organizational
challenges
that would have confronted the respondent.â
I do not think that it is correct to approach the issue on the basis
of whose interests should be preferred. The question was whether
or
not the dismissal was substantively fair. In conclusion on the issue
of the substantive fairness of the dismissal, I am of the
view that
the dismissal was substantively fair. The Court a quo erred in
concluding the contrary. In the light of this the respondentâs
cross-appeal must succeed.
Did
the dismissal constitute a lock-out dismissal?
[45] On
this aspect of the appeal, the appellantsâ argument ran as follows:
the respondent wanted to continue employing the employees
but on
different terms and conditions and at the Newtown factory; in order
to achieve this, the respondent insisted that, before
the employees
could be dismissed at the Booysens factory, that they should accept
different terms and conditions of employment, namely,
those
applicable in the Newtown factory; when the union and the employees
did not accept the new terms and conditions of employment,
the
respondent dismissed the employees; such a dismissal constituted an
automatically unfair dismissal as contemplated by sec 187(I)(c)
of
the Act in that the dismissal was resorted to in order to
âcompel
the [employees] to accept a demand in respect of [a] matter of mutual
interest between the employer and employeesâ.
[46] The
Court a quo correctly rejected this contention. The second and
further appellants were employed at the Booysens factory.
The
evidence clearly established that there were operational requirements
which justified the dismissal of the employees who were
employed
there. That evidence was not contradicted. Accordingly, the reason
for the dismissal of the second and further appellants
could not have
been to compel the second and further appellants to accept any demand
of mutual interest. Quite clearly, the respondent
made the offer of
employment at the Newtown factory either as a way of avoiding the
dismissal of the second and further appellants
or as a way of
mitigating the adverse effects of the dismissal of the second and
further appellants. The respondent had certain terms
and conditions
of employment governing the employment of its employees who were
based at the Newtown factory. It did not want to
change those terms.
Those were going to remain the same irrespective of whether or not
the employees from the Booysens factory took
up employment at the
Newtown factory. To suggest that it did all of this because it
wanted to compel them to accept different terms
and conditions of
employment is devoid of any factual basis. The appellantsâ
contention that their dismissal constituted a lock-out
dismissal is
without merit and falls to be rejected.
Procedural
Fairness
[47] The
Court a quo found that the dismissal of the second and further
appellants was procedurally fair. The appellants appeal against
this
finding. Before us it was argued on behalf of the appellants that the
dismissal of the second and further appellants was procedurally
unfair in that it took place before the respondent exhausted the
consultation process. In substantiation of this submission two
matters
were pointed out. The one was that in its letter of the 24
th
February 1997 addressed to the union, the respondent had invited the
union to a meeting to consult it on the working of short-time
as an
alternative to retrenchment and yet at the meeting held thereafter
the respondent did not discuss short time. The second matter
pointed
out was that at the meeting of the 25
th
February 1997 the respondent raised
âthe issue of re-employment of the employees after retrenchment in
a manner never previously placed on the tableâ.
[48] It
is true that in its letter of the 24
th
February the respondent extended an invitation to the union to meet
with it for the purpose of consulting on the working of short-time
as
an alternative to retrenchment. It is also true that at the meeting
the respondent did not pursue the issue of short-time. However,
that
does not necessarily mean that the respondent acted unfairly by not
pursuing that matter. It was also open to the union if it
was
interested in having that issue discussed, to also raise it at the
meeting. The union did not raise it. Had it done so, there
is no
reason to think that the respondent would have refused to discuss it.
[49] It
seems probable that the reason why the respondent did not pursue the
issue of short-time is because it probably thought that
the employees
would be more interested in the offer of employment on a permanent
basis at the Newtown factory than in working short-time.
I would not
blame the respondent for that if that was the reason. In any event
there had already been consultation on the issue of
short-time and
the respondent had rejected it. The duty to attempt to reach
agreement on the matters which are required to be the
subject of
consultation is not that of the employer only but is shared by both
parties to the consultation process. If one party
becomes aware that
an issue which the parties should consult on is being left out of
consideration, such party must raise it. It
must not keep quiet in
the hope that, if its proposals are rejected and the retrenchment
takes place, it will then use that point
subsequently to say there
was no proper or adequate consultation.
[50] It
is true that at the meeting of the 25
th
February 1997 the respondent made a proposal to employ at the Newtown
factory all the employees facing retrenchment. It is also true
that
the respondent proceeded to retrench the employees on the 28
th
February. That the respondent proceeded to effect the retrenchment on
the 28
th
February even though it had only made its employment offer on the
25
th
February does not mean that there had not been proper consultation on
the issue. The position is that the union had already rejected
the
respondentâs proposal at the meeting but said it would consult with
its members and revert to the respondent. It consulted
with its
members and reverted to the respondent before the 28
th
February and said that the employees had rejected the proposal. In
this regard it must be recalled that the retrenchment had initially
been scheduled for the 13
th
December 1996 and the union requested that it be moved into the new
year. The respondent agreed and moved it back by a period of
about
ten weeks. But even after the retrenchment had
been
effected, the respondent continued to almost plead with the union and
the employees to see reason and accept its proposal. It
even moved
the deadline for the employees to start work at the Newtown factory
from the 17
th
March 1997 to the 4
th
April 1997. The union and the employees spurned that offer. In my
view they acted in an unreasonable manner in not taking up the
offer
and cannot now complain that there was no adequate consultation on
it. In any event that offer was not, it seems to me, made
by the
respondent in order to avoid the dismissal but to mitigate the
adverse effects of the dismissal. There was, in my view, sufficient
consultation. The union should take the blame for the fact that most
of the employees did not take up employment at Newtown.
[51] In
conclusion I am satisfied that the appellantâs contention that the
consultation process was not adequate cannot be upheld.
In the
result the appellantsâ appeal must fail and the respondentâs
cross-appeal must succeed.
[52] With
regard to costs, both parties approached the matter in their heads of
argument on the basis that costs should follow the
result.
Accordingly, costs will follow the result.
[53] In
the premises I make the following order:.
The
appeal is dismissed with costs.
The
cross-appeal is upheld with costs.
The
order of the Court a quo is set aside and is replaced by the
following order:
â
The
applicantsâ claim is dismissed with costs.â
______________
RMM
Zondo
Judge
President
I
agree
_____________
K
van Dijkhorst
Acting
Judge of Appeal
I
agree
_______________
R.G.
Comrie
Acting
Judge of Appeal
Appearances:
For
the appellants : Adv. H. van der Riet SC
Instructed
by : Cheadle Thompson and Haysom
For
the respondent : Adv. A Franklin SC
Instructed
by : Bowman Gilfillan Inc
Date
of argument : 15 May 2001
Date
of Judgement : 29 June 2001