South African Commercial Catering and Allied Workers Union and others v Mahawane Country Club (JA83/99) [2001] ZALAC 12 (14 September 2001)

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[2001] ZALAC 12
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South African Commercial Catering and Allied Workers Union and others v Mahawane Country Club (JA83/99) [2001] ZALAC 12; [2002] 1 BLLR 20 (LAC); (2002) 23 ILJ 902 (LAC) (14 September 2001)

17
IN THE LABOUR APPEAL COURT OF
SOUTH AFRICA
HELD AT JOHANNESBURG
Case No: JA 83/99
In the matter between
SOUTH AFRICAN COMMERCIAL
CATERING 1
ST
Appellant
AND ALLIED WORKERS UNION
SIMON KOKONG AND FIVE OTHERS
2
ND
to 6
th
Appellants
and
MAHAWANE COUNTRY CLUB 1
st
Respondent
_______________________________________________________________
JUDGEMENT
_______________________________________________________________
ZONDO JP
Introduction
[1] This is an appeal against a
determination that was made by the Industrial Court in terms
of
sec 46(9) of the Labour Relations Act, 1956 (Act NO 28 of 1956)
(
“the old Act”
) in a dispute between the appellants and
the respondent concerning an alleged unfair labour practice as
defined in sec 1 of that
Act. The second to the sixth appellants had
been employed by the respondent. They were dismissed on the 18
th
July 1996. After they had been dismissed, they instituted
proceedings in the Industrial Court in terms of sec 46(9) of the old
Act alleging that the respondent’s conduct in dismissing them
constituted an unfair labour practice and seeking an order of

reinstatement. The Industrial Court, after hearing evidence and
argument, decided that such conduct did not constitute an unfair
labour practice and dismissed the appellants’ claim. It is against
that determination that the appellants now appeal to this
Court.
The facts
[2] The relevant facts in this
matter are
largely undisputed. The respondent is a country
club based in Mpumalanga. With effect from the 15
th
January 1996 the respondent employed a new manager, one Mr Van der
Merwe. When Mr Van der Merwe took over as manager of the respondent,
the respondent was in a weak financial position. Eskom, on which the
respondent relied heavily, if not exclusively, for subsidies,
informed Mr Van der Merwe that it was giving him 12 months to turn
the respondent around failing which Eskom would cut its subsidy
and
the respondent would either have to close down or generate its own
funding.
[3] Mr Van der Merwe testified that
at various staff meetings he informed the staff that the future of
the respondent was hanging
in the balance. He also testified that,
when he took over as manager
of the respondent, the personnel
files needed to be updated. They were in such a state that he could
not tell, for example, which
employees had taken leave and how much
leave they were entitled to. Mr Van der Merwe sought to rectify this
situation by ensuring
that the personnel files were properly
updated. In this regard one of the decisions that were made was to
prepare written contracts
of employment which would be signed by
each employee and kept in each employee’s file. The respondent
referred to these
as service agreements. The records showed
that at some stage in the past some employees had signed certain
written contracts of
employment. Using an old contract of
employment; Mr Mavuso, the vice-chairman of the respondent, had
prepared what he considered
to be updated contracts of employment
which would be presented to the employees to sign.
[4] On a number of occasions during
the first half of 1996 the respondent asked its employees to sign
the service agreements. Some
of the employees signed the service
agreements but the second and further appellants did not. In June
1996 the appellants were
issued with warnings for refusing to sign
their respective service agreements. They were again asked to sign
the agreements and
were told that, if they failed to do so, they
would be dismissed. They still failed or refused to sign the service
agreements.
They were then dismissed on the 18
th
July
1996. It appears from their letters of dismissal that their
dismissal was summary.
Consideration of the fairness
of the dismissal
[5] As the second and further
appellants were dismissed for alleged misconduct and they dispute
the fairness of their dismissal,
the respondent must show that they
committed a material breach of their contracts of employment before
it can be said that it had
a right in law to terminate the
contracts. If it fails to show a material breach of the contracts in
circumstances where the dismissal
was summary, this will mean that
the respondent had no right in law to terminate the contracts. If it
did not have such a right
in law, then the dismissal will almost
invariably be unfair. If, however, it had such a right, that would
not be the end of the
inquiry. The respondent would still have to
show that it exercised that right in a fair manner.
[6] The first question that arises
in this matter is, therefore, whether the conduct of the second
and further appellants in refusing
to sign the service agreements
constituted a material breach of their contracts of employment. In
our law an employer only has
a right to summarily terminate a
contract of employment where the employee has committed a material
breach of the contract of employment.
The respondent labelled the
conduct of the second and further appellants as a
“failure to
comply with a reasonable official order”.
[7] Although an employee is obliged
to obey an instruction from his employer failing which he may be
disciplined, this does not
apply to a situation where the employee’s
refusal does not constitute a breach of the employee’s contract of
employment or
where the employee’s conduct cannot be said to be
unlawful.
As the second and further appellants were dismissed
for refusing or failing to sign written contracts of employment, the
respondent
had to show that it was a term of their contracts of
employment that they were obliged to sign the written contracts of
employment
that they were required to sign. The respondent has not
proved this.
[8] The respondent also did not
prove that the documents presented to the second and further
appellants to sign were only recordals
of the actual agreements
between the parties. In argument Counsel for the respondent
indicated that he could not dispute that the
documents included few
terms and conditions of employment. Accordingly the respondent has
failed to prove that, by failing or refusing
to sign such written
contracts, the second and further appellants acted in breach of
their contracts of employment.
[9] The second and further
appellants may have been ill-advised in making an issue of the
signing of the contracts but that is
a far cry from saying that they
acted unlawfully or in material breach of their contracts of
employment. The respondent was also
misguided in dismissing them
for such conduct. The effect of the conclusion that the respondent
failed to prove a breach
of the contracts of employment is
that the respondent had no right in law to summarily dismiss the
second and further appellants.
The dismissal of the second and
further appellants was therefore, in those circumstances, both
unlawful and unfair. It also constituted
an unfair labour practice.
In holding to the contrary, the industrial court erred.
Relief
[10] There remains the question of
what relief, if any, should be granted to the second and further
appellants. In their statement
of case they asked for reinstatement
with retrospective effect to the date of their dismissal. That date
is the 18
th
July 1996. The trial in the Industrial Court
was finalised in March 1998 when the determination was handed down.
That was just
under two years since the date of the dismissal. The
appeal in this Court was heard in March 2001. That means that it
took three
years for the appeal to be heard. The record of appeal
was delivered to the Registrar of this Court in terms of the Rules
on the
29
th
of August 2000 and the appeal was set down
for hearing on the 1
st
March 2001.
[11] From the above it is clear
that there was no delay in the appeal being heard once the record
was ready. It appears therefore
that the delay was between the date
of the handing down of the determination of the Industrial Court and
the date of the delivery
of the record. There has been no suggestion
that the delay was due to negligence or lack of diligence on the
part of any of the
parties. If the Industrial Court had made the
correct determination, namely, that the dismissal constituted an
unfair labour practice,
the period of just under two years between
the date of dismissal and the date of the determination would
certainly not have been
so long as to justify a refusal of
reinstatement.
[12] The question which arises in
this case is whether the long period of time, namely, just over five
years, which has lapsed between
the date of the dismissal of the
second and further appellants and the date of the finalisation of
this matter on appeal precludes
the granting of reinstatement. On
its own, it should not. However, it is a factor to be taken into
account together with all other
relevant factors in deciding whether
the relief of reinstatement should be granted. In any event this
Court must make such order
as, in its opinion, should have been made
by the court a quo unless special circumstances have arisen since
then which make it
inappropriate or incompetent to make such an
order.
[13] In the court a quo the
respondent led evidence to the effect that it had employed permanent
employees in the posts previously
occupied by the second and further
appellants and that there were no vacancies that could be filled by
the second and further appellants.
The respondent sought to use this
as one of the reasons why the second and further appellants should
not be granted reinstatement.
Mr Van der Merwe testified that, if
the second and further appellants were reinstated, he would not know
what to do with the respondent’s
current employees. He testified
that he was working very well with the current employees. He also
said that there was a very good
spirit in the work place. He asked
whether he would be expected to turn to the present employees and
tell them that he had no work
for them anymore.
[14] The answer to Mr Van der
Merwe’s problem is that it was wrong for the respondent to employ
new employees on a permanent basis
in circumstances where the
respondent knew that there was still pending litigation arising from
the dismissal of the second and
further appellants and that the
latter were still seeking reinstatement in their jobs. According to
Mr Mavuso’s evidence the
current employees were employed on a
permanent basis
“last November”.
It is not apparent from
the record whether Mr Mavuso said this before or after November
1997. If it was after November 1997, then
it would mean that the
current employees were made permanent in November 1997. If it was
before, it would mean that they were made
permanent in November
1996. In either case it was at a time when the respondent knew full
well that the litigation was still going
on. If it was November
1997, it would mean that the matter was part-heard when the
respondent decided to employ the current employees
on a permanent
basis.
[15] No reason has been given by
the respondent in this matter why it did not do what every
reasonable employer does when there
is litigation pending between
itself and its former employees about their dismissal in which they
seek reinstatement and employees
are needed to work in the meantime,
namely, to employ employees on a temporary basis or to employ them
on whatever basis but on
the condition that, their contracts of
employment will be terminated if the dismissed employees are granted
reinstatement. The
temptation to infer that the respondent adopted
the attitude that it would
“we will cross that bridge when we
come to it”
is irresistible.
[16] Even before the
Labour
Relations Act, 1995
was passed, our law had reached such a stage of
development that courts were required to lean towards granting
reinstatement when
a dismissal had been found to be unfair unless
the employer could show that reinstatement would be inappropriate.
If an employee
should not have been dismissed in the first place in
the sense that there was no valid reason for such employee’s
dismissal,
justice demands, generally speaking, that such employee
should be reinstated. The employer cannot, therefore, frustrate the
attainment
of justice by the device of simply employing another
employee on a permanent basis in the dismissed employee’s
position.
[17] The respondent can only have
itself to blame if the second and further appellants are reinstated
and it has to decide what
to do with its present employees. It is
true that, as Mr Van der Merwe testified in the court a quo, the
respondent may face litigation
from the current employees if it
dismisses them in order to accommodate the second and further
appellants. The respondent should
have foreseen that it was taking a
risk of this happening when it employed the current employees
without making it a condition
of their employment that their
contracts of employment would be terminated if the reinstatement of
the second and further appellants
was ordered. The respondent must
accept the consequences of its action in this regard.
[18] The respondent’s witnesses
also testified that the second and further appellants should not be
reinstated because there was
no longer any trust relationship
between the parties. Mr Van der Merwe emphasised that there was a
lot of trust between himself
and the current employees. The
question arises as to why this is so if, indeed, it is so. The
reason for the dismissal of the
second and further appellants was
not in any way related to dishonesty. Both parties may have been
misguided in handling the matter
of the signing of the service
agreements in the way that they did. That cannot on its own lead to
the disappearance of the trust
relationship.
[19] It cannot be said that, simply
because the second and further respondents refused to sign a
document that they were not under
an obligation to sign, that
resulted in the disappearance of the trust relationship that had
existed between the parties before
nor can it be said that the trust
relationship which had existed before has disappeared because the
second and further appellants
have sought to pursue their legal
rights through the courts. The trust relationship cannot also be
said to have disappeared because
of the time lapse since the
dismissal. I think that the position is simply that the respondent
would prefer to keep the current
employees rather than to have the
second and further appellants back. Such a preference does not go to
the serious issue of the
trust relationship. In any event when an
employee has been dismissed in circumstances where he should not
have been dismissed,
he cannot be denied reinstatement simply
because the system he has had to use in order to protect his rights
takes a long time
to have the matter finalised.
[20] In all of the circumstances I
am satisfied that no good reason exists to deny the second and
further appellants the relief
of reinstatement. Accordingly an order
of reinstatement will be made at the end of this judgement.
Should the order of
reinstatement be made retrospective? If so,
for how long should it be
retrospective?
[21] The appellants asked in their
statement of case that they be granted an order of reinstatement
with retrospective effect to
the date of their dismissal. The
financial position of the respondent is relevant in this regard.
Before Mr Van der Merwe took
over as manager of the respondent, the
respondent had had to close its restaurant. This had resulted in the
retrenchment of about
12 or 13 employees. Accordingly, Mr Van der
Merwe took over at a time when a lot of work needed to be done in
order to ensure
that the business of the respondent was conducted
in such a way that it remained financially viable and Eskom did not
cut its subsidy.
[22] In considering this part of
the matter, the Court must seek to do justice to both sides. I have
already held that the respondent
had no right in law to dismiss the
second and further appellants and should not have dismissed them.
There is no reason not to
accept that, had they not been dismissed,
they would have continued to work for the respondent in the interim
period.
[23] As I have said above, this
Court must give such order as, in its judgement, should have been
granted by the court a quo at
the time of the judgement of the court
a quo. In this case that was in March 1998. From the 18
th
July 1996 when the dismissal took place to March 1998 is
approximately 20 months. I am of the opinion that the reinstatement
order
that should be awarded to the second and further appellants
should not be retrospective to the date of dismissal. This is
because
the respondent’s stance that it was never told by the
second and further appellants what the nature of their difficulties
were
with the signing of the service agreements was not disputed in
any way. It is also because the respondent’s witnesses made it
clear that they would have been amenable to any changes to the
contents of the service agreements that the second and further

appellants might have wished to be made if they had suggested
changes.
[24] The second and further
appellants also contributed to this situation in that, had they
articulated their difficulties, if
there were any, to the
respondent, common understanding may have been reached. Of course,
the respondent must take a bigger portion
of the blame. That is why
reinstatement without any retrospectivity would be inappropriate. It
must not be forgotten that in the
present state of unemployment, the
second and further respondents have probably spent the most part of
the period without any income
Their suffering should not be
overlooked. In these circumstances I am of the view that the
reinstatement order that the industrial
court should have ordered is
one which would have been retrospective for at least 12 months. That
still leaves the second and further
appellants not having been paid
wages for just under one year.
[25] With regard to costs it
appears to me that the requirements of law and fairness dictate that
the appellants should be awarded
their costs on appeal and that in
the court a quo no order as to costs should be made. In the result
the order I make is as follows:-
The appeal is
upheld with costs.
The order of
the Industrial Court is set aside and replaced by the following
one:-
“
a) The dismissal of the second to the seventh applicants by
the respondent on the 18
th
July 1996 constituted an
unfair labour practice.
b) The respondent is ordered to reinstate the second to the
seventh applicants in its employment on terms and conditions of
employment
not less favourable to them than those that governed
their employment immediately prior to their dismissal and to accord
them all
such benefits as they would have been accorded had they not
been dismissed.
c) The order in 2 above is to operate with retrospective effect
from 12 months from the date of this order.
d) There is to be no order as to costs”.
RMM
Zondo
Judge
President
I
agree
D.M
Davis
Acting
Judge of Appeal
I
agree
B.R.
du Plessis
Acting
Judge of Appeal
Appearances:
For the appellants : Mr Modise
Instructed by : Routledge-Modise Attorneys
For the respondent : Mr Snyders
Instructed by : De Klerk Van Dyk & Snyders
Date of argument : 1 March 2001
Date of Judgement : 14 September 2001