Unitrans Zululand (Pty) Ltd v Cebekhulu (DA28/01) [2003] ZALAC 5; [2003] 7 BLLR 688 (LAC) (23 May 2003)

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[2003] ZALAC 5
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Unitrans Zululand (Pty) Ltd v Cebekhulu (DA28/01) [2003] ZALAC 5; [2003] 7 BLLR 688 (LAC) (23 May 2003)

IN
THE LABOUR APPEAL COURT OF SOUTH AFRICA
HELD
IN DURBAN
Case
no DA28/01
In the
matter between:
UNITRANS
ZULULAND (Pty) Ltd Appellant
and
MHAMBISENI
JOHNSON CEBEKHULU Respondent
________________________________________________________________
JUDGEMENT
________________________________________________________________
ZONDO
JP
Introduction
[1] The
appellant, a subsidiary of Unitrans Freight (Pty)Ltd, had certain
contracts which it operated in Kwa - Zulu Natal in 1998.
One contract
was a sugar contract in Amatikulu, another, a mining contract at
Richards Bay Minerals and a fuel depot run out of Empangeni.
It also
managed fuel distributions for Engen which, in turn, managed fuel
distributions for Total. Each contract was run by a management
team
in a specific geographic location. The contracts related to different
activities, either agricultural, mining or fuel. They
were operated
and managed totally separately from, and independently of, one
another.
[2] The
respondent was employed by the appellant as one of two assistant
depot managers for the appellant’s mining contract in Richards
Bay
Minerals. The appellant dismissed the respondent from its employ with
effect from the 31
st
January 1999 for its operational
requirements. In due course the respondent instituted an unfair
dismissal claim against the appellant
in the Labour Court and sought
reinstatement and the payment of backpay and costs. The appellant
defended the action. The Labour
Court, through Jammy AJ, found that
the respondent’s dismissal was substantively fair but procedurally
unfair and ordered the appellant
to pay the respondent compensation
equal to his salary for 12 months and costs. With the leave of the
Court a quo the appellant now
appeals
against the order for
the payment of compensation. To this end the appellant is challenging
the Court a quo’s finding that the respondent’s
dismissal was
procedurally unfair. The respondent has noted a cross-appeal against
the Court a quo’s decision not to order reinstatement.
To this end
the respondent is challenging the finding made by the Court a quo
that his dismissal was substantively fair.
Witnesses
in the trial
[3] In
the trial the appellant called two witnesses, namely, Mr Hidden, who,
at all material times, was the appellant’s human resources
manager,
and Mr Wellman, the depot manager for the appellant’s mining
contract at Richards Bay Minerals. The appellant gave evidence
and
called Mr Makhathini, also an employee of the appellant at the time,
as his witness.
EVENTS
SURROUNDING THE RESPONDENT’S DISMISSAL
[4] The
senior management structure in the Richards Bay Mineral contract of
the appellant consisted of a depot manager and two assistant
depot
managers. The one assistant depot manager was the respondent. The
other one was a Mr Wikus du Preez. During 1997/1998 there
was a
severe drought in the areas in which the appellant operated. That
drought had a very serious impact on the sugar cane operations
of the
appellant with the result that it became necessary for the appellant
to review its human resources. Furthermore, the appellant
was given
notice by Engen that Total planned to distribute its fuel itself from
the 1
st
January 1999 which meant that its contract
relating to the management of fuel distribution for Engen would not
be renewed. There
had also been significant increases in the fuel
price.
[6] The
events referred to above and their effects on the appellant’s
operations were discussed at a management forum meeting of
the
appellant early in October 1998. The management took the view that
these developments were such as to call for a review of its
previous
profit forecasts. The management reviewed these profit forecasts and
decided to reduce them drastically. A decision was
also taken to
reduce staff. It was thought likely that 29 employees would be
affected by the contemplated reduction of staff. The
fact that the
mining contract at Richards Bay Minerals had two posts for assistant
depot manager was also discussed. It was decided
that the post of
assistant deport manager occupied by the respondent be declared
redundant.
[7] Meetings were held on the 15
th
October and 10
th
November 1998. These were attended by
Messrs Hidden and Wellman as well as Mr Makhathini and the
respondent. A Mr Holmes also attended
the meeting of the 10
th
November. One Mr Khanyile, who was employed by the appellant as an
industrial relations officer working under Mr Hidden, attended
the
meeting of the 15
th
October as an observer. At this stage
it is not necessary to go into details about what each witness said
was discussed at each
of the two meetings. It suffices to say that
both the respondent and Mr Makhathini agreed that at the
commencement of the meeting
of the 15
th
October Mr Hidden
said that the management had taken a decision that the respondent was
dismissed with effect from the 30
th
November as a result
of drought on the sugar cane side of the appellant’s operations but
that he would try and find him an alternative
position elsewhere. Mr
Makhathini and the respondent also testified that, when asked certain
questions arising from this, Mr Hidden
repeatedly said that he did
not know as he was only a messenger bringing this message to the
respondent and refused to disclose the
identity of the person who had
sent him.
[8] Mr Hidden’s version included
that he had given the respondent and Mr Makhathini the background to
the appellant’s financial
circumstances, had indicated that the
appellant intended to terminate the respondent’s services with
effect from the 30
th
November, had told the respondent
that he would try and find an alternative position for him in
Mtubabuba but that later this could
not materialize. Mr Hidden also
said that he undertook at the meeting of the 10
th
November
to look for an alternative position for the respondent in the
Durban’s operations of the appellant. He also said that
the
respondent or Mr Makhathini had asked why the respondent – not
being on the sugar can side of the appellant’s operation -
was
selected for retrenchment when the drought had been in the sugar cane
operation of the appellant and, not on the mining side
of the
operations.
[9] On the 15
th
October
Mr Hidden also wrote a letter to the respondent. As the letter is
important, I reproduce the body thereof hereunder:-
OPERATIONAL REQUIREMENTS –
TERMINATION OF CONTRACT
With reference to our
discussion today, the severe impact of the drought on the cane
operations had demanded a review of the Company’s
operations and a
rationalization of human resources.
Given our obligations under
Section 189 of the Labour Relations Act read in conjunction with
clause 15 – Retrenchment Procedure
of the National Bargaining
Council Agreement, we have no alternative, in terms of our
operational requirements, but to notify you
of our intention to
terminate your contract of employment on 30 November 1998.
There are developments
elsewhere in the Unitrans Group and every effort will be made to find
alternative employment with the Group.
On behalf of management, I wish
to thank you sincerely for your contribution to the development and
success of Unitrans Zululand.
We wish
you everything of the best.
Cc
Depot Manager RBM – Mr K Wellmann”
As can be seen from that letter,
Mr Hidden told the respondent that
“we have no alternative, in
terms of our operational requirements, but to notify you of our
intention to terminate your contract
of employment
on 30 November 1998.”
[10] On the 25
th
November 1998 Mr Hidden addressed a letter to the respondent
confirming that his contract of employment was going to be terminated
on the 30
th
November. The respondent only received the
letter on the 1
st
December. On the 27
th
November the appellant wrote a letter to the respondent purporting to
withdraw the respondent’s retrenchment. That letter is important.
The body of the letter read:-
On 15 October 1998 I met with
you to discuss the severe impact of the drought and the country’s
economic climate on the Company’s
profit. I explained that it had
become necessary to review the Company’s operations and to consider
the rationalisation of the
Company’s Human Resources. Subsequent to
this meeting, I held further discussions with you to discuss the
rationalization and your
possible retrenchment.
During November 1998, the
Company has been attempting to find alternatives to retrenchment.
These include finding you alternative
employment elsewhere in the
Company and placing employees on short time.
On 25 November 1998 you were
given a letter advising you that your contract of employment would
terminate on 30 November 1998 but
that the Company would continue to
make every effort to find you alternative employment within the
Unitrans Group. Since receiving
this letter, you have expressed
certain concerns about your retrenchment. The Company has accordingly
decided to retract your retrenchment
and to engage in further
discussions with you regarding the rationalisation and appropriate
measures to avoid retrenchment. The Company
wishes you to make
representations regarding the rationalisation and any other issues
relating to retrenchments.
As required by Section 189 of
the Labour Relations Act, and in order to facilitate proper
consultation, we advise you as follows:
As stated above, it has become
necessary to review the Company’s operations and to consider the
rationalization of the Company’s
Human Resources as a result of
the severe impact of the drought on the cane operations.
29 employees are likely to be
affected by the rationalisation. The job categories in which they
are employed are as follows:
Assistant Workshop Foreman
Assistant Depot Manager
Contracts Manager
Contracts Supervisor
Admin Supervisors
Driver Trainer
Supervisor
Admin Clerk
Workshop Clerk
In the event that the
rationalization does take place, and the positions referred to above
are made redundant, retrenchments are
likely. As stated above, the
alternatives already considered by the Company include placing
employees elsewhere in the Company
and working short time,
In the event that here are no
alternatives to retrenchment, the method for selecting which
employees to retrench will be by depot
and by job category, based on
the principle of last-in, first-out.
Any retrenchments are likely
to take effect either in December 1998 or January 1999.
The Company proposes paying
severance pay of one weeks’ salary for every completed year of
service.
The Company is committed to
providing employees with every assistance in finding alternative
employment.
The Company is prepared to
offer you re-employment, in the event that you are retrenched, if
suitable vacancies arise.
The Company wishes to meet you
on 8 December 1998 to commence consultations with you regarding the
issues referred to above. You are
required to confirm with me that
you will be attending the meeting.
[11] In terms of the letters from
Mr Hidden to the respondent dated the 15
th
October and
25
th
November 1998 the respondent’s last day in the
appellant’s employment was meant to be the 30
th
November
1998. The 1
st
December was meant to be the first day when
he would no longer be required to report for work. The respondent
received a telephone
call from the appellant to collect a letter from
the appellant’s offices. He went to the appellant’s offices on
the 1
st
December and was handed the letter from Mr Hidden
dated the 27
th
November which has been reproduced above.
[12] The respondent testified
that, after learning from the letter of the 27
th
November
that the appellant was retracting his retrenchment, he was pleased
and thought that he was then going to be allowed to
continue
working. However, he said that when he telephoned Mr Hidden to
enquire whether he could return to work, Mr Hidden told him
not to
report for duty. Consequently the appellant did not report for work
for the period 1 December 1998 to 31 January 1999 but
was paid his
remuneration for that period.
[13] On the 10
th
December 1998 another meeting was held. It was attended by Mr Hidden,
Mr Makhathini and the respondent. The respondent’s version
was that
Mr Hidden was in a rush when he came to the meeting and that he
wanted to confirm whether the respondent had received the
letter
dated the 27
th
November which the respondent then
produced. Mr Hidden’s evidence was that he used his letter of the
27
th
November as an agenda and went through every point
raised in the letter and gave the respondent and Mr Makhathini an
opportunity
to deal with each point and to make proposals. Mr
Makhathini corroborated this part of Mr Hidden’s evidence but Mr
Makhathini emphasized
that Mr Hidden told them that there was nothing
that was going to change and that all he could do was try and get a
job for the respondent
elsewhere. Mr Makhathini admitted that Mr
Hidden did tell them at this meeting that he had been unable to find
alternative employment
for the respondent.
[14] On the 22
nd
December a firm of attorneys, acting for the respondent and Mr
Makhathini, wrote a letter to the appellant asking the latter to
clarify
the employment status of the two as the appellant had
initially given them letters of termination but thereafter such
termination
seemed to have been retracted. The response to the letter
came from the appellant’s attorneys initially by way of a telephone
call
to the respondent’s and Mr Makhathini’s attorneys and later
by way of a letter dated 23 December. In that letter the appellant’s
attorneys referred to what their client regarded as previous
consultations as well as the letters dated the 15
th
October, 25
th
and 27
th
November from Mr Hidden
to the respondent. With regard to the letter of the 27
th
November the appellant’s attorneys said that this letter had
conveyed the decision that the the respondent’s retrenchment was
retracted and
“our client continued to seek alternatives to the
retrenchment of your client”
. The appellant’s attorneys also
said in the letter that Mr Hidden had encouraged the respondent and
Mr Makhathini at the meeting
of the 10
th
December to use
the opportunity to look for alternative employment as they were not
required to report for duty. The appellant’s
attorneys stated that
the appellant intended holding a final consultation with the
respondent on 30 December 1998 and asked that,
if the respondent had
any proposals prior to the meeting, they should convey those in the
meantime.
[15] The last meeting was held
between Mr Hidden, on the one hand, and, the respondent and Mr
Makhathini, on the other, on the 30
th
December 1998. Mr
Hidden said that the purpose of that meeting was for the appellant to
explore one final opportunity to obtain proposals
for alternatives to
retrenchment but none was made by the respondent. In this regard Mr
Hidden said that the appellant was focusing
on alternative positions
within the freight company. He testified further that at the end of
the meeting he advised the respondent
that, in the absence of
proposals for alternatives to a retrenchment, the appellant would
have no option but to terminate the respondent’s
services at the
end of January 1999. Mr Hidden was asked what his attitude was to the
respondent’s retrenchment and to the consultation
process. He
answered that the appellant had provided its thinking, rationale and
proposals and, apart from a concern raised by the
respondent on the
method of selection and the involvement of a mining contract when the
problem arose from drought in the sugar cane
operation, there had
been no response to the appellant’s proposals and no challenge to
the proposals made by the appellant. He
said that it had been a
disappointing process as the appellant felt that it had really tried
to seek consensus.
[16] Under cross-examination Mr
Hidden was asked why it had been necessary to hold a further meeting
when, on his version, at the
meeting of the 10
th
December
he and the respondent and Mr Makhathini had discussed the
“same
sort of issues contained in the letter of the 27
th
November and there was no outcome”.
His answer was that the
need arose because the appellant wanted to
“provide additional
time for the [respondent]
to consider his situation and to
provide opportunity for response”
. He said that it was
frustrating that the respondent did not provide any information or
proposals to avoid the retrenchment. He conceded
that all along the
respondent’s contention was that he could not understand the
rationale behind the reason for his retrenchment.
Mr Hidden also
conceded that the reason why the respondent did not come up with
proposals on alternatives to retrenchment was that
he was contesting
the rationale for the decision to retrench in the first place.
[17] The respondent testified that
Mr Hidden told him and Mr Makhathini that up to that stage the
appellant had failed to find alternative
jobs for him in the Group.
The respondent said that Mr Hidden wanted to know from them whether
they had anything to say to him. Their
response, continued the
respondent, was to request to see the person who had sent him to them
and he said that they could not see
the person. The respondent said
that at that stage Mr Hidden asked them to wait outside his office.
He said that after about 30 to
40 minutes Mr Hidden called them in
and gave them letters of dismissal dated the 30
th
December
1998 to the effect that they were being dismissed with effect from 31
January 1999.
[18] In the letter of the 30
th
December addressed to the respondent, the appellant informed the
respondent that the rationalisation of its human resources had been
done on a depot by depot basis and job category by job category and
the method of selecting which employees would have their contracts
of
employment terminated was the “
Last in First out
” rule.
Under cross-examination the respondent was asked whether he had been
of the view that it would serve no purpose to discuss
the issues
relating to the retrenchment with Mr Hidden at the meeting of the
30
th
December. He answered in the affirmative and said
that was so because Mr Hidden had said that he knew nothing and he
was simply a
messenger sent by someone else. Mr Makhathini’s
evidence was that at the meeting of the 30
th
December Mr
Hidden said that he had failed to find alternative jobs for him and
the respondent and that the two were then on their
own.
The Court a quo’s finding
and the basis therefor
[19] The Court a quo’s finding
that the respondent’s dismissal was procedurally unfair was based
on its view that the adequacy
of the consultation process had to be
determined only on the basis of what occurred after the appellant had
withdrawn the notice
of retrenchment of the respondent by the letter
dated the 27
th
November. The Court a quo concluded that
the appellant’s decision to retract the retrenchment and, in the
appellant’s own words,
to “
commence
” consultations was
made because it had itself concluded that its prior attempts to
consult had not complied with the provisions
of sec 189. The Court a
quo held that there was nothing unfair or improper about the
appellant retracting the respondent’s retrenchment
and seeking to
commence the consultation process afresh provided that its conduct in
so doing was motivated by a genuine acknowledgment
of its
inadequacies “
and sincere and genuine intention, made in good
faith, to remedy the situation on an equitable basis.
”
[20] The Court a quo went on to
say that it was not convinced that the appellant had acted genuinely
and in good faith. It found that
after the 27
th
November
the appellant had tried to
“paper over the cracks”
in its
conduct prior to that date by merely going through the motions of
compliance with the relevant statutory requirements. This
accorded
with the submission that had been made on the respondent’s behalf.
In paragraph 35 of its judgement the Court a quo found
that “
(t)he
compelling impression which emerges from the testimony as a whole,
was that having, at a much earlier stage, immutably decided
that the
[respondent] should go, its purported compliance with fair procedure
in that context, was superficial, insincere and misleading.”
[21] In paragraph 34 read with
paragraph 33 of its judgement the Court a quo said, among other
things, that the appellant had not
been motivated by a genuine
acknowledgment of the procedural inadequacies of the dismissal and a
sincere intention to remedy the
situation on an equitable basis. It
said that the picture which the appellant sought to present of a
total commitment to the consultation
process was not one it could
accept unreservedly
“in the fact of the consistent and mutually
corroborative evidence of the [respondent] and Mr Makhathini.”
[22] The
Court a quo found that the respondent had been justified in his
conclusion that no purpose would be served by his engagement
in what
he regarded as a flawed exercise. The Court a quo preferred the
respondent’s version that Mr Hidden had said he was simply
a
messenger who had been sent to convey the message of retrenchment to
the respondent as opposed to the appellant’s version that
Mr Hidden
had not said that and had in fact fully engaged the respondent in the
consultation process.
[23] Mr Pillemer, who appeared for
the appellant, submitted that the Court a quo misdirected itself in
assessing the fairness of the
consultation process only with regard
to the period 27 November to the dismissal of the respondent. He
submitted that the Court a
quo ought to have had regard to the
discussions and other interactions between the parties that took
place prior to 27
th
November. The reason why the Court a
quo took that view was partly, if not mainly, that in its letter of
the 27
th
November the appellant had itself said that it
was going to “
commence”
consultations. This suggested that
it itself took the view that what had happened up to that stage had
not been consultations.
[24] It is
now necessary to consider the issues on appeal. It is convenient to
deal first with the cross-appeal because it relates
to the
substantive fairness or otherwise of the dismissal and, thereafter, I
shall consider the appeal which relates to the procedural
fairness of
the dismissal.
The cross-appeal
[25] It was contended on behalf of
the respondent that the Court a quo erred in finding that the
respondent’s dismissal was substantively
fair. The basis advanced
in support of this contention was that the substantive and procedural
fairness of the dismissal were so
intricately linked that, once the
Court a quo had found that the dismissal was procedurally unfair, it
could not find that it was
substantively fair because it was
impossible to decide whether dismissal was the only option available
when alternatives thereto
including bumping had not been properly
considered in the consultation process. This contention cannot be
upheld. In relation to
a dismissal, procedural fairness relates to
the procedure followed in dismissing an employee. Substantive
fairness relates to the
existence of a fair reason to dismiss. In
relation to substantive fairness the question is whether or not, on
the evidence before
the Court, and not on the evidence produced
during the consultation process, a fair reason to dismiss existed.
With regard to procedural
fairness, the question is not whether a
fair procedure was followed in Court. The question is whether, prior
to the dismissal, the
employer followed a fair procedure. The result
hereof is, therefore, that, if the evidence placed before the court
establishes a
fair reason to dismiss which was present at the time of
the dismissal, the dismissal is substantively fair. It does not
matter, for
purposes of determining the substantive fairness of the
dismissal, that such reason was not the subject of discussion during
the
consultation process. The fact that the reason for dismissal was
never a subject of consultation matters only at the level of
procedure
because in terms of sec 189 of the Act, it should be a
subject of consultation.
[26] There
was also an attempt made on behalf of the respondent during argument
to argue that the dismissal was substantively unfair
because there
were employees who had shorter service periods in the appellant’s
employment than the respondent who were performing
work that the
respondent could perform and who were not retrenched. The difficulty
with this argument is that Mr Hidden’s evidence
to the effect that
the respondent was not suitable for the work that those other
employees did was never challenged nor was it contradicted
by the
respondent. When this was pointed out to the respondent’s attorney
during argument, he conceded that no such contradictory
evidence had
been led. In those circumstances the cross-appeal cannot succeed and
it falls to be dismissed.
The appeal
[27] The Court a quo found that
the respondent’s dismissal was procedurally unfair. This was based
on the view taken by the Court
a quo that the process which the
appellant had embarked upon prior to the 27
th
November was
to be disregarded and the procedural fairness of the dismissal had to
be assessed only with reference to the process
that was followed
after the retraction of the respondent’s dismissal by the letter of
the 27
th
November. For its approach the Court a quo relied
on the last sentence in the appellants letter of the 27
th
November in which the appellant itself said to the respondent that it
was seeking “
to commence consultation
” on the issues
referred in the letter. It was submitted on the appellant’s behalf
that the Court a quo erred in adopting such
an approach.
[28] The appellant’s letter of
the 27
th
November is very critical to the assessment of
the procedural fairness of the respondent’s dismissal in this
matter. One reason
why the letter is significant is that the evidence
established quite clearly that the decision to make the respondent’s
position
redundant and to choose him as the one who would not
continue as assistant depot manager was made before the 15
th
October and, therefore, before there was any discussion of any kind
with him. The result hereof is that there can simply be no doubt
that, to the extent that it can be said that the meetings of the 15
th
October and 10
th
November were consultations, the
consultation which took place before the 27
th
November was
fundamentally flawed. So flawed was the process that, had the
appellant not written the letter of the 27
th
November
seeking to retract the respondent’s retrenchment, there could have
been no doubt that the respondent’s dismissal was
procedurally
unfair because the consultation did not precede but it followed the
decision to choose the respondent for dismissal.
There can also be no
doubt that the reason why the appellant wrote the letter of the 27
th
November purporting to withdraw the respondent’s dismissal was that
it realised that there had not been a proper consultation.
[29] Another reason why the
appellant’s letter of the 27
th
November is significant
is that, if the appellant was entitled to withdraw the dismissal and
then seek to commence or continue with
the consultation process, then
it may well be that the appellant was able to rectify what otherwise
was a flawed consultation process.
It was not argued on behalf of the
respondent that the appellant was not entitled to withdraw the
dismissal since it had already
conveyed to the respondent its
decision to dismiss him. See
University of the North v Franks &
others (2002) 23 ILJ 1252 (LAC)
where it was decided that an
employer has no right to unilaterally withdraw a dismissal once the
dismissal has been conveyed to the
employee. It, would, therefore, be
inappropriate to consider that issue. What will, therefore, determine
whether the respondent’s
dismissal was or was not procedurally fair
is whether it can be said that the interaction between Mr Hidden, and
the respondent between
the 27
th
November and the 31
st
January 1999 constituted a fair procedure despite the fact that the
interaction prior to the 27
th
November was demonstrably
unfair. I now turn to consider this question.
Was the procedure followed
after the 27
th
November fair?
[30] Mr Pillemer submitted that
the respondent’s dismissal was procedurally fair and drew attention
to the various meetings that
the appellant’s Mr Hidden held with
the respondent on 15October, 10 November, 10 December and 30 December
1998. He also drew special
attention to the letter of the 27
th
November that Mr Hidden wrote to the respondent. He submitted in
effect that it was difficult to see what more the appellant could
have done because meetings were held at which the respondent had
ample opportunity of making representations and proposals.
[31] The attorney who appeared for
the respondent argued that no weight could be given to the purported
consultation process that
the appellant attempted in this case. He
submitted that this was because it was clear from the evidence that
the appellant made the
decision to dismiss the respondent even before
the latter could be consulted. It was submitted on the respondent’s
behalf that
the appellant had first decided to dismiss the respondent
and then he consulted with him. The argument was that the appellant
simply
went through the motions. It was submitted that the attempt by
the appellant to legitimize the consultation process by retracting
the respondent’s retrenchment did not make any difference. In this
regard the respondent’s attorney submitted that the appellant
did
not withdraw its decision to declare the respondent’s post
redundant. He persisted in the submission that the dismissal was
procedurally unfair.
[32] The first question to decide
is what role the interaction between the appellant and the respondent
before the 27
th
November must play in deciding whether the
respondent’s dismissal was procedurally unfair. As already
indicated above, the Court
a quo took the view that any
consultations which took place during that period should be
disregarded. As I have already indicated
above, such consultation as
may have taken place prior to the 27
th
November was, in my
judgement, without any doubt, completely flawed. By the time the
appellant had its first discussion with the
respondent on the
retrenchment, it had already made its decision to dismiss him. That
this is what happened is supported by the respondent’s
evidence
that, when he entered the office where Mr Hidden was present on the
15
th
October to have a meeting with the latter, Mr Hidden
told him that he was sorry to inform him that his services would be
terminated
on the 30
th
November. It is also supported by
Mr Makhathini’s evidence that, after he had arrived at the meeting
of the 15
th
October, Mr Hidden said precisely that.
Further support for this is to be found in Mr Wellman’s evidence.
Mr Wellman was asked
the question: “
So, in short, Mr Wellman, if
I understand you correctly, the purpose [of the meeting of the 15
th
October 1998] was to tell [the respondent] about the decision which
had been taken. Is that so?”
Mr Wellman answered:
“correct”.
The respondent’s attorney also put a similar question to Mr
Hidden and got an affirmative answer. The record reflects the
questions
and answers between the respondent’s attorney and Mr
Hidden thus:
“So in other words this was just merely to inform
him as to what was about to happen?… That is correct.
And at that stage had it
already been decided that he was one of the candidates for
retrenchment? … That is correct.”
Of course, the letter which
Mr Hidden wrote to the respondent on the 15
th
October 1998
also made it clear that the decision to dismiss him with effect from
the 30
th
November had been taken already.
[33] Mr Hidden tried at some stage
during his evidence to suggest that no decision had been made by
the 15
th
October to dismiss the respondent but that the
appellant only had an intention to terminate his contract of
employment and wanted
to discuss that intention with him. I do not
think that this makes much, if any, difference. An employer should
not form an intention
to terminate an employee’s contract of
employment for operational requirements before consultation takes
place with the employee
concerned or his representative. In any event
it is clear from the last paragraph of Mr Hidden’s letter of the
15
th
October that the appellant had made its decision to
dismiss the respondent. That is why in that paragraph Mr Hidden even
thanked
the respondent for his contribution to the development and
success of the appellant and wished him everything of the best.
[34] In fact Mr Hidden was
confronted with this question during his cross-examination. It was
put to him that in effect what had occurred
before the 27
th
November did not constitute consultations and that, if there had been
consultations prior to the 27
th
November, he would not
have written in the last paragraph of that letter about commencing
consultation. He was then asked whether
he disputed what was being
put to him. His answer made little, if any, sense in relation to what
had been put to him. Indeed, he
did not dispute what had been put to
him. His answer was:
“... M’Lord, my expectation of the issue of
consultation is that it is a two-way process, and certainly my
experience up to the
meeting of the 10
th
December was that the amount of response was extremely limited from
the [respondent]”
[35] With regard to the
appellant’s criticism of the Court a quo’s decision to disregard
the consultation process before 27 November
1998, it needs to be
pointed out that, in the last paragraph of Mr Hidden’s letter of
the 27
th
November withdrawing the respondent’s
retrenchment, Mr Hidden pointed out on behalf of the appellant that
the appellant would now
“
commence”
the consultation
process. What the appellant was conveying through that was
effectively that what had happened before was not to
be regarded as
consultation and that the consultation was the one that would
commence after that letter. When the Court a quo held
that the
purported consultation that took place before the 27
th
November had to be disregarded, it referred to the fact that the
appellant had stated in the letter of the 27
th
November
that it would “
commence
” consultations with the
respondent. In these circumstances I do not think that it is open to
the appellant to criticise the Court
a quo for disregarding the
purported consultation that occurred prior to the 27
th
November when it itself gave the impression that it was starting the
consultation process afresh after the 27
th
November.
[36] In the light of the above the
purported consultation that the appellant embarked upon between the
15
th
October and the 27
th
November was, in my
judgement, so fundamentally flawed that it could not assist the
appellant in any way on the question whether
the dismissal was
procedurally fair.
[37] In my judgement, the critical
question, as far as the procedural fairness of the dismissal is
concerned, is whether the consultation
that the appellant embarked
upon between the 27
th
November and 30 December constituted
a fair procedure. It was contended on the respondent’s behalf that
the consultation that took
place after the 27
th
November
was also a farce and still left the dismissal procedurally unfair.
The argument was still that the appellant had made its
decision to
dismiss the respondent and it was simply going through the motions.
It was submitted in effect that, even though the
appellant withdrew
the retrenchment that was to be with effect from the 30
th
November, this was meant to create an appearance of a bona fide
process. It was pointed out that the appellant did not withdraw its
decision to declare the respondent’s post redundant and that that
decision continued to stand during the consultation process after
the
27
th
November.
[38] It would seem from the
paragraph just below the list of positions in Mr Hidden’s letter of
the 27
th
November that, at least on paper, the respondent
contemplated that the positions referred to which included the
respondent’s position
were yet to be declared redundant. I shall
assume in the appellant’s favour that by implication it had
withdrawn its decision to
declare the respondent’s position
redundant.
[39] There are, however, at least
two matters that, in my view, support the Court a quo’s finding
that even during the period
after the 27
th
November the
appellant was going through the motions and was seeking to “
pepper
over the cracks
” in its consultation with the respondent. The
one matter is that the appellant did not call a meeting of all the
employees who
could potentially be affected or their representatives
and consult them but simply identified the employees that it wanted
to dismiss,
took the decision to dismiss them, retracted that
decision and thereafter consulted the employees and proceeded to
give effect to
its decision to dismiss them. What the appellant
should have done was to issue a notice to employees generally and
indicate that
it was contemplating a retrenchment and invite them or
their representatives to a consultation process. That would have
entailed
that the other assistant depot manager who was the
respondent’s colleague and others would also be part of the
consultation process.
There is no suggestion at all that the
appellant ever had a consultation with the other assistant depot
manager and other employees
other than the ones it sought to dismiss.
The respondent as well as the other assistant depot manager ought to
have been regarded
as having been potentially at risk for dismissal.
It is only an agreement reached on who would be retrenched or the
implementation
of either agreed or fair and objective selection
criteria (decided upon after consultation) that would have dictated
who in the end
was retrenched. That is not what the appellant did.
The appellant first identified which employees it sought to dismiss,
sought to
consult with them and ultimately dismissed them.
[40] The other matter that, in my
view, supports the Court a quo’s finding that, even after the 27
th
November the appellant was going through the motions when it
purported to consult the respondent is the appellant’s decision
preventing
the appellant from reporting for duty from the 1
st
December onwards and the reason for such prevention. The respondent’s
attorney took this issue up during the cross-examination
of Mr
Hidden and asked why, if the dismissal was for operational
requirements, the appellant was not required to work but was paid.
Mr
Hidden’s answer was that the appellant’s intention in not
allowing the respondent to work during the period was
“to
provide him with every opportunity to find alternative employment
himself in that period.”
Mr Hidden confirmed that this was
during a period when consultations were still continuing.
[41] The appellant’s conduct in
keeping the respondent away from work so that he could look for
alternative employment during that
period despite the fact that
consultations were still to commence reveals that in the appellant’s
plans the respondent remained
dismissed after the 30
th
October despite the purported retraction of that dismissal but only
the date of dismissal was changed. Otherwise, there is no explanation
for the appellant’s decision that the respondent should look for
alternative employment even before the commencement of fresh
consultations.
In any event that attitude and conduct on the
appellant’s part are consistent with the evidence given by both the
respondent and
Mr Makhathini that Mr Hidden told them that there was
nothing they could do which would make the management change their
decision.
This is evident from the following of Mr Makhathini’s
evidence under cross - examination:
“Mr. Alexander
Now at
that particular meeting on the 10
th
of December, Mr Hidden gave evidence in this Court that he used the
contents of that letter as an agenda and that he moved through
all
the issues contained in that letter. Is that correct? .... Ja, he did
go through.
And did he discuss the various
issues contained in the letter with both you and Mr. Cebekhulu? .....
Yes, he did.
And did he give you an
opportunity to make representations regarding all those issues?......
Ja, the only thing he says, he says this
thing is final and
management has decided these are just formalities, as I understand
it”
.
[42] When Mr Makhathini was
thereafter asked under cross - examination whether Mr Hidden had
given him and the respondent an opportunity
to make representations
at the meeting of the 10th December, he replied:
“Ja, the only
thing that he said, he also said there’s nothing going to change
but he can try maybe to get us a job somewhere
else. That’s what he
said. So it was not an input from our side, it’s
.....”
[inaudible].
[43] In the light of all the
above, I conclude that the appellant was simply going through the
motions when it purported to consult
with the respondent both before
and after the 27
th
November. It had made its decision that
the respondent would be dismissed unless it found an alternative job
for him. It was unfair
for the appellant to first decide to declare
the respondent’s position redundant, to make the decision to
dismiss the appellant
and only thereafter to consult with him. I,
accordingly, also find that the respondent’s dismissal was
procedurally unfair and
there is no basis to interfere with the
finding to that effect by the Court a quo. Accordingly, the appeal
falls to be dismissed.
[44] On the issue of costs, the
position is that argument on the cross - appeal took so negligible an
amount of time that costs relating
to it should follow the costs of
the appeal because the appeal took up virtually the whole time of
argument.
[45] In
the premises the appeal is dismissed with costs. The cross-appeal is
also dismissed and any costs arising from the cross -
appeal will be
costs in the appeal.
___________
Zondo JP
I agree.
___________
Davis AJA
Appearances:
For the
Appellant: Mr M. Pillemer SC
Instructed
by Deneys Reitz Inc.
For the
Respondent: Mr Z.E. Buthelezi
Instructed
by: Buthelezi Attorneys
Date of
judgement: 23 May 2003
Date
of hearing: 3 September 2002
IN THE
LABOUR APPEAL COURT OF SOUTH AFRICA
(
HELD
AT DURBAN
)
Case
Number: DA 28/01
In the
matter between
:
UNITRANS
ZULULAND (Pty) Ltd
Appellant
and
MHAMBISENI
JOHNSON CEBEKULU
Respondent
JUDGMENT
Du
Plessis AJA
:
1. I
have read the judgment of my colleague Zondo JP and I agree with the
order he proposes. My reasons for dismissing the cross-appeal
differ
from those of my colleague however.
As is
pointed out in paragraph 25 of my learned colleague’s judgment,
counsel for the respondent contended that the respondent’s
dismissal was substantively unfair because the substantive and the
procedural fairness of the dismissal “were so intricately
linked
that, once the Court
a quo
had found that the dismissal was
procedurally unfair, it could not find that it was substantively
fair...” My learned colleague
rejects the argument in principle.
In my respectful view it should not be rejected in principle, but
only on the facts of this
case.
3. The
Labour Relations Act, 66 of 1995 (the Act) makes a distinction
between
“
unfair
dismissals” and dismissals that are “unfair only because the
employer did not follow a fair procedure” (Section 193(2)(d);
s
194(1)). In my view this distinction does not justify an inference
that substantive fairness and procedural fairness will always
fall
into separate, impermeable compartments. There may be circumstances
in which the procedural fairness and the substantive fairness
of a
dismissal are so inextricably linked that the dismissal cannot be
fair in the absence of a fair procedure. There may also be
circumstances in which it will be impossible after the event to
determine that the dismissal was fair despite the failure to follow
a
fair procedure.
4. The
procedure prescribed in section 189 of the Act is relevant in this
case. The section obliges employers who contemplate dismissing
one
or more employees for reasons based on operational requirements, to
follow the consultative process prescribed in the section
(Section
189(1)). The purpose thereof is to endeavour to achieve consensus
as to, among others, appropriate measures to avoid the
dismissals
(Section 189(2)(a)). The consultative process is a measure aimed at
ensuring that the dismissals themselves are fair.
An employer who
decides to dismiss an employee for operational reasons without
consulting in terms of section 189, may find it impossible
to prove
that nothing the other consulting party could have said could have
changed the decision as to the need to dismiss. To hold
otherwise
will reduce the consultative process to a mere formality that can be
ignored at the risk only of paying compensation as
provided for in
section 194(1) of the Act.
In this
case the evidence established that the appellant was facing
difficult business conditions that adversely affected its
profitability.
The respondent did not seriously challenge the
appellant’s decision to retrench. The respondent’s attack was
aimed at the
decision to retrench him and not other employees whom
the respondent identified. The appellant proved that the respondent
was
not suitable for the work that those other employees did. There
is no basis in the evidence to hold that a proper consultative
process would have affected the decision to retrench the respondent.
6. In
the result I agree with the order proposed by the learned judge
president.
BR
du Plessis AJA
Date of judgment: 23
May 2003