Highveld Steel and Vanadium Corporation Limited v National Union of Metalworkers of South Africa and Others (JA29/02) [2003] ZALAC 21; [2004] 1 BLLR 11 (LAC); (2004) 25 ILJ 71 (LAC) (20 November 2003)

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[2003] ZALAC 21
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Highveld Steel and Vanadium Corporation Limited v National Union of Metalworkers of South Africa and Others (JA29/02) [2003] ZALAC 21; [2004] 1 BLLR 11 (LAC); (2004) 25 ILJ 71 (LAC) (20 November 2003)

IN THE LABOUR
APPEAL COURT OF SOUTH AFRICA
(HELD
IN JOHANNESBURG)
Case
No.:
JA 29/02
In
the matter between:
HIGHVELD
STEEL AND VANADIUM CORPORATION LIMITED
Appellant
and
NATIONAL
UNION OF METALWORKERS
OF SOUTH AFRICA
First Respondent
P
NGWENYA AND 67 OTHERS Second and
Further Respondents
________________________________________________________________________
JUDGMENT
________________________________________________________________________
COMRIE
AJA :
[1.]
The
appellant (Highveld) is a large scale producer of steel and ferro
alloy products which it sells on the domestic and international
markets. In order to remain competitive it embarked, over a period
of time, on a succession of exercises to cut production costs
and
improve efficiency. In July 1999 Highveld commenced a round of
consultations with the affected unions and in particular with
the
first respondent, the National Union of Metalworkers of South Africa
(Numsa). These consultations were protracted and were punctuated
by
various disputes. One such dispute led to an application in the
Labour Court for an interdict. The application was settled and
the
talks were resumed.
[2.]
Eventually,
on 17 January 2000, Highveld informed the unions that it regarded the
consultation process in terms of
s. 189
of the
Labour Relations Act
66 of 1995
as being at an end. It further informed the unions of its
intention to retrench 77 employees, most of whom were members of
Numsa.
Over 70 employees were in fact retrenched by the end of the
month.
[3.]
Numsa,
on behalf of its members and some others (the individual applicants)
challenged the fairness of these dismissals in the Labour
Court.
After a trial of some length
Maleka
AJ
held that the
retrenchments were substantively fair, but procedurally unfair. The
learned Judge ordered Highveld to pay each of
the individual
respondents, subject to certain exclusions, compensation equivalent
to twelve months’ remuneration calculated at
the rates applicable
immediately before the retrenchment, and costs. With leave granted
by the Court
a quo
Highveld appeals
against the order of compensation awarded by the Labour Court which
was based on the finding that the dismissals
were procedurally
unfair. There is no cross-appeal.
[4.]
The
trial Judge held:
“
20. I agree
with Mr Barrie, who appeared on behalf of Highveld that Numsa adopted
a particular strategic approach to the consultation
process, namely
to delay the implementation of the retrenchments as much as possible.
In my judgment, that approach, however much
regrettable, did not
relieve Highveld of its duty to implement the retrenchments in a
manner which was fair and objective.”
I agree with
that assessment. The learned Judge then proceeded to find that
Highveld had failed in that duty in three major respects.
In summary
these were:
the particular
employees to be retrenched were identified for the first time in a
list which was furnished to Numsa on 17 January
2000, concurrently
with Highveld’s declaration that consultations were closed.
Although the listed individuals fell substantially
within the
category of job grades which Highveld had decided to abolish (and
which had been the subject of consultations), “there
is no
evidence to show how that list was arrived at.”
not all of the
employees who fell within the affected job grades were retrenched.
Others remained and continued to be employed.
The Court was not
satisfied that the selection and inclusion of the listed employees
“was achieved through an agreed selection
process or a process
which was fair and objective.” Previous selection criteria were
not shown by evidence to be relevant.
the timing of
the implementation of the retrenchments, which followed immediately
upon disclosure of the list, was unfair.
[5.]
The
employees who were retrenched worked in four divisions and fell into
several classes. The first main class consisted of “artisan
helpers” in two divisions of Highveld’s works at Witbank. They
were unskilled, and their work was to carry the tools of artisans
and
on occasions to assist such artisans in a physical way. Highveld
concluded that, subject to certain exceptions where a second
pair of
hands was required, artisan helpers were an expensive luxury which
could no longer be afforded. Overseas competitors did
not employ
such persons. Highveld introduced an education scheme in terms of
which helpers were encouraged to improve their skills
so as to
qualify as “utility men”, who would be able to perform a wider
range of tasks. Many helpers qualified, but others did
not. Most of
the latter were “pooled” as general workers and eventually a
substantial number of them were retrenched.
[6.]
The
second main class of retrenched employees consisted of unskilled
cleaners. They fell into various sub-groups which will be considered
in due course. Then there is a third class of miscellaneous
employees in various divisions who were considered by Highveld to be
redundant for various reasons. It may be noted that the trial Court
did not distinguish between the different classes and sub-groups
of
employees, but held that all the individual applicants had been
unfairly treated. The few applicants who were excluded from relief,
were excluded for other reasons. Likewise, when it came to the
question of compensation, the trial Court drew no distinction between
the different categories of employees.
[7.]
In
view of the conclusions reached by the Court
a
quo
, and the
contentions on appeal, it is necessary to set out an overview of the
consultation process, paying particular attention to
whether it was
properly concluded and to the questions of the selection criteria and
the timing. On 23 July 1999 Highveld gave the
unions notice in terms
of
s. 189
of the
Labour Relations Act of about
80 potential
dismissals for operational reasons. At early meetings with the
unions motivation for redundancies was furnished and
selection
criteria were discussed. Numsa favoured a variation of LIFO, whereas
Highveld preferred a skills-based approach. Numsa
suggested the
introduction of a four shift system and a concommittant reduction in
overtime. The numbers of potential retrenchees
fluctuated. The
union began to ask for information (i.e. documentation) on the need
for retrenchment.
[8.]
Negotiations
were conducted for Highveld for the most part by Mr Hugo, its
assistant general manager of human resources. On 30 August
1999 he
sent a detailed document to the unions entitled: “Early
Retirement and Redundancies”. With regard to redundancies
it
itemised 89 specified positions by division or department, and it
furnished reasons for the various possible retrenchments. Examples
of such reasons were: “position no longer exists”;
“outsourcing”; and “surplus to requirement”. While some of
the
specified positions later fell out of the picture, and others
were later added, many of the employees who were eventually
retrenched
can be found by description in this listing. In the flat
products department, 9 artisan helpers and 2 “slabyard” were said
to
be redundant because “position no longer exists”. “Slabyard”
were later better described as slabyard cutters; 3 were dismissed;

and the reason changed. Under iron plant 20 artisan helpers were
specified for the reason: “members reduced by 50 %”. There
was
an asterixed note to this item, reading:
“
*The criteria
to be used will be as per the attached schedule.”
The schedule in
question, headed “Redundancy Criteria” , revealed a points system
which took into account factors such as years
of service, age,
disciplinary record, sick leave, skills and education. Those artisan
helpers in iron making who fared the worst
would be considered
redundant.
[9.]
In
the light of what had gone before, it is in my view fair to say that
Highveld had indicated some selection criteria for the various
positions, even to the extent of drawing a distinction between
artisan helpers in one division (flat products, part of the steel
division) and artisan helpers in another division (iron making).
Highveld had previously indicated that it was not in favour of
using
LIFO as a selection criterion.
[10.]
At
subsequent meetings, prior to the interdict application, there was
more discussion of the selection criteria among other subjects.

After the application was settled, Highveld gave notice of a meeting
“to further discuss the planned redundancies”. The meeting
was
held on 23 September 1999 and Numsa was represented among others by
Mr Daniels, who was the union’s internal legal adviser.
Highveld
regarded this as a resumption of the consultations that had commenced
in July. In evidence Mr Daniels initially conceded
this on more than
one occasion; but at the end of his evidence he sought to retract
this concession and claimed that the talks were
starting afresh. Mr
Daniels was new to the matter and I have no doubt that the meeting of
23 September was a resumption of the
consultations, even though the
agenda changed in some respects. At the meeting detailed
presentations were made in respect of the
various divisions and
indications were given of potential redundancies, some of them in the
longer term.
[11.]
In
the ensuing weeks there were disputes about the disclosure of
information and regarding its confidentiality. The parties
eventually
signed a confidentiality agreement in November. The union
also sought to achieve a collective agreement on job security. There
was another dispute about whether certain provisions of the “house
agreement” were applicable to the consultation. I should
mention
that it appears to have been the attitude of Numsa at this point that
the need for retrenchment should be debated first,
and that the
selection criteria should, if necessary, be discussed later. This
may account for the fact that from September onwards,
the union’s
input on such criteria did not amount to much.
[12.]
Despite
the difficulties which arose, consultations continued. On 15 October
1999 Highveld sent an important document to Mr Daniels.
It proposed
a meeting to discuss further motivations of “the proposed
divisional retrenchments in the following categories of
employees”
of which details were furnished. The positions under review were
listed by division and by position. The numbers were
given and the
reasons provided. There was a summary which read thus:
“
Number
of positions
Iron
Plant 38
Structural
Mill 8
Flat
Products 12
Engineering
Services 16
Human
Resources 21
____
TOTAL 95
.”
Four divisions
were involved: iron, steel (which included structural mill and flat
products), engineering services, and human resources.
The two latter
divisions were new to the process; at the same time some other
planned redundancies were dropped for the time being
at least. It
became common cause during the trial that it was this total of 95
which was eventually reduced to 77 in January 2000.
[13.]
It
may be helpful to compare the two totals (ignoring for the moment the
exclusions made by the learned trial Judge):
15/10/99 17/1/2000
Iron Plant –
artisan
helpers 18 19
belt
cleaners 9 7
other
cleaners 11 5
Structural
Mill and Flat Products –
artisan
helpers 16 or 17 16
slabyard
cutters 3 3
Engineering
Services –
motor
rewind workshop 9 5
aircon
workshop 4 -
test
department 3 3
Human Resources
–
single
quarters 9 2 waiters
1
cook
personnel cleaners 12
15
cleaners
______
77
[14.]
Some
commentary on this comparison is necessary. First, with regard to
the artisan helpers in iron making, whose numbers were being
reduced,
selection criteria (the points system) had been proposed on 30
August. Second, with regard to artisan helpers in the structural
mill and flat products division, it is not clear from the typescript
whether the proposed number was 16 or 17. Third, as to engineering
services, the proposal to close the air-conditioning workshop was
later abandoned or postponed. Further, the motor rewind workshop
(armature rewinding) was replaced by a “strip and quote” facility
of 3 positions. Fourth, in human resources, the personnel
cleaners
appear to have been the cleaners employed at the change houses which
(like the single quarters) were to be outsourced.
[15.]
The
next important meeting for present purposes occurred on 7 December
1999. At that meeting the new grading system for employees,
which
had already been introduced, was explained. It meant that unskilled
labourers, including artisan helpers, “would disappear
from the
scene.” A purpose of the meeting was to discuss the redundancies
proposed on 15 October,
supra
.
There was no material change to the figures. Mr Marshall spoke for
the iron making division. He was then assistant general manager,
iron making production services and mining. In response to questions
he is reported in the minutes to have said:
“
(a) whether
artisan helpers had been tested for utility men position. Mr
Marshall stated that all had been tested but that there
were
insufficient utility men positions available to accommodate the 18
artisan helpers. A policy decision had been made that artisan
helpers are no longer required.
Cleaner
positions were no longer needed as a result of automation and
outsourcing.”
Mr Sherlock
(works manager) spoke for flat products and the structural mill, and
Mr Frost (service manager) for engineering services.
He mentioned
the “strip and quote” facility. With regard to the test
department (weighfeeder), he said that “cleaning and
maintenance to
be done by I.P. personnel.” [I.P. meant iron plant]. I should add
that it appears from the evidence of Mr Frost,
and from other
documents, that retrenchments were still being debated by a committee
at divisional level in his department. I shall
return to this aspect
later. Mr Mafoane (manager, personnel and industrial relations)
spoke for human resources and explained that
the single (residential)
quarters had outlived their usefulness and were to be outsourced from
1 January 2000. The consequent redundancies
were 9 people (cleaning
and food preparation), of which the contractor had indicated that he
would accept 6. Mr Mafoane explained
that the change house
facilities were to be outsourced from the same date, leading to 12
redundancies, some of whom might be taken
over by the contractor. Mr
Hugo set forth the proposed redundancy package. Because the main
purpose of the meeting of 7 December
was for Highveld to furnish
information, the union had little to say.
[16.]
In
a letter dated 10 December 1999 Mr Hugo re-iterated that the motor
rewind workshop was to be closed, and provided further information
regarding the single quarters and change houses. With regard to the
latter, the inference is that there were only 12 employees.
It is
evident from the correspondence and the evidence that by this time
Highveld was becoming impatient with what it perceived
to be the
unnecessary delays caused by Numsa. It endeavoured to accelerate the
process but eventually agreed, with reluctance, to
the next meeting
being held on 13 January 2000, as previously scheduled.
[17.]
Meanwhile
a dispute about the disclosure of information had been referred to
the Commission for Conciliation, Mediation and Arbitration.

According to Highveld’s Mr Mafoane, he attended a meeting at the
Commission on 13 December 1999 when the commissioner directed
Numsa
(per Mr Boshielo) to inform him before 1 January 2000 of any
information which it was claimed Highveld had failed to provide,
failing which the commissioner would regard the matter as closed (ie.
resolved). Mr Mafoane stated in evidence that in January
2000, and
again in April, he checked the Commission’s file and found no
letter from Mr Boshielo or Numsa. Mr Mafoane’s evidence
on this
point was uncontroverted - Mr Boshielo did not testify - and there is
no reason not to accept it. The relevance of the point
is that at
the meeting of 13 January 2000 Highveld took the stance that, by
reason of the aforegoing, the information dispute was
not being
persued and that Highveld was not required to supply further
information.
[18.]
The
final meeting (except at engineering services divisional level) took
place on 13 January 2000 after the holiday period. Highveld
had
already indicated its wish to finalise the consultations at this
meeting. There are no minutes, and we have to gather what occurred
from the correspondence, the evidence and certain notes. At all
events a list of 79 proposed retrenchments was tabled (p. 1169 of
the
appeal record), a reduction from 95. The air-conditioning department
was dropped (4 positions), and some of the other previous
figures had
been trimmed. In summary the revised figures were:
Iron
Plant 31
Structural
Mill and Flat Products 19
Human
Resources 19
Engineering
Services 10
___
79
While
it is clear that the retrenchments were debated at length, and that
various proposals were advanced by the unions, little seems
to have
been added about selection criteria. In its letter of 17
January 2000, in which Highveld responded to Numsa’s
queries and
proposals, Mr Hugo wrote:
“
. . . the
corporation believes that the consultative process has now been
concluded. The corporation further advises that compulsory
retrenchments will unfortunately now be implemented.”
The
list of 77 employees was attached.
[19.]
Numsa
was taken aback by this development since it was expecting further
consultations. Meanwhile, Mr Frost’s divisional committee
was
still busy, in the belief that there was a two week period of grace.
Alternative jobs were in fact found for some of the employees,
which
explains some of the exclusions made by the Court
a
quo
. A dispute
was declared by Numsa on 31 January 2000.
[20.]
I
turn now to consider the various categories of retrenched employees
division by division. It is convenient to begin with the human
resources division.
HUMAN
RESOURCES DIVISION
[21.]
This
division was first placed on the list of proposed redundancies in the
communication of 15 October 1999. As will be seen from
the annexure
to this judgment, 19 redundancies were proposed, being 9 for the
single quarters and 12 for the personnel cleaners (in
the change
houses). The reason given in both instances was outsourcing to
private contractors. The figures remained the same in
the list of 13
January 2000. Ultimately, 18 employees were retrenched, being no.s
28 to 45 on the list of 17 January 2000. They
comprised 15 cleaners,
2 waiters and 1 cook. At the consultation meeting on 7 December 1999
Mr Mafoane explained the outsourcing
in detail. He explained that
the single quarters were able to accommodate some 220 people, but
currently had only 36 Highveld residents.
Nine people (cleaning and
food preparation) would become redundant, of whom the contractor had
indicated his willingness to accept
6. Mr Mafoane explained that the
cleaning of the change houses was undertaken at a cost of R75 980 per
month. (At Numsa’s request
a breakdown of this cost was furnished
three days later). The 12 cleaners would become redundant, all or
some of whom might be taken
over by the contractor. In the letter
dated 10 December 1999 Highveld provided further information
regarding the arrangements for
the single quarters and the change
houses, as well as the cost breakdown of the latter.
[22.]
At
the meeting of 13 January 2000 relatively little appears to have been
said about the retrenchments in the human resources division.
Numsa
recorded its position thus:
“
those persons who may be
retrenched as a result of the
outsourcing
(of cleaning and single quarters) must first be offered voluntary
retrenchment. For those who do not accept voluntary retrenchment,
the company must negotiate with the potential contractor to employ
these persons. We stated and warned you that we believed that
section 197
of the LRA 1995 may be applicable.”
With regard to
voluntary severance packages generally, Numsa proposed: four weeks
per year of service with no ceiling.
[23.]
Highveld
recorded that it had noted the comment about transferring employees
to the contractor. Highveld’s response (in its letter
of 17
January 2000) was that it undertook to provide successful contractors
with the detail of redundant employees, but it would
be the
contractor’s decision whether a redundant employee could be
employed in terms of the contractor’s conditions of employment.

Highveld also recorded that it had noted Numsa’s severance package
proposal. Highveld’s response, in the same letter, was:
“
The severance
package as tabled on 7 December 1999 is considered to be extremely
fair and certainly far better than what is provided
for in the House
Agreement and the Basic Conditions of Employment Act.
The
corporation cannot agree to a package of four weeks earnings per year
of service and no maximum ceiling.”
[24.]
In
evidence Mr Mafoane confirmed that the minutes of 7 December 1999
were a reasonable reflection of what he had said at the meeting.
He
stated that the successful contractor for the single quarters, Reef
Food Services, interviewed the employees, of whom only two
accepted
an offer to join Refood. The change house cleaning contract was
awarded to Acona Cleaning Services (Mrs Mazibuko) who was
willing to
take over all the cleaners. Only two employees arrived for a
meeting, both of whom declined to join Mrs Mazibuko’s
company.
[25.]
Looking
at the position of the human resources division overall in the light
of the documentation and evidence, it appears to me that
the
consultation process was effectively exhausted when Highveld sent its
letter of 17 January 2000. I gain the impression that
Numsa was not
seriously opposing the outsourcing of the single quarters or the
change house cleaning function. It had been provided
with the
information which it requested. It made proposals for re-employment
by the contractors, which were noted and responded
to. It also
sought for redundant employees generally a better severance package.
Its proposal was noted and rejected. The selection
criteria were
clear: all the employees in the single quarters and all the cleaning
personnel in the change houses. I can see nothing
objectively unfair
in such criteria if the outsourcings were to go ahead. As regards
the timing, I can see nothing unfair in the
retrenchments proceeding
immediately upon the conclusion of the consultations. The evidence
reveals that employees generally were
well aware of the impending
retrenchments, so that the actual notices of termination would not
have come as a bolt from the blue.
[26.]
There
is a discrepancy of one between the number of retrenchments proposed
on 15 October 1999 (and repeated on 13 January 2002) and
the number
of actual retrenchments. This discrepancy was not explored by either
side in evidence. The evidence in regard to other
divisions does
disclose, however, that there were several possible “innocent”
reasons for a discrepancy of this kind.
[27.]
My
conclusion with regard to the retrenchments in the human resources
division is that, considered as a group on their own, such dismissals
were both substantively and procedurally fair. As will be seen in
due course, I have reached the conclusion that the dismissals
of some
employees in other divisions were procedurally unfair. This raises
the question whether the consultations could properly
be severed, and
if so, how. If such severance is not permitted, the question arises
whether there should not be a distinction with
respect to
compensation. The leading cases on the joint consensus seeking
process contemplated by
s. 189
of the
Labour Relations Act, and
by
the preceding unfair labour practice jurisprudence, are:
Media
Workers Association of SA and Others v. The Press Corporation of SA
Ltd
(1992) 13 ILJ
1391 (A)
[1992] ZASCA 149
; ;
1992 (4) SA 791
(A);
Atlantis
Diesel Engines (Pty) Ltd v. National Union of Metal Workers of SA
(1994) 15 ILJ
1247 (A)
[1995] ZASCA 30
; ;
1995 (3) SA 22
(A);
Johnson
& Johnson (Pty) Ltd v. Chemical Workers Industrial Union
(1999)
20 ILJ 89 (LAC);
Alph
Plant & Services (Pty) Ltd v. Simmonds and Others
(2001) 22 ILJ 352 (LAC). These cases do not, however, address the
first of the questions mentioned above, and in regard to the
second
question they only do so obliquely. It seems to me that an employer
may, for convenience or some other adequate reason, group
several
categories of employee within a
s. 189
consultation process. The
considerations that apply to one category of employees may not apply
to another category, and the possible
retrenchments in one category
may not be dependent on the retrenchments in another category. There
may be common features, for example
the severance package. In such a
case (unless there is a contrary agreement) no reason of logic or
fairness suggests itself why
the employer should not in principle,
and on appropriate facts, be entitled to treat the consultations as
closed in respect of one
category but as remaining open in respect of
another category. Indeed, it might well operate unfairly on the
employer to preclude
such a course, since otherwise it would be
obliged to retain the services for an indefinite period of employees
whose retrenchment
is inevitable.
[28.]
In
casu
the requisite
circumstances were in my opinion present for the employees in the
human resources division. They constituted a separate
group, clearly
identified, whose fate was not dependent on the fate of employees in
other divisions. The severance package, common
to all employees, had
been debated. There was no all or none agreement. To my mind it
would have been proper for Highveld on 17
January 2000 to declare
closure of the consultation process in respect of the human resources
division, and had it done so, no unfairness
to the employees in that
division would have resulted. Where Highveld erred was to declare
closure in respect of all the affected
employees in all four
divisions. I do not consider in the circumstances that this error
should preclude Highveld from invoking a
notional severance. I say
this because there was no real unfairness to the employees in the
human resources division. Their only
complaint can be that they were
retrenched earlier than they should have been, but that complaint on
analysis is illusory: the unfairness
of premature closure was
towards other employees, not towards them. In my view therefore the
dismissals of the employees in the
human resources division was
attended by no procedural unfairness.
[29.]
If
I should be wrong in the aforegoing approach, I arrive at the same
conclusion by applying the principles relating to compensation.
It
is well settled that prior to the recent amendment of the
Labour
Relations Act, the
Court
a
quo
had a
discretion to award compensation according to a formula or to award
no compensation. Compare
Johnson’s
case,
supra
.
As will appear later, we do not know what factors the trial Court
took into account in awarding compensation. It may safely be
accepted, however, that it did not take the present consideration –
the lack of any real prejudice to the employees in the human
resources division – into account when awarding them compensation.
This appears manifestly from the Court’s whole approach to
the
matter, set out earlier in this judgment, as well as from its failure
to appreciate or evaluate the distinction which I have
drawn. If
Highveld’s procedural unfairness towards the employees in the human
resources division was technical, as explained above,
and resulted in
no real prejudice to them, then it would be clear to me that they are
not deserving of compensation and that the
discretion should be
exercised against them.
STEEL
DIVISION
[30.]
The
steel division encompassed the structural mill department and the
flat products department (but not the engineering services division,
which was housed within the same premises). On 23 July 1999 Highveld
invited the unions, including Numsa, to attend a meeting on
5 August
to discuss the redundancy, for operational reasons, of employees in
the iron and steel divisions. According to a note dated
23 July,
Highveld stated that LIFO would not be suitable as the corporation
needed to maintain skills. Proposed criteria were tabled
and the
unions agreed to consider and respond. At the meeting of 5 August Mr
Hugo intimated 14 redundancies in the steel plant and
43 in the
mills. He agreed to provide a detailed list of the affected
positions. Redundancy criteria were discussed again. Mr
Hugo also
indicated that Highveld was considering a similar package to that
which had prevailed for voluntary resignations. It
appears from an
internal Numsa letter written by Mr Boshielo that some detail was
provided affecting 47 positions in the steel division.
It was in
this letter that Mr Boshielo asked his regional secretary:
“
Is there
anything that we can raise with management with a view to stop or at
least delay the redundancy/retrenchment?
I
am inviting the views and strategy to counter management’s action.”
The
letter was copied to other members of the union.
[31.]
At
the meeting on 11 August 1999 Mr Hugo tabled more particulars of
affected employees in the steel division. There were 50, among
them
12 artisan helpers and 3 slabyard. At this meeting Numsa suggested
the introduction of a 4 shift system and a cut in overtime,
and again
suggested “LIFO but retain skills”. At subsequent meetings the
unions, especially Numsa, began to press for information
justifying
the retrenchments. Highveld agreed to the 4 shift system as a long
term objective. On 30 August 1999 Highveld telefaxed
to the unions a
document entitled “Early Retirement and Redundancies” which set
out Highveld’s proposals in detail. This included
a redundancy
package. More detail was furnished regarding the affected employees:
16 in flat products and 10 in the structural
mill. Among the former
were 9 artisan helpers (“position no longer exists”) and 3
slabyard (“position no longer exists”).
Reference was made to
the divisional restructuring and training committees, and to a
future 4 shift system. Highveld stated that
“implementation of the
abovementioned redundancies is scheduled for 15 September 1999 to be
the last working day”.
[32.]
At
subsequent meetings the same or similar issues were debated, and
Highveld altered the scheduled date to 17 September. Numsa declared
a dispute regarding disclosure of information and failure to
negotiate properly and on 7 September 1999 referred it to the CCMA.

Highveld issued notices of retrenchment. Litigation followed and
Highveld agreed to postpone the retrenchments pending further
consultations. The first such consultation took place on 23
September 1999. Mr Daniels, who was Numsa’s in-house legal adviser
at the time, introduced himself. Presentations were made in respect
of various divisions; Mr Gardner made the presentations for
the
steel division. It was agreed that Numsa would set fourth the
information and motivation which it required; that Highveld would
respond thereto; and that Highveld would provide an effective date
for the redundancies and the members involved. Thereafter the
consultations appear to have become bogged down in the several
disputes which I have mentioned earlier in this judgment.
[33.]
Nonetheless
on 15 October 1999 Mr Mafoane wrote to Mr Daniels providing “Further
motivation of the proposed divisional retrenchments
in the following
categories of employees”. In respect of the steel division, the
following information was furnished:
“(II)
Structural
Mill
Artisan
Helpers
(8
positions)
The
corporation proposes to adopt a policy to do away with
the position of
helpers for artisans. All helpers would thus be redundant.
Flat
Products
Slabyard
(3 positions)
It is proposed
that there are 3 positions surplus to the restructured team
requirement.
Artisan Helpers
(8 employees)
The corporation
proposes to adopt a policy to do away with the position of helpers
for artisans. All helpers would thus be redundant.”
It will be noted that with
regard to the artisan helpers in the steel division (as distinct from
the iron division,
infra
),
all
such helpers would be redundant.
[34.]
At
the meeting of 7 December 1999 Mr Sherlock “talked through the
documents tabled on the Flat Products and Structural Mill”.
He
gave redundancy figures but it appears that he included a number of
early retirements. The following day Mr Daniels wrote to
Mr Hugo
recording that the parties were still in dispute regarding the
disclosure of information on ten points. Highveld replied
on 10
December 1999. In the course of that letter Mr Hugo wrote: “To
repeat ourselves, the position of artisan helper has become
redundant
and artisans will in future be responsible for tasks previously
performed by such helpers”. I have already mentioned
the list of
retrenchments dated 13 January 2000. This indicated 7 artisan
helpers in the structural mill, 9 artisan helpers in flat
products,
and 3 slabyard cutters. Pursuant to the meeting on that date,
Highveld subsequently wrote in its letter of 17 January
2000: “the
position of artisan helper has become obsolete” and “that there
are no other vacancies for which artisan helpers
could be trained”.
It wrote further:
“
(b) Testing
and testing results of artisan helpers will serve no purpose in view
of the fact that there are no vacancies for which
testing, to
determine trainability, would have been required. The employer also
said that the corporation will not be in a recruitment
mode for the
foreseeable future and therefore there is no purpose in training the
said employees for other positions which are not
going to
materialise.”
This was in
response to a request for information by Numsa, recorded in paragraph
2.2 of its letter of 17 January 2000. I have already
alluded to some
other matters raised in these two letters.
[35.]
Eighteen
employees were retrenched from the steel division. They were no.s 9
and 11 – 27 on the list of 17 January 2000 and they
comprised 15
artisan helpers and 3 slabyard cutters. Mr Mafoane testified that
employee no. 10 was not in fact retrenched but was
retained in an
operating position. The trial Court necessarily excluded him from
relief. Also excluded was employee no. 13, who
was not properly
before the Court.
[36.]
Mr
Sherlock, the steel works manager, gave evidence explaining the five
year plan. He stated that pursuant to a corporate-wide ruling
that
artisan helpers should be made redundant, the artisan helpers in his
division were pooled some months before January 2000.
They were
allocated piecework as it arose. They could apply for advertised
vacancies within the corporation. Employee no. 10, Mr
Matabane, was
temporarily given the job of a sample cutter, and after training
through SBT, he got a permanent position. He was
not retrenched.
The witness referred to the three slabyard cutters, whose position
was more fully explained by Mr Nkhambule,
infra
.
Mr Sherlock stated that some artisan helpers had become utility men.
There was no point in moving artisan helpers from one independent
division to another as the position had become redundant.
[37.]
In
cross-examination it emerged that the artisan helpers were pooled by
management in March 1999, and that the three slabyard cutters
may
also have been identified by that time. Mr Sherlock described this
as a “forewarning” of redundancy. He agreed that the
decision to
pool had not been the subject of consultation with the unions. He
stated that:
“
the slabyard
cutter position was removed and the persons who were doing that job
have learnt some other tasks and they are now known
as team members
and they have the option of learning all the tasks in the area,
moving up the various levels, providing they meet
the criteria set by
Standards Based Training, whichever level they can achieve within the
team.”
While the
individuals were counselled and were made well aware of the
implications, as were the shop stewards, the policy decision
was not
the subject of consultations at union level. The unions must,
however, have been aware through the shop stewards of SBT
and that
restructuring was taking place. The Court put this question to Mr
Sherlock:
“
COURT
: The point is the union did not make an imput as to who is or is
not suitable, who qualified, who did not qualify, who passed,
and who
did not pass the test? - - - No that’s correct.”
[38.]
I
review the position of artisan helpers. Their identity was known as
early as March 1999. The number proposed on 15 October 1999
(16 or
17) differed only slightly from the number retrenched (15). Nothing
was made in evidence, or in argument before us, of the
fact that
employee no. 10 was eventually retained. Highveld made it clear to
the unions that, subject to immaterial exceptions,
the position of
artisan helper had become obsolete, and that in the steel division
all
such helpers who had not made the grade to the post of utility man
were redundant and would be retrenched. The selection criterion
was
therefore clear enough. One may debate, however, whether the process
was not fundamentally flawed in that the selection was implemented
prior to consultation with the unions. Highveld contemplated the
retrenchment of artisan helpers (in this division) within the meaning
of
s. 189
of the
Labour Relations Act at
least by March 1999, when
these employees were pooled, and arguably earlier. However, this was
not the unions’ complaint at the
time. So far as appears from the
documentation and evidence, the unions did not during consultation
complain that the selection
was premature, nor request that the
selection process be revised. They questioned the need for
retrenchment, repeatedly called for
more information, made a few
counter-proposals, and discussed the severance package. Over a
period of consultation lasting virtually
six months, premature
selection was not on the unions’ agenda. In the circumstances it
would be wrong to hold against Highveld
on a technical basis, when
the unions had every opportunity over a period of months to revisit
the question before the retrenchments
were implemented. In respect
of this group of employees it appears to me that the consultation
process was effectively exhausted
when Highveld wrote its letter of
17 January 2000. It was pointed out in argument that the package was
improved during the period
from August to January. The selection
criteria were to my mind objectively fair. I have no criticism of
the timing.
[39.]
The
3 retrenched slabyard cutters were employees: no 25 Mr Masilela; no
26 Mr Magahle; and no 27 Mr Madiega. The proposed number
of
retrenchments remained constant from 11 August 1999. On 30 August
1999 Highveld stated that the “position no longer exists”,
but
this reason was revised on 15 October 1999 to “three positions
surplus to the restructured team requirement”. It does not
appear
from the available documentation that Numsa raised any specific
queries regarding the slabyard cutters. However, Numsa was
furnished
by Highveld with an information dossier on 7 December 1999 and I
infer that some of the presentations were based on the
documents in
this dossier. It is a substantial document running to over 130 pages
and all or most of it appears to be a detailed
statement of
Highveld’s five year restructuring plan. It does not appear
whether Mr Daniels or other representatives of Numsa
studied the
dossier with any particularity. If they did so, they would have
found some passages dealing with the slabyard. I have
mentioned Mr
Sherlock’s testimony. Another witness for Highveld, Mr Nhkambule,
who was a personel officer in flat products, drew
the trial Court’s
attention to these passages and explained them. There was a general
reference under restructuring to the benefits
of the standard based
training modules, whereby higher skilled operators led to better
productivity. The point was developed with
regard to the steel
division at p. 1064 of the appeal record. At pp 1124 – 5 there was
an analysis of the Slabyard – Automation
and Restructuring. It
inter alia recorded that: “Through restructuring the inspectors
were removed from the slabyard. The scarfing,
cutting and chipping
and crane driving functions were combined”, and that 3 employees
were redundant. At p. 1133 the report stated:
“Through SBT
restructing in the slabyard P Masilele, J Magahle and P Madieza were
released”.
[40.]
Mr
Nkhambula told the trial Court that in 1998 employees in the slabyard
wanted incentives for additional jobs they were performing,
which
management could not give because merit increases had been done away
with. Management then told the employees about restructuring
and the
introduction of SBT “whereby employees would have to be assessed.
And after assessment and found competent they will be
able to get
some incentive” or advancement. The witness stated that the
implication was the acquisition of literary skills to
avoid possible
redundancy. The shop stewards and the employees were aware of this.
The jobs in the slabyard were regrouped and
training of employees
began. The three employees were illiterate. They were offered ABET
(Adult Basic Education Training). Messrs.
Masilele and Magahle
declined to participate because they regarded themselves as too old.
Mr Madiega, who appears to have been of
similar age, was willing and
started the course. He eventually found that it was too much for
him, that he was losing out on overtime,
and he gave up.
[41.]
It
seems probable that these three employees had been identified for
retrenchment by March 1999, and in any event by 11 August 1999.
The
unions did not raise premature selection as a complaint. Although
Highveld and the employees were aware that possible redundancy
loomed, Highveld could not contemplate the actual retrenchments until
the training process had run its course, because all the employees
might have passed. The three slabyard cutters were put on the
consultation table by Highveld on 11 August 1999 and they remained
there until their retrenchment in January 2000. They were a small
and readily identifiable group. The selection criterion was declared
on 15 October 1999, and further details could have been obtained by
Numsa on enquiry. It could have ascertained their names,
investigated
the position, and made proposals for re-evaluation or
further employment within the corporation. That was not done. Here
again
the consultation process was in my view effectively exhausted
by 17 January 2000. I cannot find that the selection criterion was
objectively unfair. I have no criticism of the timing; five months
had passed from mid-August to mid-January.
[42.]
I
am accordingly of the view that the dismissals of all the employees
in the steel division (artisan helpers and slabyard cutters)
were
substantively and procedurally fair. Alternatively, on a parity of
reasoning with the human resources division (supra), I would
award
them no compensation.
THE
IRON DIVISION
[43.]
The
employees who were retrenched in this division fell into three
categories: artisan helpers, belt cleaners, and “pool” cleaners.
I shall deal with the artisan helpers first. There were 19 of them
(no.s 47 to 65 on the list of 17 January 2000). Employee no.
55, Mr
J. Mabena, was excluded by the trial Judge on the ground that he was
not properly before the Court. The iron division was
mentioned in
the letter of 23 July 1999. At the meeting of 5 August 1999 46
redundancies were tabled. On 11 August 1999 Highveld’s
list
included 20 artisan helpers. Included in Highveld’s list of 30
August 1999 were:
“Artisan
Helpers 20 numbers reduced by 50%.”
The
asterixed note read: “The criteria to be used will be as per the
attached schedule”. The schedule, headed “Redundancy
Criteria”,
revealed a points system which took into account as factors:
service, age, disciplinary record, sick leave, skills,
and
education”. Those with the worst scores would be considered
redundant. On 15 October 1999 Mr Mafoane wrote to Mr Daniels:
“
Artisan
Helpers
(18
positions)
The
corporation proposes to adopt a policy to do away with
the position of
helpers for artisans. The Iron Plant currently employs forty-one
(41) artisan helpers and as a first step wishes
to reduce the number
by eighteen (18).”
[44.]
At
the meeting of 7 December 1999, Mr Marshall, on behalf of
iron-making, talked through the information dossier. The redundancy
of 18 artisan helpers was tabled. In response to a question whether
artisan helpers had been tested for utility men positions, Mr
Marshall said according to the minutes:
“
that all had
been tested but that there were insufficient utility men positions
available to accommodate the 18 artisan helpers.
A policy decision
had been made that artisan helpers are no longer required.”
On 10 December
1999 Mr Hugo wrote the passage (“To repeat ourselves. . . “)
quoted earlier. On the list of 13 January 2000 the
number of artisan
helpers to be retrenched remained at 18. At the meeting on that day
Numsa again requested information about artisan
helpers generally.
Highveld responded on 17 January 2000 that the information requested
was irrelevant because the position of artisan
helpers had become
obsolete. Highveld also wrote that testing would serve no purpose
because there were no vacancies.
[45.]
What
actually happened was that while the consultations were underway, the
selection process was implemented: 19 artisan helpers were
identified
as surplus (according to Mr Marshall, they were the least suitable)
and retrenched. The position of the affected employees
in the iron
division differed materially from their counterparts in the steel
division. In the latter division, as I have shown,
all artisan
helpers who had failed to qualify as utility men were retrenched. In
the iron division, however, there were not enough
utility men
positions available so that a choice or selection had to be made as
to who would be trained. That selection process
was completed, it
would seem, by 7 December 1999. It is clear that from August 1999,
and especially from 15 October, Highveld contemplated
the
retrenchment of some but not all artisan helpers; it tabled a
proposal along with suggested criteria. It was premature for
Highveld to have implemented the selection without, as a minimum,
specifically informing the unions of that intention and specifically
inviting the unions’ views thereon. That the unions might in
response have prevaricated or otherwise refused to co-operate is
by
the way. So is the fact that the actual selection might have been
implemented in the fairest possible way. The point is that
Highveld
unilaterally closed the door on further consultations on the issue of
the selection criteria.
[46.]
Mr
Barrie
,
for Highveld, submitted that his client was entitled but not obliged
to consult with the unions about the
appointment
of employees whether as utility men or into other production
positions (there was, for example, evidence that some of the
potential
retrenches found jobs which were advertised elsewhere
within the corporation). The argument misses the point. The
declared intention
was to retrench those artisan helpers in the iron
division who were not selected for training as utility men (or who
did not find
a job elsewhere). And that is what happened: the
remainder men, as Mr
Barrie
called them, were retrenched. I am satisfied that the dismissals of
these artisan helpers were procedurally unfair.
[47.]
Eight
belt cleaners in the iron division were retrenched. They were
employees no.s 66 to 73 on the list of 17 January 2000. They
were
first identified as a group in the list of 11 August 1999, the given
reason being “(outsource)”. The document of 30 August
1999
identified 9 belt cleaners (“position no longer exists”). Mr
Mafoane’s letter of 15 October 1999 stated:
“Belt
Cleaners (9 positions)
Automation and
technical improvements have made this function obsolete.”
On
the list of 17 January 2000 7 belt cleaners were mentioned.
Beyond what I
have recorded, very little appears in the documentation with regard
to the belt cleaners. In evidence in chief Mr Marshall
was asked
about the “automation and technical improvements”. He answered:
“
Ja, what
happened there is a better type of belt scraper was installed which
reduced the amount of spillage and in fact you didn’t
have to do
full-time cleaning on all the conveyor belts that were around so it
wasn’t really automation it was more a technical
improvement.
Automation into the fact that things like conveyor routes were
improved and interlocked with each other so that spillage
could not
occur along these lines and better chutes and types of instruments
like that were installed. And chute detection equipment
so that if a
chute blocked it would automatically stop the equipment and thing
like, items like that, it reduced the spillages.”
Shortly after
that the witness stated that spillages were not eliminated, they were
reduced.
[48.]
In
cross-examination, after dealing with the artisan helpers who were
sent to the test centre, Mr Marshall was asked:
“
And the belt
cleaners and pool cleaners, didn’t they go for tests? - - - I am
not too sure, we didn’t encourage them at all, we
didn’t say they
should go, yes.”
Later there was
a brief but muddled exchange regarding automation, obsolescence and
redundancy.
[49.]
All
in all I am left at something of a loss as regards the belt cleaners.
There is a paucity of evidence. I appreciate that as a
result of
technical improvements, a lesser number of belt cleaners was
required. But it is unclear whether they all went or only
some of
them, and in the latter event, how the choice was made. The burden
was on Highveld to adduce sufficient evidence but in
my view it
failed to do so. It is true that Numsa failed, as with some other
types of employee, to make pertinent enquiries, but
in my judgment
that factor alone is not sufficient to pull Highveld through. I
would not disturb the trial Judge’s finding that
their dismissals
were procedurally unfair.
[50.]
The
names of four “pool” cleaners appeared on the list of 17 January
2000. They were employee no.s: 74 Mr Maduma; 75 Mr Mpubane;
76 Mr
Mtsweni; and 77 Mr Tshehla. In addition there was one employee
described as a cleaner, no. 46 Mr Zwane. No’s 75 and 76
were
excluded by the trial Court because it transpired that they had not
in fact been retrenched but had been given jobs as radial
gate
attendants. The first mention of cleaners in the iron division is
to be found in Mr Boshielo’s letter to his colleagues
dated 6
August 1999. The list of 11 August 1999 featured 1 office cleaner, 3
paste cleaners, and 12 “Cleaning Pool (outsource)”.
On 30 August
1999 the list comprised:
“Pool
Cleaners 9 position no longer exists
Paste
Cleaners 3 position no longer exists
Office
Cleaner 1 position no longer exists”
[51.]
On
15 October 1999 Mr Mafoane wrote to Mr Daniels.
“
Cleaners
(8 positions)
It is
planned to outsource this function to a private
contractor.”
and
“
Office
Cleaner
(1
position)
It is
planned to outsource this function to a private
contractor.”
At the meeting
of 7 December 1999, when Mr Marshall spoke for iron making, he is
reported to have tabled proposed redundancies of
among others 8
cleaners and 1 office cleaner. He gave the reason: “Cleaner
positions were no longer needed as a result of automation
and
outsourcing” (the automation referred to the belt cleaners, supra).
On the list of 13 January 2000 the number of cleaners
was stated as
6. I have already noted (in connection with the human resources
division) that at the meeting on that day Numsa requested
Highveld to
negotiate for the contractors to employ the cleaners. Highveld’s
response, as noted earlier, was:
“
The
corporation undertakes to provide successful contractors with the
detail of redundant employees but it will be the contractor’s
decision whether a redundant employee could be employed in terms of
the contractors conditions of employment.”
[52.]
In
evidence in chief Mr Marshall stated with regard to outsourcing of
pool cleaners:
“
They would be
general cleaners for round the floors and around the plant, it is a
very large area of the iron making, it is a huge
area and the eight
positions could not accommodate the total, how can I put it, you know
could not move around the whole area of
the cleaning and therefore it
was necessary to look at ways of making this cleaning better utilised
by less spillages, which we did
a lot of work on, not only on the
conveyor belts but also on kilns, and we put in other things like
high pressure water cleaning
that also affected the cleaning and
these positions became not as intensive, where only eight people were
needed for the full period
of the time, but only needed certain times
of the day only.”
[53.]
With
regard to employees no.s 75 and 76, Mr Marshall stated that they were
in the cleaning pool, that they applied for the advertised
positions
of radial gate attendant, were found to be suitable and were
employed. In cross-examination Mr Marshall could not say
when they
were appointed. It was a different job, one grade up from cleaner.
There had probably been other applicants, and a managerial
panel
would have made the selection without input from the unions.
Management actively encouraged potential retrenchees to apply
for
vacancies, especially in iron making. Mr Mthimunye, who was an
industrial relations officer at the time, testified that these
two
employees (and some others) were appointed by December 1999 when he
arrived in the iron plant, and that the inclusion of their
names on
the final list was an administrative error. They were not handed
retrenchment letters. He described pool cleaners as general
cleaners. He could not explain how no’s 75 and 76 (and others)
were appointed to vacancies by management because this had occurred
before his arrival in the iron plant.
[54.]
Mr
Mafoane, who was called to testify on other matters, also adverted to
the pool cleaners and to employees 75 and 76. In cross-examination
he stated that at the request of the shop stewards, plant management
interviewed potential retrenchees, and no’s 75 and 76 were
successful. He maintained that this happened before 18 January. He
had earlier been instructed by Mr Hugo to minimise the impact
of the
retrenchments together with the shop stewards. This was one of the
reasons for the number reducing from 95 to 77.
[55.]
Mr
Hugo gave evidence that the cleaners were pooled because they had
little or no work to do, and were redundant. He stated that
all the
cleaners were affected, and that “no criteria applied there”
(whatever that meant).
[56.]
I
review the cleaners. Once again there is a paucity of evidence. In
the absence of direct evidence I infer, on the probabilities,
that
the paste cleaners fell away; they were not specifically mentioned
from 15 October 1999 onwards. It also appears likely that
the office
cleaner was employee no. 46, Mr Zwane. It would seem that a group of
cleaners had been “pooled” at least by August
1999. The
reduction in the number of their proposed redundancies from August
1999 to January 2000 was not explained; nor, except
for no.s 75 and
76, was there an explanation for the fact that out of the original
12, only 2 were retrenched. Initially, it was
stated by Highveld
that the “position no longer exists”. Later, the reason advanced
was outsourcing to a private contractor.
But the witnesses who could
have testified about outsourcing (Messrs. Hugo and Marshall) failed
to do so. On the contrary their
evidence created the impression that
the cleaning team had either been reduced or done away with; and if
the former, they failed
to explain how the choice had been made. The
unions were entitled to rely on the outsourcing assertion once it was
advanced and
they ultimately made a request in that connection which
I have cited above together with Highveld’s response. It appears
to me
that there was insufficient evidence to warrant a finding by
the trial Judge that the dismissals of the pool cleaners and (office)
cleaner were procedurally fair.
[57.]
I
therefore conclude that Highveld’s appeal in respect of all the
employees in the iron division should fail. I shall address the
question of compensation later.
ENGINEERING
SERVICES DIVISION
[58.]
It
is unnecessary to furnish a lengthy exposition in respect of this
division. The names of eight employees (no.s 1 to 8) appeared
on the
list of 17 January 2000, but jobs were found for three of them (no’s
3, 6 and 7), one or more after the retrenchments were
announced.
Those three employees were excluded by the trial Court. The division
formed an Engineering Services Restructuring Committee
which began
meeting on 19 November 1999 under the chairmanship of Mr Frost. The
unions were represented by shop stewards. These
meetings continued
until 7 February 2000. The minutes were placed before the trial
court. It is apparent from these minutes and
from the evidence of Mr
Frost that the matters under discussion were the very redundancies
which had been proposed as between Highveld
and the unions. They
related to the air-conditioning workshop (eventually postponed when
employees put up a feasible proposal);
the transfer of the
weighfeeder test function to the iron plant (already implemented) but
leaving a question of who should be retrenched;
and the reduction of
the armature rewinding workshop to a “strip and quote” facility
(the actual repairs to be undertaken by
outside contractors). This
also raised the question of who should be retrenched. It is equally
apparent that at divisional level
the discussions were incomplete.
Mr Frost testified that Mr Hugo gave him a two week period of grace
from 21 January 2000 to finalise
matters. Some significant decisions
were taken by the committee during that fortnight. It is clear that
the consultation process,
as between Highveld and the unions, was not
exhausted or completed by 17 January 2000, in respect of the
engineering services division,
and that the closure was premature.
The likely reason was Highveld’s impatience. There is no reason to
interfere with the trial
Court’s decision that all five dismissals
in this division were procedurally unfair. I shall deal with
compensation next.
COMPENSATION
[59.]
As indicated at para. [3] above, the trial Court ordered Highveld to
pay each of the individual respondents, subject to certain
exclusions, compensation equivalent to twelve months of the salary
which each employee was entitled to receive immediately before
retrenchment. In respect of the respondents who were employed in the
human resources and steel divisions, that order necessarily
falls to
be set aside in view of my conclusion that they were fairly
dismissed. However, the position requires reconsideration in
respect
of the individual respondents who were employed in the iron and
engineering services divisions, whose dismissals were procedurally
unfair. In the judgment under appeal
Maleka
AJ
recorded that
counsel for the employees had asked for reinstatement. The learned
Judge thought this not to be an appropriate remedy
for reasons which
he furnished. He continued:
“
It seems to
me that the appropriate remedy is financial compensation for the
individual applicants. The order I make, therefore,
is the following
. . . . “
[60.]
It
will be noted that
Maleka
AJ
did not furnish
particularised or any reasons for the latter conclusion. A possible
interpretation is that the learned Judge thought
he was faced with a
choice: either reinstatement or compensation. If so, he would have
erred, since the law is clear that he had
a discretion to refuse
compensation.
Johnson
& Johnson’s
case supra. In the case of procedural unfairness the all or nothing
principle meant that the Court
a
quo
had either to
award full compensation according to the statutory formula or
nothing. (
Ibid;
Alpha Plant & Services (Pty) Ltd v. Simmonds & Others
(2001)22 ILJ 359 (LAC). An alternative interpretation is that
Maleka
AJ
weighed the
proposition just stated and came down in favour of (full)
compensation. If so, then (as I have pointed out) he furnished
no
reasons when, with respect, I would have expected at least brief
reasons.
Road
Accident Fund v Marunga
2003(5) SA 164 (SCA) at para. 31 – 3. There was some debate at the
bar as to the legal nature of the discretion exercisable by
the Court
a quo
and as to the circumstances in which this Court might interfere with
its exercise on appeal. The problem, however, is that in the
absence
of reasons we, as a court of appeal, cannot assess whether the
discretion was properly exercised. It appears to me that
on either
interpretation we have no alternative but to reconsider the matter
afresh and exercise the discretion ourselves.
[61.]
In
regard to the individual respondents in the engineering services
division, I have shown that the consultation process with Numsa
was
prematurely terminated by Highveld. I have also shown that
productive consultations continued after 17 January 2000 at shop
steward level. I think the conclusion is unavoidable that, had Numsa
been given a final opportunity to consult, and had it chosen
to do so
meaningfully, then other or at least different jobs may have been
saved. Some or all of the individual respondents in
this department
may not have found themselves out of work. It is arguable that in
the event of such an opportunity Numsa may have
continued to drag its
heals to some extent, but I do not think it probable. Numsa was
aware from recent correspondence, for example
Highveld’s letter of
10 December, that Highveld was anxious to move on with the
retrenchments. Numsa’s letter of 13 January
(sent on 17 January),
recording what was discussed at the meeting of 13 January reveals
that it made a number of concrete proposals
and was coming to grips
with the position. Had Highveld on 17 January announced the closure
of the consultation process in respect
of the human resources and
steel divisions only, and the concommittant retrenchments in those
divisions, Numsa would no doubt have
declared a dispute. But such an
announcement would be likely in my view to have spurred Numsa to
serious and urgent consultations
in the other two divisions.
[62.]
The
Alpha Plant
case, supra, enjoins us to have regard among other things to the
extent of Highveld’s deviation from the requirements of the
Labour
Relations Act. In
the engineering services division the facts set
forth earlier show that the deviation was substantial. The
consultations at shop
steward level after 17 January were not an
attempt to rectify Highveld’s error; it appears rather that the
Head Office and the
division were operating according to different
time tables.
[63.]
The
severance package was as follows: 3 weeks’ wages per year of
service up to a maximum of 52 weeks; a training grant of R5 000
(the
affected employees were all at the lower end of the skills spectrum);
housing allowance to be paid for a period of 6 months.
In addition
persons 58 years and older would receive a retirement gratuity of 1%
of basic earnings for each year of service (there
were only two or
three such employees, all in the iron division). This package was a
generous one, in excess of statutory minimum.
The length of service
in the engineering services division varied, but in the iron division
it was, with two exceptions, uniformly
long.
[64.]
In
the engineering services division we have only to consider, after
exclusions, five employees whose ages and lengths of service
varied.
Three of them had served Highveld for many years. Compare the
Alpha
Plant
case at
para. 115. All in all it seems to me that it would be fair and
appropriate to award all five employees compensation for
the breach
of their rights.
[65.]
I
turn to the iron division. Here we have to consider, after
excusions, nearly 30 employees of whom two had 6 years service each.

The remainder had served from 12 to 32 years. The youngest was 38
years old (he had served 16 years). The eldest was 60 years
old (he
had served 31 years). Of this group 18 were artisan helpers who were
deprived of the benefit of proper consultations with
regard to
selection criteria, the selection having been implemented
prematurely. As with their colleagues in the engineering services
division, I consider that it would be fair and appropriate to award
them compensation.
[66.]
That
leaves several cleaners of various descriptions in the iron division.
I have already mentioned ages and length of service.
It will be
recalled from my detailed discussion of these employees that the
common feature was the paucity of evidence. When it
comes to
compensation I do not think this should redound to Highveld’s
benefit, even though the extent of the breach of rights
cannot be
precisely fathomed. The youngest retrenched cleaner was 49 years
old, and he had 26 years service. The severance pay
was generous, as
I have said, but on the other hand it would not have been easy for
poorly skilled employees in this age group to
find other work. Again
I consider that it would be fair and appropriate to award them
compensation.
COSTS
[67.]
My
conclusion accordingly is that, exclusions aside, the appeal succeeds
in respect of approximately half the individual respondents
(being
those in the human resources and steel divisions) and fails in
respect of the other half (being those in the iron and engineering
services divisions). This amounts to substantial success on appeal.
Many of the issues were closely connected, and much ground
had to be
covered in evidence that was common to all four divisions. Had
Highveld appealed only in respect of the two divisions
where it has
been successful, the argument before us (which lasted two days) would
have been shorter, but not by a full day. I think
there would have
been little or no saving in the length of the appeal record. In my
view there is no reason to deprive Highveld
of part of its costs of
appeal. Highveld’s costs should be paid by Numsa and not by the
individual respondents.
[68.]
The
Court below ordered Highveld to pay the costs of the trial. That
order has to be revisited in the light of the fact that approximately
half of the individual respondents should not have succeeded at first
instance. Numsa’s eventual position, however, is that it
has
achieved substantial success in the trial in that the best part of
half of the employees whom it represented have won their cases
and
are to receive compensation. Numsa should therefore have its trial
costs, subject to possible deduction. As on appeal, so at
the trial
many of the issues were linked and much ground common to all four
divisions had to be considered. The question is whether
Numsa, by
including as claimants employees in the human resources and steel
divisions, materially lengthened the trial. On an overall
conspectus
I am not persuaded that the trial was lengthened by as much as one
full day, and I would accordingly make no deduction.
THE
ORDER ON APPEAL
[69.]
The
order is in the following terms:
The appeal
succeeds in part with costs, such costs being payable by the first
respondent;
The order granted by the
Court
a quo
is amended by the further exclusion from paragraphs 1 and 2 of the
individual applicants who were employed in the human resources
and
steel divisions.
_______________
COMRIE AJA
I agree.
_______________
ZONDO JP
I agree.
_______________
JAPPIE AJA
APPEARANCES
:
For the
appellant : ADV. F.G. BARRIE
Instructed
by : BRINK COHEN LE ROUX & ROODT INC
JOHANNESBURG
For
the respondents : ADV. J.G. VAN DER RIET (SC)
Instructed
by : RUTH EDMONDS ATTORNEYS
JOHANNESBURG
Dates
of hearing : 25 FEBRUARY AND 8 MAY 2003
Date
of judgment : 20 NOVEMBER 2003