Rubin Sportswear v SA Clothing and Textile Workers Union and Others (CA8/03) [2004] ZALAC 8; [2004] 10 BLLR 986 (LAC); (2004) 25 ILJ 1671 (LAC) (9 July 2004)

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[2004] ZALAC 8
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Rubin Sportswear v SA Clothing and Textile Workers Union and Others (CA8/03) [2004] ZALAC 8; [2004] 10 BLLR 986 (LAC); (2004) 25 ILJ 1671 (LAC) (9 July 2004)

16
IN THE LABOUR
APPEAL COURT OF SOUTH AFRICA
HELD IN JOHANNESBURG
Case no: CA8/03
In the matter
between:-
Rubin Sportswear APPELLANT
and
SA Clothing and Textile Workers
Union 1
st
RESPONDENT
J
HENDRICKS 2
nd
RESPONDENT
P
MAY 3
RD
RESPONDENT
A
FISHER 4
TH
RESPONDENT
Q
ADAMS 5
TH
RESPONDENT
___________________________________________________________
JUDGMENT
ZONDO JP
Introduction
[1] This appeal raises the question whether an employer
may render a particular age to become the normal retirement age for
his employees
or a category of his employees as contemplated by sec
187(2)(b) of the Labour Relations Act, 1995 (Act 66 of 1995) (“the
Act”)
by fixing it unilaterally as the retirement age for them. The
facts from which this question arises are set out below.
The facts
[2] The
appellant and a company called Val Hau et Cie (“Val”) concluded
an agreement in terms of which the manufacturing part
of Val’s
business was transferred as a going concern to the appellant. That
agreement was to take effect on the 1
st
February 2001. This was a transfer of a business as contemplated in
sec 197(2)(a) of the Act
1
as it read in 2001. In terms of sec 197(2)(a) of the Act, as it read
in 2001, such a transfer of business or part of a business
automatically
transferred the contracts of employment of the
employees of the business transferor to the transferee. The result of
such transfer
is that in relation to such employees’ contracts of
employment with the business transferor, the business transferee
stepped into
the shoes of the business transferor.
[3] Prior to the transaction the appellant had a normal
retirement age for its employees which was 60. Val did not have a
normal retirement
age nor did it have an agreed retirement age. The
second and further respondents were employed by Val for many years
until the 1
st
February 2001 when their contracts of employment were automatically
transferred to the appellant by operation of law in terms of
sec
197(2)(a). Before the transfer of business could take effect, Val,
the appellant and the first respondent – the latter being
a
registered trade union acting on behalf of, among others, the second
to the fifth respondents – concluded an agreement in terms
of which
they all agreed, among other things, that the same terms and
conditions which Val’s employees had enjoyed at Val would
apply to
all Val’s employees being transferred to the appellant’s
employment. That agreement was signed on the 30
th
January 2001. By operation of sec 197 (2)(a) of the Act the second to
the fifth respondents became employees of the appellant on
the 1
st
February 2001.
[4] On or about the 15
th
February 2001 the appellant called the second and further respondents
and/or the shopstewards and informed them that with immediate
effect
it was fixing 60 as the normal retirement age for all its employees.
This included the ex-Val employees. It presented them
with a document
which bore the heading: “
Retirement policy:
Rubin Sportswear”
which was dated the 1
st
February 2001. The document read thus: “
As
the normal retirement age is 60 years it is the policy of this
company that with immediate effect the retirement age for all
employees
is set at 60. All necessary counseling and assistance will
be available. The Company will usually remind employees before the
time
of this fact.”
[5]
It
was accepted before us that the second and further respondents did
not agree to the appellant’s purported fixing of 60 as the
normal
retirement age applicable to them as well. Indeed, the fact that the
dispute arising therefrom led to litigation is a clear
indication
that the respondents rejected the appellant’s idea of fixing 60 as
the retirement age applicable to them. Subsequent
to its conduct of
purporting to fix normal retirement age for the employees from Val at
60, the appellant dismissed the second to
the fifth respondents on
different dates as they turned 60.
[6] The
respondents did not accept the dismissal. The respondents made the
point that the second to the fifth respondents were still
able and
willing to perform their work beyond the age of 60 and had thus far
been performing it satisfactorily and the appellant
had not raised
any complaints about their performance. They contended that this was
a dismissal on grounds of age in breach of sec
187(f) of the Act
which rendered the dismissal automatically unfair. Sec 187(1)(f) will
be quoted shortly. The appellant contended
that the second and
further respondents had been dismissed on account of an agreed or
alternatively, normal retirement age as provided
for in sec 187(2)(b)
of the Act which, so the appellant contended, rendered the dismissal
fair. A dispute then arose about the fairness
or otherwise of the
dismissal of the second and further respondents. The resultant
dispute was referred in due course to the Labour
Court for
adjudication. The Labour Court, through Waglay J, held that there had
been no agreed nor normal retirement age in relation
to the second
and further respondents and that, therefore, the dismissal was in
breach of sec 187(1)(f) of the Act and, therefore,
automatically
unfair. It ordered the appellant to pay the second to the fifth
respondents certain compensation but made no order
as to costs. The
Court a quo subsequently granted the appellant leave to appeal to
this Court against that order. This, then, is
the appeal against that
order.
The appeal
[7] Sec 9(1) of the Constitution of the Republic of
South Africa 108 of 1996
(“the
Constitution”)
provides that
“(e)veryone
is equal before the law and has the right to equal protection and
benefit of the law.”
Sub- section (2)
provides that
“(e)quality includes the full
and equal enjoyment of all rights and freedoms
.”
It goes on to provide that
“(t)o promote the
achievement of equality, legislative and other measures designed to
protect or advance persons or categories of
persons disadvantaged by
unfair discrimination may be taken
.” In so
far as it is relevant to this case, ss(3) provides that
“(t)he
state may not unfairly discriminate directly or indirectly against
anyone on one or more grounds, including, … age… .”
Subsection
(4) provides that “(
n)o person may unfairly
discriminate directly or indirectly against anyone on one or more
grounds in terms of subsection (3). National
legislation must be
enacted to prevent or prohibit unfair discrimination.”
Subsection (5) reads: “
Discrimination on one
or more of the grounds listed in subsection (3) is unfair unless it
is established that the discrimination is
fair.”
[8] Sec 187(1)(f) of the Act reads thus:
“
(1) A dismissal is automatically unfair if the
employer, in dismissing the employee, acts contrary to section 5 or
if the reason for
the dismissal is:-
(a) - (e)
(f) that
the employer unfairly discriminated against an employee, directly or
indirectly, on an arbitrary ground, including but not
limited to …
age…”.
Sec 187(2)(b) provides an exception to the general rule
created by sec 187(1)(f). It reads thus:
“
(2) Despite subsection 1(f)-
a dismissal based on age is fair if the employee has
reached the normal or agreed retirement age for persons employed in
that capacity.”
[9] The respondents’ complaint against the dismissal
is that it offends against the provision of sec 187(1)(f) and that it
is, therefore,
automatically unfair. The respondents further contend
that the appellant’s conduct in purporting to unilaterally fix the
retirement
age at 60 constituted a unilateral change of the second
and further respondents’ terms and conditions of employment which
it had
no right to do which was ineffectual in law. In its defence
the appellant seeks refuge in the exception created by the provision
of sec 187(2)(b) and contends that the second and further respondents
had reached normal retirement age of 60 when they were dismissed
and
that, for that reason, the dismissals were fair. The appellant does
not contend on appeal that the second and further respondents
had
reached an agreed retirement age when they were dismissed.
Accordingly, what needs to be determined is whether there was a
normal
retirement age of 60 that was applicable to the second and
further respondents. If there was not, that is the end of the appeal.
If there was, there may or may not be further issues to consider.
[10] It was accepted by all concerned that the second
and further respondents’ terms and conditions of employment at Val
did not
include any provision to the effect that their normal
retirement age was 60. It was also accepted that those terms and
conditions
of employment did not include any provision for an agreed
retirement age. Accordingly, it follows that in law Val could not
have
dismissed the second and further respondents on the basis that
they had reached an agreed or normal retirement age for persons
employed
in the capacity in which they were employed. In terms of the
agreement concluded between the appellant, Val and the first
respondent
on the 30
th
January 2001 as well as in terms of sec 197 of the Act the terms and
conditions of employment which the Val employees, including
the
second and further respondents, enjoyed at Val before the transfer
were to continue to apply to them after the transfer. The
effect of
this was, therefore, that there was no agreed or normal retirement
age applicable to them immediately before the appellant
purported to
unilaterally fix 60 as the normal retirement age for them.
[11] The question that arises is whether the appellant
could render 60 to be the normal retirement age for the second and
further
respondents by simply declaring unilaterally that 60 was
their normal retirement age. In acting as it did, the appellant was
seeking
to in effect introduce a new condition of employment into the
terms and conditions of the employment of the second and further
respondents.
In law it had no right to do that without the second and
further respondents’ consent. The appellant’s conduct in
purporting
to unilaterally fix 60 as the normal retirement age for
the former Val employees including the second and further respondents
was
a breach of their terms and conditions of employment which it
had taken over from Val by reason of sec 197(2)(a) and of the
agreement
of the 30
th
January. It was a breach of their contracts of employment in that
regard because, with their contracts not containing any clause
or
provision fixing a retirement age, it was implicit in their contracts
of employment that their contracts of employment could not
be
terminated in the absence of a fair reason and age could not per se
be a fair reason for their dismissal. Such conduct constituted
a
repudiation of the second and further respondents’ contracts of
employment. The repudiation gave the second and further respondents
an election either to accept it or to reject it and hold the
appellant to the terms and conditions of their contracts of
employment.
In this matter the second and further respondents chose
the latter course. Accordingly, the purported change of their
employment
terms and conditions was unlawful, wrongful and of no
legal effect.
[12] I
have so far dealt with the matter on a particular basis. There is an
additional basis on which the matter can be dealt with
which relates
to whether the appellant’s conduct did make 60 the normal
retirement age for the second and further respondents.
The
appellant’s attorney accepted, correctly in my view, that, if the
appellant’s conduct did not render 60 the normal retirement
age,
the appeal must fail. Of course, he submitted that the appellant’s
conduct did render 60 the normal retirement age for the
second and
further respondents.
[13] I am unable to uphold the appellant’s contention
that by unilaterally fixing 60 as the retirement age of all its
employees
including the second and further respondents, 60 became the
normal retirement age for such employees. What is normal retirement
age
depends upon the meaning to be accorded the word “
normal”
in sec 187 (2) (b). The word is not defined in the Act. It,
accordingly, must be given its ordinary meaning. Chambers –
Mcmillan’s
South African Student’s Dictionary describes the word
“norm” thus:
“You say that something is
the norm if it is what people normally or traditionally do.”
It further says:-
“Norms are usual or
accepted ways of behaving.”
It describes
the adjective “normal” as meaning
“usual,
typical or expected.”
The word “normality”
is described as
“the state or condition in
which things are as they usually are.”
The
New Shorter Oxford English Dictionary describes the word
“norm”
as meaning, among others
“a standard, a
type; what is expected or regarded as normal; customary behavior,
appearance.”
As to the adjective “
normal”,
one meaning that the latter dictionary gives is
“constituting
or conforming to a standard; regular, usual, typical, ordinary,
conventional.”
[14]
The
adjective
“normal”
and the adverb “
normally
”
have also received some judicial attention within the context of
different statutes. In
SA Breweries Ltd v
Kroonstad Municipality
1913 OPD 34
the Court
had to deal with an Ordinance which provided, inter alia, that the
valuer or valuers had to frame the valuation roll in
such a manner as
to show the
“value of buildings, by which
shall be understood the making of an estimated
normal
valuation.”
(Underlining supplied). In
discussing the meaning of the word “
normal
”
within the context of that Ordinance Maasdorp CJ,
with whom Fawkes J concurred, said at 36
“…
the meaning of the word ‘normal’ according to the English
language, as adopted, amongst others, by Webster, is ‘in the
ordinary way’ – the ordinary way in which things are done.”
[15] It would seem that, when in
Jacobs v African Guarantee & Indemnity Co.
Ltd­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­
­­­­­­­­­­­­­­­­1964(2)SA
804(C) Corbett J had to decide whether
a certain insurance excess was
a normal excess, he looked at whether there was a common underwriting
policy in regard to excess among
the insurance companies. I say this
because he held that, without such a common policy, it was impossible
to see how it could be
said that there was any norm. The matter went
on appeal. The decision of the Appellate Division is reported as
African Guarantee & Indemnity Co Ltd v
Jacobs
1965 (1) SA 759
(A).
On appeal it was
accepted that what had to be decided was whether the excess that the
respondent had referred to as normal excess
at an insurance company
he had dealt with before was normal to that insurance company. The
appellant insurance company in that matter
contended that excess had
not been normal to that earlier company. The Court took the view that
there was a fallacy in the appellant
insurance company’s argument
that the excess required of the respondent was not normal to that
insurance company. Beyers JA, writing
for a unanimous court, said
that the fallacy in the appellant insurance company’s argument lay
in the assumption that, like other
companies, that company had an
excess which was normal for all motorists or for motorists generally
whereas that company had no such
excess. Beyers JA held that in the
case of that company any excess was normal only in relation to
particular categories of motorists.
In other words the normality of a
particular excess was determined with reference to the category of
motorists into which the insured
person fell.
[16] In
S v Phahlaamhlaka
1965
(3) SA 401
(T)
the question was whether a so
– called Bantu Affairs Commissioner had been right in finding under
the Bantu Urban Areas Act, 1945
(Act 25 of 1945) that the appellant
was
“normally unemployed”
and, was, therefore, “
an idle person
”
within the meaning of those words as contained in sec 29 (2) (a) (i)
of that Act. This was within the context that out of 12 years,
the
appellant had been employed for the first 10 years, had been in
detention or jail for some time during which he, obviously, was
not
free to work and was unemployed for the previous 6 or 7 months after
his release from detention or jail when he was free to look
for work
before he was arrested and brought to the commissioner for the
enquiry.
[17] On appeal in the High Court, Colman J, with
Claassen J concurring, took the view that the commissioner had
considered only the
last six or seven months in the period of 12
years to arrive at the conclusion at which he had arrived. He held
that the whole period
of 12 years had to be taken into account and,
if that was done, there could be no doubt that the appellant had been
normally employed
for that period. The Court had regard to the whole
period instead of a part of the period to determine whether the
appellant was
normally employed or normally unemployed. Colman J
said, in relation to the adverb
“normally”
:
“That word was recently introduced into the
statute by amendment and there is, as far as I am aware, no judicial
authority interpreting
it in that context. But its meaning is plain
enough. It refers to the ordinary and usual way of life of the person
under investigation;
not what he has done or failed to do in special
circumstances.”
[18] Colman J said that proper weight had to be given to
the word “
normally
”
and, if that was done, then out of 12 years,
the appellant had worked during 10 of the 12 years, had been unfree
to work during a
further one and a half years and thereafter for 6
and a half years he did not seek employment. All of this, said Colman
J, meant
that over that 12 year period the appellant was normally
employed. Didcott J, with the concurrence of Leon J, subsequently
adopted
the same approach or test in
re
Buthelezi
1976 (1) SA 856
(N)
.
[19] It seems to me that the word “
normal”
as used in sec 187 (2) (b) really means what it says. It means that
which accords with the norm. However, it is important to bear
in mind
that that word is used in relation to persons employed in the same
capacity as the person whose dismissal on the basis of
having reached
normal retirement age is in issue. Sec 187 (2) (b) must, therefore,
not be read as if it says
“(d)espite
subsection 1 (f), a dismissal based on age is fair if the employee
has reached the normal or agreed retirement age.”
It
includes the words at the end
“for persons
employed in that capacity.”
What the
section does not make clear is whether the words “
persons
employed in that capacity
” refer to such
persons who are in the same employer’s employ or whether it also
refers to persons who are employed in the same
capacity by other
employers in the same industry or in general.
[20] It seems to me
conceivable
that one employer could have different normal retirement ages for
different categories of employees within its workforce.
There may,
for example, be different normal retirement ages for professionals
and artisans. In such a case the employer cannot retire
an employee
on the basis of a normal retirement age applicable to employees
employed in a capacity different from that of his own.
In other
words, where an employer seeks refuge in the provisions of sec 187
(1) (b) against a claim of unfair dismissal and his defence
is that
the employee had reached normal retirement age, he must show not only
that the employee had reached normal retirement age
but that the
retirement age is normal to employees employed in the same capacity
as the employee concerned.
[21] In
this matter it seems that the appellant sought to make 60 the normal
retirement age for all its employees, irrespective of
the capacity in
which they were employed. Of course, there can be nothing wrong with
the fixing of a normal retirement age for all
the employees of an
employer irrespective of their different capacities in which they may
be employed. However, as I have said, the
manner in which the
appellant sought to achieve the objective of a normal retirement age
applicable to Val’s former employees in
its employ was not lawful.
In law the appellant had no right to unilaterally impose such a
condition to the employment of the second
and further respondents
because their terms and conditions of employment did not include a
normal retirement age and the appellant
was seeking to unilaterally
introduce a new condition of employment into their conditions of
employment.
[22] In my view a certain age cannot suddenly become a
normal retirement age for employees or for a certain category of
employees
simply because the employer wakes up one morning and
decides that he wants a certain age as the normal retirement age for
his employees
or for a certain category of his employees. He can put
a proposal to his employees on what should be the retirement age and,
if they
agree, then there will be an agreed retirement age in that
workplace applicable to all those who have agreed to the proposal. A
retirement
age that is not an agreed retirement age becomes a normal
retirement age when employees have been retiring at that age over a
certain
long period - so long that it can be said that the norm for
employees in that workplace or for employees in a particular category
is to retire at a particular age. An example would be where, without
any formal agreement, employees in a particular category have
over
20 years been retiring at a particular age without fail. The period
must be sufficiently long and the number of employees in
the
particular category who have retired at that age must be sufficiently
large to justify saying that it is a norm for employees
in that
category to retire at that age. If the period is not sufficiently
long but the number is large, it might still be that a
norm has not
been established. If the period is very long but the number of
employees in the particular category who have retired
at that age is
not large enough, it might be difficult to prove that a norm has been
established.
[23] It seems to me that, where an employer finds itself
in the position in which the appellant found itself with regard to
its wanting
to ensure that the former Val employees shared the same
normal retirement age as his other employees, one remedy available to
him
is to institute a lock – out – obviously after complying with
all the requirements of the Act – and then compel the former
Val
employees to agree to 60 as the agreed retirement age for them.
Resorting to a unilateral change of the second and further
respondents’
terms and conditions of employment was not the way to
go about it.
[24] Sec 187 (1)(b) creates two bases upon which an
employer can justify the dismissal of an employee on grounds of
retirement age.
The one is an agreed retirement age, the other is
normal retirement age. Those are the only two bases. In this case 60
was neither
the normal nor the agreed retirement age for the second
and further respondents.
[25] In the circumstances the dismissal could not be
justified on the basis of sec 187 (1) (b) of the Act but was contrary
to the
provisions of sec­­­­­­­­­­­­­­­­­­­­­­­
­­­­­­­­­­ 187(1)(a) and was
automatically unfair. In this regard the Court a quo was right
in so
finding. In the premises the appeal is dismissed with costs.
Zondo
JP
I agree.
Willis JA
I agree.
Davis AJA
Appearances
For the
appellant : Mr H C Niewoudt
Instructed
by : Deneys Reitz Attorneys
For the
respondent : Adv. C.S. Kahanovitz with Mr J Whyte
Instructed
by : Cheadle Thompson Attorneys
Date of
judgement : 9 July 2004
1
Sec
197(2)(a) of the Act as it read in 2001 provided as follows: “ If
a business, trade or undertaking is transferred in the
circumstances
referred to in subsection (1)(a), unless otherwise agreed, all the
rights and obligations between the old employer
and each employee at
the time of the transfer continue in force as if they had been
rights and obligations between the new employer
and each employee
and, anything done before the transfer by or in relation to the old
employer will be considered to have been
done by or in relation to
the new employer.”. Sec 197(2)(a) now reads: “If a transfer of a
business takes place, unless otherwise
agreed in terms of subsection
(6) –
the new employer is
automatically substituted in the place of the old employer in
respect of all contracts of employment in existence
immediately
before the date of transfer.”