Springbok Trading (Pty) Limited v Zondani and Others (PA2/03) [2004] ZALAC 12; [2004] 9 BLLR 864 (LAC); (2004) 25 ILJ 1681 (LAC) (9 July 2004)

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[2004] ZALAC 12
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Springbok Trading (Pty) Limited v Zondani and Others (PA2/03) [2004] ZALAC 12; [2004] 9 BLLR 864 (LAC); (2004) 25 ILJ 1681 (LAC) (9 July 2004)

53
IN THE LABOUR
APPEAL COURT OF SOUTH AFRICA
HELD IN JOHANNESBURG
CASE
NO: PA2/03
In
the matter between:-
SPRINGBOK TRADING (PTY) LIMITED
APPELLANT
and
W.
ZONDANI & ELEVEN OTHERS
RESPONDENTS
JUDGMENT
JAFTA AJA
Introduction
[1] On the 14th July 2000 the appellant terminated the
respondents’ contracts of employment. Aggrieved by this decision,
the respondents
took the resultant dismissal dispute to the
Commission for Conciliation, Mediation and Arbitration (“the CCMA”)
for conciliation.
When the dispute could not be resolved through
conciliation, it was referred to the Labour Court for adjudication.
The matter came
before
Ngcamu AJ
who, after hearing evidence from both sides, found that the
respondents’ dismissal was substantively and procedurally unfair.
The
Court
a quo
ordered the reinstatement of the respondents on terms and conditions
no less favourable to them than those that had governed their
employment before their dismissal. With the leave of the Court a quo,
the appellant now appeals against that order.
The facts and evidence
[2] The
appellant and the respondents have two diametrically opposed versions
on the main issue in this appeal which is whether the
parties had
reached an agreement in respect of the termination of the
respondents’ contracts of employment. The appellant says
that they
had whereas the respondents say that they had not. That issue may
well be decided on the probabilities. Accordingly, it
may be
necessary to set out the parties’ respective versions and extracts
from their evidence in a more detailed manner than one
would
ordinarily do. This should help in the assessment of the plausibility
and probability of each version and in that context I
proceed to set
out the facts and evidence.
[3] The appellant is
a registered company which procures hides and skins in Southern
Africa and gets them semi-processed and sells
the product on local or
overseas markets. The respondents are former employees of the
appellant and members of the National Union
of Leather and Allied
Workers (“the union”) who were dismissed from the appellant’s
employment for alleged operational requirements
on the 14
th
July 2000. Mr Arthur Petrus (“Petrus”) features prominently in
this matter. He was the organiser of the union who dealt with
the
appellant in regard to matters affecting members of his union
employed by the appellant including the respondents. Another person
who features prominently in this matter is Mr Peter Bell (“Bell”).
He was a director of the appellant and also owned a labour
brokerage
called Prostaff Agency (“Prostaff”). Prostaff provided a group of
workers to the appellant and charged the latter a
fee for their
services.
[4] At
the trial the appellant called only Mr Bell as a witness. The
respondents called two witnesses, namely, Mr Petrus and a Mr
Ndleleni, one of the respondents. Bell testified that early in 2000
the appellant’s directors had a discussion over what they regarded
as the inconvenience experienced by the appellant in maintaining a
separate payroll for its employees when Prostaff administered
another
payroll in respect of its employees who worked at the appellant’s
plant. Bell testified that during this discussion it
was said that
all the employees of the appellant should be placed on the payroll of
Prostaff.
[5]
Bell stated that on 23 May 2000 he held a meeting with Petrus to
discuss various matters pertaining to members of the union who
were
in the appellant’s employ. He said that he informed Petrus for the
first time at this meeting that the appellant was contemplating
retrenching its employees and to have them employed by Prostaff.
Bell said that Petrus did not say much. Bell promised to send Petrus
a letter in regard to the proposed retrenchment.
[6] Bell’s evidence as to what transpired at the
alleged meeting of the 23
rd
May was detailed. He said that the meeting took place at the
appellant’s premises. He said that their discussion was about
“grievances and disciplinary issues and
stuff.”
He said that he was just giving
Messrs Petrus and Ndleleni (“Ndleleni”) clarity on some
questions. Bell went on to say:.
“
One of the issues that came up that I do recall
was that they wanted to know how they could get hold of me and how
they could complain,
because they did have problems and I asked them
why they had not raised them up until that point in time, and they
seemed to be confused
about the fact that I was not on the premises,
and I did explain to them how to contact me and that if they had a
material issue
that needed discussion I would be there for them, and
that they need just give me a written grievance and hand it to, I
gave them
a contact person who was my contact person, because I used
to come out every week or twice a week, but I would not bother to go
into
the store at that point in time if there was no issue that
needed to be resolved on a daily basis, and I would drop off the
wages
with one of the people in the admin office, and I explained to
them that they should use that contact, if they wanted to get hold
of
me, just give a written grievance, or if there was a really pressing
matter go to him and make a phone call so that I could get
there.”
[7] Bell went on to say that they were discussing
“(j)ust a few nitty gritty issues about who
was in charge, who should they report to, who could they complain to
and so on and so
forth and process.”
He
said that that was the basis of the meeting. Bell said that the
meeting did not take long. He said that he did not take minutes
of
the meeting because he did not believe that there was a need to. He
stated that the meeting was
“low key”.
He
testified that he explained to Petrus and Ndleleni how to get hold of
him and said that, if there were any issues, he would address
them.
[8] Bell further testified that at the end of the
meeting he
“got into a little bit of a
verbal banter, if you wish to start with Mr Petrus, to explain to him
what was in fact imminently on
the horizon.”
He
said that he told Petrus that he had had a discussion with the other
directors of the appellant and they were finding it rather
inconvenient, time-consuming and wasteful to have two groups of
employees working “
in tandem
”
because they had to have a
“fancy wage
system going for [the appellant’s] employees which were separate
from [those of Prostaff], the appellant had to have
a person
‘constantly on administrative issues of the employees of [the
appellant] and effectively
I
was handling all the labour issues and they just saw it as being the
obvious solution to their problem in terms of economics,
administration
and efficiency to place all the employees that were
located in their premises under the obvious place, Prostaff Agency,
which at
that stage had been working fine.”
[9] Bell went on to say
“I took
it as an opportune time to discuss it with Mr Petrus at that
particular meeting of the 23
rd
,
and I actually went into it in a large amount of detail because,
well, as much detail as was possible for this rather simple matter,
a
case of this is what [the appellant’s] management perceive, this
makes sense, this is what we want to do, this is why we want
to do it
and this is how it is proposed that we do it, and all of that I went
through with Mr Petrus at that particular meeting and
I said to him
but listen do not worry about it, he did not have any issues or
questions, he just shrugged his shoulders or something
if I remember
again, and I said to him that I will formalise it because in terms of
sec 189 it is required that I give him the letter
stating the points,
the reasons, etc what I propose. So I indicated to him at that point
in time that a letter would follow shortly
to him.”
[10] On 30
th
May 2000 Bell addressed a letter to the union for the attention of
Petrus as a follow-up to the discussion that he said he had had
with
him and Ndleleni on 23
rd
May. The letter read thus:.
“
Re: PROPOSED RETRENCHMENT OF SPRINGBOK TRADING
EMPLOYEES.
We act on behalf of Springbok Trading in the above
matter.
As
discussed at our meeting of 23 May 2000, it is proposed that all the
weekly paid employees of Springbok Trading be retrenched and
employed
through the brokerage, Prostaff Agency.
The
reason for this proposal is that the majority of the employees at
Springbok are already employed by Prostaff, and it is economically
and administratively wasteful running the workforces in tandem.
Prostaff
is a professional employment organisation and the benefit of
employing the employees through such a vehicle is that it frees
up
the management of Springbok to concentrate their efforts on their
core business.
It
is proposed that this change take effect as soon as possible and all
the employees affected are free to offer their issues.
Please
contact the writer in order that we may set a meeting date to discuss
the matter.”
Bell’s evidence was that
the letter was transmitted by telefax to the union and a fax report
slip was put up in support thereof.
The respondents and Petrus did
not dispute that the letter was sent to, and, received by, the
union’s office but Petrus said that
it did not reach him. As can be
seen from the letter, Bell concluded it by inviting Petrus to contact
him so that they could set
up a meeting to discuss the matter.
[11] Both Petrus and Ndleleni denied having had a
meeting with Bell on 23
rd
May. In fact they also denied that there ever was a meeting between
Bell and Petrus which was attended by Ndleleni at any stage.
Petrus
testified that on the 23
rd
May he was attending a meeting of wage negotiations at the bargaining
council and could produce documentary proof in support thereof.
This
had been put to Bell under cross-examination but he had persisted in
his version in this regard. Petrus was never asked when
he gave this
evidence to produce the documentary proof of his attendance of the
meeting of wage negotiations at the bargaining council
nor did Bell
or the appellant’s Counsel seek the production of such documentary
proof. Petrus denied that he had any discussion
with Bell on 23
rd
May along the lines testified to by Bell.
[12] Petrus’ version was that pursuant to his letters
of early May 2000 to the appellant he had met on the 11
th
May with Mr Kok of the appellant’s management whom he thought to
have been the manager of the appellant but Mr Kok had referred
him to
Bell. Petrus said that he then set up a meeting with Bell and that
meeting took place on 14
th
June 2000.
[13] Petrus testified that at the meeting of 14
th
June he and Bell discussed the issues set out in his letter of the
8
th
May 2000 as
well as
“the wage.”
Those issues were reflected in the letter as the
“company’s
procedural guidelines”,
disciplinary code
and
“grievance Code and Employees.”
Petrus said that he also discussed with Bell the appellant’s
failure to provide him with documents that he had requested
previously.
He said that Bell told him that he did not have copies of
those documents with him but would supply Petrus with such documents
in
due course. Petrus testified that he then brought up the question
of a wage increase for his union members. He stated that he wanted
to
know what the appellant’s intentions were in that regard. He said
that he asked Bell whether he would have a meeting with him
regarding
a wage increase for the employees and Bell said that he was in a
hurry as he had other commitments and was not prepared
to discuss a
wage increase on that day.
[14] Petrus was asked whether Bell did not raise the
question of retrenchment at this alleged meeting and he said that he
did not.
It was put to him that it was highly improbable that Bell
would not have raised that issue at that meeting if such a meeting
had
taken place as he had already written the letter of the 30
th
May to the union about the issue of a retrenchment. Petrus insisted
that Bell did not raise the issue of retrenchment at that meeting.
Under cross-examination Petrus emphasised that the meeting of the
14
th
June was held
at his request and that the issues that he had wanted to be discussed
“
were brought up, very fast, very quick and
off went Mr Bell.”
Petrus testified that,
after his meeting with Bell, he had a meeting with his members and
reported back to them what had transpired
at that meeting. Bell
denied having had a meeting with Petrus on the 14
th
June.
[15] Under
cross-examination Petrus testified that, after the meeting of the
14
th
June 2000 but before the 19
th
June, he drew up wage demands for the union members at the appellant
and sent them to Bell. He testified that among those demands
he made
a 20% wage increase demand. He testified further under
cross-examination that he asked for the meeting of the 19
th
June to discuss wage demands with Bell. He said that he requested the
meeting before the 19
th
June and on that occasion Bell mentioned to him that he wanted
“to
bring up some proposed retrenchment.”
Petrus said that Bell was also anxious that they have a meeting about
the retrenchment.
[16] Under cross-examination Petrus’ attention was
drawn to the fact that in par 6 of the respondents’ statement of
claim it was
alleged that Bell had telephoned Petrus “
on
or about 19 June 2000
” and asked Petrus to
attend a meeting on the appellant’s premises on the 19
th
June. Petrus was then asked whether the allegation in the statement
of claim was incorrect and that he was the one who had requested
the
meeting of the 19
th
.
Petrus answered that the allegation in the statement of claim was
wrong as he was the one who had telephoned Bell and asked for
a
meeting to discuss wages. It needs to be observed that in his
evidence in chief Petrus had said that Bell had telephoned him on
the
19
th
June and
asked him to “
come out
”
to the appellant’s premises and he had obliged.
[17] Petrus testified that he did not bring anyone to
the meeting. Asked why he had not taken any one of the union members
to the
meeting, he replied that that was because he did not “
want
to interfere with the production
.” Earlier
on Petrus had testified that he had not taken any employee to any
meeting with Bell because there was fear that any such
employee would
be victimised because the only shopsteward for the union who had ever
been elected in the appellant, one Raymond,
had been dismissed
“unfairly” which was perceived as victimisation. Petrus was then
asked whether the reason why he did not
take any one of the union
members to the meeting of the 19
th
June was no longer fear of victimisation but a reluctance to
interfere with production. To this he answered: “
and
it is not proper that we take workers to wage negotiations, only
shopstewards
.”
[18] Under cross-examination Petrus said that the
purpose of the meeting of the 19th June was to discuss wages and the
first issue
that he raised at that meeting was the issue of a wage
increase. Petrus said that Bell’s reply to this was that, if the
appellant
could afford an increase, it would consider giving an
increase to certain employees. Petrus said that he then told Bell
that “
there is no such thing that if the
company can afford it that the people must get paid increase.”
Petrus testified that Bell
“was
very short and said [as] he always [said] that you can do what you
want. I cannot even threaten him with industrial action
because he
said he can anytime get a truckload of workers to replace those that
are taking part in the industrial action.”
[19] Petrus said that he then told Bell that he would
report to the workers that Bell did not want to discuss wages with
him. Petrus
said that Mr Bell’s answer to this was to say that
Petrus could do whatever he liked. As far as the issue of
retrenchment is concerned,
Petrus said that at the meeting of the
19
th
June Bell
said that he intended retrenching the workers from the appellant and
bringing them over to Prostaff’s payroll. Petrus
stated that his
answer to this was to ask Bell to put everything in writing and send
it to him and they could take the matter further
after that. Petrus
said that Bell then told him that whether Petrus liked it or not, he
was going ahead with the retrenchments. Petrus
said that he then
asked if he could speak to the workers and Bell told him that he
could speak to the workers and tell them what
he had said but whether
they accepted it or not, that was what was going to happen. Petrus
testified further that, after his meeting
with Bell, he met with the
employees and reported back to them. He said that they were upset.
He said that he told them not to sign
any documents if Bell gave them
documents to sign. Petrus testified that he instructed the workers
not to sign any document because,
as he put it,
“I
know how Mr Bell operates.”
[20] Petrus was asked under cross-examination what Bell
said to him when he said that, if he wanted to retrench, he should
notify
him in writing and put his reasons for such retrenchment and
proposals in a letter. Petrus answered that Bell’s reaction to his
request was that whether he (Petrus) liked it or not, he, (Bell) was
going ahead with the retrenchment. Petrus was then asked whether
Bell
did not at any stage say that he had already done that by way of his
letter of the 30
th
May. Petrus said that Bell did not mention any such letter. It was
then suggested to Petrus that it was highly improbable that Bell
would not have referred to his letter of the 30
th
May if he, Petrus, had asked him to put this in writing because in
effect this would have been asking Bell to repeat an exercise
that he
had already done. Petrus persisted in his version that no mention of
such a letter was made by Bell. Petrus had maintained
the same stance
in respect of his alleged meeting of the 14
th
June. Petrus testified that the meeting of the 19
th
June did not even last for half an hour because Bell’s attitude was
“whether you like it or not I am going
ahead.”
Bell denied having had a meeting
with Petrus on the 19
th
June and insisted that his second meeting with Petrus was on the 29
th
June or thereabout. Petrus testified that he then waited to see
whether Bell would go ahead with the retrenchment. Petrus said that
he thought that Bell might change his mind about retrenching the
employees but, if he did not, his plan was to declare a dispute
and
refer to the CCMA.
[21] Bell was asked during his evidence in chief whether
Petrus had contacted him in response to his letter of the 30
th
May. Initially Bell answered that Petrus had not contacted him. Bell
added that that time was the season for annual wage negotiations
for
a number of companies in which the union was involved and Petrus was
always complaining whenever Bell got him on the telephone
about how
busy he was “
travelling from here to there
to Durban…”
He said that it was the peak
season for annual wage negotiations for the various industries in
which the union was involved and
“they were
busy running from pillar to post.”
Mr Bell
testified that he eventually spoke to Petrus and they agreed upon a
meeting on the 29
th
of June. Bell said that this meeting of the 29
th
June was convened to discuss the retrenchment. He said that he was
100% sure that Ndleleni also attended that meeting. Bell said
that
the meeting was held at the appellant’s premises.
[22] Bell testified that the next meeting was on the
29
th
June 2000.
He said that present at that meeting were Ndleleni and Petrus, on
behalf of the union, and himself on behalf of the appellant.
Bell
gave a detailed version of what occurred at the meeting of the 29
th
.
He testified that he went through the motivation for the appellant’s
proposal. He said that there was no objection or any comment
from
Petrus and Ndleleni. He said that he then took it upon himself to
“
talk about practicalities, the details of
actually making the change”
because he
wanted to satisfy the union and the workers that “
there
would not be any issues.”
He said that he
wanted to make the transition as smooth as possible for them. Bell
went on to say:
“So there were no proposals
whatsoever from the union, he sat and listened with a mouth full of
teeth. I will be quite honest, and
he nodded and he did not show any
point of disagreement or otherwise, and I specifically looked at
issues that I thought could be
of concern to workers.”
Bell said that he told Petrus that, if the workers were paid out
severance pay and they were then employed by Prostaff, they would
in
such a case be employed as new employees at Prostaff in which case,
if there was a retrenchment at Prostaff, they would “
bear
the brunt of”
such retrenchment on the
basis of the last in first out (LIFO) rule. Bell went on to say that
he had told Mr Petrus that the employees
in question were
“loyal
chaps”
and he did not want them to feel
threatened in any way that their services would be terminated. Bell
testified that he proposed
that he would “
put
a rider into the agreement … that [he] would accept that the
service would be counted as service, albeit not for future payment
of
severance pay, but for length of service.”
[23] Bell also testified that the other matter of
concern to him which he raised at the meeting with Petrus and
Ndleleni was that
he did not want to have “
to
pay out the bonus and leave accrual or allocations from [the
appellant] to the employees [as] it was close to Christmas and [he]
did not want them to end up having a situation where they got to
Christmas and their bonuses had been paid out in August and they
had
nothing for Christmas
.” Bell said that he
proposed that the appellant hold back the bonus and annual leave pay
“so that they would not have an affected
leave cycle or get their money and blow it before Christmas
.”
Bell said that he also proposed at the meeting that the employees’
sick leave cycles continuous as their service was to be
regarded as
continues once they were in Prostaff’s employment. He said that he
had already spoken to the appellant about this.
He testified that his
aim in this regard was to ensure that the employees “
would
not end up having sick leave that they did not have an entitlement
to.”
Bell said that “
those
were the issues
” at the meeting of the 29
th
June “
otherwise it was the normal stuff, we
will pay you this, we will terminate service on such and such a date,
that is what the proposal
was
.”
[24] Bell emphasised that all the proposals came from
him and that Petrus did not raise anything. He said that
“(t)here
was no murmur whatsoever other than an acknowledgement, nodding of
heads [in] recognition of what I was saying and that
it in fact made
sense, and further than that I proposed to look after the employees.
And I raised concerns on their behalf because
that was my honest
intention. It was not meant to subvert them or anything. It was just
a question of it was operational, the practical
thing to do. At the
end of that meeting Mr Petrus suggested that he would go back to the
employees and revert to me and that is where
we parted on that
particular day.”
Mr Bell testified that
most of the time during the meeting Mr Petrus sat there
“with
a mouth full of teeth”
and did not say
anything.
[25] However, Bell testified that Petrus failed to
revert to him despite having promised to. Bell attempted to contact
Petrus by telephone
on a number of times without success. Bell
testified that, when he eventually reached Petrus on the telephone,
which was on the 11
th
July 2000, the latter reported that the union members had accepted
the appellant’s proposal. According to Bell, he then suggested
that
a written agreement be signed but Petrus indicated that he was not
available. Bell testified that he then asked Petrus whether
Ndleleni
could sign the agreement instead. Bell said that Petrus answered in
the affirmative. Bell said that he thereafter drafted
an agreement
for signature by Ndleleni. For reasons that will emerge in due course
in this judgement, it is necessary to quote the
terms of that
agreement in full. That agreement read thus:-
“
It is hereby agreed between Springbok Trading (the
company), and the union represented by the below mandated shop
steward on behalf
of the employees, that the employees services with
the company shall terminate with effect from Friday 14 July 2000 and
both parties
waive the requirement for notice beyond this point.
All
the affected employees shall be entitled to severance pay in terms of
the law.
Annual
leave and bonus accrued shall be held in reserve and paid to the
employees at the time it would normally have been paid had
they
continued with their employment with the company.
With
effect from the same date as above, all the affected employees shall
be given employment with Prostaff Agency, subject to their
terms and
conditions, and be placed on a labour broking basis, with Springbok
Trading.
It
has been agreed with Prostaff Agency that recognition shall be had
for past service in as much as the determination of service
length is
concerned, although this shall not mean that Prostaff Agency has any
obligation to pay severance payments on these years
as this payment
shall already have been made.”
[26] It will have been seen from the agreement signed on
11
th
July that,
after the retrenchment of the employees from the appellant, the
employees would be employed by Prostaff on Prostaff’s
terms and
conditions of employment. It will also have been seen from that
agreement that Prostaff would place the employees with
the appellant.
In the light of the fact that the agreement of the 11
th
July contemplated that Prostaff would employ the employees on its
standard terms and conditions, those terms and conditions of
employment
are obviously relevant to this matter. It is not necessary
to quote the full standard Prostaff contract of employment for
present
purposes. It is sufficient to quote only clauses 1-9 thereof.
They read thus:
“
1. Your services shall be hired out to companies
who wish to use the services of Prostaff Agency. You shall take
instructions and
work under guidance from the client who is using our
service and from the management of Prostaff.
You understand that the client hiring our service,
can terminate the work contract with Prostaff at any time, or can
ask of the
replacement of an individual or group of employees.
Should this happen, you understand that if Prostaff is unable to
place you
at another of its client companies, your employment
contract shall be suspended in its entirety until you are placed
elsewhere.
All benefits shall be suspended. You may also be placed
on short-time without pay while at a client if need be in the event
of
shortage of work.
In line with 2 above, you agree to work for any
client or Prostaff if instructed.
A 3 month probation period shall apply, whereafter
the employer may, at his sole discretion, confirm permanent
employment or extend
the probation period if necessary.
Your initial payrate shall be 6-22 per hour.
Hours of work shall be within the limits prescribed
by law and the employer reserves the right to alter starting and
finishing times
subject to his requirements.
Overtime working, within statutory limits, shall be
compulsory if so directed.
Should you be requested to work on a public holiday,
you must oblige.
Any task related to the business of the
client/employer, must be carried out if so directed, even if it is
not normally or generally
performed by yourself.”
[27] Bell testified that, after he had prepared the
agreement, he called Ndleleni whom he had understood to be a
shopsteward. He
testified that he explained the agreement to Ndleleni
in English. Bell went on to say that he told Ndleleni that the union
had agreed
to the terms of that agreement. This part of Bell’s
evidence accords with Ndleleni’s evidence on this aspect. Bell said
that
he also looked for another employee, one Jacobs, and called him
to come and sign the agreement as well. Bell said that he explained
the contents of the agreement in Afrikaans to Jacobs. Asked under
cross-examination why he had taken the trouble to explain the
contents
of the agreement to Jacobs as he was only going to sign as a
witness, Bell said that he was not sure that Ndleleni would
understand
fully the terms of the agreement and did not want it to be
thought that he had got Ndleleni to sign the agreement without
understanding
its terms and wanted there to be someone else, too,
whose ability to understand the agreement he trusted. Bell said that
after he
had explained the agreement to both Ndleleni and Jacobs,
they both signed the agreement.
[28] Both Petrus and Ndleleni denied having had a
meeting with Bell on the 29
th
June. In support of this version Petrus testified that, on the
morning of the 29
th
June, he and other union delegates were on their way to a meeting of
the national executive committee of the union in George which
was to
be held during that week-end. Petrus said that there was no way in
which he could have had a meeting with Bell on the 29
th
June. This version was put to Bell under cross-examination and he
persisted in his evidence that he had a meeting with Petrus and
Ndleleni on that day.
[29] Petrus
denied that he told Bell that the workers had agreed to the
appellant’s proposal that they be retrenched from the appellant
and
be taken over by Prostaff. He said that he never concluded any
agreement with Bell and that he would never conclude such an
agreement
over the telephone. He said that
“we
do not negotiate over telephones. It is in person.”
He also denied that he had given a go-ahead that Ndleleni sign any
agreement on behalf of the union. He denied, too, that Ndleleni
ever
accompanied him to any meeting with Bell. He denied the evidence by
Bell that he had said that he was busy. Petrus said that,
when it
came to serious matters like agreements, he would make time even if
his schedule was tight.
[30] Ndleleni’s version of how he came to sign the
agreement on the 11
th
July ran thus:
“
On this day, 11 July 2000, Mr Bell arrived when we
were still at our jobs at Springbok Trading with this document. He
said that I
should look for another person who can witness to the
signing of this document. He said that he was coming from our union
office
and Mr Petrus said that [I] should sign. I tried to get
someone and I finally got Mr Jacobs to sign as witness. We went to
the office
and Mr Bell asked us to sit down. He said I should sign
here and Richard on the other side. He spoke to Richard in Afrikaans.
I requested
him whether should I not phone my organiser, my union
organiser, and ask him whether is this really the real document, is
this truthful.
He refused to give me the opportunity to phone. I
again requested him to give me this document and go out and show this
document
to the other employees outside so that I can ask them
whether is it correct for me to sign this document, and he refused me
to do
that. He said that I do not have a choice, everything has been
agreed upon, it comes from my union. He further said that if I do
not
sign on this document then I will be on the other side of the gate.
Then at that moment we stared at each other, myself and Richard,
we
were confused. We then ultimately both signed the document. Then the
following morning, that means 12 July, I then phoned Mr Calvin
Petrus, our organiser, telling him about this document that Mr Bell
said we must sign, and he said that it was coming from him. He
denied
knowledge of this document and also he denied ever seeing Mr Bell in
his offices. He then said that I must take this document
and put it
aside, I do not have to worry about it, because this what Mr Bell has
done is not correct. That is all.”
[31] Under cross-examination Ndleleni was asked why, if
Bell was coming from a meeting with Petrus at the union office, he
would not
have got Petrus to sign the agreement as he was happy with
it but instead come to the work place and ask him, Ndleleni, to sign
the
agreement. Ndleleni’s answer was that maybe Petrus was not
authorised to sign the agreement. It seems quite improbable, that
Bell
would have said that he had been to the union office and had met
with Petrus who had said he was happy with the agreement but he
had
not got Petrus to sign the agreement but brought it to the workplace
to be signed by a union member. Ndleleni testified that
there were
two reasons why he had signed the agreement despite the fact that
Petrus had given instructions for the employees not
to sign any
document from Bell. He said that the one was that Bell said that he
was coming from the union offices and Petrus was
happy with the
agreement and the other was that Bell had threatened him with
dismissal if he did not sign the agreement.
[32] Petrus testified that on the 12
th
July he was telephoned by Ndleleni who told him that Bell had forced
him to sign an agreement. Petrus testified that he told Ndleleni
not
to worry and that, if Bell went ahead
“with
this thing”
, he would declare a dispute and
refer it to the CCMA. He did not ask Ndleleni to let him have a copy
of that agreement. He also did
not telephone Bell to ask him what was
going on or ask him about Ndleleni’s allegation that he had
threatened him with dismissal
if he did not sign the agreement or
that Petrus had authorised the signing of the agreement. Petrus said
that he did not think of
contacting Bell about this because he
thought that Bell would not go ahead with the retrenchment.
[33] Petrus testified that later – after the 12
th
July – Bell had telephoned him and
“told
me that the people were already retrenched from Springbok Trading and
they do not want to sign the contract of employment
that he is
offering them.”
Petrus testified that his
response ran thus:
“I told him Bell over the
phone, Bell as far as I am concerned no retrenchment took place, and
if you go ahead with this I am going
to declare a dispute against
Springbok Trading which is the company that they work for.”
Petrus said that he knew for the first time on the 7
th
August that Bell had gone ahead with the retrenchment. He said that
some of the workers were not allowed into the premises. He said
that
he then went to the company and had a meeting with the workers
outside the gate and it was on that day that the workers gave
him a
copy of the agreement of the 11
th
July and a standard Prostaff contract of employment. Thereafter he
wrote the letter of the 8
th
August demanding the reinstatement of the workers.
[34] Bell said that in terms of the agreement between
the parties, the contracts of employment of the employees were going
to terminate
on the 14
th
July. He testified that various documents were then included in the
pay packets of the employees which included the standard Prostaff
contract of employment which they were asked to sign on the 14
th
or the 17
th
July.
The employees were meant to commence duty in Prostaff’s employment
on the 17
th
July.
Bell said that on Monday, the 17
th
July, some of the employees signed the Prostaff contracts of
employment but others, including the respondents, refused to do so.
Bell said that, when he realised early in the week commencing on the
17
th
July that
some of the employees were refusing to sign the Prostaff contracts of
employment, he telephoned Petrus and told him this.
He testified that
Petrus was upset about this. Bell stated that he told Petrus that he
would give him another week to sort the problem
out and in the
meantime he would allow the employees refusing to sign to work as
casuals. Bell stated that Petrus said that he would
sort the problem
out.
[35] Bell testified that at the beginning of the week
commencing on the 24
th
July he had the same problem as at the beginning of the previous
week. He testified that the employees who had refused to sign the
Prostaff contracts of employment the previous week continued to
refuse to sign. Bell said that he once again contacted Petrus who
again said that he would talk to the employees. Once again Bell
allowed the employees to work that week as casuals. Bell said that
the same thing happened the following week. That was now the week
commencing on the 31
st
July. Bell testified thus in regard to that week:
“
I
think it was the end of that week [the week beginning the 31
st
July]. I said well that is it and I had warned, I told Mr Petrus
that, if they do not sign now finally that I will not allow them
on
the premises on the day that I think I gave them three weeks of
indulgences where I contacted Mr Petrus on at least three occasions
to tell him please sort it out, what is the problem, what is going
on, and each time he told me he would get back to me, he will
sort it
out, and get them to sign. I kept saying I will give you an
indulgence. Eventually I got to the point where I had to instruct
the
security guards not allow them onto the premises.”
[36] Bell said that round about the 8
th
August he heard that it was being alleged that he had misled Ndleleni
and Jacobs into signing the agreement of the 11
th
July by saying to them that the union had agreed to that agreement.
Bell said that he contacted Petrus and asked him what exactly
this
was all about. Bell said that he was “
flabbergasted
”.
Bell said that Petrus replied that one of the employees had been to
the union office to complain and the union’s general secretary
happened to be in the office at the time and the general secretary
had insisted that Petrus “
take up the
matter
” and he, that is Petrus, had felt
that he had to do it. Bell said that Petrus said that that is not
what he had wanted to do.
The decision of the Court a
quo
[37] As
already indicated above, the respondents did not accept the
dismissal. They regarded it as unfair and demanded reinstatement.
Needless to say, the appellant’s attitude was that the termination
of the respondents’ services was fair in that it had been
agreed
upon with the union but that, even if it was found that the union had
not agreed to such termination, same was fair both substantively
and
procedurally as there were valid operational requirements and a fair
procedure had been followed. In the adjudication of the
resultant
unfair dismissal dispute, the Court a quo found that the appellant
had failed to discharge the onus of proving that the
union had agreed
to the termination of the respondents’ contracts of employment by
the appellant and that they be moved into the
employment of Prostaff.
In those circumstances the Court a quo found that the appellant had
failed to prove the existence of a fair
reason to dismiss the
respondents. With regard to procedural fairness, the Court a quo
found that the dismissal was procedurally
unfair because, among other
reasons, the consultation process had not been completed when the
appellant dismissed the respondents.
As already indicated earlier,
the Court a quo ordered the appellant to reinstate the respondents in
its employ retrospectively to
the date of their dismissal. It also
ordered the appellant to pay the respondents’ costs.
The appeal
[38] Basically the judgement of the Court
a
quo
was challenged on the following grounds;
namely;
That the Court a quo erred in accepting the testimony
of the respondents’ witnesses and rejecting the evidence of the
appellant’s
witness;
That the Court a quo should have found that the
respondents’ contracts of employment were terminated in terms of
an agreement
concluded by the parties;
That alternatively to (b) above, the Court a quo erred
in holding that the respondents’ dismissal was substantively and
procedurally
unfair on the basis that a fair reason for the
dismissal was not proved and that no proper consultation was held
prior to the dismissal.
Issues on appeal
[39] The parties’ version about a number of aspects of
this matter are divergent. Both parties were agreed that, prior to
the termination
of the contracts of employment of the respondents,
two meetings took place which involved Bell and Petrus. However, they
differ on
the dates on which those meetings took place and on whether
Ndleleni also attended those meetings. On Bell’s version the two
meetings
took place on the 23
rd
May and on the 29
th
June and he thought that Ndleleni attended the meeting of the 23
rd
May but was not sure but he said that he was ‘100% certain’ that
Ndleleni attended the meeting of the 29
th
June. On Petrus’ version the two meetings that he said he had with
Bell took place on the 14
th
and the 19
th
June
and Ndleleni never attended any of those meetings. Ndleleni
corroborated Petrus’ version that he did not attend any meetings
with Petrus and Bell. Ndleleni’s evidence was that Petrus had a
meeting with the appellant’s employees on the 19
th
June at about lunch time which was in accordance with Petrus evidence
in that regard because Petrus testified that after meeting
with Bell
he had a meeting with the workers. At some stage in the course of his
evidence Bell seemed unsure that the date of the
second meeting was
the 29
th
but said
that he thought it was on that date. He said that the second meeting
was near the end of June.
[40] I agree with the Court a quo that it is not really
necessary to decide on which of the two sets of dates provided by the
parties
the two meetings took place. However, it does seem probable
that the first meeting took place on the 23
rd
May. Otherwise it is not clear what motive Bell would have had to
refer in his letter of the 30
th
May to the union to a meeting of the 23
rd
May. There can be no basis for any suggestion that Bell fabricated
that letter. What is important is what was discussed at the two
meetings between the parties. There is also no particular
significance on whether Ndleleni was present at one or both of the
meetings
between Bell and Petrus save in so far as he may be able to
corroborate one or the other.
[41] With regard to
what was discussed between the parties at the two meetings –
irrespective of the dates when such meetings were
held – the
parties’ versions converge only to very limited extent. On both
parties’ versions Bell did raise the issue of the
retrenchment of
the appellant’s employees and their being thereafter moved into
Prostaff’s employment. On Bell’s version he
raised it for the
first time at the meeting of the 23
rd
May and gave motivation for it but told Petrus not to worry about it
at that stage as he intended sending him a letter in which the
full
proposal would be made and motivation would be given. That is the
letter that Bell sent to the union by fax transmission on
the 30
th
May. On Petrus’ version, quite apart from the fact that, on his
version, there was no meeting between the two men on 23
rd
May, Bell did not raise the issue of retrenchment at the meeting of
the 14
th
June but
did raise it at the one of 19
th
June. Petrus testified that at the meeting of 14
th
June he and Bell discussed the issues in the agenda contained in his
letter of 8
th
May
– which did not include retrenchment but he had also raised the
issue of the wage increase for the workers or wage negotiations
but
Bell had promised to let him have the documents he had asked for in
the letter of 8
th
May and had said that he was not prepared to discuss wages on that
day. Petrus said that Bell was in a hurry in that meeting and
had
told him that he had other commitments.
[42] Petrus’ version was that, even prior to the
second meeting of 19
th
June, on his version, Bell had told him that he wanted to discuss
retrenchment with him when they met. Petrus said that Bell raised
the
issue of retrenchment in the meeting of 19
th
June. On the issue of the content of the discussion of the issue of
retrenchment between the parties, their versions are, once again,
very divergent. On Bell’s version he made a proposal to Petrus on
23
rd
May, gave
motivation for it, followed it up with the letter or notification of
30
th
May and
discussed it in great detail with Petrus and Ndleleni at the second
meeting i.e. on 29
th
June. On Bell’s version he even took Petrus through a standard
Prostaff contract of employment and told him that the clause on
probation in the standard Prostaff contract of employment would not
apply but throughout these two meetings and this very important
presentation Petrus, on Bell’s version, challenged nothing, asked
no questions, made no comment and gave no indication of disapproval
or unhappiness. On Bell’s version all Petrus did was to nod with
his head in acknowledgement of what Bell was saying. On Bell’s
version for the whole time Petrus sat there with, as Bell put it, “
a
mouth full of teeth.
”
[43] On Petrus’ version Bell did not come to the
meeting to make a proposal which needed discussion. He came to tell
Petrus simply
what he was going to do, namely, that the appellant
intended to retrench the employees and they would be moved to
Prostaff’s employment
and that, when Petrus said that he would need
to discuss this with the employees, Bell told him that he was going
to retrench the
employees whether they liked it or not and
irrespective of what they may have to say. On Petrus’ version he
told this to the employees
and warned them not to sign any documents
from Bell but about four weeks or so thereafter Bell proceeded to
falsely inform Ndleleni
and Jacobs that he i.e. Petrus had agreed to
the retrenchment of the employees and their being taken over by
Prostaff and had given
a go-ahead to Ndleleni signing the agreement
of 11
th
July on
behalf of the union which Ndleleni and Jacobs signed.
[44] On Petrus’ version Bell thereafter proceeded to
retrench the employees from the appellant on 14
th
July and tried to get them to sign the Prostaff contracts of
employment which some signed but the respondents refused to sign.
However,
even on Petrus’ version Bell telephoned him at some stage
after 14
th
July
and informed him that some employees were refusing to sign the
Prostaff contracts of employment. On Petrus’ version it is
not
clear what was happening in the workplace between 17
th
July and the 8
th
August but on Bell’s version what was happening is that he was
communicating with Petrus about the problem that had arisen when
some
of the employees refused to sign the Prostaff contracts of employment
which, on Bell’s version, was contrary to the agreement
that he and
Petrus had concluded and Petrus kept on saying that he was going to
speak to the employees concerned. That which Bell
said to Petrus
when, according to Petrus, Bell telephoned him after the 12
th
July seems to be consistent with the conduct of somebody who was
speaking to a person whom he expected to know about that which he
was
talking. According to Petrus, in that telephone conversation, Bell
told Petrus: “
that the people were already
retrenched from Springbok Trading and they do not want to sign the
contract[s] of employment that he
is offering them”.
This
sounds like Bell was “
reporting
”
the workers to Petrus for conduct that he expected Petrus to find
unacceptable. Of course, Bell would expect Petrus to find the
employees’ refusal to sign the Prostaff contracts of employment
unacceptable if, to Bell’s knowledge, Petrus supported the idea
that the employees sign the Prostaff contracts of employment. If that
is so, that would, of course, corroborate Bell’s evidence
that
Petrus had agreed to the proposal that the employees be retrenched by
the appellant and taken over by Prostaff. It is, therefore,
within
this context and what follows hereunder that I have to determine
whether the termination of the respondents’ contracts of
employment
with the appellant and that they be employed by Prostaff had been
agreed to by Petrus.
[45] The respondents’ claim was that they were
dismissed by the appellant and such dismissal was without any fair
reason and there
was no consultation as required by sec 189 of the
Labour Relations Act, 1995 (“the Act”)prior to their dismissal.
The appellant’s
defence to the claim was that the termination of
the respondents’ contracts of employment was agreed between itself
and the union
and that, for that reason, the dismissal could not be
unfair and could not constitute an unfair dismissal. In fact the
effect of
that contention is that, if there was such an agreement, no
dismissal as contemplated by sec 186 of the Act occurred. If there
was
a mutual agreement to terminate the respondents’ contracts of
employment that would be a complete defence by the appellant to the
respondents’ unfair dismissal claim. If, however, there was no
agreement, this would mean that there was a dismissal and it would
still be necessary to inquire into the question whether such
dismissal was substantively and procedurally fair because the
appellant
contended that, even if there was no agreement, the
dismissal was nevertheless substantively and procedurally fair. The
central question
is thus the following: Was there a mutual agreement
between the appellant and the respondents that the respondent’s
employment
contracts be terminated?
Was there an agreement
between the parties to terminate employment the respondents’
contracts of employment?
[46] As the appellant has pleaded that the termination
of the respondents’ employment was effected in terms of an
agreement, it
bore the onus to prove not only the parties’ common
intention to enter into the agreement but also its specific terms. In
Cotler v Variety Travel Goods (Pty) Ltd and
Others
1974 (3) SA 621
(A),
the defendant
had, in defending a claim for damages arising out of a wrongful
dismissal, pleaded that the plaintiff’s employment
had been
terminated in terms of an oral agreement concluded by the parties. In
deciding where the incidence of onus lay for establishing
the
existence of the oral agreement,
Wessels JA
stated at 628H – 629C:
“
Variety’s defence was thus, on the pleadings
that the plaintiff had contracted out his right to insist on three
months’ notice
of termination of his employment. In substance,
though not in form, Variety’s case is that plaintiff by his oral
agreement waived
his contractual right to require three month’s
notice of termination of his employment. Proof of the conclusion of
the oral agreement
relied upon would have been the complete answer to
plaintiff’s claim against Variety. … The averment that plaintiff
had contracted
out of his right to three months’ notice of
termination of his employment, forms an essential part of Variety’s
case that plaintiff’s
employment was lawfully terminated. No other
form of lawful termination is relied upon. In my opinion, therefore,
the incidence of
onus in relation to the defence pleaded by Variety
is governed by the second principle referred to by Davis AJA in
Pillay v Krishna
and Another, supra at 951. The oral agreement relied
upon is in effect a special plea, and the onus of proof quad that
defence would
rest on Variety”.
[47] In his heads of argument Mr Grogan, who appeared
for the appellant, submitted that the appellant, represented by Bell,
and the
union had reached an agreement the terms of which were set
out in the agreement of the 11
th
July. However, before us he adopted a different position. He
submitted that the appellant’s case was that Petrus had agreed to
the “
core issue”
of the termination of the contracts of employment of the employees
with the appellant and that they be moved to Prostaff’s employment
but that it was not the appellant’s case that Petrus had agreed to
the terms and conditions under which they would be employed
at
Prostaff. This was, however, after Mr Grogan had accepted at the
commencement of his address that the appellant had to satisfy
the
Court on what the agreement was on such terms and conditions. In my
view once the appellant’s case does not include that Petrus
agreed
to any specific terms and conditions under which the employees would
be employed by Prostaff, the respondents’ version that
Petrus did
not agree to the appellant’s proposal to terminate the employees’
service and move them to Prostaff’s employment
becomes even the
more probable than if the appellant’s version is that Petrus
agreed to Prostaff’s standard terms. I say this
because it is
highly improbable that a union organiser of 30 years experience in
trade union work, as in this case, would have agreed
to such a
proposal without satisfying himself that his members would be
employed under acceptable conditions once they were under
a new
employer. Mr Grogan’s approach that what Petrus had agreed to was
simply the dismissal of the employees by the appellant
but not that
he had agreed to certain terms and conditions that would govern their
employment by Prostaff is at variance with Bell’s
evidence. Bell’s
evidence was that he was certain that Petrus had agreed that the
terms and conditions under which the employees
would be employed by
Prostaff would be Prostaff’s standard terms and conditions of
employment. It is convenient to address the
matter on both basis.
[48] Since
Bell was the only witness called at the trial by the appellant, it is
to his testimony that one must primarily look to
see whether the
appellant has established such agreement as well as its terms. Of
course, the respondents’ evidence must also be
considered in order
to establish the agreement and its terms. A close examination of
Bell’s evidence reveals that he testified
that a proposal for the
retrenchment of the respondents was made to Petrus who responded by
promising to consult the respondents
and revert to Bell. In this
regard Bell’s testimony is consistent with the appellant’s
defence as pleaded in its statement
of defence. At paragraph 2 of the
statement, the appellant alleged:
“
2.3
The [appellant] consulted with Mr Petrus of NULAW and Stephen
Ndleleni, the 11
th
applicant, regarding the proposed retrenchment on or about the 29
th
of June 2000; …
2.3.4 At the conclusion of the consultations, Mr
Petrus undertook to discuss the proposed retrenchment and the
proposals of the [appellant]
with the employees of the [appellant]
and undertook to revert to the [appellant] after his discussions”.
[49] Bell testified that during a telephonic
conversation between himself and Petrus, on 11
th
July, the latter advised him that the respondents had accepted the
appellant’s proposal and pursuant to that conversation, a formal
agreement was signed by Ndleleni (on behalf of the union) and the
appellant on 11 July 2000. It was not pleaded that the formal
agreement
signed on 11 July constituted a recordal of an earlier oral
agreement.
[50] Initially Mr Grogan argued that the written
agreement signed on 11 July reflected the terms of the proposal which
was explained
to Petrus at the meetings of 23 May and 29 June. He
submitted that the union was bound by the terms set out in the
written agreement
because it had authorised Ndleleni to sign it on
its behalf. However, the argument to the effect that the written
agreement reflected
the terms of the proposals made earlier was not
supported by Bell’s testimony. This is so because his oral evidence
in respect
of what he and Petrus had agreed would be some of the
terms and conditions of employment of the employees at Prostaff
differed in
material respects from the provisions of the agreement of
11
th
July. Two
examples in this regard relate to probation and the client with whom
the employees would be placed. Bell testified that
the agreement
between himself and Petrus was that the employees would not be
subject to probation on their taking up employment
with Prostaff and
yet in terms of the agreement of the 11
th
July read with the standard Prostaff contracts of employment during
the first three months would the employees would be on probation.
In
regard to the clients with whom the employees would be placed, the
agreement of 11
th
July said that would be the appellant, but the standard Prostaff
contracts of employment said any client. Bell confirmed that it
was
the appellant with whom the employees will be replaced.
[51] Mr Grogan’s further submission was that the
appellant has succeeded to establish the existence of the agreement
to terminate
employment against, at least, those workers who signed
the written agreement 11 July. I do not agree. The written agreement
was,
as pleaded by the appellant, concluded by the union and the
appellant. Throughout the trial, the appellant’s case was that the
two workers were authorised by and were acting on behalf of the union
when they signed the document. It was never alleged that they
were
also acting in their personal capacities. In fact, the terms of the
document itself expressly state that the agreement was between
the
union and the appellant. To the extent that the appellant’s case
was that in terms of the agreement concluded between Bell
on behalf
of the appellant and Petrus on behalf of the union, the respondents’
employment by Prostaff would be governed by the
standard Prostaff
terms and conditions of employment, such terms and conditions were
very unfavourable to the respondents. The respondents
would be worse
off than under the appellant. The clauses of such contract of
employment relevant to this aspect have been quoted
above. Clause 1
was to the effect that an employee had to agree that he would be
hired out to companies which might wish to use the
services of
Prostaff Agency. Clause 2 was to the effect that, if a client
terminated its contract with Prostaff and Prostaff could
not
immediately place the employee with another client, the employment
contract between the parties would be suspended “
in
its entirety
” until the employee was placed
elsewhere. The employee also had to agree that he could be placed on
short time “
without pay while at a client if
need be in the event of shortage of work
.”
Clause 4 provided that: “
a 3 month probation
period [would] apply, whereafter the employer [could] at his sole
discretion, confirm permanent employment or
extend the probation
period if necessary”
In
terms of clause 6, Prostaff reserved “
the
right to alter starting and finishing times subject to his
requirements
.”
[52] As already
indicated above, the appellant had to prove the agreement as well as
its the terms and conditions that it alleged
had been concluded. If
that agreement was to the effect that, once the respondents were
employed by Prostaff, they would be subject
to the standard terms and
conditions of employment applicable at Prostaff, the respondents
would have to serve a probationary period.
However, in his evidence
Bell said that the three month probation period clause in the
standard Prostaff agreement would not apply
but everything else in
the agreement would. Despite this, Bell emphasised that the agreement
with the union was that the respondents
“
would
accept the terms and conditions of Prostaff Agency
.”
But at another stage he said: “
No,
everything would have applied barring the three month probation
”.
If the position is that the agreement between the appellant and the
union was that the probation clause of Prostaff’s standard
contract
of employment would not apply, it is strange that the written
agreement that Bell prepared and asked Ndleleni to sign contained
a
clause to the effect that the employees’ employment by Prostaff
was to be subject to Prostaff’s standard terms and conditions
when
he knew that the standard terms and conditions of employment at
Prostaff included a three month probationary period.
[53] During
the cross-examination of Bell, the appellant’s Counsel, during an
objection to some line of questioning, placed on record
that Bell’s
version was that the agreement was in writing and oral evidence could
not be led about its terms. That is contrary
to the evidence that
Bell gave, namely, that the agreement was oral but the document
signed by Ndleleni was simply a confirmation
of the oral agreement
reached between him and Petrus.
[54] Bell was asked whether he had explained to Petrus
“
the intention
” of
all the clauses of the agreement and he answered: “
I
recall explaining them to him, I think they are fairly self
explanatory, the clauses are
.” The
respondents’ Counsel and Bell then had the following exchange:
“Counsel: I put to you earlier that
clause 2 in particular strips the employees of their rights, and you
said look
well in practice that was not going to happen. Did you take
Mr Petrus through these (intervention) …
Mr Bell: I cannot say with 100% certainty that I
did, but I believe that I did yes, that I explained to him that he
need have no concern.
What I do know, as I said before, is that it
was clear to him that it was going to be under the terms and
conditions of Prostaff
Agency, that much I can say to you with 100%
conviction and clarity.
Counsel: If one now assumes your, if I can
call it adapted version, I am going to argue to this court that the
chances of the union
representative, without putting up a fight,
after having been made aware that his employees’ job security is
going to be stripped
away, and just consenting to it, in fact
shortening the process, it is almost inconceivable, it just does not
happen. ---
Mr
Bell: You put that to me, I have to say to you that as far as I am
concerned there is nothing much in this clause here, in this
agreement, that is different to any normal work situation, nothing
much in this clause here, in this agreement, that is different
to any
normal work situation, nothing significantly so. It is quite possible
to put people on short term. If a person requires discipline
he can
be disciplined. Yes, you maintain that in your view there is a
question of that we can take the service away. The purpose
of that is
not about that, the purpose of removing a group of individual
employee is to do with the cyclical movements. It is pretty
much like
short time.”
[55] Later on Bell said that the agreement with the
union was that the employees would accept Prostaff’s standard terms
and conditions
of employment. At some stage later Bell said: “
There
was an agreement, the trade union said that they agreed to the
retrenchment and the severance and everything else, they agreed
to
retrenchment. That agreement is contained in the document that was
signed by Mr Ndleleni, and that is the document. I cannot force
an
employee who says I do not want to work for you to work for me, but
it was agreed by the trade union …
”
Bell’s evidence that the document signed by Mr Ndleleni reflected
the agreement with the union is in conflict with his evidence
that
the clause on probation in the standard Prostaff contract of
employment would not apply because in a Prostaff contract of
employment
the probation clause would apply.
[56] Bell testified that the employees “
were
told that they would be employed at Springbok Trading …”
The standard Prostaff contract of employment envisaged that an
employee would be placed with any client. In regard to the fact that
the employees were being required to sign contracts of employment
with such a clause, Bell said:
“… but that
is the standard contract of employment of all people who work for my
brokerage but they were certainly for Springbok
Trading. I have no
wish to meddle with them and change people around, so the agreement
that was signed about them working at Springbok
was until proven
otherwise certainly correct, yes
.”
[57]
Bell was also referred to clause 2 in the standard Prostaff contract
of employment which provided that, if an employee was placed
with a
client and the client asked for a replacement of that employee or
group of employees and Prostaff was unable to place the
employee with
another client, the contract of employment of that employee would be
suspended together with all benefits until the
employee was placed
elsewhere. It was put to Bell that his earlier evidence that the
employees were being employed by Prostaff on
terms that were
comparable to those applicable in the appellant’s employment was
wrong because under the appellant their employment
was not subject to
such a condition. Bell’s answer to this was that the purpose of the
clause in the contract of employment was
not to allow a client to
dictate the replacement of an employee just because it might not like
him. He said that, if after a month
the appellant said that with
regard to any of the employees, he would have argued with them that
clause 2 of the contract was not
meant for that. Quite frankly in
this regard Bell was trying to maintain an indefensible position.
There can simply be no doubt that
the alleged agreement that he
relied upon placed the employees in a far more disadvantageous
position than had been the case under
the appellant.
[58] Furthermore the standard Prostaff contract of
employment had a clause in terms of which the employees’ employment
by Prostaff
would be subject to a probationary period of three
months. When Bell was asked about this under cross-examination, he
said that this
clause would not have applied and said that he had not
put it into the agreement. He said that his discussions with Petrus
had not
included a probationary period. Later on in his evidence
under cross-examination Bell said that he and Petrus had discussed
the probation
clause and “
I had to tell him
that on a matter of trust that I would not enforce it, because it is
the standard contract, I did not change the
contract.
”
Despite this Bell still persisted in saying that the employees were
going to be in comparable positions under Prostaff. When asked
whether he had told whoever he had consulted with that the employees
would be in comparable positions under Prostaff, Bell said:
“
I
in fact never did. I just told them the benefits in terms of what
they would be paid, they would be employed under the terms and
conditions of Prostaff Agency which Petrus was familiar with because
he had certain members on my staff who were employed by Prostaff
directly right from the outset.”
[59] Three
observations need to be made in regard to the above. The one is that,
if the appellant’s version that Petrus agreed on
behalf of the
union to the dismissal of the employees from the appellant and their
employment by Prostaff is to be accepted, then
it will have to be
accepted that he agreed to moving his members from one employer where
they enjoyed better conditions of employment
to an employer whose
conditions of employment were undoubtedly far more unfavourable to
them than those provided by the appellant.
The question which arises
is why a union would have agreed to such a deal for its members. When
this question was put to Bell under
cross-examination, his answer was
that the advantage of such a deal to the union was that, if the
appellant got into trouble, they
would not be without jobs if they
were employed by Prostaff Agency, because Prostaff could place them
with another client. I have
serious doubt that this reason would have
been attractive to a trade union because Prostaff provided the
services of a labour broker
and a labour broker is always available
to take workers who are available and place them with clients who
need their services. The
employees did not need to have been with
Prostaff for any length of time before Prostaff could place them with
a client. The employees
could have continued in the appellant’s
employ until such time that the appellant got into trouble and
retrenched them before going
to Prostaff. If they were to be
retrenched by the appellant at some stage in the future and they
approached Prostaff, Prostaff would
not have turned them away but
would have taken them and looked for clients with whom it could place
them. As the appellant had not
at that time given any indication to
the union or the employees that it was in trouble, I cannot see what
the union would have seen
as attractive to the proposal. There was no
advantage in the proposal for the union and the employees. If the
union agreed to the
proposal, it would have agreed to their members
losing secure employment and being subjected to a probationary period
and to suspension
of their contracts of employment and all benefits
when there was no client with whom they could be placed. In the event
of a suspension
of the contracts of employment of the employees if
Prostaff could not place them with any client, the employees would
not have been
able to pay their union dues because they would have
been without wages during such periods. The standard Prostaff
contracts of employment
did not put any limitation on the duration of
such period. This means that an employee’s contract of employment
could be suspended
for as long as, for example, six months or even a
year if Prostaff did not find a client with whom it could place such
employee.
[60]
Another negative feature inherent in Prostaff’s standard terms and
conditions of employment is that, since the employees’
contracts of
employment could be suspended if there was no available client with
whom Prostaff could place the employees, Prostaff
would not at any
stage have any need to retrench the employees because, if it could
not place them with any client, it would not
be incurring any costs
by way of wages if it kept them in its employ but on suspension. If
it retrenched employees, it would be obliged
to pay severance pay. If
it did not retrench them, it would not have to pay severance pay. In
such a case the period of suspension
without pay could be so long
that the employees might resign and go and look for alternative
employment elsewhere and, if they resigned,
Prostaff would not be
liable for the payment of severance pay to them. I cannot see how any
union could possibly agree to such a
raw deal for its members,
particularly when there appears to have been no sound reason for them
to agree to such a deal and the person
who is said to have so agreed
on behalf of the union is a union official with about 30 years
experience in trade unions.
[61] On Bell’s version he had two meetings with Petrus
in which there was some discussion of one kind or another relating to
retrenchment.
The first one was on 23
rd
May and the second one on 29
th
June. According to Bell, on both occasions Petrus did not say much
but simply listened to what Bell had to say. To show how passive
Petrus was at the second meeting, Bell even said in his evidence that
Petrus simply sat there with “
a mouthful of
teeth”
and said nothing. I find it very
strange that a union official, when approached with an issue as
sensitive as a proposal for the
moving of all his members from the
employ of their employer to that of a labour broker, would keep
quite, ask no questions, challenge
nothing and only say that he would
consult his members and, thereafter, simply come back to say: my
members agree.
[62] I also have some difficulties with certain aspects
of the respondents’ version. The one difficulty is that Petrus
insisted
up to the end that there had been no meeting between himself
and Bell on 23
rd
May even when he saw Bell’s letter of 30
th
May which referred to such a meeting. Another aspect of the
respondents’ version that is cause for concern is that on their
version
Petrus told the employees not to sign any document from Bell
and yet there is no indication in his evidence that he was upset by
the news, when it came to his that Ndleleni and Jacobs had signed the
agreement of 11
th
July
[63] Furthermore, there is the period from 12
th
July to 7
th
August. On 12
th
July Ndleleni apparently told Petrus about his signing the agreement
of 11
th
July.
Petrus did not do anything about this between 12
th
July and 7
th
August. I find it strange that during that period of three weeks
Petrus did absolutely nothing in relation to the problems that his
members at the appellant/Prostaff were experiencing. I would have
thought that, if the employer had indicated an intention to retrench
a union’s members and the union had spoken to its members and they
were opposed to the employer’s proposal and the union was
told
that the employer had subsequently gone to some of the employees and
falsely alleged that the union had agreed to the retrenchment
of its
members and had thereafter proceeded to mislead some of the union
members into signing an agreement that the union is opposed
to, the
relevant union official would be so angry at what the employer has
done that he would take the matter up with the employer
and find out
what was going on and not just sit back and do nothing. Petrus’
conduct in not doing anything for three weeks after
this had been
brought to his attention is not consistent with the conduct of a
union official who had not agreed to the proposal
and, indeed, who
together with the employees, was strongly opposed to it.
[64] On Bell’s version there is clear evidence of what
was happening during the period of three weeks between 17
th
July to 7 August. On that version some of the employees were refusing
to sign contracts of employment with Prostaff during that period
and,
Bell telephoned Petrus on no less than three occasions telling him
that some of the employees were refusing to sign the contracts
and
each time Petrus promised to speak to them. On Petrus’ version
there seems to have been no contact between him and Bell during
that
three week period. It is rather difficult to believe that, when there
was the tension that there must have been between Bell
and the
workers during that three weeks period arising out of some of the
employees’ refusal to sign the contracts, Bell would
not have
contacted Petrus about the problems at all during that period of
three weeks. It is also difficult to believe that the employees
did
not themselves contact Petrus and tell him what was happening which
would prompt him to have contact with Bell if Bell had not
been in
contact with him about these problems .
[65] Another aspect of concern in regard to the
respondents’ version is that even on Ndleleni’s version, it was
Bell’s idea
that Ndleleni should look for someone else who would
sign as a witness when Ndleleni signed the agreement of 11
th
July. The question that immediately arises is why Bell would want a
witness to Ndleleni’s signing of the agreement if, indeed,
the
union had not reached any agreement with him. That is not conduct
that is consistent with somebody who was falsely implicating
the
union in a raw deal for its members.
[66] From
what I have said above it is clear that I have difficulties with both
the appellant’s version that Petrus agreed to the
appellant’s
proposal as well as with the respondents’ version that no such
agreement was struck between the two men. However,
although the
respondents’ version has the various difficulties to which I have
referred above, I return back to the fundamental
difficulty I have
with the appellant’s version that Petrus, a union official of 30
years experience in trade unions, agreed to
such a raw deal for these
employees in this case. That seems to me highly unlikely. If, of
course, as Mr Grogan submitted, he was
not contending that Petrus
agreed to any specific terms and conditions of employment for the
employees at Prostaff, then this raises
even more disquiet because it
would mean that this very experienced union official had agreed to
the termination of the employees’
services without securing
anything in return for them. That is the one point. The second point
is that that was never the appellant’s
case in the trial.
[67] Although
none of the versions of both parties is beyond criticism, it is
important to bear in mind that the appellant bears the
onus to prove
that the appellant concluded an oral agreement with Petrus
representing the union and what the terms and conditions
of such
agreement were. In the light of all the difficulties to which I have
referred in the appellant’s version, I am of the view
that,
imperfect as the respondents’ own version is, there is sufficient
doubt about the appellant’s version to justify the conclusion
that
the appellant has failed to discharge that onus. Accordingly, I
conclude that on a balance of probabilities the appellant has
failed
to prove the agreement upon which it relies as well as the terms of
such agreement. As I have said above, the appellant’s
version is
even more improbable if the matter is approached on the basis that
Petrus only agreed to the dismissal of the employees
from the
appellant’s employment without necessarily agreeing to any specific
terms and conditions under which they would be employed
by Prostaff.
Substantive fairness
[68] The
appellant bears the onus of proving that the dismissal was both
substantively and procedurally fair.
[69] According to Bell the respondents’ jobs were not
redundant nor did the appellant want to operate with a lesser number
of employees
in order to reduce costs. The appellant required the
same number of employees to do the work which was done by the
respondents before
the retrenchment. The reason given by Bell for the
retrenchment was that it was
“economically
and administratively wasteful”
for the
appellant to run two workforces in tandem. That reason was not
sustained by the facts as testified to by Bell. He stated that
Prostaff’s employees were on its own payroll and that he was
responsible for all labour issues relating to the appellant’s
employees.
Therefore, there is nothing indicating that the appellant
was in any way involved in administering Prostaff’s employees.
Instead
Bell stated that the appellant had its own payroll for the
respondents and other employees. One person was employed to
administer
the appellant’s payroll and that person was not
retrenched when the respondents were retrenched because his services
were still
required as not all of the appellant’s employees were
retrenched. In essence, the appellant continued to maintain a payroll
for
the remaining employees. This seriously undermines the reason
given for the retrenchment to the extent that it can hardly
constitute
a fair reason. No evidence was given to prove that it was
“economically wasteful” to keep the employees in the appellant’s
employment. It seems to me that, at best for the appellant, such
administration as there was in connection with the payroll of all
the
affected employees was a little but of an inconvenience for the
appellant and it wanted to do without such inconvenience. I do
not
think that that kind of inconvenience was a fair reason warranting to
dismiss the employees.
[70] Moreover,
Bell’s evidence on whether there was any decision taken to retrench
the respondents was extremely vague. At one stage
he stated that a
suggestion to have them retrenched was made at an informal meeting he
had with two other directors of the appellant
company. But he could
not remember if the discussion went beyond the level of a mere
suggestion into an actual decision to retrench
nor could he recall
which director took the decision. When asked under cross –
examination if the decision was taken by Mr Staples
(one of the
directors), he said:
“
I guess at the end of that day if you were to
(sic) he would be the first person (sic) you would call upon and then
he would explain
himself further in that respect. I do not know that
he would necessarily recall exactly whether he made the decision by
himself or
whether he consulted, or (sic) [whether] it was himself,
because it was not really a major issue, we did not take minutes of
it,
it was a discussion about the realities of their operation and
the practicalities thereof, but I guess technically he is the guy
that should be or could be approached regarding that actual initial
decision”.
[71] Surprisingly,
Bell was the one who decided to initiate and take steps towards the
implementation of the retrenchment. He gave
notice to the union
setting out the reason for retrenchment and yet he could not recall
if and by whom the actual decision to retrench
was taken. It appears
that Bell stood to gain financially from the retrenchment because he
intended to employ the respondents through
Prostaff and charge the
appellant fees for their services. Therefore, it is likely that he
was motivated by the financial gain in
hastily implementing the
retrenchment without first establishing whether a proper decision had
been taken or not.
Procedural fairness
[72] The process of consultation was, according to Bell,
prematurely terminated and no consultations were held after the
meeting of
29 June. This was the meeting at which the first formal
discussions on the retrenchment were held. Bell’s evidence did not
prove
that any alternatives were considered but of course on the
appellant’s version that was unnecessary when, on their version,
an
agreement was reached between the parties. Since I have concluded
that the appellant failed to establish such agreement, the procedural
fairness of the dismissal must be decided on the basis that the
consultation process was not completed. Indeed, Counsel for the
appellant
conceded that, if we find that there was no agreement, then
we must find that there the consultation process was not completed.
As
a result I must conclude that the appellant has also failed to
prove that the dismissal was procedurally fair. Accordingly, it was
procedurally unfair.
[73] In
the circumstances, the appeal is dismissed with costs.
Jafta AJA
I agree.
Zondo JP
I agree.
Davis
AJA
Appearances:
For the Appellant: Adv JG Grogan
Instructed
by: Schoeman Oostheizen Inc.
For
the Respondents: Adv PN Kroon
Instructed
by: Brown, Braude & Vlok Inc.
Date
of judgment: 9 July 2004
[13] The
Court a quo took the view, correctly I think, that the terms and
conditions of employment by Prostaff which the respondents
would be
governed by if they signed the agreement, were significantly less
favourable to the respondents then their then current.
The Court a
quo found that on the probabilities it was highly unlikely that the
union official would have agreed to the termination
of permanent
employment of the union’s members in favour of unattractive terms
and conditions offered by Prostaff. This finding
appears to be
justified when viewed in the context of the relevant facts. Under
Prostaff the respondents would not have security
of employment. They
could have been placed with any of its clients and could only be
required to work when their services were required.
When there is no
work available, they would lose income because their contracts of
employment, and with it, their benefits, would
be suspended. It is
highly improbable that any union official would agree to a
retrenchment of the union’s members induced by the
terms and
conditions of employment offered by Prostaff.