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[2007] ZALAC 21
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Shelco Shelving (Pty) Ltd v National Union of Metal Workers of South Africa and Others (JA47/2004) [2007] ZALAC 21 (20 March 2007)
IN
THE LABOUR APPEAL COURT OF SOUTH AFRICA
(HELD
AT JOHANNESBURG)
Case No: JA47/2004
In
the matter between:
SHELCO
SHELVING (PTY) LTD
Appellant
and
NATIONAL
UNION OF METALWORKERS
OF
SA
1
st
Respondent
DAVID
MAZIBUKO
2
nd
Respondent
RAYMOND
STHEBA
3
rd
Respondent
DODO
MPHAHLELE
4
th
Respondent
DOMINIC
NXUMALO
5
th
Respondent
SAMSON
TANADZANA
6
th
Respondent
JUDGEMENT
H.M. MUSI, AJA
INTRODUCTION
[1] This is an appeal against a judgment of the Labour
Court delivered on 13 May 2004 in terms of which Tlaletsi AJ found
that the
dismissal of the 2
nd
to the 6
th
respondents (“
the individual respondents”
) by the
appellant for operational requirements on the 26
th
April
2001 was substantively and procedurally unfair and ordered the
appellant to pay them compensation equal to the salary that
each one
of them would have earned for a period of 6 months from the date of
dismissal. He also ordered the appellant to pay the
costs of suit.
The appeal is with the leave of this Court upon petition after
Tlaletsi AJ had refused leave to appeal.
CONDONATION
[2] The record of the appeal was delivered to the
Registrar out of time and the appellant accordingly brought an
application for
the condonation of the late delivery of such record.
The application was not opposed and we considered that a reasonable
explanation
had been given for the default and accordingly granted
condonation. However, there is an aspect that caused us concern in
this
application. The affidavit filed in support thereof was signed
by Mr Snyman, the appellant’s attorney, but was not attested
to
by a commissioner of oaths. At the hearing in the Labour Court Mr
Snyman, handed in a fresh affidavit, which was on the face
thereof
properly attested to.
[3] We sought clarification from Mr Snyman on the
discrepancy in the earlier affidavit. His explanation was that he had
gone to
an attorney with the unsigned affidavit, had told the
attorney that the contents thereof were within his knowledge and were
true
and correct. He said that he had then signed the affidavit and
given it to the attorney to attest to it later. Mr Snyman said that
he had later collected the affidavit from the attorney without
noticing that the attorney had not attested to it. Mr Snyman said
that this was normal practice amongst attorneys who know each other.
I have no knowledge of whether Mr Snyman’s statement
that this
is normal practice between attorneys who know each other is correct.
The law is very clear that the person who seeks
to depose to an
affidavit is required, among others, to be before a commissioner of
oaths and must swear that the content of the
document or statement
are within his personal knowledge and that they are, to the best of
his knowledge and belief, true and correct.
Mr Snyman acted
irregularly in this matter in regard to the first purported affidavit
because his explanation does not say that
he took the required oath.
It is unacceptable to sign an affidavit as a deponent without taking
the oath or an affirmation.
THE ISSUES
[4] The issues in respect of which leave to appeal was
granted in this matter were very limited. They were whether the
individual
respondents were offered alternative employment which they
rejected and, if so, what the effect thereof is on the order that was
granted by the Labour Court. This appeal is confined to these issues.
The facts
[5] The appellant is a private company which has its
principal place of business in Cape Town. It has a branch in Tulisa
Park,
Johannesburg. Its core business is the manufacture and supply
of steel shelving systems. The individual respondents were employed
in the appellant’s Johannesburg branch. This branch comprised
two sections: a stores/warehouse section and a section called
“contracting” section. The stores/warehouse section is
where products were kept and from where they were sold and
distributed. The “
contracting
” section did stores
design, joinery and installation of the steel shelving systems. This
section specialised in the actual
fitting and installation of the
shelving systems designed according to the individual orders of each
customer. The Johannesburg
branch seems to have employed a total of
about 35 employees in the two sections.
[6] During March 2001 the appellant made known its
intention to restructure its business by closing down the contracting
section.
It sought the assistance of an organisation called the
National Employers Forum (“
the NEF
”), a registered
employers’ organisation of which it was a member. The NEF
initiated a process of consultation with
the individual respondents
and their union, the first respondent, by way of a notice in terms of
section 189(3) of the Labour Relations
Act no. 66 of 1995 (“
the
Act
”).
[7] At the first meeting between the parties held on 5
April 2001 the appellant gave its reasons for wanting to close down
the contracting
section. The reasons it gave were that some of its
customers who had been buying its shelving systems had also become
actively
engaged in the joinery and installation work. This meant
that, in so doing, such customers were thus competing with the
appellant.
This was considered undesirable and hence the need to
close down the contracting section. The management said that the
company
wanted to focus on manufacturing. The closure of the
contracting section would obviously make some of the workers
redundant. The
appellant raised two alternative proposals to
retrenchment. In the minutes of that meeting the alternative
proposals are reflected
thus:
“
At this moment in time, the company have the
following alternatives:
i) to secure a number of jobs in the manufacturing
division.
“
ii) The possibility exists that an independent
company might start a fitting company. The Company can see whether
they can secure
a number of position[s] at the new company.”
[8] The company indicated that the number of employees
who were likely to be retrenched or who were going to be retrenched
was +-13.
It also said another +- 13 employees would be offered
possible alternative employment while another +- eight employees
would continue
in the appellant’s employment. The company
proposed to use skills and qualifications as selection criteria. The
next consultation
meeting took place on 18 April 2001. At this
meeting the union made some proposals which, in the light of the
crisp issue before
us, I need not go into. The suggestion that a new
company would be formed to take over the work of the contracting
section and
that it might offer alternative employment was again
raised and discussed. The union also asked for some information
about the
new entity or company. Subsequent to this meeting the union
placed on record by way of a letter dated 20 April 2001 the proposals
it had made to the company at the meeting of the 18
th
April. It is not necessary to refer to those proposals.
[9] On the 20
th
April 2001 the company
addressed a letter to the union paragraph three (3) of which read
thus: “
The company wishes to advise that it is in the
process of negotiating possible alternative employment for a number
of employees
with a party interested in opening a new contracting
business. Shelco Shelving will have no investment, shareholding or
business
interest in this venture whatsoever.”
The
appellant said that it would sublease to the new entity a portion of
its Johannesburg branch. The appellant also said that the
new entity
would require about 14 workers. The letter specifically cautioned
that selection of staff for employment in the new
business would be
solely at the discretion of the owners of the new business and that
“
contract work may be offered to the retrenched employees
subject to skills requirement and workload”.
[10] The final meeting was held on 25 October 2001. The
issue of alternative employment by the new entity was again
discussed
but nothing came of it. Other issues were also discussed
including severance pay and other alternatives but the meeting
reached
a deadlock. The dismissal of the individual respondents
followed on 26 April 2001.
[11] It is common cause that the appellant did not
itself offer the individual respondents or any of the employees
alternative employment.
However, it is clear from the appellant’s
letter of 20 April 2001 to the union that the appellant confirmed
that it was negotiating
with the owners of the new entity to ensure
that the new entity offered alternative employment to as many of the
workers to be
retrenched as it needed.
[12] In his evidence - in - chief Mr Harvey testified
that the appellant had selected for retention the employees who had
been working
in the stores. He said that their selection was
primarily because of their knowledge and skills in that department
and that the
rest would have to be retrenched. Under
cross-examination he made it clear that Storeworks CC could only be
established after
the closing down of the contracting section and the
dismissal of the affected employees. He also testified that the
individual
respondents were without jobs because they refused to
accept the offers of alternative employment made to them by or on
behalf
of Storeworks CC. He testified that had they accepted
alternative employment, the individual respondents would not have
been without
employment.
WAS ALTERNATIVE EMPLOYMENT OFFERED BY STOREWORKS
CC OR MR HARVEY ON BEHALF OF STOREWORKSCC?
[13] The cardinal question therefore remains whether
Harvey or Storeworks CC did offer the individual respondents
alternative employment.
An interesting development is the production
at the trial of a letter addressed by Storeworks CC to Ketumile C.
Mogase & Associates,
a firm that at some stage represented the
first respondent in the negotiations with the appellant. The letter
advised that employment
offers had been made to the addressee’s
clients with effect from the 1
st
of May 2001 and that,
since the offers had been rejected, Storeworks CC would make
alternative arrangements to fill the positions.
The respondents
denied having instructed such firm and disputed the contents of this
letter. No direct evidence was led about
the authenticity of this
document or the circumstances under which it was written. The letter
also did not list any of the individual
respondents as being amongst
the clients of the firm concerned. This notwithstanding, it was
never put to Harvey that such letter
was a fabrication.
[14] There was a dispute whether a particular group of
employees had been targeted for retrenchment and if so, which ones
and which
group would be offered alternative employment. In the
meeting of 5 April 2001 it was recorded that a total of 34 employees
were
involved. Of these 13 would be retrenched, 13 would be offered
alternative employment in the new entity and eight (8) would be
retained by the appellant. The eight employees who were to be
retained worked in the stores section which was not affected by
the
restructuring and they were not retrenched. However the 2
nd
respondent, David Mazibuko, who was a driver in the stores section
was not retained and was retrenched. Evidence at the trial
established that the reasons for his retrenchment were not fair. In
this appeal it has been conceded that he was not offered alternative
employment and that, indeed, his retrenchment was unfair. He will
feature in this judgment only insofar as he was part of the
26
employees that were involved in the retrenchment process.
[15] The individual respondents stated that they were in
the group that was targeted for retrenchment from day one and that is
why
they were not offered alternative employment. They also alleged
that there was a list identifying those targeted for retrenchment,
though they were unable to produce one. According to this version of
the affected employees, 13 were earmarked for alternative
employment
and another 13 for outright retrenchment. Harvey, on the other hand,
denied that any list was drawn either of the people
that were
earmarked for retrenchment or those to be offered employment.
According to him a process would have been put in place
for the
selection of staff that Storeworks CC required, based on skills and
experience and that they would be retained on the same
terms and
conditions of employment that governed their employment by the
appellant. Indeed, he said that their length of service
with the
appellant would be recognised by Storeworks CC. He had estimated that
they would require about 13. Those that could not
be accommodated in
Storeworks CC would have had to be retrenched.
[16] In oral argument Mr. Snyman, for the appellant,
alleged that selection was confined to 13 employees who included the
individual
respondents. He said that this is because these were the
only people who worked in the contracting department and who had the
experience and skills that Storeworks CC required. He submitted that
the offers of employment could only have been made to this
group and
that the inference should be drawn that they knew of the offers and
rejected them.
[17] In response the attorney for the respondents
submitted that there were in fact 26 employees in the contracting
department.
She referred to the organogram appearing at page 86 of
the record which shows a total staff compliment of 35, of which 8
worked
in the stores and one was a tea lady, leaving a balance of 26
for the contracting department. She pointed out that in fact 26 had
to be retrenched with the closing down of the contracting department,
precisely because that was its full compliment. This may
have been
so but Mr Harvey was adamant both in his evidence in chief and under
cross-examination that offers of alternative employment
had been
made to, among others, the individual respondents in this case
(except Mr Mazibuko) and he was not shaken in his evidence.
No reason
was ever suggested why Mr Harvey would have said that offers of
employment were made to these individual respondents
when that was
not so. He knew the employees well as they worked together. It was
never suggested to him under cross-examination
that he could be
mistaken about the identity of the employees to whom offers of
alternative employment had been made by him or
on behalf of
Storeworks CC.
[18] As I said earlier in this judgment, the sole
question in respect of which this Court granted the appellant leave
to appeal
was whether or not the individual respondents were offered
alternative employment which they rejected and, if so, what the
effect
thereof would be on the order that was granted by the Labour
Court.
[19] On behalf of the appellants it was argued that
Storeworks CC had offered the individual respondents alternative
employment
but they rejected it. Mr Harvey was very emphatic that
this was the position. The two witnesses who testified on behalf of
the
respondents denied that Storeworks CC had offered them or the
individual respondents alternative employment but one, namely, Mr
Dodo Mphahlele, testified that Mr Harvey took his telephone number
and promised to telephone him but never telephoned him. However,
this
part of his evidence cannot be used against Mr Harvey because it was
never put to him during his cross-examination.
[20] In seeking to substantiate his denial that Mr
Harvey or Storeworks CC had offered the individual respondents
alternative employment,
Mr Mazibuko, one of the individual
respondents, sought to explain that there were two groups of 13
workers each. He said that the
one group was that of workers who got
retrenched and the other one was that of the workers who went to work
for Storeworks CC.
He further stated that he and the individual
respondents belonged to the group that was retrenched and not the
group that was retained
and moved to Storeworks CC.
[21] Mr Mazibuko’s evidence seems to be in line
with the argument that the attorney for the respondents advanced,
namely,
that the individual respondents fell into a group that was
not offered alternative employment. As I understand it, this point is
directed at saying that Mr Harvey was mistaken as to which group of
employees was offered alternative employment if any one was
offered.
The difficulty with this version is that it was never put to Harvey
that he was mistaken as to which group was offered
alternative
employment. However, even if it was put – may be not as clearly
as it should have been put – Mr Harvey’s
version seems
more probable and he was very emphatic that offers were made to these
individual respondents. On the whole he also
presented his evidence
in a very clear manner.
[22] If one leaves out Messrs Mazibuko’s and
Mphahlele’s evidence referred to above, one is left with Mr
Harvey’s
evidence that the individual respondents (except for
Mr Mazibuko) were offered alternative employment by Storeworks CC but
they
rejected such offer and what amounts to almost a bare denial by
the individual respondents that they were offered such alternative
employment.
[23] It does not appear to me that it is difficult to
resolve this conflict in the versions of the two parties because
there are
certain common cause facts which will facilitate the
resolution of this conflict. The first is that during the
consultation meetings
between the appellant’s management, which
included Mr Harvey, and the representatives of the workers the
appellant’s
management did say that there was a new company or
entity to be established which would take over the work previously
done by the
contracting department. The second is that Mr Harvey or
the appellant’s management also said that that entity would
offer
about 13 employees from the contracting department alternative
employment.
[24] The third is that the employees from the
contracting department whom Storeworks CC wanted would have had the
skills and experience
that Storeworks CC as a newly formed entity
would need in doing the work previously done by the contracting
department. In terms
of par 2.26 of the pre-trial minute it is
common cause between the parties that “
[the appellant]
negotiated employment for several employees with Storeworks CC.”
[25]
At the meeting of the 25
th
April
2001 Mr Harvey is reflected as having explained “
all the
required information relating to the new company.”
In those
minutes it is also recorded that
“(t)he parties spend (sic)
some time discussing the new company and the conditions of employment
for the staff
who will be taken on by the new company
.”
In its letter of 20 April 2001 to the first respondent, the
appellant, through Mr Harvey, said in par 3 that it “
wishes
to advise that it is in the process of negotiating possible
alternative employment for a number of employees with a party
interested in opening a new contracting business.”
There
was even a letter which Storeworks CC wrote to a firm of attorneys or
consultants where they placed on record that they had
made offers of
alternative employment to that firm’s clients but those clients
had rejected such offer and it, that is Storeworks
CC, would then
have to look for other people to offer them such employment.
[26] I am of the view that all of these common cause
facts show that, on a balance of probabilities, the individual
respondents
herein, except Mr Mazibuko, were offered alternative
employment at the suggestion of the appellant and they rejected it.
Storeworks
CC or Mr Harvey had promised to employ some of the
employees from the contracting department who had the necessary
skills and experience.
Why would Mr Harvey have changed his mind when
he and the union had spent a lot of time dealing with the union’s
questions
about the new entity? Why would Storeworks CC have elected
to offer employment to employees who had no skills or experience
which
it required when there were workers previously employed in the
contracting department who had the skills and experience that
Storeworks
CC was in great need of if, indeed, such workers were
available and willing to continue doing such work as they had done in
the
contracting department?
[27] In all of the above circumstances I am satisfied
that the Court a quo erred in finding that no offer was made to the
individual
respondents. The probabilities are overwhelming that they
were offered alternative employment at Storeworks CC but rejected it.
As it is common cause that the appellant negotiated with Storeworks
CC or its future owners to offer alternative employment to
some of
its employees who were facing possible retrenchment, I am of the view
that the dismissal was not substantively unfair.
The offer of
alternative employment and its rejection by the individual
respondents particularly when employment was going to be
on the same
terms and conditions of employment as those which had governed their
employment while in the appellant’s employ
and the fact that
they were going to retain their service periods, rendered the
dismissal substantively fair.
[28] The Court a quo also found that the dismissal was
procedurally unfair. No leave to appeal was granted against this part
of
the order of the Court a quo. That finding or order must therefore
remain. However, I am of the view that the effect of the finding
made
above with regard to the offer of alternative employment is that, had
the individual respondents accepted Storeworks CC’s
offer of
alternative employment, they would not have suffered any loss of
income. Accordingly, they should not be awarded any compensation.
With regard to costs I am of the view that no order as to costs
should be made in this case. I think that in the Court a quo as
well
as in this Court, there should be no order as to costs. That seems to
me to accord with the requirements of law and fairness.
[29] In the result I make the following order:
The appellant’s appeal against the orders of the
Labour Court in so far as such orders related to individual
appellant Mr
Mazibuko is hereby dismissed.
The appellant’s appeal against orders of the
Labour Court appealed against concerning the rest of the respondents
is hereby
upheld.
There is to be no order as to costs on appeal.
The order of the Labour Court is hereby replaced with
the following order:
“
(a) The dismissal of applicant Mr Mazibuko was
substantively and procedurally unfair.
The dismissal of the rest of the individual
applicants was procedurally unfair but substantively fair.
The respondent is ordered to pay Applicant Mr
Mazibuko an amount of compensation equal to the remuneration that
he would have
earned over a period of six (6) months calculated at
the rate of pay applicable to him at the time of his dismissal.
The payment referred to in (c) above must be
effected within fourteen (14) days from the date of the service of
the order.
No order for the payment compensation is made in
respect of the individual applicants other than Mr Mazibuko.
Leave is hereby granted to applicant Mr Mazibuko
and the respondent to approach the Court for the computation of the
amount
payable to applicant Mr Mazibuko should there be a dispute
on the amount and the parties fail to resolve it.
There is to be no order as to costs.”
HM Musi AJA
I agree.
Zondo JP
I agree.
Jappie AJA
Appearance:
For the appellant : Mr S. Snyman
Instructed by : Snyman Attorneys
For the respondent : Ms R. Edmunds
Instructed by : Ruth Edmonds Attorneys
Date of judgment : 20 March 2007