Oosthuizen v Telkom SA Ltd (PA5/04) [2007] ZALAC 6; [2007] 11 BLLR 1013 (LAC); (2007) 28 ILJ 2531 (LAC) (29 June 2007)

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[2007] ZALAC 6
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Oosthuizen v Telkom SA Ltd (PA5/04) [2007] ZALAC 6; [2007] 11 BLLR 1013 (LAC); (2007) 28 ILJ 2531 (LAC) (29 June 2007)

49
IN THE LABOUR
APPEAL COURT OF SOUTH AFRICA
HELD
IN JOHANNESBURG
Case no: PA5/04
In the matter between
Andre Johan Oosthuizen
Appellant
And
Telkom SA Ltd respondent
JUDGMENT
ZONDO JP
[1] I have had the benefit of reading the judgment
prepared by McCall AJA in this matter. I agree with him that the
appellant’s
appeal must succeed. I also share McCall AJA’s
conclusion that the dismissal of the appellant was without a fair
reason. In the
light of this conclusion it is, in my view,
unnecessary to consider and decide whether the appellant’s
dismissal was also procedurally
unfair. A finding that the
appellant’s dismissal was also procedurally unfair will not give
the appellant any practical benefit
which he will not have any way
once it is found that his dismissal was substantively unfair. I set
out below my reasons for the conclusion
that the appellant’s
dismissal was without a fair reason or was substantively unfair.
[2] In his judgment McCall AJA has set out most, if not
all, of the factual background to this matter. For that reason I do
not propose
to set it out in this judgment save that I shall
highlight those facts that seem important for a proper understanding
of this judgment.
It may be helpful to refer to some provisions of
the Labour Relations Act, 1995 (Act 66 of 1995) (“
the
Act
”) at the outset.
[3] Sec 185 of the Act confers on every employee the
right not to be dismissed unfairly. In so far as it is relevant to
the present
matter sec 188(1) provides:
“
(1) A dismissal that is not automatically unfair
is unfair if the employer fails to prove –
that the reason for dismissal is a fair reason –
…
.
based on the employer’s operational requirements,
and
(b) ….. .”
[4] Sec 189 of the Act governs dismissals for
operational requirements. Sec 189(1) requires the employer to engage
employees or their
representatives, depending on the circumstances,
in a consultation process when it contemplates dismissals based on
its operational
requirements. Sec 189(2)(a)(i) of the Act provides
that the employer and the employees or their representatives must
attempt to reach
consensus on appropriate measures to avoid the
contemplated dismissals. Sec 189(3)(b) requires the employer to
disclose to the other
consulting party in writing the reasons for the
proposed dismissals and “
the alternatives
that the employer considered before proposing the dismissals and the
reasons for rejecting each one of those alternatives
.”
Implicit in sec 189 (2)(a)(i) and (ii) and sec 189(3)(a) and (b) of
the Act is an obligation on the employer not to dismiss
an employee
for operational requirements if that can be avoided. Accordingly,
these provisions envisage that the employer will resort
to dismissal
as a measure of last resort. Such an obligation is understandable
because dismissals based on the employer’s operational
requirements
constitute the so-called “
no-fault
terminations
”.
[5] The obligation of an employer not to dismiss an
employee for reasons of its operational requirements where it can
avoid such employee’s
dismissal as now provided for implicitly in
sec 189(2)(a)(i), (ii) and 189(3)(a) and (b) of the Act is not a new
obligation that
came with the enactment of the Act. It is as old as
our modern law of retrenchment in this country. (see Halton Cheadle:
Retrenchment:
The New Guidelines (1985) 6 ILJ 127 at 128-129
particularly guideline No 5 at the top of 129 and the case of
Gumede
& others Richdens (Pty)Ltd t/a Richdens Foodliner (1984) 5 ILJ 84
(IC) at 91B-C.
) Recently this Court
re-affirmed this principle in
General Food
Industries Ltd t/a Blue Ribbon Bakers v FAWU & others (2004) 25
ILJ 1655 (LAC
). In this regard it is to be
noted that article 13(1)(b) of ILO Convention 158, the Termination of
Employment Convention provides
that the employer must give workers’
representatives an opportunity to consult on measures to be taken to
avert dismissals or to
find alternative employment. This obligation
also includes that, where the employee may need some training in
order to be able to
perform the duties attached to an alternative
position, the employer should afford the employee the opportunity to
get such training.
Naturally, this has to be within reason because,
obviously, the employer should also not be burdened with an exercise
that may have
undue cost implications. I note that par 21 of ILO
Recommendation 166, the Termination of Employment Recommendation,
1982 provides
as follows:
“
The
measures which should be considered with a view to averting or
minimising termination of employment for reasons of an economic,
technological, structural or similar nature might include, inter
alia, …
internal
transfers, training and retraining, ...
”
(my underlining).
[6] Two of the grounds upon which the appellant
challenged the substantive fairness of his dismissal relate to the
selection criteria
and to the fact that he was dismissed at a time
when the respondent had vacancies in which, the appellant contended,
he could have
been accommodated and for which vacant positions he
had applied. In this regard note must be taken of the provisions of
sec 189(7)
of the Act. It requires the employer to “
select
the employees to be dismissed according to selection criteria –
(a) that have been agreed to by the consulting
parties; or
(b)
if no criteria have
been agreed, criteria that are fair and objective
.”
[7] The appellant made applications in respect of twenty
two vacancies within the respondent before he was dismissed and four
after
he had been dismissed. He was shortlisted for interviews in
respect of four but was not appointed. In respect of some of the
vacancies
for which he had applied, he was advised that his
applications had been unsuccessful. In respect of others he was not
even afforded
the courtesy of a letter advising him of the outcome of
his application. The dismissal of the appellant while there were such
vacancies
must be viewed against the background that it is common
cause that the respondent had undertaken to give employees training
should
they require some training in order to do other work.
[8] In my view an employer has an obligation not to
dismiss an employee for operational requirements if that employer has
work which
such employee can perform either without any additional
training or with minimal training. This is because that is a measure
that
can be employed to avoid the dismissal and the employer has an
obligation to take appropriate measures to avoid an employee’s
dismissal
for operational requirements. Such obligation particularly
applies to a situation where the employer relies on the employee’s
redundancy
as the operational requirement. It is in accordance with
this obligation of the employer that in the
General
Foods
case referred to above this Court found
the dismissal of the employees unfair. In that case while the
employer was retrenching some
employees, it was busy recruiting new
employees for work which the employees being retrenched could
perform. As already stated, this
Court found the dismissal
substantively unfair for this reason. In such a case the dismissal is
a dismissal that could have been
avoided. A dismissal that could have
been avoided but was not avoided is a dismissal that is without a
fair reason.
[9] In his statement of claim the appellant also
complained that in selecting him for dismissal the respondent had not
applied fair
and objective selection criteria. This was in par 6.4 of
the statement of claim. In par 5.20 of the statement of claim the
appellant
alleged that there was no need for the termination of his
services because “
there existed alternative
positions within in the respondent’s structures
”.
He also alleged that the respondent failed to retrain and redeploy
him despite having previously undertaken to do so. In its
response
the respondent maintained that there was a need to terminate the
appellant’s services. It did not deny that there were
vacant
positions but stated that there were “
no
suitable alternative positions for the [appellant] within the
Respondent’s structures
.” It denied
having failed to retrain and redeploy the appellant and alleged that
it bore no knowledge of any previous undertaking
in this regard.
[10] In reply to a request for reasons why the appellant
was not appointed to one of the positions he had applied for, the
respondent
referred to a document which it said it annexed as
annexure “
A
” to
its reply to such notice but either no such document was attached or
whatever document may have been attached did not contain
the reasons
requested.
[11] In a pre-trial minute signed by the parties’
attorneys in February 2003 it was stated to be common cause that
“(t)he respondent bore the responsibility to
make a concerted effort to place affected staff within the
organisation
”. In that same pre-trial
minute one of the issues that the parties agreed was in dispute was
“
whether or not there existed, within the
respondent’s structures valid alternatives to dismissal
.”
Another matter which the parties agreed was in dispute and which the
Court was called upon to decide was
“(w)hether
the respondent failed to take adequate or any steps to retrain and
redeploy the [appellant] within the organisation as
it had undertaken
to do
.”
[12] In his amended statement of claim dated 18
September 2003 the appellant inter alia alleged that the respondent
unfairly declined
to employ him in a post vacated by one De Beer
(project manager, Logistics) when he emigrated to New Zealand when
the appellant had
previously applied for that position before De Beer
was appointed to it. The appellant also alleged in par 5.27.2 of his
amended
statement of claim that the respondent “
unfairly
failed to appoint [him] to the positions afforded D Venter, R Naidoo,
L Vermeulen, L Faro, A Bames, M Skozana, R Naicker,
K G Abdull, N
Mpati, S Francis and J Scholtz. In this particular regard the
[appellant] applied for all the aforementioned positions
and was, in
addition, possessed of the required skill and had longer service than
the appointed employees (as listed above
).”
In par 5.28 of the amended statement of claim the appellant
specifically stated:
“
In
view of the respondent’s failure to consult the [appellant] as
required by the Act, the respondent is put to the express proof
of
its rationale for terminating the [appellant’s] services, the
absence of alternatives to the [appellant’s] termination and
the
fairness of the selection criteria and their application.”
In par 4.11 of the pre-trial minute signed by the
attorneys for both sides the parties recorded, among other things,
that the Court
was called upon to decide whether the respondent in
selecting the appellant for retrenchment had failed to apply criteria
that were
either fair or objective.
[13] In its amended response to par 5.27 of the
appellant’s amended statement of claim, the respondent alleged in
par 25.1 – 25.5:
“
25.1 All interviews of staff in the redeployment
pool for alternative positions including interviews with the
[appellant] were conducted
in accordance with a fair and objective
procedure.
Interviews were conducted by a selection panel
consisting of relevant line managers and human resources personnel
to make sure
that the interview and selection process was fair and
sometimes also recruitment specialists.
[appellant] along with the rest of the employees in
the redeployment pool went through this process. If he was
unsuccessful in
obtaining alternative employment at the respondent,
that nonetheless was the result of a fair and objective procedure.
Employees
who were successful in respect of jobs for which
[appellant] also applied were better qualified and suited for those
jobs, performed
better in the interviews and were selected as the
result of a targeted fair and objective selection procedure.
De Beer was a grade 6 project manager and the
position offered to him was project manager, material logistics. He
declined the
offer and elected instead to take the VSP at the end
of February 2002. The moratorium meant that this position was not
offered
after 8 March 2002.
Most of the positions referred to were offered
outside of Port Elizabeth and the Southern region and Respondent is
unable to reply
to the allegations concerning these posts with any
particularity.
Except
for the above, these allegations are denied.”
[14] The respondent said that the criteria used by it in
selecting the employees from the redeployment pool to be given other
jobs
were skills, suitability and employment equity policy. The
evidence of its witnesses was also to the effect that length of an
employee’s
service was not taken into account. It will have been
observed from the above that the appellant complained in his
statement of claim
that he was retrenched and yet some employees were
retained by the respondent even though he had longer service periods
than them
and they were retained in jobs that he could do. In this
regard it needs to be remembered that the appellant had been in the
respondent’s
employment for 30 years. The appellant was prepared to
take any position even if it was at a lower grade than the grade he
was occupying
at the time of his dismissal. Furthermore, the
appellant was prepared to move to any part of the country to take a
position.
[15] It will also have been observed that the
respondent’s version was in effect that it left the decision as to
which one of the
employees in the redeployment pool would be given
each of the vacant posts to panels which would interview shortlisted
candidates.
Those interview panels were required to use the selection
criteria referred to above, namely, skills, suitability and
employment
equity. Mr Amod, one of the witnesses called by the
respondent, was part of the panel involved in filling one of the
positions for
which the appellant had applied but he said that the
appellant was not shortlisted for that position. He said that he was
not involved
in any of the other positions and interviews.
[16] The respondent did not call a single person who was
part of the interviewing panel in respect of any of the positions for
which
the appellant was interviewed. The effect of this is that the
respondent did not lead any evidence to explain why the appellant was
not given any of those positions, particularly those for which he was
shortlisted. I say particularly those for which he was shortlisted
because the fact that the respondent had shortlisted him for those
means that on the respondent’s own version he met the basic
requirements for those positions. The respondent also led no evidence
about the qualifications, suitability, or race or gender of
those
employees who were appointed to those positions.
[17] For
his part the appellant testified that the positions that he applied
for were positions which involved work that he could
do. He also said
that the four positions for which he was shortlisted required
experience that he had or that was very close to the
experience that
he had. In fact he said that after some of the interviews he felt
that he was going to be appointed. He testified
that he was not told
the reasons why his application was unsuccessful. The respondent’s
witnesses had no idea why length of service
was not part of the
criteria used to select the employees from the redeployment pool who
would be appointed to the vacant positions.
[18] It seems to me that the effect of the evidence
placed before the Court a quo is that at the time that the appellant
was retrenched:
(a) the respondent had a number of vacant positions;
(b) the respondent knew that the appellant was desirous
of being appointed to any one of at least twenty two vacant
positions;
(c) both
the appellant and the respondent were agreed that the appellant met
the basic requirements of some of the vacant positions
– which is
why he had been shortlisted for them;
(d) the respondent disregarded the appellant’s long
service of 30 years in considering whether or not he should be given
one of
the vacant positions;
(e) those of the respondent’s employees who were
appointed to some of the positions have not been shown to have had
longer service
periods than the appellant nor to have had better
skills or qualifications than the appellant nor to have been more
suitable for
those positions than the appellant nor has it been shown
that they were black or female and that, therefore, being preferred
above
the appellant may have been on grounds of advancing employment
equity; accordingly, on what is before the Court, the decision not
to
give one of those positions to the appellant may well have been on
arbitrary or capricious grounds; the respondent made absolutely
no
attempt to place evidence before the Court to explain why an employee
with 30 years service could not be appointed to one of the
positions.
[19] The fact that the respondent did not place any
evidence before the Court to explain why it did not give one of the
positions
to the appellant and gave positions to other employees
means that the respondent has failed to justify the dismissal of the
appellant.
In other words the respondent selected employees from the
redeployment pool to remain in its employ by virtue of appointing
them
to certain positions and selected those to be retrenched by not
appointing them to any of the vacant positions. The respondent was
obliged to explain the basis of such selection criteria applied
should have complied with the applicable criteria in terms of the
Act. And that means that if such criteria have not been agreed, they
should be fair and objective. In the end one is left in the
dark as
to why the appellant was in effect selected to be among those who did
not get any of its available positions and had to be
retrenched.
[20] In the light of the above I am of the opinion that
the respondent has failed to prove that there was a fair reason for
the dismissal
of the appellant in this case. Sec 188(1) of the Act
provides that a dismissal that is not automatically unfair is unfair
if the
employer fails to prove that the reason for dismissal is a
fair reason based on the employer’s operational requirements.
Furthermore,
as already stated, sec 189(7) of the Act requires the
employer, in selecting employees to be dismissed for operational
requirements,
to select the employees to be dismissed according to
selection criteria that have been agreed to by the consulting parties
or if
no criteria have been agreed, criteria that are fair and
objective.
[21] In this case the evidence revealed that the
respondent initially selected employees as potential candidates for
retrenchment.
Once it had identified such employees, it gave them an
option to either take a voluntary severance package or to join the
redeployment
pool. Those who elected to take the voluntary severance
package obviously left the company on a voluntary retrenchment basis.
The
respondent was going to try and find jobs for all or as many as
possible of, those who were in the redeployment pool. Obviously those
who would be put in some vacant positions would have successfully
avoided dismissal for operational requirements but those whom the
respondent failed to put in vacant positions would have to be
dismissed. Part of what the respondent has failed to do in this case
is to explain the basis upon which it chose to retain those employees
that it retained in those positions and not the appellant.
[22] In this matter the respondent had undertaken to try
and accommodate the employees in the redeployment pool, which
included the
appellant, in vacant positions. It had also undertaken
to give training. It seems highly unlikely that of all the 26
positions that
the appellant applied for – 22 before dismissal and
four after dismissal – there was not even one position in which the
respondent
could accommodate him - an employee who had served it –
probably very loyally – for thirty years with a clean disciplinary
record
- even if he might need a little or some training. I would be
very surprised if out of all the employees from the redeployment pool
who were appointed to some of the positions there was not even one
who had far less than 30 years of service with the respondent
and who
was appointed to a position that the appellant would have accepted
and the duties of which he could perform with or without
some limited
training.
[23] I conclude, therefore, that the respondent has
failed to prove that there was a fair reason for the selection of the
appellants
for dismissal. Accordingly, his dismissal was
substantively unfair. The Court below, per R Pillay AJ, did not
consider the issue
of the substantive fairness of the appellant’s
dismissal at all nor did it consider the issue of the fairness of the
selection
criteria or whether the selection criteria were applied
fairly or not. In particular the Court below did not consider the
appellant’s
complaint that his dismissal could have been avoided by
his appointment to one or other of the vacant positions for which he
had
applied including those for which he was shortlisted for
interviews. The failure of the Court below to consider these issues
occurred
despite the fact that in the pleadings and in the pre-trial
minute they were part of the issues that the Court was called upon to
decide. Indeed, in the evidence the issues had been dealt with,
certainly from the point of view of the appellant. The Court a quo
confined itself in its judgment only to the procedural issue of
consultation.
Relief
[24] Now
that I have found the dismissal to be substantively unfair, the
question arises as to what relief, if any, should be granted
to the
appellant. Sec 193 of the Act makes reinstatement the preferred
remedy where a dismissal has been found to be without a fair
reason
unless one or more of the exceptions stipulated in sec 193 applies.
The appellant testified that he was seeking reinstatement
and, if
reinstatement was not granted, he would seek compensation. The
respondent did not place any evidence before the Court a quo
to say
why reinstatement would not be an appropriate remedy if the Court
found that the appellant’s dismissal was substantively
unfair. If
there was such evidence, it was its duty to place it before the
Court. Obviously, if there was no such evidence, there
would have
been nothing to place before the Court.
[25] The appellant can be reinstated – not in the
position which he occupied before he was put in the redeployment pool
– but
to the position he was in when he was in the redeployment
pool. I do not understand that to have been a specific position. When
he
and other employees were in the redeployment pool, they were given
certain tasks while the respondent was trying to redeploy them.
Upon
reinstatement the appellant can be dealt with in the same way that he
was or could have been dealt with when he was in the redeployment
pool. That means that, if the appellant can be put in a certain
position and he is happy with such position, that would be the end
of
the matter. If, however, the respondent cannot find such a position
or the two parties cannot agree, the respondent must consider
itself
to have a surplus of employees. It could be having one employee more
than it needs. If that is the position, the respondent
must then deal
with that situation as the law requires it to when faced with such a
situation. Of course, that situation does not
necessarily mean that
the appellant would be the employee to go. It may be that some other
employee with a lesser period of service
should go. In the end the
appellant, like all employees, must be treated fairly, particularly
when he has served the respondent for
such a long time – namely,
over 30 years and has, as I understand the position, an unblemished
disciplinary record. The bottom
line is that, if the appellant is
effectively selected for dismissal for operational requirements,
there must be a fair reason for
that and it must be possible to say
why he was chosen for dismissal and other employees with lesser
service periods doing work that
he can do were retained. And the
basis thereof must disclose a fair reason. That must also disclose
the use of selection criteria
that are fair and objective, unless sec
189(7)(a) applies. If the appellant is once again dismissed for
operational requirements
and he feels aggrieved thereby, that would
be a fresh dispute which can take its course. However, it seems to me
that it ought to
be possible for the parties to reach an agreement in
the light of the appellant’s age and his preparedness to take a
position lower
than the one he had before and his preparedness to
serve the respondent in any part of the country.
[26] In the result I make the following order:
The appeal is upheld.
The respondent is ordered to pay the appellant’s
costs of the appeal.
The order of the Court below is set aside and replaced
with the following order:
“
(a) The applicant’s dismissal was substantively
unfair.
The respondent is ordered to reinstate the applicant
in its employ on terms and conditions no less favourable to him than
those
that governed his employment immediately before his dismissal.
the order in (b) above is to operate retrospectively
for a period of 12 months from the date of this order.
The order in (b) above will also operate
progressively.
It is hereby recorded that the reinstatement of the
appellant in the respondent’s employ in terms of par (b) above is
not a reinstatement
to the post which the appellant occupied
immediately before he joined the redeployment pool at about the end
of 2001 or early in
2002 but it is a reinstatement to his employment
as it was immediately before he was dismissed.
the appellant’s reinstatement in terms of par (b)
above is to give the respondent an opportunity to offer the
appellant a specific
position in its employ or to enable the
appellant and the respondent to reach some other agreement about the
future of the appellant
in the respondent’s employ.
Should the respondent be unable to offer the
appellant a position that the appellant accepts or should the two
parties fail to reach
any other agreement with regard to the
appellant’s future in the respondent’s employ, the respondent’s
right to deal with
the situation in accordance with the law relating
to dismissal for operational requirements is not affected by this
order.
It is recorded that, should the respondent find
that, as a result of the order in (b) above, it has one employee in
excess of its
requirements, nothing contained in this order shall be
construed as authorising the respondent to necessarily select the
appellant
for dismissal to deal with the situation.
The respondent is to pay the appellant’s costs.”
Zondo JP
I
agree.
Kruger
AJA
Appearances
For
the appellant : R.B. Wade
Instructed by
: Kaplan Bloemberg
For the respondent
: T.J. Bruinders SC
Instructed
by : Soni Inc.
Date of
Judgment : 29 June 2007
IN THE LABOUR APPEAL COURT
HELD AT
JOHANNESBURG
CASE NO. PA5/04
In the
matter between:
ANDRE JOHAN OOSTHUIZEN APPELLANT
and
TELKOM
(SA) LIMITED RESPONDENT
________________________________________________________________
J
U D G M E N T
________________________________________________________________
McCALL
AJA
[1] As appears from the end of this judgment I agree with the
conclusion reached by my brother, Zondo JP, in his judgment, but I
have dealt, in this judgment, with the facts and some of the other
issues raised in argument. The appellant had been employed by
the
respondent (“Telkom”) but was dismissed with effect from 3 May
2002 on the grounds of operational requirements.
[2] At the
relevant time the appellant was a member of the South African
Communications Union (“SACU”) but he did not fall within
the
bargaining unit because of the seniority of his position – namely a
grade 5 specialist switching engineer.
[3] Because
of a decrease in capital expenditure it was necessary to reduce the
number of Telkom employees. This reduction in numbers
was planned in
accordance with a Staff Optimization Plan (“SOP”).
[4] It is
not disputed that Telkom began consulting with the Alliance of Telkom
Unions (“ATU”) about SOP at some stage during
2001 and that ATU
includes SACU.
[5] On 23
August 2001 Telkom and ATU concluded a written agreement on staff
optimization which provided,
inter alia
, for selection
criteria, the procedure to be followed when contemplating
retrenchment and/or redundancies, and a procedure for avoiding
and/or
minimizing dismissals. The agreement governed the bargaining unit
which excluded the appellant, but, according to Telkom,
it served as
the framework within which all SOP measures were to be taken,
including the procedure to be followed when Telkom determined
redundancies or surplus numbers of employees.
[6] The
procedure sought to avoid actual retrenchments by offering employees
who were determined to be redundant two options, namely:-
1. a
voluntary severance package (“VSP”) or
2. entry into a redeployment pool which was aimed at providing
employment within Telkom, although this was not guaranteed.
[7] By
November 2001 Telkom had prepared a retrenchment timetable which
contemplated a briefing of affected employees between 22 and
26
November 2001 and ended with the acceptance of either VSP or a
voluntary early retirement package by no later than 28 February
2002.
[8] When
appellant was declared redundant in November 2001 he was, on 27
November 2001, offered the choice between the two options
on 5
December 2001. He elected, in writing, to accept the redeployment
option. It, in turn was comprised of two options, namely
“Consideration for redeployment opportunities” or “Redeployment”.
[9] By
accepting the redeployment option the appellant:-
(i) agreed that the last day in his redundant position was 31
December 2001;
(ii) accepted
the offer to endeavour to retrain and redeploy him within Telkom
until 28 February 2002;
(iii) accepted
the option to take up the VSP offer at any time until 28 February
2002.
[10] On 25 February 2002 the decision was taken to terminate the
employment of employees in the redeployment pool on 31 March 2002
and
notice of termination was given on 10 March 2002.
[11] However,
as a result of an urgent application brought by SACU and others to
interdict the respondent from retrenching their members,
including
the appellant, on 31 March a written agreement was concluded between
SACU and Telkom. It was made a consent order, in
terms of which the
retrenchment was postponed until 30 April 2002 and Telkom invited
SACU to consult with Telkom on all outstanding
issues concerning the
proposed retrenchments “as soon as practicable”. It is not
disputed that the appellant did not know that
he was an applicant in
those proceedings and did not benefit from the extended period.
[12] Following
his entry into the redeployment pool and until his ultimate
retrenchment on 3 May 2002 the appellant applied unsuccessfully
for
22 vacancies in Telkom’s organization.
[13] On or
about 22 May 2002, the appellant referred the matter of his dismissal
to the Commission for Conciliation, Mediation and
Arbitration.
Conciliation was unsuccessful and the applicant brought an
application in the Labour Court.
[14] The
appellant alleged that the retrenchment process was unfair and that
the respondent failed to consult him as required by s.189(1)
of the
Labour Relations Act of 1995 (“the Act”). He sought an order for
reinstatement retrospective to the date of his dismissal,
alternatively compensation in terms of ss.194(1) and (2) of the Act
and costs.
[15] In
opposing the application the respondent denied all of the appellant’s
complaints and denied that it failed to consult the
appellant in
terms of s. 189 of the Act.
[16] In
the pretrial minute (Item 3.16) the respondent admitted that it had a
duty to consult directly with the appellant regarding
the issues
dealt with in s. 189 of the Act and alleged that it did so consult.
[17] However,
the appellant filed an amended statement of claim and, in its
response, the respondent alleged that consultations with
SACU were
held in accordance with s. 189(1) of the Act and that, despite the
fact that the appellant was consulted, respondent was
not obliged to
consult with the appellant “and/or he is precluded from complaining
that he was not consulted”.
[18] Pillay
R. AJ dismissed the appellant’s application with costs. Following
the decisions in
Baloyi v M & P Manufacturers
ILJ 2001
(22) 391 at par. 20-23 (“
Baloyi
”), and
Mzeku and Others
v Volkswagen SA (Pty) Ltd and Others
ILJ 2001 (22) 1575 (LAC)
(“
Mzeku
”) he held that only where the agencies referred to
in s 189(1)(b), (c) and (d) of the Act, before its amendment by Act
12 of 2002
from 1 August 2002, were unavailable and/or not
applicable, would an employee be entitled to claim a right to be
consulted personally.
He further held that it was not open to the
appellant to contend that the communications between him and
respondent in respect of
vacancies were in fact consultations in
terms of s. 189 of the Act. He said that the appellant did not
allege that the representative
Union did not consult fully on his
behalf and that consequently his claim that he was not properly
consulted (in terms of the Union’s
consultations) must fail. He
further held that his claim that he ought to have been consulted
personally because he was not included
in the agreement in terms of
which the SOP would be implemented must also fail because the Union
alliance, representing the appellant,
had agreed to exclude his grade
and he was bound by that agreement. Finally he found that the
respondent had discharged its duty
to consult with the appellant
properly in terms of the Act.
[19] The
appellant appeals against the decision of the Labour Court.
[20] At
the commencement of the hearing of the appeal reference was made to
the fact that the appellant had not filed a Notice of
Appeal as
required in terms of the provisions of Rule 5(1) of the Rules for the
conduct of proceedings in the Labour Appeal Court.
The appellant’s
counsel, Mr Wade, asked for leave to hand in a Notice of Appeal. The
respondent did not object to the late filing
of the Notice of Appeal.
The Court allowed the Notice to be handed in and agreed to hear the
appeal, subject to a substantive application
for condonation of the
failure to file the Notice of Appeal being made. Such an application
was made and was not opposed.
[21] This
Court accordingly condones the late filing of the Notice of Appeal.
[22] Although
in Mr Wade’s Heads of Argument on appeal, the emphasis appeared to
be on the failure of the respondent to consult
with the appellant and
the appellant’s Union and, as a subsidiary point, that the
respondent did not discharge the
onus
of establishing that
there were no reasonable alternatives to the appellant’s dismissal,
Mr Wade began his argument before us with
reference to the latter
point. Also in the Notice of Appeal which was handed in, the latter
point is listed as the first ground
of appeal.
[23] The
grounds of appeal in the belated Notice of Appeal are the following:-
“
1. The
Learned Acting Judge erred in failing to conclude that the Respondent
had not discharged its onus of proving that there were
no viable
alternatives to the Appellant’s dismissal and that his dismissal
was for that reason substantively unfair.
The Learned Acting Judge erred in failing to
conclude that the retrenchment of the Appellant was procedurally
unfair on account
of the fact that the Respondent, although intent
upon doing so, failed to consult the Appellant in his individual
capacity.
3. The Learned Acting Judge erred in failing to
conclude that, in the light of the collective agreement entered into
(sic) the Respondent
and the ATU, the Respondent was in terms of
Section 189 under a duty to consult the Appellant personally.
4. The Learned Acting Judge erred in failing to
direct that the Appellant be retrospectively reinstated, with costs.”
[24] The
argument advanced by Mr Bruinders, for the respondent, may be
summarized as follows:-
In terms of s 189(1) of the Act before its amendment with effect
from 1 August 2002, the party with whom the respondent was obliged
to consult over retrenchment was the registered trade union, SACU,
of which the appellant was a member, and there was no duty on
the
respondent to consult with the appellant personally.
The evidence shows that the respondent did consult with SACU, as a
member of ATU, over the retrenchment and, specifically, about
the
appellant personally and considered the appellant’s situation
before retrenching him.
The appellant’s contention that there was an agreement or express
undertaking by the respondent to consult with the appellant
personally was not pleaded nor canvassed in evidence and therefore
cannot be pursued on appeal. Assuming that the point can be
considered on appeal, it cannot be said that the respondent elected
to consult with the appellant personally, but even if it did
so
consult, such consultation merely supplemented the consultations
with the appellant’s union.
With regard to the appellant’s contention that the respondent had
not discharged the
onus
of proving that there were no
reasonable or viable alternatives to the appellant’s dismissal,
the evidence showed that “Telkom
had done everything possible to
assist appellant’s union in salvaging their members’ jobs which
met with some success. It
had also explored proper alternatives to
retrenchment”.
The respondent and the appellant’s union had concluded the three
agreements relating to retrenchment and if the evidence establishes
that the respondent did not comply with these three agreements, then
it is not the appellant but his union that has the right or
legal
standing to claim performance in compliance with the agreements.
[25] As the argument developed before us, it became apparent that it
may not be essential, in order to arrive at a decision on appeal,
to
determine whether or not the respondent had a duty, in law, to
consult with the appellant personally. However, since the matter
was
decided in the Court
a quo
on the grounds that the respondent
had no duty to consult with the appellant personally, and in case
this matter should go further,
I consider it advisable to deal with
the legal position regarding consultation.
[26] The
source of the duty to consult is s 189(1) of the Act. It is common
cause that the appellant was dismissed with effect from
3 May 2002.
S 189(1) of the Act before section 189 was substituted by
section 44 of Act 12 of 2002 with effect from 1 August
2002, provided
as follows:-
“
189 Dismissals based on operational
requirements
When
an employer contemplates dismissing one or more employees for
reasons based on the employer’s operational requirements, the
employer must consult –
any person whom the
employer is required to consult in terms of a collective
agreement;
if there is no
collective agreement that requires consultation, a workplace
forum, if the employees likely to be affected by
the proposed
dismissals are employed in a workplace in respect of which there
is a workplace forum;
if there is no
workplace forum in the workplace in which the employees likely to
be affected by the proposed dismissals are
employed, any
registered trade union whose members are likely to be affected by
the proposed dismissals;
if there is no such
trade union, the employees likely to be affected by the proposed
dismissals or their representatives nominated
for that purpose.”
[27] In
Baloyi (supra)
the
employer was obliged to retrench for economic reasons. After
consultation with a union (NUMSA), of which trade union Baloyi
was a
member, the employer dismissed Baloyi. He was a welder who had
longer service than other welders but who was less artistic
and had
less flair than the other welders and had a poor disciplinary record.
Baloyi complained to the Labour Court that he had
been unfairly
retrenched. The Labour Court dismissed his claim and on appeal to
the Labour Appeal Court it was contended that the
employer should
have afforded Baloyi an opportunity to answer the allegations about
his lack of ‘artistic flair’ and skill as
a welder. This
contention was rejected by the Labour Appeal Court. Davis AJA after
referring to the provisions of s 189(1) of the
Act said:-
“[20] In short, s
189(1) provides for the identity of the parties to be involved in the
process of consultation with the employer.
Section 189(2) sets out
the agenda and objectives of the process to be adopted by an employer
when the latter contemplates dismissing
employees for reasons based
upon operational requirements.
[21] Read together,
the two subsections represent the codification of the standards which
had previously been developed by way of
the principle of fairness as
contained in the concept of an unfair labour practice. Section 185
may well require that an employer
must comply with both the substance
and the form of the requirements as contained in s 189, but it adds
nothing to the content of
the process to be followed.
Given the nature of
the detailed codification of the procedure to be adopted for such
dismissals, it cannot be said that some residual
test remains,
notwithstanding that the employer has complied meticulously with the
requirements as laid out in s 189(1) and (2).
[22] It was not
contended that respondent did not follow the proper procedures in
dealing with NUMSA nor, in the light of the meetings
to which
reference has already been made, could such an argument have been
justified. The argument that the appellant should have
been afforded
a hearing in person in circumstances where the union which
represented him had properly been consulted runs counter
to the
express terms of the section. Cf Benjamin & Others v Plessey
Tellumat SA Ltd (1998) 19 ILJ 595 (LC) at para [31].
[23] In keeping with
a premise of the Act, s 189(1) envisages that the collectivities of
management and labour represented by trade
unions should engage in an
appropriate process of consultation, save where the affected
employees are not so represented. To interpret
the section so as to
allow an employee represented by a union to engage in a parallel
process of consultation would undermine the
very purpose of the
section.”
[28] The appellant sought to
distinguish
Baloyi
on the basis that in
Baloy
i, Baloyi
was a member of the trade union, NUMSA, which acted as his
representative at the employer’s business and it was not contended
that there had been no compliance by the employer with the duty to
consult with NUMSA in terms of s 189(1), whereas in the present
case,
although the appellant was a member of SACU, he did not fall within
the bargaining unit and the agreement of 23 August 2001
between the
respondent and ATU on staff optimization, excluded the appellant’s
grade. In my opinion there is no merit in the appellant’s
argument
in this regard. Even accepting that the appellant was excluded from
the bargaining unit and the agreement of 23 August
2001, s 189(1)(c)
would still have applied and the respondent would have been obliged
to consult with the Union concerning the position
of the appellant
who was an employee likely to be affected by the proposed dismissals.
[29] In
United National Breweries
(SA) Ltd v Khanyeza and Others
(2006) 27 ILJ 150 (LAC)
there
was a collective agreement applicable in the workplace where the
employee concerned was employed. The Labour Appeal Court found,
however, that the employee was not an employee as defined in the
collective agreement and, as such, fell outside the definition of
“union member” in the agreement. However, the Court found that
although employees who were members of the union who fell outside
the
definition of the word “employee” were not entitled to union
representation in terms of the collective agreement, they were
entitled to such representation in terms of s 189(1)(c) of the Act.
Zondo JP said, in para [24]:-
“On this approach
employees who are members of the union who fall outside the
definition of the word ‘employee’ are not entitled
to union
representation in terms of the collective agreement when the
appellant contemplates their dismissal for operational requirements
but they are still entitled to such representation in terms of s
189(1)(c) of the Act. The contention advanced on behalf of the
appellant would have the effect of depriving union members employed
as permanent employees of the appellant outside the specified
departments of their right in terms of the Act to union
representation which they ordinarily otherwise have when their
employer contemplates
their dismissal. A construction of the Act
which has the effect of taking away employees’ rights should not be
lightly adopted.
Indeed, if there is another construction of the
statute which does not take away such rights, such construction is
the one that
should be preferred.
The Court also rejected the
contention that even if the employer was obliged to have consulted
with the union and did not do so,
it should be held to have
substantially complied with the consultation requirements of s 189
because it consulted with the affected
employees themselves,
including the first respondent, because the evidence did not
establish that the appellant held proper consultations
with the
employees before it made the decision to retrench. On the basis of
the decision in
Khanyeza
, because the appellant fell outside
the bargaining unit for the purposes of the agreement of 23 August
2001, the respondent had a
duty in terms of s 189(1)(c) to
consult with the appellant’s union concerning the retrenchment of
all those union members
not covered by the agreement, including the
appellant.
[30] The appellant sought to rely upon
the decision in
SCCAWU v Amalgamated Retailers (Pty) Ltd
[2002] 1 BLLR 95
(LC), (2002) 23 ILJ 165 (LC). In that case the
employer consulted with the recognized trade union but it was not
mandated to represent
non-union members affected by the proposed
retrenchment. Van Niekerk AJ said, in para [26]:-
“
The identification
of a consulting party by applying the criteria established in s
189(1)(a), (b) and (c) might confer exclusive rights
on the partner
with first claim in relation to other potential partners listed in
those paragraphs, but it does not relieve the employer
of an
obligation to consult in terms of subsection (d) with affected
employees or their representatives nominated for the purpose
if those
employees are not represented in some manner or form by a collective
bargaining agent, workplace forum or registered trade
union
respectively”.
[31] The Court found that in the case
under consideration the employer had decided to initiate and conduct
a separate consultation
with
non-union
members but had not
discharged the
onus
of establishing that the consultation
process complied with the requirements of s 189. The case is
distinguishable from the one
under consideration in that the
appellant in the present case was a member of the union whose members
were likely to be affected
by the proposed dismissals and s 189(1)(c)
therefore applied. In the
Amalgamated Retailers (Pty) Ltd case,
it was established that the employer had elected to consult with
non-union members.
[32] In my opinion, therefore, since
the appellant was a member of SACU which was a member of the Alliance
of Telkom Unions, the respondent
was obliged to consult with ATU
concerning members of SACU who were not part of the bargaining unit,
including the appellant, but
was not obliged in terms of the LRA also
to consult separately with the appellant. In that regard, I am of
the view that the judgment
in the Court
a quo
was correct, but
that is not the end of the matter. It is still necessary to
determine whether or not the respondent complied with
s 189(2) of the
Act in relation to the dismissal of the appellant and to consider the
argument that the appellant did not discharge
its
onus
of
proving that there were no viable alternatives to that dismissal.
[33] The relevant portions of s 189(2)
of the Act before its amendment are:-
“(2) The
consulting parties must attempt to reach consensus on-
appropriate
measures-
to
avoid dismissals;
to
minimize the number of dismissals;
to
change the timing of the dismissals; and
to
mitigate the adverse effects of the dismissals;
the
method of selecting the employees to be dismissed; and
the
severance pay for dismissed employees.
The employee must
disclose in writing to the other consulting party all relevant
information, including, but not limited to-
the
reasons for the proposed dismissals;
the
alternatives that the employer considered before proposing the
dismissals, and the reasons for rejecting each of those
alternatives;
the
number of employees likely to be affected and the job categories in
which they are employed;
the
proposed method for selecting which employees to dismiss;
the
time when, or the period during which, the dismissals are likely to
take effect;
the
severance pay proposed;
any
assistance that the employer proposes to offer to the employees
likely to be dismissed; and
the
possibility of the future re-employment of the employees who are
dismissed.
---
(5) The employer must allow the other consulting
party an opportunity during consultation to make representations
about any matters
on which they are consulting.
(6) The
employer must consider and respond to the representations made by the
other consulting party and, if the employer does not
agree with them,
the employer must state the reasons for disagreeing.
The
employer must select the
employees
to be dismissed according to selection criteria –
that
have been agreed to by the consulting parties; or
if
no criteria have been agreed, criteria that are fair and objective.”
[34] The respondent called two witnesses to give evidence in the
proceedings before the Labour Court. They were Mr A.K. Amod (“Amod”)
and Mr G.J. Allan (“Allan”).
[35] Amod was the Senior Human Resources Manager at Telkom. He had
been the Chief Negotiator for Telkom until 31 December 2001 and
used
to negotiate and bargain with the unions active in Telkom over,
amongst other matters, retrenchment. He gave evidence regarding
the
course of events which eventually led to the retrenchment of the
appellant and regarding the extent to which there were consultations
between Telkom and the unions representing the affected parties.
[36] According to Amod, he initiated discussions with both ATU and
CWU regarding SOP. He was a signatory, on behalf of the respondent
to the Agreement on Staff Optimisation concluded between the
respondent and ATU on 23 August 2001. That is the agreement which
provided
that employees who were determined to be “surplus/redundant”
would be allowed to exercise an option between a Voluntary Severance
Package (“VSP”) or a Voluntary Early Retirement Package (“VER”)
on the one hand and, on the other hand, to join a redeployment
pool.
The agreement specifically provided that where employees needed to be
selected from a group of employees the selection criteria
of Skills,
LIFO (Last In First Out) and Race and Gender correction, where
appropriate were to be applied.
[37] Amod said that on 16 November 2001 there was a meeting between
management and ATU to discuss voluntary severance packages for,
inter
alia
, Technology and Network Services (“TNS”), which was the
service organisation in which the appellant was employed. However,
it
emerged under cross-examination by reference to a document headed
“TNS STAFF OPTIMISATION PROCESS AND ASSOCIATED TIMELINES” that
finalisation of affected numbers and work groups and the compilation
of name lists of affected staff was to be completed by 6 November
2001 and the selection, using the aforesaid criteria, was to be
completed by 12 November 2001 ie. before the meeting of 16 November.

Amod said:-
“The selection criteria would have been applied
and then lists of the people in the bargaining unit as well as
managers who would
be identified as selected and effected, would be
made available.”
[38] He
said that would have happened in the early part of November 2001.
[39] When
faced with the proposition that, in the mind of the company, by 22
November 2001 the appellant’s job was effectively redundant
without
any form of consultation having occurred in respect of the appellant,
Amod justified the company’s position by saying that
the process
was, in effect, a two stage process. The first stage was that
selected people would be offered VSP or VER and this was
a voluntary
process, not retrenchment. Only when that process had been exhausted
was the second stage, leading ultimately to retrenchment
in the case
of employees who were not redeployed or retired, put into operation.
The final retrenchment date was envisaged to be
31 March 2002.
However, as a result of the urgent application brought by SACU and
two others on 28 March 2002, to interdict the
retrenchments, and the
resulting settlement agreement, retrenchments were postponed to 30
April 2002.
[40] Between 28 March and 3 May 2002 a process was put into place to
see if respondent could assist in placing affected members into
redeployed positions but, eventually, 223 including the appellant,
were retrenched on 3 May 2002. Amod said that the appellant was
interviewed for certain positions but unfortunately more suitable
candidates were found. The appellant should have been retrenched
on
31 March 2002 but as a result of the extension, was retrenched on 3
May 2002.
[41] Amod conceded that “at the time the exercise was being
implemented” the appellant was 49 years and 1 month old, or 11
months
shy of his 50
th
birthday when he could have opted
for and obtained the early retirement option. Early retirement
carried with it certain benefits
including a monthly pension and a
telephone allowance. Although Amod said that when they selected
employees for “ultimate retrenchment”
they applied the aforesaid
selection criteria, LIFO did not work for the appellant because he
was in an area that was made redundant.
[42] Amod conceded under cross-examination that whilst Telkom
consults with the unions with regard to employees in the bargaining
units, when it comes to managers they go an extra mile and consult
with the managers themselves, irrespective of whether or not they
belong to the unions. He said that the appellant was afforded the
benefit of “a dual consultation process”.
[43] According to Amod when it became quite apparent that they were
not going to realise their reductions through the voluntary process,
they would have continued with the s 189 process “with the
applicant and the other managers”. There was, however, no evidence
from Amod that after the meeting of 22 November 2001 the provisions
of s 189 were, in fact, complied with, either in consultations
with
the union or in consultation with individual managers, including the
appellant. He was also not aware of any consultations
with the
appellant commencing in July 2001. He said independent consultations
with the appellant would have commenced after the
group presentation
by Marna Wilden which was on 22 November 2001. He confirmed that the
affected managers had been identified by
the company by 22 November
2001.
[44] Amod conceded that retrenchment only became an issue in
January/February 2002 because prior to that the respondent had
indicated
that there would be no involuntary retrenchments.
[45] In re-examination it was put to Amod by the respondent’s
counsel that there must have been a stage when the respondent had
to
embark on s 189 proceedings with those who had not taken a
voluntary package of any kind, that is to say those in the
redeployment
pool. Although Amod confirmed that a decision was taken
to embark on such proceedings, he did not in fact give evidence of
any such
proceedings having taken place. He said “…. the company
then took a decision that the redeployment pool cannot continue
ad
infinitum
and that we need to come to a close and a convenient
date to come to a close would be tied up with the financial year on
31 March
2002”. He said that they would have gone into
consultations with the unions and advise them that they were now
going to consult
with them in terms of s 189. There was a debate
about whether there was a letter or minutes inviting the unions to
discussions.
Counsel for the respondent referred the Court to a
newsletter from SACU dated 2002/03/13 the penultimate paragraph of
which says:-
“To this end we were informed late in February
2002 that the company intends retrenching employees remaining in the
pool at the
end of March 2002.”
But the last paragraph states:-
“The
Labour Relations Act is
very specific in the
process that must be followed when contemplating retrenchments,
but
thus far the company has not abided by such provisions
,
and therefore called for an urgent meeting with the company.” (My
emphasis.)
[46] In a document dated 2 May 2002 and headed “Memorandum of
understanding between alliance of Telkom Unions (ATU) and Telkom
SA
on the finalisation of the staff optimisation programme”, it is
recorded that the parties “had consulted in terms of
Section 189
of
the
Labour Relations Act in
respect of the staff optimisation
programme which commenced in August 2000”. It is further recorded
that the parties had concluded
the consultations on 2 May 2002 and
that the termination date of affected employees would be 3 May 2002.
Paragraph 4 states:-
“The company undertakes together with a
representative of ATU to investigate all instances and circumstances
where there is alleged
discrepancies and unfair procedural issues.
The company is committed to investigate these circumstances and on
the merits of each
case address the particular circumstances fairly,
justly and equitably. The parties will commence this task on the 6
th
May 2002 to 31
st
May 2002.”
[47] There
was however no evidence from Amod that the specific requirements of s
189 of the Act were observed in respect of the retrenchment
of the
appellant.
[48] Allan was the line executive responsible for the Technology and
Network Services Organisation for Telkom Southern Zone and was
the
acting executive during the relevant period of 2001/2002. He
confirmed that the appellant was employed in the section called
Switching Engineering which was a sub-section of regional network
engineering.
[49] According to Allan the reduction in capital expenditure in the
southern region over the years 1999/2000 to 2002/2003 rendered
redundant the two specialist switching engineer positions, one of
which was occupied by one Charles Williams and the other by the
appellant. The redundancy was finalised and communicated to the
managers in November 2001. In September 2001 the respondent offered
voluntary early retirement packages to those who were over the age of
50 or 55 and only in November 2001 were voluntary severance
packages
offered. He referred to the letter dated 27 November 2001 addressed
to the appellant recording that he had been informed
by his immediate
supervisor/manager that his current position was affected and stating
that the “criteria … used to populate
the structure and identify
affected employees” were:-
“Qualifications
Experience
Performance
Correction
for race and gender.”
[50] There was no mention of LIFO. It was in this letter that the
appellant was offered the options of either a voluntary severance
package or redeployment. Allan said that the respondent did not
guarantee an employee a job if he went into the redeployment pool.

He described how those in the redeployment pool could apply for
positions which were published on a weekly basis in a vacancy
bulletin.
The respondent applied the “standard selection process”
which it followed when appointments were made, to the applications
for
people in the redeployment pool. He referred to a document which
set out the process. It recorded that “the selection process
for
redeployment and normal recruitment is exactly the same”. There
was an interview panel consisting of three to six people which
arrived at a “consensus decision”. He said that “Normally they
would agree on beforehand the criteria to be used for selection
and
they would basically work out a scoring sheet. Each member would
evaluate the responses by the applicant and at the end of the
day
generally the person with the highest mark awarded by the committee
would get the position, but taking into account the company’s
employment equity policies”.
[51] It emerged from Allan’s evidence that when the appellant’s
position was “declared redundant”, Allan was aware of that
fact,
but that he did not specifically talk to the appellant about
retrenchment.
[52] Allan, too, adopted the attitude that as at 22 November 2001,
although positions at risk had been identified, retrenchment was
not
the issue. He said:-
“At that stage there was no agreement with
organised labour as to what the next steps would be with those
members who were affected
but who did not opt for the VSP or did not
find alternative employment in the company.”
He specifically said that when it was communicated to employees in
November (2001) that positions had become redundant, they did
not
tell them that they were being retrenched: “Because retrenchment as
an alternative had not yet been agreed to with organised
labour”.
He said, in regard to what was communicated in talks with managers
after the meeting of 22 November 2001:-
“What was communicated that if there were still
people in the redeployment pool by the end of February, beginning of
March the company
would have to consider other methods of how we
would deal with these people because the retrenchment
per
se
had not been negotiated with the
union.”
[53] Although,
according to Allan, LIFO was one of the selection criteria employed
in selecting people for redundancy, this was, according
to Allan’s
evidence, before the options were put to affected employees and not
at the retrenchment stage.
[54] Allan described the steps which were taken to assist employees
who had elected to participate in the redeployment process.
He said
he had spoken to the appellant unofficially several times after he
moved into the redeployment pool. He said that the appellant
had on
one occasion requested that he give consideration to creating a
special position to retain him on the section and also to
give
consideration to extending the cut-off date for taking the voluntary
early retirement package so that he could apply for it.
He said that
he followed up this request and consulted with the HR division but
the company could not grant him the request for
extension of the date
to March 2003.
[55] Allan was referred to an e-mail addressed to him by the
appellant on 19 April 2002 in which the appellant said: “The job
moratorium
since beginning of March and employment equity
restrictions has made it very difficult to secure positions as
advertised on vacancy
bulletins after the original redeployment drive
ended in February.” Asked about the moratorium Allan said:-
“The moratorium was an instruction issued by the
Chief Technical Officer of Telkom that no positions, vacant
positions, were to
be filled without specific permission from himself
and the Chief Deputy-Officer”
and
“The notice was given late February or early
March of 2002”
and
“I think the decision as to who would fill a post
would still be left up to the committee as I described earlier, but
whether that
post was actually filled or not that was special
authority had to be taken – be obtained from the Chief Technical
Officer.”
[56] Allan was referred to a passage in the same e-mail in which the
appellant referred to “a motivation from Garth Schooling’s
section (product development) with Reuben September for me to fill a
position – no response yet.” He said he discussed this
with
Garth Schooling. He thought that “some time towards the end of
April, all the positions were finalised that were allowed
to go
through”.
[57] Under cross-examination Allan confirmed that as at 21 November
2002 was not part of the process and said: “… what was going
to
be the result if there were not sufficient employees taking voluntary
severance package, that was discussion or for subject to
further
negotiation with the unions”. He conceded that that was also the
case for the individuals themselves who were not represented
by
unions. He said that as the company was not contemplating
retrenchments, there would have been no purpose for it to consult in
terms of the section of the Act dealing with retrenchments. He
conceded that he had no idea at what stage consultations started.
He
said:-
“… the first time I became aware that
retrenchments were a certainty was round about the end of February
when a company communicay
was sent out.”
[58] Although,
in response to a leading question by the Court, Allan said that he
became aware that further negotiations with organised
labour and the
company were taking place about the manner in which they were to deal
with employees who were still in the redeployment
pool after all the
alternatives were exercised, he was not a party to those discussions.
He said that non-union members who were
retrenched were not
consulted but added that managers were: “If you define consultation
as speaking to him, indicating reasons
for the – the reasons for
reduction in staff, exploring the options, assisting with options,
then yes, that consultation did take
place over a period”.
[59] In response to a question by the Court, Allan said that the
appellant was not spoken to about retrenchment prior to 28 February
and continued:-
“There was indi …. he was not specifically
informed that his position would be redundant, was not a definite
indication his position
would be redundant prior to the 27
th
.
There were indications that the positions in the switching
engineering were going to be affected, but it was not definitive
statement
that your particular position is redundant.”
[60] He eventually agreed that prior to the 22
nd
November
2001 the appellant was not specifically informed that his position
was at risk. He conceded that the appellant was never
consulted
about whether the removal of his job from the organogram was a good
idea or not because that was a head office decision.
[61] Allan did not dispute that the appellant was not consulted about
the criteria to be applied in deciding who was to be selected
out of
the redeployment pool for any particular position but said:-
“Well the criteria used to fill those posts and
the process was the standard company procedure and criteria which is
known, or should
be known to everybody in the company specifically
persons in the managerial manner.”
[62] He
conceded that the process or procedure for filling vacancies did not
make any allowance for long service, and specifically
said: “No, in
applying for a position in terms of redeployment the length of
service would not be a factor”.
[63] Allan conceded that the moratorium did impact on a number of
positions available for redeployment. He was not sure of the “exact
practice rationale” for the fact that long service did not play
some role in the placements. Asked by the Court if the policy
of
appointment was a policy that was derived in consultation with the
union or with the workers, he said “The company recruitment
policy
was negotiated with organised labour, or elements of it was
negotiated with organised labour”. He did not, however, say
what
was agreed or what elements were agreed.
[64] Allan’s evidence was that the applicant’s position was not
filled and that the work that was done in the switching network
hierarchy actually disappeared in Port Elizabeth.
[65] To summarise, on the basis of the evidence presented by the
respondent, the position regarding consultation and section 189
of
the Act was as follows:-
For the period from about July 2001 until 22 November 2001 the
respondent did consult with the unions regarding the Staff
Optimisation
Process.
(b ) Before the presentation to managers on 22 November 2001 the
respondent had already identified the areas which were affected
and
the specific posts which would become redundant.
(c ) Although, according to the documentation, the criteria to be
applied in selecting positions for redundancy were skill, LIFO
and
race and gender correction, there is no evidence that the criteria
were actually applied in every case and, particularly, in
the case of
the appellant’s position.
(d ) The respondent did not regard it as being necessary to apply s
189 of the Act because it did not consider the staff optimisation
plan or process to, at that stage, involve retrenchments or
dismissals based on operational requirements.
(e ) Because managers were not included in the bargaining unit the
respondent did consult with managers whether or not they were
members
of a union on matters affecting SOP and their particular positions.
(f ) Prior to his being presented with the letter on the 27
th
November 2001 offering him the choice between a voluntary severance
package and redeployment, the appellant had not been consulted
about
the selection of his post for redundancy.
(g ) There was no evidence before the Court
a quo
that, when
the respondent did decide, in January or February 2002, to retrench
those persons left in the redeployment pool, it consulted
with either
the unions or with individual managers concerning the matters
referred to in s 189(2) of the Act.
(h ) The criteria for selecting from applicants in the redeployment
pool employees to fill vacant posts were decided upon by the
selection committee and did not include LIFO.
(i ) There was no evidence of any attempts being made to place the
appellant in another position, apart from affording him the
opportunity
of applying for listed vacancies and some enquiries made
on his behalf by Allan.
(j ) In late February or early March 2002 and at a time when
displaced employees in the redeployment pool were still applying for
alternative posts, the Chief Technical Officer of Telkom imposed a
moratorium in the form of an instruction that no vacant positions
were to be filled without specific permission from himself and the
Chief Deputy-Officer.
(k ) There was no evidence to explain the necessity for this
moratorium or regarding the criteria which were applied in deciding
whether or not to approve a placement, neither was there any evidence
regarding which and how many of the applications made by the
appellant were affected by this moratorium.
[66] The
appellant gave evidence. He described himself as a specialist
netplan and data integrity specialist, in category D.5 or
N.5. He
had been unable to secure alternative employment since his dismissal,
although he had, with others, endeavoured to set up
a close
corporation doing job brokering to try and find employment for
retrenched or older people.
[67] The appellant said that he was 49 years and 1 month of age on
the date of his retrenchment, 3 May 2002. Had he been allowed
early
retirement, he would have been entitled to a number of benefits which
he had lost on his retrenchment. The first intimation
he had that
his position was “effected and selected” was when he was notified
to that effect by his then manager prior to receiving
the letter of
27 November 2001 giving him the choice of four options. He had not
been invited to the meeting addressed by Marna
Wilden on 22 November
2001 and had not attended that meeting. He did however attend a
social plan workshop which was, as he described
it, an “information
cascading exercise” informing people basically what benefits would
be allowed when they exited the company.
This was after he had
elected to take the redeployment option. Had he been allowed early
retirement there would have been certain
tax benefits.
[68] The appellant said he opted for redeployment because he had been
with the respondent for 30 years and wanted to retain his association
with the company. He was “absolutely convinced” that with his
years of experience he would get some form of employment either
in
Telkom or in some other organisation based upon the fact that the
letter of 27 November 2001 actually said, that the company would
endeavour to retrain people who did not completely fit a position
applied for.
[69] The appellant dealt in detail with the various applications he
had made, referring to a schedule which appears at page 611 of
the
record. In all he had applied for 22 positions before his
retrenchment date and 4 after his employment ended. He had applied
for the 22 positions because he felt that he had the experience to do
the job in those particular categories. He was only short-listed
for
4 of the applications and was unsuccessful. He knew about the
moratorium and understood that it did not preclude him from applying
for positions but they would not necessarily appoint somebody even if
successful until approval had been given for the appointment.
[70] The appellant referred to his e-mail to Allan on 19 April 2002
when he advanced the proposal to accommodate him at least to
the age
of 50 so that he qualified for early retirement. No-one ever came
back to him regarding his proposal. He had also suggested
that he
could play an important part with the data integrity exercise leading
up to Netplan Integration which he had been involved
in for 10 months
prior to his retrenchment, but this proposal was also not approved.
He ultimately got the letter dated 3 May 2002
confirming that he
would be retrenched on that date. He identified a letter dated 17
July 2002 which he had addressed to The Executive,
Telkom Employee
Relations in which he set out the history of the process leading to
his retrenchment and in which he asked for relief.
[71] The appellant said he wanted reinstatement and, if that was not
possible, a form of compensation.
[72] In response to a question by the Court the appellant said that
he did not really think that it was justified to declare his
position
redundant. In cross-examination he took the view that although
Telkom had consulted with the union before his retrenchment,
there
was a duty and obligation to consult with him directly. Referring to
the letter of 27 November 2001 and to the words “the
company will
endeavour to retrain and redeploy you within Telkom”, in the
context that there was no guarantee of redeployment,
he said he
understood the definition of endeavour to be “actually trying”.
Regarding his choice to go into the general redeployment
pool, he
said:-
“My interpretation of that at that at that stage
was redeployment that the company would endeavour to redeploy, in
other words,
it would not be an effort on my behalf, it was something
that the company would recommend.”
[73] He
dealt with correspondence he had had by e-mail with Marna Wilden
regarding his application for a certain position. In response
to
questions by the Court, he referred to positions which he thought he
should have got. Asked if he felt that he was denied jobs
he should
have got because of any bias on the part of the selection panel, he
replied “I quite honestly did not know what the selection
criteria
was, so I do not know if the bias was objective or subjective, I have
absolutely no idea”. He also said:-
“Well of these positions I actually applied, but
when I was retrenched none of those positions had been filled, so I
have absolutely
no idea whether I was successful or not successful.
I had no indication from the company whether I was in actual fact
successful
or not. Even afterwards there was no indication.”
[74] The appellant confirmed that he had received written
communications from SACU from time to time because he was a member of
the
Union and that he had corresponded with his shop steward at the
time. He said:-
“One of the reasons was because I was not getting
much feedback from managerial side as far as the consultation
process, as far
as looking at or revisiting alternative positions in
the company.”
[75] He
had heard from the shop steward that there was a Union member up in
Pretoria who was going to discuss revisiting alternate
job
applications. He had no response from his Union to this mail
although he was assured that the list of job applications made
by him
had been given to somebody at Telkom.
[76] I have found earlier in this judgment, there was no obligation
on the part of the respondent to consult with the appellant
personally in terms of s 189 of the Act because he was a member of
SACU. However, it is clear from the evidence of both Amod and
Allan
that it was the policy of the respondent to consult personally with
employees in the management category whether or not they
were members
of a union. That was undoubtedly fair, bearing in mind that, the
managers did not form part of the bargaining unit.
There is much to
be said for the contention advanced on behalf of the appellant that
the respondent, having elected to consult with
management regarding
retrenchment issues, was obliged to consult with managers, including
the appellant, in addition to consulting
with the unions. It is,
however, not necessary to decide that issue for the purposes of this
case. That is because the evidence
placed before the Court
a quo
did not establish that the respondent had consulted with ATU or SACU
in an attempt to reach consensus on the matters referred to
in s
189(2) of the Act or that it complied with sub-sections 189(3), (5),
(6) and (7). Although there may have been consultation
between the
respondent and the unions regarding SOP, it was the respondent’s
own case that it did not regard those consultations
as being
consultations in terms of s 189 of the Act because there was no
decision to retrench until January or February 2002, after
the
attempts to bring about a reduction of personnel by early retirement
and the acceptance of a VSP had been exhausted. There is
no evidence
that the employees who remained in the redeployment pool were, as
required by s 189(7) of the Act, dismissed according
to selection
criteria that had been agreed with the union or which were fair and
objective. The decision that those remaining in
the redeployment
pool were to be dismissed by a certain date was solely a management
decision. There is no evidence that thereafter
there was compliance
by the respondent with s 189 of the Act. Indeed as appears that the
application by the Union for an interdict
to prevent the
retrenchments was sought on the basis that the intended retrenchments
would constitute unlawful dismissals in that
the provisions of s 189
of the Act had not been complied with.
[77] The dismissal of the appellant
was, therefore, unlawful because of non-compliance with s 189 of the
Act.
[78] However, in my opinion, there is
a much stronger and clearer ground for upholding the appeal. Even
assuming that there was proper
consultation between the respondent
and the unions regarding the dismissals, pursuant to the agreed SOP,
a distinction must be drawn
between consultation regarding dismissal
for reasons based on the employer’s operational requirements and
the implementation of
those dismissals. In the case of the appellant
and the others who elected to accept the redeployment option, the
modus operandi
was that their position would be regarded as
redundant and non-existent and they would have to reapply, like any
other applicant
for employment, for alternative positions which
became available, either within the redeployment pool or outside of
it within the
company. The issue to be decided is whether that
procedure and its implementation in the case of the appellant was
fair and reasonable.
[79] Once it has been proved that an
employee was dismissed, the
onus
passes to the employer to
prove that the employee was dismissed “for a fair reason and in
accordance with a fair procedure” –
see
John Grogan –
Workplace Law
(8
th
Ed.) 168. As 188(1)and 189(7)(b) of
the Act
In
FAWU and Others v SA Breweries
Ltd
[2004] 11 BLLR 1093
(LC) at 1109B-D, Gamble AJ said:-
“
[39]
The test for substantive fairness in dismissals for operational
reasons has traditionally been described by the Labour Appeal
Court
as being whether the retrenchment is “properly and genuinely
justified by operational requirements in the sense that it was
a
reasonable option in the circumstances” (
Decision
Surveys International (Pty) Ltd v Dlamini & Others
[2002] ZACC 27
;
[1999] 5 BLLR 413
(LAC). See also
SACTWU
& Others v Discreto (A Division of Trump & Springbok
Holdings)
(1998) 19 ILJ 1451 (LAC).
[40] More recently
the Labour Appeal Court endorsed a less deferential test for proof of
substantive fairness – an approach which
calls for a more rigorous
or exacting examination by the courts of the reasons advanced by the
employer. This requires the employer
to show that the dismissals
were “a measure of last resort” which “could not be avoided”
(see
CWIU & Others v Algorax (Pty)
Ltd
[2003] 11 BLLR 1081
(LAC).”
In
General Food Industries Ltd v
FAWU
[2004] 7 BLLR 667
(LAC) 682J, para. 55, Nicholson JA said:-
“The loss of jobs
through retrenchment has such a deleterious impact on the life of
workers and their families that it is imperative
that – even though
reasons to retrench employees may exist – they will only be
accepted as valid
if the employer can
show
that all viable alternative steps
have been considered and taken to prevent the retrenchments or to
limit these to a minimum” (My
emphasis.)”
[80] As I have said earlier in this
judgment, Mr Wade, for the appellant, based his case mainly on the
proposition that the respondent
did not discharge the
onus
of
establishing that there were no reasonable alternatives to the
appellant’s dismissal. I understood him to say in reply to the
respondent’s argument before us that the appellant did not disagree
with the criteria applied but did question why he was not selected.
[81] In my opinion, Mr Wade may have
unnecessarily restricted the scope of the appellant’s case. In his
amended Statement of Claim,
the appellant, in paragraph 5.27, after
alleging that the respondent unfairly failed to employ the appellant
in certain named positions
said, in paragraph 5.28:-
“In view of the
Respondent’s failure to consult the Applicant as required by the
Act, the Respondent is put to the express proof
of its rationale for
terminating the Applicant’s services, the absence of alternatives
to the Applicant’s termination, and the
fairness of the selection
criteria and their Application.”
In reply the
respondent said:-
“25.3 Applicant
along with the rest of the employees in the redeployment pool went
through this process (interview by a selection
panel). If he was
unsuccessful in obtaining alternative employment at the Respondent,
that nonetheless was the result of a fair and
objective procedure.
Employees who were successful in respect of jobs for which Applicant
also applied were better qualified and
suited for those jobs,
performed better in the interviews and were selected as the result of
a targeted fair and objective selection
procedure.”
And:
“25.5 Most of the
positions referred to were offered outside of Port Elizabeth and the
Southern region and the Respondent is unable
to reply to the
allegations concerning these posts with any particularity.”
[82] In my view the evidence before
the Court
a quo
did not establish that the procedure resulting
in the appellant’s dismissal was fair and objective, for the
following reasons:-
1. There was no evidence to explain,
or justify, why it was fair and reasonable to require the appellant,
who had 30 years service
and a clean record, and who was approaching
the early retirement age, to forfeit his employment with the
respondent and to have to
reapply in competition with other displaced
employees, who may have had far less service than him, for the
available positions or
as to why it was not possible to create a
position for the appellant within the company.
2. Although, according to the
respondent, it applied the criteria of Last In First Out in deciding
which positions would become redundant,
length of service did not,
according to Allan, play any part in the process of selection of
applicants for the available positions.
3. In the letter dated 27 November
2001 informing the appellant that his current position was affected,
he was led to believe that
the respondent would endeavour to retrain
and redeploy him within Telkom but there is no evidence whatsoever
that it did endeavour
to retrain him or to redeploy him in any manner
other than to allow him to apply for vacancies in competition with
other employees.
4. There is nothing in the said letter
of 2001 which would have alerted the appellant to the fact that his
length of service would
not carry any weight in the process of
redeployment from the pool.
5. There was no evidence to establish
precisely why the applicant was less suitable than others for the
positions for which he applied
and was unsuccessful and no
documentation was placed before the Court
a quo
in this
regard. In addition, the appellant was treated in a most
unreasonable manner, having regard to his seniority and length
of
service, in that he was not even informed of the outcome of some of
his applications or told why others were selected in preference
to
him, if that was the case.
There
was no evidence to establish the need for the moratorium which
appears to have been an obstacle placed by the respondent
in the way
of a fair implementation of the redeployment plan, neither was there
any evidence as to the criteria used in deciding
whether or not to
approve an appointment. It is possible that some of the
applications by the appellant were rendered unsuccessful
under the
moratorium, simply at the whim of the Chief Technical Officer and
the Chief Deputy Officer.
[83] In my judgment, it was not
established on the evidence before the Court
a
quo that there
were, in fact, no alternatives to the dismissal of the appellant or
that the procedure adopted leading to his dismissal
was fair and
objective. The appellant’s claim in the Court
a quo
ought,
accordingly, to have succeeded and the appeal must be upheld.
[84] As far as the remedy is
concerned, I have read the judgment of my brother Zondo JP and, for
the reasons given by him I agree
with the order he proposes.
McCall AJA
Counsel for the appellant : R.B. Wade
Instructed by : Kaplan Bloemberg
Counsel for the respondent : T.J.
Bruinders SC
Instructed by: Soni Inc.
Date of judgment : 29 June 2007