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[2009] ZALAC 24
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Molapo Technology (Pty) Ltd v Kukard and Others (JA 3/2007) [2009] ZALAC 24 (8 May 2009)
IN THE LABOUR APPEAL
COURT OF SOUTH AFRICA
HELD AT
JOHANNESBURG
CASE NO: JA 3/2007
In the matter between:
MOLAPO TECHNOLOGY
(PTY) LTD APPELLANT
and
MICHAEL JOHN KUKARD &
OTHERS RESPONDENTS
_______________________________________________________
J U D G M E N T
LEEUW
JA
:
Introduction:
[1] This appeal, with the
leave of the Labour Court, is against part of the judgment granted by
Ntsebenza AJ reported as
Kukard & Others v Molapo
Technology Pty (Ltd)
[2006]
4 BLLR 334
(LC). In the Labour Court, Ntsebenza AJ held that the
dismissal of the respondents by the appellant for operational
requirements
was not in accordance with a fair procedure because the
appellant did not afford the respondents more time to consider
certain
issues raised during the consultation process which was not
complete when the respondents were dismissed. As a consequence the
Court ordered the appellant to pay each respondent compensation equal
to three (3) months remuneration.
[2] The Labour Court made
a finding that the “decision to lay off the selected employees
was substantially (sic) fair.”
It had been admitted by the
respondents in the pre-trial minute that in general there was a need
to retrench. The respondents
applied for leave to cross-appeal
against the Court’s order that the dismissal was substantively
fair but leave to cross-appeal
was refused. The second respondent
was a shop steward of Communication Workers Union (CWU). The
respondents did not oppose this
appeal and thus the appeal is
unopposed.
Background
[3] The respondents were
all employees of the appellant and were members of CWU.
The appellant purchased
a business from Telkom called IUVATEK as a going concern. The
transfer of a business pursuant to such
a purchase is subject to
the provisions of section 197 of the Labour Relations Act No 66 of
1995 (LRA). IUVATEK was a division
of Telkom. It conducted
business in electronic systems. It was essentially involved in the
repair of circuit boards and electronic
pay phones normally
operated in the streets. The respondents were employees of IUVATEK
prior to the transfer.
It is common cause
between the parties that, when IUVATEK was transferred to the
appellant, Telkom had not fully disclosed to
the appellant the true
financial state of affairs of IUVATEK which was that IUVATEK was
running at a loss. More details about
this will emerge later in
this judgment.
For some time prior to
the transfer of IUVATEK to appellant, Telkom had held discussions
with respondents and their trade union
with regard to the
restructuring of IUVATEK. In 1999 some employees of Telkom were
retrenched and others offered voluntary
severance packages.
Employees of IUVATEK who were under the age of fifty (50) years
were not offered voluntary severance packages
by Telkom. The
respondents, who were employees of the IUVATEK Division then, were
advised that they were not eligible for
voluntary severance
packages. They were informed at the beginning of 2000 that they
would be transferred to appellant with
effect from the
1
st
April 2000
.
22 March 2000
A meeting was held on
the
22
nd
March 2000
between CWU
representatives which included the second respondent and the
appellant’s management where it was indicated
to the union
that:
3.4.1 Telkom was offering
voluntary separation packages to the affected employees who would be
over the age of 50 years prior to
the transfer of IUVATEK on the
1
st
April 2000
. The appellant urged affected employees who were
eligible to accept the offer of voluntary separation packages.
3.4.2 In that meeting the
management informed the union representatives that certain affected
employees of IUVATEK had indicated
their wish to be retrenched.
According to the management the employees concerned were of the
opinion that the appellant purchased
IUVATEK with the purpose of
selling it at a profit which the employees thought would affect them
adversely in that there was a
likelihood that they would forfeit
their retirement benefits and other benefits due to them. The
management also said that the
employees complained of lack of work in
certain sections.
3.4.3 The appellant’s
representative also indicated to the respondents that:
(a) appellant intended to
turn IUVATEK into a profitable business;
(b) Alexander Forbes
would be appointed and be responsible for the transfer and
administration of the Pension Fund;
(c) appellant was
conducting an analysis of the organisational structure of IUVATEK and
the results thereof would be made available
to the union.
3.5 It was agreed in the
meeting that the shop stewards would conduct a survey within its
members with the purpose of determining
the general morale and
commitment of its members to appellant as well as the above mentioned
offer of voluntary separation packages
and other issues that could
arise relating to the transfer of IUVATEK and that the union would
report to the management at a meeting
that was scheduled for the
29
th
March 2000
.
3.6 Whilst awaiting a
response from CWU on the issues discussed at the meeting of 22
nd
March 2000, before the meeting of the 29
th
March 2000, the
respondents brought an urgent application in the Labour Court for an
order restraining Telkom from transferring
IUVATEK as a going concern
to the appellant. The application was dismissed with costs.
29 March 2000
[4] On the
29
th
March 2000
, prior to the transfer of IUVATEK to the appellant, a
meeting was held between the representatives of CWU, Telkom, and the
appellant.
I deal below with what transpired in that meeting.
CWU stated that
Telkom’s offer of voluntary early retirement for employees 50
years and older was discussed at length
with its members and that,
though it was not the union’s policy to encourage its members
to take the offer, it was, nevertheless,
acceptable to some members
who raised concerns about the future availability of their medical
and telephone benefits, which
would not be available in the future.
The exact number of possible retirees was not yet established;
Mr
Hart, who was the chairman of appellant, informed CWU
representatives that the management would present the employees
with
an offer of voluntary retrenchment on Monday
3 April 2000
and those employees who wished to take voluntary retrenchment would
most likely receive more
favourable
terms
than those who would be laid off through any possible future
restructuring process that could be initiated by the appellant.
It was agreed that the
management would prepare a “Draft General Notice” to
employees which would outline the terms
and conditions of the offer
of voluntary termination of service. This document would be given
to CWU for comment as soon as
possible and the management would in
turn consider any “constructive input” in that regard.
The terms and conditions
of the voluntary termination of service
were discussed.
Mr
Hart informed the meeting that
“management had initiated
an analysis to assist in the evaluation of the most appropriate
organizational structure in
order to sustain a viable company in
the future.”
He said that the first draft structure
would be completed by the
5
th
or 6
th
April 2000.
He further stated that he had made an undertaking
during the
“road show”
exercise with the IUVATEK
employees that he would
“
endeavour
to let all employees know where they stood in terms of any new
structure within two weeks of the beginning of April 2000”.
Mr
Hart said that the management would give a report back to the
unions at a combined meeting of CWU and the other trade union at
appellant’s: Alliance of Telkom Unions (ATU). That meeting
was scheduled for 10h00 on Friday 7 April 2000 where the
management
was going to provide details of the proposed structure of the new
organization.
[5] IUVATEK was
transferred to the appellant on the
1
st
April 2009
. The appellant was able to enter into the financial
system of IUVATEK which it had bought with the business. It was
discovered
that the single line telephone repairs which constituted a
major portion of the business of IUVATEK seemed to have little or no
work. It was then that the management discovered that a large
portion of its anticipated revenue was being depleted.
[6] Appellant was at all
times, prior to the transfer of IUVATEK, under the mistaken belief
that Telkom would relinquish ownership
of the phones and sell or
outsource same to another party, which party would be responsible for
doing the “stock out service”
and continue the supply of
single line telephones to the Telkom subscribers and that appellant
would have exclusive rights to repair
those phones. That right was
included in the appellant’s service level agreement with
Telkom. However, it came to light
on the
1
st
April 2000
, when transfer took place, that Telkom had instead
made an arrangement in terms of which every single subscriber had to
own a single
line telephone and these subscribers were responsible
for fixing their telephones or have them replaced when damaged. This
was
so despite the fact that in the appellant’s service level
agreement with Telkom which was to the effect that any equipment
sold
by Telkom as well as the rights attached thereto, would be
transferred to the appellant as a new buyer.
[7] The subscribers could
then go to any supplier, for instance, Pick and Pay or Hyperama, and
other suppliers who rendered the
same service as appellant and did
not have to only go to the appellant. Telkom was not responsible for
providing such service
- not even through an outsourced subscriber.
Appellant, according to
Mr
Hart, was now
faced with a situation where it had to search for the subscribers.
Other stores rendering similar repair services
as appellant emerged.
As a result of this unforeseen situation the appellant had to
expedite the restructuring process and approach
the unions with a
proposal of a possible closure of business by having the company
liquidated or by restructuring its business.
When management
realised that the appellant was in dire straits, it initiated a
consultation process in contemplation of retrenchments.
Consultations in terms
of section 189 of the LRA
6 April 2000
[8] According to Mr Hart,
the first week of April 2000 was hectic. On the
6
th
April 2000
a meeting was held with the respondents’ union
where
Mr
Hart made a presentation. The
necessary figures with regard to the viability of continuing with the
business of IUVATEK at a profit
were presented. At this meeting, Mr
Hart presented: an analysis of the income statement of the old
IUVATEK Electronics Division,
and explained that IUVATEK did not
conduct an efficient financial accounting system. The financial
statements of IUVATEK were
also provided to the union. It was
explained that the total expenditure was approximately R50 million
higher than the revenue
earned. Mr Hart further informed the union
that appellant had procured the services of outside consultants at
great expense over
the previous one or two weeks, and that they put
together a proposal on the total restructuring of IUVATEK.
[9] Mr Hart also
disclosed in the meeting the figures submitted to appellant by
Telkom. He said that those figures were unreliable
because of the
inefficient accounting system used by Telkom. Mr Hart pointed out
that this was the information upon which appellant
had relied when it
formed the view that the organization could increase its income by a
further R30 million. Mr Campbell of the
Human Resources Consultants
also explained the processes applied in the review of the business.
[10] A notice issued in
terms of section 189 of the LRA was read out at the meeting. Mr
Campbell went through a detailed schedule
for conducting the
restructuring process of the repairs division. CWU was invited to
actively consult with the management and to
prove suggestions on any
possible alternatives that could avoid the need to retrench whilst at
the same time facilitating the organization’s
conversion to a
profitable business concern. The management said that the time frame
was tight because:
(a) the shareholders of
appellant wanted an early conclusion of the restructuring process so
as to determine the long term viability
of the organization and,
(b) appellant had
promised the employees during the road show presentations that the
restructuring exercise would be finalized
within two weeks after the
transfer of IUVATEK to the appellant.
[11] In terms of the
“General Notice” dated
6
th
April 2000
prepared by Mr Hart, permanent employees of IUVATEK
were offered voluntary termination services. This letter was read
and discussed
at the meeting of the 6
th
April 2000.
Certain changes were effected to the “Offer of Voluntary
Termination of Service” document and an application
form was to
be drafted which would allow the employees who would be eligible for
voluntary termination of service to (i) subsequently
qualify for
preferential treatment if re-employment opportunities arose subject
to qualification and experience requirements, and
(ii) that they be
given a period of 48 hours after receiving their actual package
information sheets to make a final determination
on whether or not to
accept the offer.
[12] CWU was given an
opportunity (approximately 20 minutes) to caucus on the issues
raised. After the caucus CWU indicated that
it was not in a position
to respond to the presentation at that time. It was further agreed
by all parties at the instance of
ATU that the meeting which was
scheduled for the
14
th
April 2000
be
moved to the
12
th
April 2000
at
14h00, and also that the consultations be held jointly with the
management and the two unions and each union be given 2 hours
at all
sites to give a report back to their members. It was stated that the
deadline for submitting applications for voluntary
termination of
service (VTOS) was to be 16h00 on Wednesday
12 April 2000
.
The timetable for the proposed action plan was from
6
th
April 2000
and
2
nd
May 2000
. The
management and the unions agreed to adhere to this programme. It was
further agreed that the report back, with regard to
the issues
discussed at this meeting, would be held on Friday
7
th
April 2000
at 9h00.
7 April 2000
[13] On the
7
th
April 2000
, a special meeting was held between the management
(Messrs Hart, Peddie and Campbell) and CWU representatives (Messrs
Roberts,
Sithebe, Makolo and Kemp). The purpose of the meeting was
to finalise the communication processes between the management and
the
unions and the recognition and service level agreements with
Telkom. CWU apologised to the management for not having come back
to
them on the retrenchment proposals when they were supposed to have
done so. Mr Roberts of CWU requested that they be given
an
opportunity to address their members on the proposals from the
management. It was decided that all communication from appellant
to
CWU be made through CWU’s head office. CWU representatives
were given a copy of the service level agreement between appellant
and Telkom as well as annexures relating to all the equipment to
which appellant had exclusive rights. The meeting was then postponed
to the 12
th
April 2000.
12 April 2000
[14] At a consultation
meeting attended by CWU and ATU representatives and appellant’s
management on the
12th April 2000
a letter dated 11 April 2000
from Mr Sithebe, the Sector Co-ordinator of CWU, which was addressed
to the “Chairman”
of the appellant, was read out. The
subject matter thereof was “voluntary retrenchment and requests
for disclosure of information.”
In this letter CWU:
confirmed the
discussions held at the meeting of the 6
th
April 2000,
and the appellant’s intention to restructure and that they
had agreed to meet on the
14
th
April
2000
;
complained about the
fact that appellant, when it bought the business from Telkom, had
already contemplated its intention to
retrench and that it started
the consultation process with CWU at the last minute which CWU
regarded as undermining the consultation
process;
stated that at the
“last-minute” consultation meeting of the
6
th
April 2000
, they were advised that, if they failed to
co-operate with the management, appellant would consider
liquidation proceedings;
stated that it required
more time to consult and canvass the issue of retrenchments with
its members so as to have a meaningful
and informed consultation
with the management in that regard;
stated that the
management did not have consultations with them on the retrenchment
package, the selection criteria, the skills
required and the
training that could be offered to the employees;
stated that there was
no clarity with regard to the number of workers to be retrenched
and the reasons therefor as well as information
on voluntary
retrenchment packages, and, as such, they required more time to
consult with their members;
stated that the
deadline of
12 April 2000
for the submission of applications
for voluntary retrenchments was unrealistic and they urged the
management to extend the
date; and
also requested the
management to disclose certain technical information such as
audited financial statements, organizational
financial and
logistical evaluation by the consultants and management, and the
reasons why Telkom did not want to be involved
in the “single
line telephone repairs” and whether appellant had been made
aware of the state of affairs when it
took transfer of IUVATEK, and
many other issues.
[15] The contents of the
union’s letter of the 11
th
April 2000 was discussed
at this meeting and Mr Campbell, said that
(a) CWU was engaging in
the consultation process in bad faith;
(b) the management was
prepared to meet everyday including weekends with the unions in order
to allow the report back sessions to
all employees to take place
expeditiously since time was running out for the appellant’s
restructuring of its business, which
was to be urgently completed.
[16] It was agreed that a
meeting would be held on Tuesday
18 April 2000
at 18h00.
Management undertook to respond in writing to the concerns raised and
to furnish the unions with information in terms
of section 189 of the
LRA by close of business on Monday
17 April 2000
.
[17] ATU, after having
queried some of the calculations stipulated in the offer of voluntary
termination of service package, and
these having been corrected or
adjusted by the management at the meeting, indicated that they were
satisfied with the offer made.
18 April 2000
[18] Mr Hart responded in
writing and furnished the union representative, Mr Sithebe with the
required information at the consultation
meeting of the
18
th
April 2000
. At this meeting, which was attended by the
management and the representatives of ATU and CWU, the issues raised
by the unions
in the previous meeting were discussed and each point
addressed.
With regard to the
issue of facilitating a discussion between CWU and Telkom, CWU
proposed that a meeting be arranged between
itself and Telkom
Financial Personnel to discuss the repairs division. It was agreed
that the meeting would be scheduled for
the following day (
19
April 2000
). However, later CWU requested that the meeting be
postponed to a later date as it wanted to focus on the key issues
relating
to the consultation process in an attempt to assist in
meeting the time frames prescribed for the consulting process.
This
request was granted.
18.2 ATU stated that
there was information still outstanding from appellant and that they
were not in a position to propose an
alternative retrenchment
strategy without the required information. The meeting was adjourned
in order to reconvene on the
25
th
April 2000
at 10h00.
25 April 2000
[19] The minutes of the
meeting of the 25
th
April 2000 are not available but the
version of the appellant is that, on the
25
th
April 2000
the meeting was delayed for two hours because
CWU’s key representatives namely, Messrs Sithebe and Roberts,
did not arrive
on time and the meeting had to proceed in their
absence. CWU was represented by Messrs Makola and Joachim and ATU by
four (4)
members.
The management was
expected to report back to the unions on:
“●
A diagram reflecting
the structure of the organization
●
Key job requirements for the
proposed organizational staffing model;
●
Criteria to be used for skills
retention;
●
The reason for Molapo
continuing with the purchase of the Iuvatek organization with the
“Single Line Repairs Function;
●
A confidential list of the
names of all employees whose applications for VTOS had been rejected
●
Management’s view on
employees whose applications for the VTOS had been rejected but were
later to be retrenched.”
CWU was to report back
to the management on the relationship it had had with its members
regarding their suggestion on possible
alternatives that would
avoid retrenchments and other proposals from the management.
19.3 ATU had requested
certain information from the management which was outstanding at the
time of the meeting of the 18
th
April 2000 which
information was required by it in order to propose an alternative
strategy to deal with the problem which was
threatening jobs.
[20] At this meeting Mr
Peddie, the Human Resource Manager, identified the employees who
would be affected by the retrenchment.
The list was given to the
representatives of the different trade unions at the end of the
meeting. Mr Peddie informed the representatives
of the trade unions
that he had e-mailed the list of those names on the night of the
24
th
April 2000
to the offices of the different trade unions. The
union representatives were not ready with the information required
and they
requested that they be given time to consult with their
members. They indicated that they would report back to the management
on
the 26
th
April 2000.
[21] The respondents’
version with regard to the meeting of the
25
th
April 2000
is that:
21.1 prior to this date,
the only information they had received from the management was the
organogram and the list which was drawn
up in respect of the status
of the voluntary termination process;
21.2 they were given a
list after the meeting at about 22h00 to consider the criteria that
the appellant envisaged using for selecting
employees for
retrenchment and that the list was allegedly faxed to them by Mr
Peddie at 18h00 on Thursday (25 April 2000);
21.3 When the meeting
ended the voluntary termination process had not yet been completed
and it was expected that the union was
still to consult with its
members on the new proposal concerning forced retrenchments;
21.4 they had
consistently explained to the management that their efforts to
consult during the April were impeded by the high number
of public
holidays, especially in view of the fact that their shop stewards
came from various regions around the country and had
other
commitments besides the consultation process at appellant;
21.5 Their time
constraints were brought to the attention of the management at all
meetings of the 6
th
, 12
th
and 18
th
April 2000, but the management did not grant them any latitude in
that regard;
the consultations were
such that management was giving them information regarding
structures proposed and other information
but had not started
addressing issues on how they could reach consensus on matters such
as retention of skills, the criteria
for selection and the
voluntary retrenchment process that was in progress at that stage;
it was unrealistic of
the management to formulate a position on retrenchments at that
stage as it was yet uncertain as to how
many employees would remain
at the end of the voluntary severance package process;
[22] According to Mr
Kemp, on the night of the 25
th
April 2000, the respondents
were asked whether they would be available for a discussion on the
26
th
April 2000. CWU indicated that they were not
available because the shop stewards were already committed to their
various regions
with regard to the April 27 activities which is a
Freedom Day;
[23] According to the
respondents, the consultation process was flawed in that the
respondents were only afforded two days, one
of which was a public
holiday, to discuss the proposal from the appellant and report back
on the mandate received from the affected
employees.
[24] According to Mr
Peddie, on the morning of the 26
th
April 2000 he sent the
additional list which contained the names of those employees who
faced forced retrenchments, and the full
compliment of their skills,
by e-mail to CWU and ATU offices. When no response was received from
CWU, Mr Hart, on behalf of appellant,
wrote a letter which was sent
by facsimile transmission to the CWU office. That letter was marked
for the attention of Mr Sithebe.
It reads as follows:
Reference: Restructure Of
Molapo Technology – LRA Section 189 Process
We refer to our consultation meeting
of 25 April 2000 at which you undertook to respond to us by close of
business on 26 April
2000 with alternatives and counter proposals in
respect of the possible retrenchment of your members.
You have now received all relevant
information requested by you for purposes of consulting on all items
as per our Section 189
notification of 6 April 2000 dealing with
possible retrenchments. We have met on numerous occasions and have
further entered into
correspondence with you. Despite this and
despite you undertaking on 25 April 2000 you have failed to respond
to us by the deadline
imposed by yourselves.
We are therefore forced to assume
that, having had access to all of the relevant information you
neither have alternatives to retrenchment
nor any further counter
proposals in this regard.
We have attached, for your
information, our response to an ATU submission in this regard and are
prepared to consider your comments
thereon should you have any.
Despite your inexplicable silence we are available to meet with you
at 15h00 for purposes of discussing
any proposals that you have
relating to the possible retrenchments. Failing that we will have no
alternative but to implement
the proposed retrenchments from the
morning of Friday 28 April 2000 as per the list of employees supplied
to you.
[25] On the
26th April
2000
Mr Sithebe wrote a letter and had drawn up a document in
which alternatives to retrenchment were proposed. He indicated in
the
document that he would send a list of the affected employees to
appellant early on Friday the
28
th
April
2000
. At this stage I pause to point out that the 27
th
April was a public holiday of great significance to the black
majority in this country. It was on the 27
th
April 1994
that black people in South Africa exercised the right to vote for the
first time. That day marked the end of the white
minority rule and
racial oppression of the black people by white people in this
country. Since 1994 the 27
th
April is a public holiday and
black people in particular celebrate that day. Mr Hart testified that
he did not receive the letter
and as there was no response from the
union, he issued letters of dismissal on the 28
th
April
2000 to everyone who was to be retrenched. In the termination
notices, Mr Hart stated that the cut-off date for the consultation
process was the 30
th
April 2000 and that it was surprising
that the employees received their notices of termination of
employment on the 28
th
April 2000.
Labour Court
[26] I have already
alluded to the fact that the Labour Court found that the decision to
dismiss the selected employees, including
the respondents, for
operational requirements was substantively fair.
[27] As regards the
procedural fairness of the dismissals, the Court stated, amongst
others, the following: “I am not persuaded
that the employer,
on the evidence tendered by it, can be held, justifiably, to have
followed a process that can be labeled as
having been wholly unfair”
because of the following:
27.1 the evidence of
Messrs “Hart and Peddie is unblemished in its clarity”
that as soon as the appellant contemplated
that retrenchments might
be necessary, it attempted to engage the unions’
representatives with the first consultation of
the
6
th
April 2000
;
27.2 on realising that
the relevant division of the appellant was in dire straits, and,
having gone through an intensive exercise
on how to salvage the
company, the appellant had embarked upon and conducted an intensive
consultation process over a period of
three (3) weeks in April 2000;
27.3 it was common cause
that the situation demanded urgent attention and also that the
appellant did provide the unions with a
great deal of information
during the consultation process; and that
27.4 the detailed
memorandum provided to the unions on the
20
th
April 2000
, was as a result of the discussions which were held
with the unions on the 18
th
April 2000, which information
assisted the appellant to compile a list of the employees identified
for retrenchment and whose criteria
were discussed at the meeting of
the 25
th
April 2000.
[28] Notwithstanding the
above, the Labour Court held that the procedural process was to a
limited extent unfair based on the different
perceptions held by the
appellant, on the one hand, and employees, on the other, with regard
to the significance of Freedom Day
celebrations on the
27
th
April
in South Africa. Mr Kemp and the respondents had explained
that the union could not have any meaningful and effective
consultation
with their members between the 20 April 2000 and 25
April 2000 (which was the Easter Weekend) and 26
th
and
27
th
April 2000 (the latter date being Freedom Day). The
Labour Court rejected a submission by Counsel for the employer with
the latter
that the reason given is an insignificant one.
[29] With regard to the
appellant’s conduct relating to the consultation process, the
court stated the following:
29.1 “There is, in
my view, something precipitous about the way in which, over that
critical period, the employer conducted
itself. The
formalistically
correct approach -business like if you want - with which the employer
dealt with this time in its negotiations process
with the workers was
insensitive. It failed to appreciate the passion with which workers,
black workers in particular, hold the
advent of freedom close to
their hearts. Insofar as I am called to make a value judgment by Mr
Wesley to the effect that the Union
failed the Applicants – and
not the Respondent – in the process that was not as complete as
it could have been, that
value judgment must be premised not only on
the evidence, but also on what I perceive to be the values of present
day South African
society. I hold that the values of dignity,
freedom and ubuntu, values enshrined in our Constitution, place an
imperative on Employers
to be much more sensitive to what is dear and
sacrosanct to their employees. In this case, a long Easter Weekend
culminating in
the Freedom Day celebrations of 27 April 2000, was
conducive to the employees’ desire to celebrate a historic
event in the
history of the land. I do not consider that it is fair,
to suggest that the choice the workers made is something that they
ought
to be blamed for.”
; and that
29.2 the appellant should
have been flexible especially in view of the fact that “a fair
process up to the point when the
long weekend came about was somewhat
marred by this unfortunate
attitude by the Employer.”
The Court described this attitude as
“hardnosed”
which
“rendered this
process not as exhaustive as it could have been, had there been some
sensitivity on the part of the Employer”.
The
Court went further to state that:
“It is an insensitivity that does not amount to
mala
fides
. It is one,
however, that is not a technical deficiency either. It goes to the
heart of what should weigh with me heavily as
to whether a matter of
weeks could have made a difference to the ultimate fate of the
employer.”
[30] The Court held that,
had the appellant allowed the consultation process to continue for a
week and to complete it, it would
not have been flawed based on the
reservations the Court strongly expressed with regard to the Easter
and Freedom Day celebrations,
which holidays are of national interest
to the people and the employees especially in the context referred to
above.
The appeal
[31] The appellant
submitted that the Court
a quo
,
erred in finding that the consultation
process was not complete when the respondents were dismissed. In the
alternative, it submitted
that, even if it could be found that the
consultation process was not complete on the date of dismissal, the
Court
a quo
,
erred in finding that the appellant was at fault for this. The
appellant also appeals against the order of compensation granted
as
well as the costs order.
[32] Counsel for the
appellant submitted that at no stage during the consultation process
did CWU indicate that the timeframe adopted
was unacceptable but
that, on the contrary, during the final consultation of Tuesday
25
April 2000
, when the
selection criteria were applied to the remaining employees, the union
had indicated that it would, in accordance with
the time frame, make
submissions concerning the application of the selection criteria on
the
26
th
April 2000
, and that the
union failed to do as promised. He further submitted that the union
had indicated in a letter sent to the appellant
on the
27
th
April 2000
that it would
submit alternatives to retrenchment on the
28
th
April 2000
, which
undertaking was not kept. He further submitted, on this issue, that
the consultation process was complete on the
28
th
April 2000
because of CWU’s
failure to submit its input as arranged.
[33] This submission
cannot be correct and it is a very unrealistic approach in that it
overlooks the issues raised by the Court
a quo
that the period during the Easter Holidays and the
27
th
April 2000
, wherein most
workers and their union representatives in all regions in the
country, would normally be involved in various Freedom
Day
celebrations, made it difficult for CWU representatives to
meaningfully consult with its members. The respondents indicated,
when they gave evidence, that it was not easy for their union to
reach its members within the short space of time at their disposal.
Furthermore, the list of employees who were to be retrenched was
e-mailed to the union’s offices on the evening of the
25
th
April 2000
and the complete
list with the selection criteria was given to the union
representative in the afternoon at a meeting of the
26
th
April 2000
. It was
expected of the respondents to consult with their members between the
night of the
26
th
April 2000
and the morning
of the
27
th
April 2000
, and give the
appellant a response on this date.
[34] I am of the view
that in the circumstances it would have been very difficult for the
union to assemble its members within that
short space of time in
order to discuss the list submitted by the appellant. The appellant
ought to have been flexible by allowing
a further extension of the
consultation process instead of issuing letters of dismissal on the
28
th
April 2000
especially in
view of the fact that the
27
th
April 2000
was such an
important public holiday which behoved all concerned to show some
understanding and sensitivity. In this case the
joint consensus
seeking process was foiled by the appellant in that regard. See
Johnson & Johmson (Pty) Ltd v Chemical Workers
Industrial Union
(1999) 20
ILJ 89 (LAC) par [26] – [31];
Alpha Plant &
Services (Pty) Ltd v Simmonds & Others
;
(2000)
22 ILJ 359 LAC; Compare
Chemical Workers Industrial
Union & Others v Latex Suraical Products (Pty) Ltd
(2002) 23 ILJ 1386 (LC) at par
[14];
[35] Mr Wesley further
referred to the letter written by CWU on the
27
th
April 2000
and submits that
nowhere in this letter was mention made of the union’s alleged
inability to consult on that date because
of its pre-arranged
commitments to COSATU. Although the letter does not make an express
reference to the union’s commitment
to COSATU, in the letter
the union did refer to the appellant’s heavy and inflexible
approach towards the completion of the
retrenchment process. Part of
the letter of the of the 27
th
April 2000 reads as follows:
“
Time
frames
The company has continuously
remained extremely rigid with respect to the completion date of the
process. We have time and again
declared our willingness to do
everything possible to do justice to the process in this regard but
the company is hell-bent on
meeting the deadline for possible
retrenchments. We still feel that the process is the important issue
and would thus once again
request that you show flexibility with
regards to the timing of the dismissals.”
[36] It was further
argued that Mr Kemp had indicated that he would be available for
consultation for the best part of the
27
th
April 2000
and therefore the union could have attended the
consultations despite the fact that it was Freedom Day. There is no
merit in this
submission. This line of argument detracts from the
fact that the consultations would have been futile taking into
consideration
the fact that the union had not consulted with its
members.
[37] Furthermore, after
the meeting of the
25
th
April 2000
,
CWU responded to the issues which were raised at the meeting and it
expressed its disquiet about the failure of appellant to adequately
disclose information requested from it. I need not overburden this
judgment with the information which the union alleged was still
outstanding, but in that letter it was indicated by the union,
amongst others, that a list had been drawn up by it as well as
alternatives to retrenchment, which list would be provided on the
morning of Friday
28
th
April 2000
.
[38] ATU had responded by
a letter dated
26 April 2000
which was sent by facsimile
transmission to the appellant to the issues raised at the meeting of
the
25
th
April 2000
. The appellant
responded to the issues raised in their memorandum but pertinently
stated that it was proceeding with the retrenchment
process and that
letters of retrenchment would be issued on the
28
th
April 2000
.
[39] At that stage,
apparently the appellant had not received the letter dated
27
th
April 2000
from CWU. The appellant in return wrote a letter to
CWU and attached ATU’s response thereto, and indicated to CWU
that,
if no response was received from CWU by 15h00 on the
27
th
April 2000
, (which was the date on which the letter was sent by
facsimile transmission), it would definitely proceed with the
retrenchment
process on the
28
th
April
2008
. The appellant did not establish whether or not its letter
was received by CWU, considering that it was a public holiday.
[40] With regard to the
issues raised above it is clear from the correspondence between CWU
and the appellant that the consultation
process had not been
concluded when the respondents’ employment was terminated. The
appellant’s inflexibility and lack
of sensitivity and
understanding towards the consultation date which fell within the
Easter week-end and Freedom Day celebrations,
contributed greatly to
the breakdown of the consultation process. I am satisfied that the
Court
a quo
did not misdirect itself in any way and that it was correct in coming
to the conclusion that the dismissal was partly procedurally
unfair.
Compensation
[41] Section 194 (1) of
the Act provides:
“
The compensation awarded to an
employee
whose
dismissal
is found to be unfair either because the employer did not prove that
the reason for
dismissal
was a fair reason relating to the
employee’s
conduct or capacity or the employer’s
operational
requirements
or the employer did
not follow a fair procedure, or both, must be just and equitable in
all the circumstances, but may not be more
than the equivalent of 12
months’ remuneration calculated at the
employee’s
rate of
remuneration
on
the date of
dismissal
.
[42] It is trite that the
decision to award compensation where the Court finds that the
dismissal was procedurally unfair, falls
within the discretion of the
Court or the arbitrator, as the case may be. See
Johnson
& Johmson (Pty) Ltd v Chemical Workers Industrial Union
supra,
Lorentzen v Sanachem (Pty) Ltd
(2000) 21 ILJ 1075 (LAC) and
H M Liebowitz (Pty) Ltd
t/a The Auto Industrial Centre Group of Companies v Fernandes
(2002) ILJ 278 (LAC) at [12]
Alpha
Plant & Services (Pty) Ltd v Simmonds & Others
supra.
The duty of the Court
of Appeal is to assess whether such discretion was properly
exercised.
[43] The extent of the
deviation from the required standard of the consultation process is
also important in determining the amount
of compensation to be
awarded. The Court
a quo
stated,
with regard to compensation, that the appellant ought to have allowed
the consultation process to continue for a period
of four to six more
weeks and that this did not happen because of the appellant’s
conduct. This is an important factor in
considering the issue of
compensation.
[44] The Court
a
quo
did not give reasons
for awarding three (3) months remuneration as compensation. In the
absence of such reasons for exercising its
discretion, this Court is
free to reconsider the appropriate amount of compensation in that
regard. See
Highveld Steel & Vanadium
Corporation Ltd v National Union of Metalworkers of SA & Others
(2004) 25 OLJ 71
(LAC) at [60]. In
reconsidering the compensation awarded by the Court
a
quo
, it is correct that
the extent of the deviation must be taken into consideration. In
this case, taking into account the fact that
the issues raised by the
unions prior to the meeting of the
25
th
April 2000
were not
adequately addressed by the appellant, and further considering that
the appellant had not taken the proposals submitted
by CWU into
account, and the fact that factors raised by the Court
a
quo
about the time limit
constraints occasioned by the Easter and Freedom day celebrations
weighed strongly in
favour
of the award for compensation, I am of the view that the compensation
awarded is not excessive and unreasonable in the circumstances.
[46] The appeal must fail
and the following order is accordingly made:
(1) The appeal is
dismissed.
(2) There is no order
as to costs
______________________
LEEUW JA
_______________________
ZONDO
JP
_______________________
TLALETSI AJA
APPEARANCES:
For the appellant : Adv M A Wesley
For the respondent : Adv J Van Der
Schyff
Date of hearing : 03 June 2008
Date of judgment : 08 May 2009