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[2011] ZALAC 37
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G E Security (Africa) v Airey and Others (CA 02/2009) [2011] ZALAC 37 (28 April 2011)
IN THE LABOUR
APPEAL COURT OF SOUTH AFRICA
(HELD AT CAPE
TOWN)
CASE NO:
CA02/2009
In the matter between:
G E SECURITY (AFRICA)
.......................................................................
Appellant
and
ROGER AIREY
............................................................................
First
Respondent
DAVID DENOON-STEVENS
......................................................
Second
Respondent
VINCENT WATTERS
..................................................................
Third
Respondent
JUDGMENT
Waglay DJP:
[1] This is an appeal and
cross appeal against the judgment of Cele J in terms of which it was
found that the retrenchment of the
first to third respondents was
procedurally unfair because of the appellant’s failure to
follow an agreed selection criteria.
The relief granted by the Court
a quo
was to order the appellant to pay each respondent
compensation that was equal to the salary they would have earned over
five months
had they remained in the appellant’s employ.
[2] There was no dispute
between the parties about the fact that the appellant had a genuine
need to restructure its business, nor
was there a dispute about the
fact that the parties had reached an agreement about the application
of the selection criteria. The
dispute between the parties was about
the terms of the agreement relating to the selection criteria.
[3] The court
a quo
found the respondents dismissal to be procedurally unfair on the
basis that the appellant did not comply with the agreed selection
criteria because of its failure to consider the respondents for posts
for which they did not apply. The Court said that the appellant’s
action amounted to a failure to consider reasonable alternatives to
respondents’ dismissals.
[4] The issues in this appeal
and cross appeal are therefore substantially narrow. They are the
following:
Was the appellant obliged
in terms of the agreement, to consider the respondents for all
positions to which they were eligible
in its new structure,
irrespective of whether they applied for any position or not? The
appellant answers the question in the
negative while the
respondents answer it in the positive. The appellant argues that,
in terms of the agreed selection criteria,
it had no obligation to
consider the respondents for positions for which they did not apply
unless the position had not been
filled by a successful applicant.
If the appellant did breach
the agreement concerning selection criteria, did this render the
dismissal substantively unfair,
as submitted by the respondents in
the cross appeal, rather than procedurally unfair as found by the
Court
a quo
? The second issue need only be considered if the
appellant fails on the first issue.
[5] In consequence of the
fact that the issues are substantially narrow, it is not necessary to
set out the general background facts
concerning the retrenchment of
the respondents. These facts in any event appear in the judgment of
the Court
a quo
. It is, however, necessary to set out those
material facts bearing upon the issues in this matter which were
emphasised in this
appeal.
[6] All of the respondents
were employed in the appellant’s Engineering Department. The
first respondent was employed in the
position of a Certification,
Validation and Test Manager. The second respondent was employed in
the position of Technical Director
in charge of the technological
development of new products. The third respondent was employed in the
position of Engineering Manager.
[7] During the latter part of
2004 and the early part of January 2005, the appellant’ s Human
Resources Manager, Ms Susan
Berrington (Berrington), conducted a
“
brown paper exercise”
with the staff in the
appellant’s Engineering Department in order to develop a new
staff structure for that Department. There
is no dispute that there
was a commercial rationale for the appellant to change its staff
structure in that Department.
[8] As a consequence of that
exercise on 29 June 2005, the appellant issued a formal section
189(3) notice to all affected employees.
[9] In the section 189
notice, which was received by each of the respondents, the appellant
inter alia
, informed its employees that employees would have
to apply for posts in the new structure which would be filled on the
basis of
competencies assessed by way of an interview and the best
fit for the job requirement as defined. The letter stated:
“
Those
employees who do not succeed in securing a position within the new
structure through the recruitment exercise will, unless
otherwise
employed through the recruitment exercise be retrenched due to
redundancy. It will accordingly be important to apply
for the posts
as and when they are advertised. Failure to apply or failure to
secure a position may lead to retrenchment.”
[10] At the initial
consultation meeting, employees were reminded that they must apply
for every post that may be of interest to
them as their failure to
apply for a post will possibly result in retrenchment.
[11] Each of the respondents
only applied for the new engineering position in the new structure
and not for any other position.
None of them were successful. The
appellant communicated its decision to them and also informed them
that no position was found
for them in the new structure and that it
had filled all positions in the new structure. Subsequent to being
told that the appellant
had filled all positions in the new structure
and in response to a request by the appellant to identify any other
alternatives,
the first and second respondents applied to be
considered for the position of Product Manager which fell outside the
new structure.
This position was located within the General Electric
organization in Europe. The appellant is part of the General Electric
group.
[12] The first and second
respondents were not successful in their application for the position
of Product Manager.
[13] Having failed to secure
a position within the appellant’s new structure the respondents
were dismissed. They challenged
the fairness of their dismissal
claiming their dismissal to be both substantively and procedurally
unfair.
[14] In the pre-trial minute,
filed in preparation of the trial, the parties recorded the following
fact to be common cause:
“
In
the event that an employee was not successful in securing a position
in the new structure. He/she would be placed in a pool of
employees
who had not obtained positions and Appellants management would
evaluate all other possible alternatives with a view to
placing
him/her in any remaining vacant positions.”
[15] One of the persons who
testified at the trial, Berrington, the appellant’s Human
Resources Manager, gave evidence that,
at the consultation meeting
held on 26 July 2005, the employees were informed that there would be
a single interview process, with
unsuccessful applicants being
considered for positions thereafter. Her testimony was also that at
the meeting on 23 August 2005,
she emphasised that those applicants
whose applications were not successful, would be considered for
alternative positions. Adding
that what she had meant was that the
unsuccessful applicants would only be considered for those positions
which have not been filled
through a successful application.
[16] The respondents dispute
Berrington’s evidence persisting that the agreement was that
they had to be considered for all
vacant positions notwithstanding
the fact that they did not apply for those posts and pointed to two
pieces of evidence that they
submit was subversive of appellant’s
averments:
In a letter dated 20 July
2005 and in response to questions posed by employees which asked:
“
If you do not apply for a position will it mean that you
are automatically retrenched, or will you be put into the pool that
management will look at for other positions?
”; the
appellant response to that was: “
Not necessarily, a person
may be offered a reasonable alternative or may be placed in a pool
until all other alternative positions
have been considered and then
if there is no other suitable alternative the person will be
retrenched
.” and,
The cross-examination of
the appellant’s CEO, Mr. R J McKenzie contains this important
testimony:
“
I
am saying your evidence was to the effect that before there is a
pool, employees who have not applied for a position for a particular
position must be assessed for that position. Isn’t that so?
That was your evidence – as a suitable alternative?
As a suitable alternative,
yes. But the answer is Yes?-Yes
That being so, Mr McKenzie
, I put it to you that on your version the applicants should have
been considered for that position of
engineering manager, which later
changed to team leader Correct?-Correct”
[17] Both the appellant’s
written answer to the employee’s questions as well as
McKenzie’s concessions are, in
my view, ambiguous. There are
two possible interpretations. Firstly, as contended for by the
appellant, the respondents would only
be considered for positions not
filled through an application process: that is, for any remaining
vacant positions. The other possible
interpretation, as supported by
the respondents, is that an employee who had failed in his
application for a senior position, would
automatically have to be
considered for a junior one, even if he did not apply for it.
[18] In my view the first
interpretation is far more probable and makes common sense. If the
respondents are correct in their interpretation
it would mean that an
employee who may have applied for a post and who was found suitable,
could still not get the job simply because
there was another employee
that may be able to be fitted into the position, but who did not
apply for it. Such a process would
make no sense when viewed within
the context of the express requirement that people should apply for
posts. The interpretation
sought by the respondents is also at odds
with the wording of the section 189 notice, as well as what took
place at the initial
consultation meetings referred to earlier. The
process contended for by the respondent would have led to manifest
confusion. Ordinarily
an employer is entitled to assume, in the
context where this method of selection is agreed upon, that an
employee who does not
apply for a position is not interested in such
position.
[19] The appellant’s
contentions are in addition strengthened by the fact that other
employees who were interested in more
than one position applied for
and were considered for all such positions.
[20]
More fundamentally, however, the respondents’ contention is at
odds with what was agreed to in the pre-trial minute referred
to
above. The pre-trial minute belies the suggestion that if any of the
respondents did not succeed in a senior position for which
they had
applied, the appellant would have an automatic obligation to consider
them for a lower position even though they did not
apply for it. In
short, the pre-trial minute made it clear: if an employee failed to
apply for a vacancy, he or she would be placed
in a pool from which
appellant would try and place them in the event of any remaining
vacancies. The key issue before this Court
had therefore been settled
in the pre-trial minute and the respondents were bound by the
admission they made therein. See in this
respect
Filta-Matix
(Pty) Ltd v Freudenberg and others
1998 (1) SA 606 (SCA) at 614B–D) and
Shoredits
Construction (Pty) Ltd v Pienaar NO & others
[1995]
4 (BLLR) 32 (LAC)
at
34C–F
[21] The respondents’
counsel submitted, relying on the matter of
Shill
v Milner
1937 AD 101
,
that the issues in the pre-trial minute had
been broadened because of a lack of an objection to the questions put
to McKenzie. Apart
from the fact that I have found that McKenzie’s
concessions are at best ambiguous, I reject this submission for two
additional
reasons.
Firstly, there was never
any formal application made to withdraw the admission.
Secondly, the appellant’s
counsel was not obliged to object to questions which sort to elicit
an answer to a common cause
fact which had been settled and was
entitled to remain silent and argue at the end that the Court could
ignore the answer of
a witness that was at variance with what were
the agreed facts. A Court does not have the power to go beyond the
agreed common
cause facts in the absence of fraud or the granting
of an application to withdraw an admission. See also
HosMed
Medical Aid Scheme v Thebe Ya Bophelo Healthcare Marketing &
Consulting (Pty) Ltd & Others
[2007] ZASCA 163
;
2008 (2) SA 608
SCA where it
was held that the parties are bound to their pleadings and that
pleadings could not be amended or changed simply
because of answers
that were solicited during the conduct of a trial.
[22] In these circumstances,
I find that the appellant, in terms of the agreed selection criteria,
had no obligation to consider
the respondents for positions for which
they did not apply. In the circumstances the dismissal of the
respondents was neither substantively
nor procedurally unfair.
[23] As the first issue has
been answered in the appellant’s favour, it is not necessary to
consider the cross-appeal.
[24] This then brings me to
the issue of costs. In determining this I must look at the record
filed in this appeal. The issues in
this matter were quite narrow and
there was simply no reason to produce the record the appellant has
produced. The record runs
to almost 2000 pages added to this are the
respondents rambling heads of over 64 pages as well as the additional
paper handed in
during argument. This meant that this Court had to
wade through pages and pages of documents most of which had no
bearing on this
appeal. This sort of conduct apart from being
unacceptable should be visited by some penalty lest this practise
continues. While
I am of the view that only about 20 percent of the
record filed was necessary, both parties suggested that only 7 of the
21 volumes
filed were irrelevant for the appeal. I do not agree. In
this matter the appellant filed the record and there was no objection
by the respondents so both are equally at fault in so far as this
aspect of the matter is concerned. This notwithstanding, I believe
that the appellant although successful and who in my view is entitled
to its costs in terms of law and equity must however suffer
a penalty
for not ensuring that a proper record is filed. In this regard it
appears just and equitable that the appellant be disentitled
to the
costs of preparing and perusing 75% of the record.
[25] In the result I make the
following order:
(i)
The appeal is upheld
with costs which costs shall not include the preparation and perusal
costs of 75% of the record.
(ii) The order of the
court a quo is set aside and in its stead the following order is
substituted:
“
1.
The dismissal of the applicants was both substantively and
procedurally fair.
2. The applicants are
ordered to pay the respondent’s costs.”
(iii) The cross appeal is
dismissed with costs.
_____________________________
Waglay DJP
I agree
_____________________________
Mlambo JP
I agree
______________________________
Davis JA
Date of hearing: 08 September
2010
Date of Judgment: 028 April
2011
For the Appellant: Adv A.C
Oosthuizen SC
Assisted by Adv G.A Leslie
Instructed by: Cliffe Dekker
Hoffmeyer Inc
For the Respondent: Adv N.F
Rautenbach
Instructed by: Justin Del
Monte Attorneys