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[2012] ZALAC 46
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Food and Allied Workers Union obo Kapesi and Others v Premier Foods Ltd t/a Blue Ribbon Salt River; Premier Foods Ltd t/a Blue Ribbon Salt River v Food and Allied Workers Union obo Kapesi and Others (CA7/2010) [2012] ZALAC 46; [2012] 12 BLLR 1222 (LAC); (2012) 33 ILJ 1779 (LAC) (16 March 2012)
Republic
of South Africa
IN
THE LABOUR APPEAL COURT OF SOUTH AFRICA
(HELD
AT CAPE TOWN)
Not Reportable
Case no: CA7/2010
In the appeal between:
FOOD AND ALLIED
WORKERS UNION
ON BEHALF OF M KAPESI
AND 31 OTHERS
..............................................
Appellant
and
PREMIER FOODS LTD t/a
BLUE RIBBON SALT RIVER
.........................
Respondent
and in the cross-appeal
between:
PREMIER FOODS LTD t/a
BLUE RIBBON SALT RIVER
...................
Cross-appellant
and
FOOD AND ALLIED
WORKERS UNION
ON BEHALF OF M KAPESI
AND 31 OTHERS
..............................................................................
Cross-respondent
Heard: 17 November
2011
Delivered: 16 March
2012
Summary: Retrenchment
in terms of s 189 of labour Relations Act 66 of 1995 of selected
employees following violent strike –
no proof that the selected
employees committed acts of violence or intimidation –
selection unfair – order for compensation
replaced with order
of reinstatement
CORAM:
WAGLAY
DJP, HLOPHE AJA and
LANDMAN AJA
________________________________________________________________
JUDGMENT
________________________________________________________________
Landman AJA
Introduction
[1]
The Food and Allied Workers Union, the applicant in the court
a
quo
, appeals, and Premier Foods Ltd,
the respondent in the court
a quo
,
cross-appeals against the judgment of the Labour Court (A Basson J)
to this Court with leave of the court
a
quo
. The court
a
quo
found that the dismissal of 31
employees was substantively and procedurally unfair and granted them
compensation. I shall refer
to the parties for convenience as FAWU
and Premier respectively.
[2]
Premier trades,
inter alia
,
as Blue Ribbon Bakery at Salt River in the Western Cape. Its business
consists of milling wheat and baking of bread and the distribution
and sales of its products particularly in the Cape Peninsula. After
the failure of wage negotiations, FAWU, a registered trade
union, and
most of its members engaged on a protected national strike. The
strike commenced on 5 March 2007. The demand was for
centralised
bargaining and its purpose was to raise the wage levels of employees
employed in rural areas to the levels of employees
employed in urban
areas.
[3] Some employees
belonging to FAWU chose not to participate in the strike but to
continue working at Premier’s Blue Ribbon
Bakery at Salt River
(the bakery) as did some non-unionised and temporary staff supplied
to the bakery through the offices of Staffgro
and other labour
brokers.
[4] It is common cause
that the strike was a particularly violent one. Non-strikers were
harassed and intimidated. Employees were
visited at their homes by
persons who threatened them with physical harm and death. Relatives
of non-strikers were also visited
in this manner and informed of what
would be done to the family members working at the bakery. One female
non-striker was dragged
from her home at night and assaulted with
pangas and sjamboks.
[5] The vehicle of a
non-striker was set alight and destroyed. Shots were fired on this
occasion. A neighbour of the non-striker
was able to identify the
perpetrators. He was subsequently shot and killed near his home.
Houses were petrol bombed. Threats to
kill senior management were
made. Some employees and the senior management group were provided
with security guards. A shot was
fired through the security guard’s
vehicle parked outside of the home of Lavery, the regional manager.
[6] Delivery vans were
held up and the daily takings were robbed as were personal
possessions and money of the drivers and staff.
A state of
lawlessness prevailed. The cost of increased private security
escalated and non-strikers went about their business knowing
that
they, their families, property and possessions were in a state of
danger.
[7] Criminal charges were
laid with the police. The police were unable to be of much assistance
and the crimes went unpunished.
An interdict was sought and obtained
in the Labour Court.
[8] Statements were
obtained from non-strikers as well as from the family members who had
experienced these crimes. Various communications
were addressed to
the union.
[9] A commencement was
made with an application for contempt of court. But it was not
finalised.
[10] The strike was
eventually settled about two months later on 9 May 2007.
[11] On their return some
employees were suspended pending disciplinary action. Disciplinary
action, it is alleged, could not be
instituted because some witnesses
were not prepared to testify on account of fear. Premier’s key
witness, one Mr. Xhongo
who was secluded for the sake of his
security, disappeared and till today, some five years later, has yet
to be found.
[12] After the
disappearance of their witness, Premier decided to abandon the
holding of disciplinary enquiries. Premier was advised
to retrench
certain employees on the grounds of operational requirements because
these employees were linked to strike violence
and intimidation. A
retrenchment process was initiated. The CCMA was requested to
facilitate consultations which it did. Six sessions
were held.
Suggestions and counter suggestions were made. Threats and
intimidation continued to be made.
[13] On 1 October 2007,
certain employees were given notice that there their services would
be terminated. Their services were terminated
on 31 October 2007.
[14] FAWU launched an
application in the Labour Court on behalf of the retrenched employees
all of whom were its members, complaining
that the dismissals of
these 31 employees were substantively and procedurally unfair. FAWU
sought the retrospective reinstatement
of the 34 members concerned
(the applicants) in their employment with Premier.
Order of the court
a
quo
[15] On 4 May 2010 the
court
a quo
delivered its judgment and made the following
order:
‘
(1) The
dismissal of the applicants was substantively and procedurally
unfair.
(2) The respondent must pay each of
the individual applicants compensation equal to 12 month’s
salary.
(3)The respondent [are] to pay the
costs, including the costs of two counsel as well as the qualifying
expenses of expert witness
Professor Tredoux.’
Synopsis of the
judgment
[16]
The court
a
quo
delivered
a comprehensive judgment. In the light of the view I take regarding
the issue on which this appeal turns, I shall only
briefly summarise
its judgment. The court
a
quo
was
not persuaded that it was impossible for Premier to hold the
disciplinary hearings and advanced several reasons for coming to
this
conclusion. The court
a
quo
considered
whether an employer could resort to the procedure in section 189 of
the Labour Relations Act (the LRA)
1
where
it is the employer’s case that it is unable to hold
disciplinary enquiries as a result of violence, disappearance of
crucial witnesses and where witnesses are being intimidated and were
afraid to testify, and held that Premier could not do this.
[17]
The court
a quo
also noted that Premier pleaded that the
dismissals were for a fair reason based on its operational
requirements; more specifically
the operational impact of
strike-related misconduct on the workplace in circumstances where,
according to Premier, it was impossible
to take disciplinary action
against the suspected perpetrators. The court
a quo
decided
that this avenue was not open to Premier as the reason for the
dismissal was on account of misconduct and was not related
to
financial considerations. The court
a quo
accepted that the
reason for the dismissal must ultimately be the economic viability of
the enterprise. The reasons for dismissal
must relate to or bear some
resemblance to the economic, technological or structural needs of the
business. The court
a quo
was prepared to accept that there
may be situations where an employer can opt for the section 189
–route where misconduct
triggered the operational rationale but
not simply because the employer cannot prove the charges against the
employees.
[18]
The court
a quo
was not persuaded that the conduct of the
applicants threatened or affected the economic viability of Premier’s
Blue Ribbon
Bakery. In any event, not to the extent that Premier had
an economic rationale to implement section 189 procedures and
therefore
able to circumvent the disciplinary route. The dismissal of
the applicants on the basis of operational requirements was therefore
unfair.
[19]
The court
a quo
noted that FAWU did not complain that the
consultations were inadequate, that they were not afforded an
opportunity of tabling
any suggestions at the consultation process,
or that such suggestions as were put forward were not properly
considered. The court
a quo
set out the various alternatives.
The primary one being that the only fair course of action was for
Premier to hold disciplinary
hearings on an individual basis. The
court noted that during the consultation process Premier suggested,
as a further alternative,
that the persons identified as potential
retrenchees submit themselves to a polygraph test.
[20]
The court noted that in the particular circumstances of the case, the
question was whether the proposal put forward by Premier
was a
reasonable suggestion aimed at minimising the number of dismissals,
as envisaged by section 189(2)(a)(ii) of the LRA, or
whether the
raising of such a proposal was so unreasonable that it vitiated or
fundamentally affected the fairness of the entire
process. The
question before the court, it said, was not one of admissibility but
of the
weight
which a court should attach to polygraph test
results.
[21]
The court considered the expert evidence and the concession made by
Premier’s expert, Dr Barland, that the polygraph
test would be
useful or valuable to eliminate the innocent and then to focus the
investigation on those people who did not pass
the polygraph test.
The court
a quo
held that in light of this and the controversy
surrounding the accuracy and reliability of polygraph tests, it was
not persuaded
that the results of polygraph tests are reasonable or
fair alternatives to minimise retrenchment.
[22]
The court a quo declined to reinstate the applicants saying that
enough evidence was placed before the court to show that an
employment relationship would not be able to exist between the
applicants and Premier. Each applicant was awarded compensation
equal
to 12 month’s salary.
The cross-appeal
[23] It will be
convenient to deal with the cross-appeal before proceeding to deal
with the appeal.
[24] The cross-appeal is
based on the following grounds:
‘
1. The court
erred in not finding that respondent’s decision not to proceed
with disciplinary enquiries after the disappearance
of Mr Xhongo was,
in the circumstances prevailing, a reasonable, fair and justifiable
decision.
2. The court
a quo
erred in
holding that disciplinary enquiries could have been held utilising
the statements that had been obtained in brackets albeit
that they
would have constituted hearsay evidence in brackets.
3. The court
a quo
erred in
holding that the dismissals of the 31 former employees could not
constitute dismissal based on the operational requirements
of the
business.
4. The court
a quo
erred in
finding that the dismissals of the said employees were not for
reasons based on the operational requirements of the business
because
the reasons for the dismissals were ‘clearly misconduct and not
financial’.
5. The court erred in finding that an
operational requirements based dismissal required that the dominant
purpose of the retrenchment
route had to be the economic viability of
the enterprise.
6. The court erred in finding that, in
the circumstances of the case, respondents' is offer of the use of
polygraph testing was
not a fair and objective selection criteria, or
a reasonable or fair proposal to minimise the number of retrenchees.
7. The court erred in not dismissing
the application.’
Evaluation
Assumptions
[25] In my view, this
cross-appeal turns on a narrow compass namely did Premier apply the
selection criteria fairly and objectively?
It is for this reason that
I am prepared to assume, in favour of Premier, without deciding,
that:
Premier’s
decision not to proceed with disciplinary enquiries after the
disappearance of Mr Xhongo was, in the circumstances
prevailing, a
reasonable, fair and justifiable decision.
Disciplinary enquiries
could not have been held utilising the statements that had been
obtained albeit that they would have
constituted hearsay evidence.
The dismissals of the
31 applicants could constitute dismissal based on the operational
requirements of the business.
The
dismissals of the employees were for reasons based on the
operational requirements of the business even though the dismissals
were for misconduct.
2
Operational
requirements based dismissals do not require that the dominant
purpose of the retrenchment had to be the economic
viability of the
enterprise.
The selection of
strikers who have committed acts of violence and intimidation
constitutes fair and objective criteria for purposes
of section 198
of the LRA.
It is competent, fair
and reasonable to further reduce the selected persons referred to
above by accepting the results of a
polygraph test for deception.
The selection criteria
[26] I have assumed above
that the selection of strikers who have committed acts of violence
and intimidation constitutes fair and
objective criteria for purposes
of section 189 of the LRA. Before turning to consider whether Premier
applied the selection criteria,
which I have assume to be fair and
objective, it is necessary to make a few observations about this
assumption:
Mr C A Oosthuizen SC,
who appeared for Premier in the court below and this Court,
submitted in his heads that after discussions
and a review of the
documentary and video evidence, Premier compiled a list of 31
persons who played ‘identifiable roles
in violence and
intimidation’ and made this list available to FAWU.
The court
a quo
captured the selection criteria as it was pleaded; one which perhaps
emphasised the evidence or proof more than the substantive
reason
for choosing the 31 persons viz: ‘
The
Respondent’s case was that the Applicants were selected for
retrenchment ‘on the basis of affidavits linking them
to acts
of serious criminal conduct’.
I
am of the view that it is clear that the potential retrenchees were
selected on account of their conduct. The affidavits or
statements
made by various persons constituted the evidence which Premier had
to hand when it proceeded to identify these applicants
for
retrenchment.
Application
of the selection criteria
[27]
Did Premier apply the selection criteria fairly and objectively?
Premier
bore the
onus
of
not only proving that the selection criteria were fair and reasonable
but that they were applied fairly and objectively. The
use of
selection criteria that are not fairly and objectively applied
renders a dismissal procedurally and substantively unfair.
In
CWIU
and Others v Latex Surgical Products
3
)
Zondo JP had occasion to remark that:
‘
If
the respondent was to prove that there was a fair reason for its
selection of the individual appellants, it was required to place
before the court evidence that would show what qualifications all the
employees, including the individual appellants had, what
years of
service they all had, what multi-skills they all had and what answers
they gave to questions as part of the evaluation.
This would have
placed the court in a good position to determine whether or not there
was a fair reason for the selection of the
individual appellants as
opposed to the selection of other employees for dismissal.’
Zondo
JP went on to say that absent this evidence:
‘…
the
court is left to conclude on the basis of the respondent’s ipse
dixit that there was a fair reason for the selection of
the
individual appellants for dismissal. That cannot be accepted
.’
4
Proof
of fairness and objective criteria
[28]
This brings me to a consideration of the evidence, presented at the
trial, which Premier submitted proves, on a balance of
probabilities,
that the selection criteria were fairly and objectively applied. This
issue was squarely placed in dispute. The
pre-trial minute focuses
attention on the application of the selection criteria. It records,
inter alia
, the following issue for decision:
‘…
whether
the employees were selected on the basis of their union affiliation
and/or race. Further, and in the alternative,
whether
the Respondent acted fairly in selecting employees for retrenchment
based on untested allegations of misconduct under the
relevant
circumstances
and where they had allegedly been linked to serious misconduct by
affidavits
and
had declined to undergo polygraph tests’
.
(My
emphasis.)
[29] I think it is fair
to say that if the complainants, who had made affidavits or
statements, testified at the trial in the court
a quo
and if
the court accepted their evidence regarding the identity of their
assailants (where this was possible) and rejected the
evidence to the
contrary, then it could be said that the selection criteria
(participation in violence and intimidation) would
have been proven
satisfactorily.
[30] So what evidence did
Premier present in the court
a quo
? It is convenient to
observe that Premier did not present all the evidence at its disposal
that the 31 dismissed employees took
part in violence and
intimidation. Premier’s failure to do so was for the reasons
that have been canvassed extensively in
the judgment of the court
a
quo
, namely the lack of willing witnesses, justified concerns for
the safety of the witnesses and the disappearance of Premier’s
key witness Xhongo. Kruger, a security officer, who could identify
two employees, was also not called as a witness.
[31] The evidence that
was presented consisted of hearsay affidavits or statements produced
in evidence mainly by Ms Elliot. Makeleni,
Mdleleni and Smuts
testified in the court
a quo
but they were unable to identify
their assailants. In addition there is photographic evidence and the
testimony of Lavery and Badenhorst
who do not personally identify any
of the retrenchees as those who committed acts of violence and
intimidation. The court
a quo
summed up the evidence regarding
the application of the criteria, very succinctly, in the following
way:
’
In
this regard Lavery testified that he had discussions with Badenhorst,
who had identified particular individuals who were going
to be
subjected to disciplinary hearings. During this process of selection
the statements of all the persons who made them were
reviewed in
consultation with Elliott, Rodney Lambert and John May. The available
video evidence were also considered in compiling
the list. Lavery
made the final decision in respect of who would be selected after he
had consulted with various other people.
Lavery also stated that he
had accepted that the persons to whom the statements were made were
considered to be credible. He, however,
conceded that it was the
credibility of the person who made the statement and not the person
who took the statements down that
was important. He did not, however,
deem it necessary to send the witnesses of the respondent for a
polygraph test.’
[32]
What is of importance is that the affidavits and statements were not
tendered to prove that the persons mentioned in them,
in so far as
they were identified, committed acts of arson or violence or
intimidation. As the court
a
quo
remarked,
Mr Oosthuizen SC submitted them to prove that the selection was
related to operational requirements
5
.
[33]
The result is that Premier refrained from proving that the persons
selected for retrenchment on the criteria chosen by it committed
acts
of violence and intimidation. By so doing Premier failed to prove
that its selection criteria were fairly and objectively
applied.
Premier proved nothing more than that the selection was made
subjectively by Lavey after reading the statements, discussing
the
matter, and viewing the video footage. This is simply not sufficient
to discharge the
onus
resting
on Premier.
[34]
In the result,
the
cross-appeal must fail.
The
appeal
[35]
I have mentioned that the court
a quo
declined to reinstate
the applicants on the grounds that the employment relationship
between the parties would not be able to exist
between them. This
approach is not based on the evidence. There is no evidence that the
applicants committed acts of violence or
intimidation. This being so
it would seem that the court
a quo
made this finding on the
evidence of violence and intimidation which was not linked to the
applicants. Without a link between the
applicants and the acts of
violence and intimidation there is no evidence that the employment
relationship between the parties
cannot be sustained. Cf
Edcon Ltd
v Pillemer NO and Others
(2009) 30 ILJ 2642 (SCA). It follows
then that the general rule, which gives primacy to reinstatement as
the preferred remedy for
unfair dismissal, must prevail.
[36]
In the premises the appeal must be upheld and the order of the court
a quo
altered to read: ‘The respondent is to reinstate
the applicant employees retrospectively to the date of their
dismissal’.
Costs
[37]
Costs should follow the result.
The
order
[38]
In the result, I make the following order:
The
appeal is upheld with costs.
The
order of the court
a quo
is altered to read: ‘The
respondent is to reinstate the applicant employees retrospectively
to the date of their dismissal’.
The
cross-appeal is dismissed with costs.
_______________
Landman
AJA
I
agree
______________
Waglay
DJP
I
agree
-------------------------
Hlophe
AJA
APPEARANCES:
FOR
APPELLANT: Adv C S Kahanovitz SC
Adv
M L Norton
Adv
L J Arnott
Instructed
by Cheadle Thompson Haysom
FOR
CROSS-APPELLANT: Adv C A Oosthuizen SC
Instructed
by Norton Rose South Africa
(Incorporated
as Deneys Reitz Inc)
1
66
of 1995.
2
The
assumption is made for the purpose of isolating the point in issue.
It may be permissible to retrench employees for misconduct
in
certain circumstances. See for instance
SA Commercial Catering
and Allied Workers Union and others v Pep Stores
(1998) 19 ILJ
1226 (LC),
Makgabo and others v Premier Food Industries Ltd
(2000) 21 ILJ 2667 (LC) and
NUMSA and Others v Genlux Lighting
(Pty) Ltd
(2009) 30 ILJ 654 (LC).
3
(2006)
27 ILJ 292 (LAC) at para 94.
4
At
para 96
.
5
See
para 13 of the judgment at page 2009 of the record.
13