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[2012] ZALAC 7
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Super Group Trading (Pty) Ltd v Janse van Rensburg (JA50/09) [2012] ZALAC 7 (25 April 2012)
REPUBLIC OF SOUTH
AFRICA
IN THE LABOUR APPEAL
COURT OF SOUTH AFRICA
Not Reportable
Case No: JA50/09
In the matter between:
Super Group trading
(Pty) Ltd
…....................................................................
Appellant
and
Andries Hendrik Janse
van Rensburg
…..................................................
Respondent
Heard: 9 November 2010
Delivered:
25 April 2012
CORAM:
TLALETSI JA, LANDMAN AJA, MAILULA AJA
_______________________________________________________________
JUDGMENT
________________________________________________________________
LANDMAN AJA:
Introduction
[1] Super Group Trading
(Pty) Ltd (the appellant) retrenched Andries Hendrik Janse van
Rensburg (the respondent). The Labour Court
(Molahlehi J) found the
dismissal to be procedurally and substantively unfair and awarded the
respondent compensation equivalent
to 12 months’ remuneration.
The appellant, with the leave of the court
a quo
, appeals
against the decision.
Grounds of appeal
[2] The appellant relies
on the following grounds of appeal:
2.1 The court erred in
doubting that the appellant was committed to engaging joint
consensus-seeking exercise. The appellant carefully
weighed up all
the suggestions made by the respondent. However, they were
impractical in [the] light of the heavy financial losses
being
sustained by the appellant;
The court erred in
finding that the decision to retain Diviane was made before the
consultation process. The court overlooked
the fact that an
employer is entitled, in principle, to have strong views concerning
issues surrounding any retrenchment. The
purpose of the
consultation process was to afford the respondent an opportunity to
assist the appellant in its decision-making;
The court erred in
finding that information regarding the comparative strengths of
both Diviane and the respondent were not
before those who took the
decision to keep Diviane. Diviane was in a far better position to
occupy the position of CEO and
to take over the functions carried
on by the respondent:
The above Honourable
Court erred in finding that the respondent was not afforded an
opportunity to make any submissions as to
why Diviane should not be
preferred over him. The appellant was prepared to consider the
submissions and duly responded to
them. The respondent was afforded
an opportunity to convince the appellant that he should step into
Diviane’s shoes.
The evidence revealed that the respondent
never seriously considered that he could perform Diviane’s
functions.
The above Honourable
Court erred in finding that there was not a fair reason for the
dismissal. There was no evidence to suggest
that the respondent
would have been preferred above Diviane under any circumstances.
There was never a suggestion, even a remote
one, that it was
unreasonable for the appellant to retain Diviane's services. It was
never seriously contended that the respondent
(whose position had
become redundant) should have bumped Diviane from his position. In
this regard, the court erroneously second
guessed the appellant's
decision as to which person would be best suited to steer the ship
through troubled waters;
The court erred in
finding that the underlying reason for the selection of the
respondent for retrenchment related to his conduct
towards
customers, staff and an alleged incident of assault. Instead, the
reason for the respondent's selection was based on
the fact that
his position was no longer required and that Diviane was far better
qualified to remain on to run the business;
The court erred in
finding that the consultation process was a 'sham'. The respondent
himself did not see the process as a sham
and participated therein.
In the light of the respondent's knowledge, involvement in the
business, the consultations that were
held in the information
shared, the dismissal was in all the circumstances procedurally
fair;
The court erred in
awarding a punitive amount of compensation to the respondent. The
court overlooked the appellant's financial
position and the fact
that fairness must be applied to employers and employees. Even if
the dismissal was unfair, compensation
not exceeding more than
three months’ salary should have been ordered. At the date of
the trial, the appellant had closed
down.
[3] These grounds can be
grouped as follows: Grounds 2, and 7 are predicated upon the court a
quo’s finding that the redundancy
or abolition of the post of
COO was a
fait accompli
. Grounds 1, 3, 4, 5 and 6 broadly deal
with the selection criteria and the possibility of bumping Diviane.
Ground 8 relates to
compensation.
COO post redundant:
grounds 2 and 7
[4] The decision to
abolish the post of the Chief Operating Officer (the COO) relates to
the crux of the respondent’s complaint.
The court
a quo
correctly appreciated this. The purpose of consultation is to try and
save a job or position. If this cannot be done the next aim
is to
avoid dismissal by placing the person, whose post has become
redundant, elsewhere. And if avoidance is not possible consultation
concerns the extent to which the consequences of the retrenchment can
be mitigated.
[5] If the decision to
make a post redundant is set in stone and not open to revision or
discussion then the main aim of consultation
has been thwarted before
it has begun. If the decision to retrench a certain person has been
pre-decided, consultation about whether
this person should be chosen
is a sham. What remains is consultation on the mitigation of
retrenchment.
[6] The decision to down
size the operations and abolish the post of COO, according to
Walters, a member of the executive committee,
was irreversible. At
page 315 lines 2-3, Walters says: ‘The decision to downsize the
business was a
fait accompli
.’ Not only this, but he and
Peters, the Divisional Managing Director, decided that the respondent
rather than Divani, the
CEO, should be retrenched. Walters confirms
that Peters had a discussion with the respondent on 3 September 2004.
No one else was
present at this discussion. The respondent says that
Peters told him during this discussion that he was going to be
retrenched.
Page 339 lines 11-12 of the record: Peters did not give
evidence.
[7] The finality of the
decision to abolish the post of COO and retrench the respondent is
confirmed by the evidence of Senekal.
Senekal represented the HR
Department and managed the ‘consultative process’.
Senekal said that once the post of COO
was selected as redundant
there was no room for discussing selection criteria.
The reason for
dismissal
[8] Cosmotrans, a
division operated by the appellant, was in deep financial trouble. It
was not making a profit. It was beset by
problems in the environment
in which it operated and its expenses were mounting. The division was
eventually closed down.
[9] I have no doubt that
the appellant was justified in deciding that the dire financial
situation faced by Cosmotrans required
drastic action. This would
necessitate the retrenchment of staff and the abolishment of the post
of COO.
[10] The appellant’s
reliance on the complaints of misconduct and incapacity against the
respondent in the context of a retrenchment
was misplaced. There was
nothing to show that, in the absence of the financial distress of
Cosmotrans, the appellant would have
dismissed the respondent. At the
outset, the cause for the dismissal of the respondent was not the
alleged conduct or actions of
the respondent. But once the appellant
was faced with a choice or the possibility that its choice of Diviane
would be disturbed,
it threw everything it had in the scale to bring
it down in favour of Diviane.
[11] The appellant, in
its over eagerness to retain Diviane, did not pause to consider
whether the allegations were true or could
be proven or what the
effect of making detrimental allegations would be.
[12] The court
a quo
concluded that the dismissal of the respondent, although in the
context of a retrenchment, was “influenced”; one could
say heavily but appropriately, by the appellant’s reliance on
alleged misconduct and incapacity. It is, therefore, necessary
to
consider whether this finding was justified by the evidence. The
allegations of misconduct and incapacity (set out in a letter
by the
appellant’s attorneys dated 12 October 2004) are:
‘
1. [T]he
fact that business associates and, more particularly, various airways
and customers have expressed serious reservations
about continuing to
do business with your client coupled with his often rude, aggressive
and confrontational behaviour;
the lack of interpersonal skills on
part of your client;
the lack of negotiating skills on the
part of your client;
the fact that numerous key employees
of Cosmotrans have resigned from its employ due to the general
demeanour, conduct and approach
of your client;
the poor relationship with which your
client has with numerous employees of Cosmotrans; and
Your client's exceptionally poor
disciplinary record.’
[13] The respondent
admits that he was found guilty in a disciplinary inquiry of assault
in the context of a strike and sanctioned.
This conduct had no
relevance to the problem facing the appellant at this moment.
[14] Chaplain, the
financial manager, testified that he was unaware of these complaints.
He mentioned that he would have known of
them as he worked on the
same level as the respondent. Chaplain also said he had heard
complaints about the respondent from suppliers
but that none of the
complaints were discussed with the respondent. Senekal, the one
person who should have known of the complaints,
did not know of the
complaints against the respondent. But his evidence does not sit well
with that of Walters who said that the
details of the respondent’s
misconduct were supplied by the HR Department. Although the details
had allegedly been supplied
to the decision makers, which included
Walters, Walters could not substantiate details of the complaints.
[15] The respondent
admitted the finding of guilt in an assault case and explained how it
came about. But he was unaware of the
remainder of the complaints.
The appellant had no evidence to substantiate a dismissal on the
basis of these complaints. Moreover,
the
allegations were not put to the respondent for his comments. This is
unfair.
[16] When it was put to
Walters that the appellant had in fact dismissed the respondent on
account of his alleged misconduct, Walters
answered: ‘No
comment’.
1
None of the other
witnesses for the appellant had insight into the reasons for the
dismissal of the respondent as it was taken at
Exco level.
[17] In any event,
it was unfair for the
appellant to throw these baseless or irrelevant allegations into the
consultation process.
Selection criteria:
grounds 1, 3, 4, 5 and 6
[18] In the light of what
has been said as regards the first two grounds of appeal, there is
little need to deal with these grounds
save to say that the court a
quo correctly found that the consultation process was unfair. The
respondent’s evidence as to
why he participated in this process
in the light of what Peters told him is very plausible. The
respondent did not want to accept
that his job was lost; he wanted to
undo the decision.
[19] Walters was correct
when he answered a question put to him by appellant’s counsel:
‘
So what was
the purpose of the consultations that followed that letter in which
Mr Van Rensburg was invited to engage the consultation
process? ---
It would have been in the normal process, I am assuming, that he
would get invited to put forward some proposal that
would
mitigate
that particular process.’ (My emphasis.)
[20] The consultations
were a “charade” or as the court
a quo
thought it
was “a sham”. It was purposeless insofar as it deprived
the respondent of a chance to save his post or avoid
his being
selected for retrenchment. His representations on that score were to
be fruitless because restructuring was a
fait accompli
. The
addition of baseless complaints and an irrelevant disciplinary
infringement (for which the respondent had been sanctioned)
in the
course of consultation were unfair.
Compensation: ground 8
[21] The court
a quo
awarded the respondent compensation in the amount of 12 months
remuneration. The submissions of Mr Hutchinson, who appeared for
the
appellant, are premised on the basis that the dismissal was for
operational reasons; but that the procedure was unfair. The
dismissal
was substantively unfair. It was, in part, founded on unproved acts
of misconduct and incapacity. The procedure which
was followed was
also was unfair. The respondent had rendered 19 years service to the
company and deserved to be treated with more
respect and
consideration that the appellant afforded to the respondent. I
decline to interfere with the award of compensation.
[22] The appeal is
dismissed with costs.
___________________
LANDMAN AJA
I agree,
_______________
TLALETSI JA
I agree,
_______________
MAILULA AJA
APPEARANCES:
FOR THE APPELLANT: Tim
Mills of Cliffe Dekker Hofmeyr Inc
FOR THE RESPONDENT: Wayne
Hutchinson instructed by Fluxmans Attorneys
1
See
page 310 lines 4-7.
9