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[2013] ZALAC 30
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4Seas Worldwide (Pty) Ltd v Commission for Conciliation Mediation and Arbitration and Others (CA 15/2011) [2013] ZALAC 30 (13 November 2013)
REPUBLIC OF SOUTH AFRICA
IN THE LABOUR APPEAL COURT OF SOUTH AFRICA, CAPE TOWN
Case no: CA15/2011
In the matter between:
4SEAS WORLDWIDE (PTY) LTD
....................................................................
Appellant
and
THE COMMISSION FOR CONCILIATION
MEDIATION AND ARBITRATION
......................................................
First
Respondent
S BHANA N.O.
.
..............................................................................
Second
Respondent
LIESL VAN DER BERG
.....................................................................
Third
Respondent
Heard: 14 March 2013
Delivered: 13 November 2013
Summary: Dismissal for operational
requirements- principle reinstated- employer having the
onus
to prove the dismissal of employee was fair and that it followed a
fair process. Employer relying on an alleged agreement with
employee
to justify retrenchment - evidence showing that no such agreement was
reached- no proper and legally acceptable rationale
for the decision
to dismiss employee- employer failing to discharge the onus.
Procedural fairness- employer using consultation to facilitate the
dismissal- employee refusing to participate in the consultation
process as termination of employment was a
fait accompli
and
the process a sham- appeal dismissed with costs
Coram: Waglay JP, Tlaletsi ADJP and Coppin AJA
JUDGMENT
COPPIN AJA
[1] This is an appeal against the order of Steenkamp J, in the Labour
Court, dismissing, with costs, an application brought by
the
appellant in that court to review and set aside an arbitration award
made by the second respondent, acting under the auspices
of the first
respondent, in favour of the third respondent (“
Van der
Berg
”). The second respondent found that the dismissal of
Van der Berg by the appellant was procedurally and substantially
unfair
and ordered the appellant to pay Van der Berg compensation
equivalent to five months’ remuneration plus one month’s
notice pay and her legal costs on scale A of the magistrate’s
court tariffs.
[2] An application for condonation for the late filing of the
appellant’s heads of argument was granted. At the outset of
the
hearing of the appeal, this Court also raised two further issues with
the appellant’s counsel, namely, regarding the
pagination of
the record and the commissioning of the founding affidavit in the
review application which was brought in the court
a quo
and
which is the subject of this appeal. In my view, these concerns were
satisfactorily addressed in a note submitted by the appellant’s
attorney and nothing further needs to be said about them.
[3] It is common cause that at the arbitration hearing, the only
witness that gave evidence on behalf of the appellant was a
consultant
the appellant had engaged, namely, Mr Steven Beukes
(“
Beukes
”). Van der Berg gave evidence in
response. Her evidence about her interactions with the appellant’s
representatives,
other than Beukes, was not refuted. The common cause
facts, or those that were not seriously disputed are, briefly, the
following.
Van der Berg was appointed as the general manager of the
appellant’s Cape Town business from 1 August 2008. She was
reporting
to one Mr Mark Llewellyn (“
Llewellyn
”),
a director of the appellant, based in London. The appellant also had
a second director, one Mr Leon Bubenicek (“
Bubenicek
”),
who was based in Australia.
[4] Van der Berg had been receiving positive feedback on her
performance from Llewellyn by way of weekly teleconferences. However,
from about March 2009 to 1 April 2009, Bubenicek alleged poor
performance on her part. Since Van der Berg had been aware that two
of her predecessors in the position had been dismissed, allegedly for
poor performance, she made an effort to satisfy the requirements
of
the appellant. According to Van der Berg, Bubenicek could not
substantiate his allegations that her performance was poor. On
25 and
26 March 2009, Bubenicek tried to change the targets that Van der
Berg had all along been required by the appellant to meet.
On 1 April
2009, Bubenicek asked her to complete a performance review form. She
was not required to complete such a form previously.
Bubenicek gave
her a week to prove and set high performance levels. According to Van
der Berg, she tried her best to corporate
with Bubenicek, but she was
aware that her predecessors had been dismissed after a similar
process had been followed.
[5] All along Van der Berg had been reporting to Llewellyn, with
Bubenicek’s intervention, her reporting line became uncertain.
As a result, on 2 April 2009, she wrote to Llewellyn and Bubenicek to
clarify this. On 3 April 2009, in response to her letter,
Bubenicek
sent Van der Berg a counselling form to sign as a matter of urgency.
Bubenicek made allegations,
inter alia,
of a deteriorated
working relationship, fraud amongst the staff under Van der Berg as
well as bad time-keeping and management.
Van der Berg replied that
she required legal representation in the circumstances.
[6] In the interim, and on or about 6 or 7 April 2009, Bubenicek
approached a labour consultant, Beukes, for advice regarding Van
der
Berg’s alleged poor performance. According to Beukes, Bubenicek
told him that they had a number of concerns regarding
Van der Berg’s
poor performance and they (referring to Bubenicek and Llewellyn) had
come to Cape Town in February of that
year to meet with her to
discuss these issues. They told Beukes that Van der Berg was
unresponsive and not meeting the request
to change things. They
further informed him that Van der Berg was the third general manager
that they had appointed, but that her
performance has not improved;
that they were spending a lot of time and effort and could manage
without such a person by managing
the inbound and outbound managers
directly and Beukes was requested to advise them on the process that
was required. According
to Beukes, communication between him and them
(i.e. Llewellyn and Bubenicek) was by e-mail. Beukes testified that
he advised them
to go through an operational requirement process
which would include consultation with Van der Berg.
[7] Van der Berg, on her part, had also enlisted the assistance of a
labour consultant, Ms Cynthia Hayward (“
Hayward
”).
On 7 April 2009, Van der Berg responded to the counselling form that
had been sent to her by Bubenicek. According to Van
der Berg, she
responded fully and showed that the allegations made by Bubenicek
lacked substance. Van der Berg testified that on
that same day there
was a telephone conference which she, Hayward and Bubenicek
participated in and in which all performance issues
were resolved.
According to her, the conference concluded on a positive note and she
was of the view that they were going to move
forward on a more
positive note and that Bubenicek had accepted her responses.
Bubenicek never mentioned to her that her position
would be made
redundant, or that she would be asked to leave.
[8] It was common cause that at the time Van der Berg was not aware
of the discussions between the appellant (i.e. its directors
Llewellyn and Bubenicek) and Beukes, nor was Beukes aware of the
conversation of 7 April 2009 between Van der Berg, Hayward and
Bubenicek.
[9] On 8 April 2009, Llewellyn telephoned Van der Berg and told her
that Bubenicek was purchasing the business and did not want
to
continue employing her. He proposed to her that she be bought out. He
suggested that she get legal representation in order to
discuss what
offer she would accept. According to Van der Berg, she told Llewellyn
that this was not her wish and that she was
and always would be
totally committed to the business.
[10] It was Beukes’ evidence that Llewellyn had informed him
that he (Llewellyn) had reached an agreement with Van der Berg
that
she would leave the appellant and negotiate the terms of a
settlement. According to Beukes, Llewellyn sent him a copy of an
e-mail which Llewellyn had written and in which he purported to
describe the conversation that he had had with Van der Berg on
the
issue and requesting Van der Berg to discuss the terms of the
settlement. Consequently, according to Beukes, he arranged a
meeting
with Van der Berg and met with her and Hayward on 15 April 2009. As
far as Beukes was concerned, and as advised by Llewellyn,
this was
just to negotiate a settlement. Beukes had with him a letter that he
had prepared based on the assumption that there was
an agreement on
the termination of the employment relationship between the appellant
and Van der Berg. Beukes had been advised
by his clients, and in
particular Llewellyn, that since there was an agreement to terminate
her employment, it was not appropriate
for Van der Berg to be in the
office of the business and that she should be asked to leave. Beukes
informed Van der Berg and Hayward
accordingly. This was objected to.
Beukes was informed by Van der Berg and Hayward that there was never
any agreement that Van
der Berg would leave the business and that her
employment would terminate. Beukes testified that he was taken by
surprise by this.
He was informed by Van der Berg and Hayward that
Van der Berg had participated in a performance process which
culminated in a telephone
conference of 7 April 2009 between Van der
Berg, Hayward and Bubenicek and that it appeared that the
relationship was ongoing.
They also told Beukes that Van der Berg
never agreed to a termination of her employment. Van der Berg was
equally surprised by
what Beukes had to say in that regard.
[11] According to Beukes, he telephoned his clients and told them
that there was no agreement on termination, but they maintained
that
there was an agreement, and expressed to him that ‘
we must
stick to this course’
. According to Beukes, he advised
Llewellyn and Bubenicek that if they (i.e. his clients) wanted to
terminate Van der Bergh’s
employment they must have a ‘
fair
reason
’ and follow a fair process. According to him, he
mentioned to them that on what they had told him, the position of
general
manager was redundant and if that was their view, they must
put it to Van der Berg and give her an opportunity to respond. On
that
basis, according to Beukes, he was given instructions to prepare
a communiqué setting out the facts, as the appellant
understood
them, and invite Van der Berg to engage in a consultation
on the matter. Beukes testified that he prepared a letter to that
end,
the contents of which were confirmed by Llewellyn and Bubenick.
He arranged to meet Van der Berg and Hayward on 15 April 2009. This
second letter, which was dated 15 April 2009, was handed to Van der
Berg at the meeting.
[12] Van der Berg also testified the impressions and views that she
had at the first meeting with Beukes; her receipt of his first
letter
and in particular how it affected her relationship with Llewellyn and
Bubenicek. She testified that it completely ended
their relationship.
She knew that she could not trust them anymore and that it was quite
clear to her that ‘
something had been going on’
.
The content of the first letter was in conflict with what she was
told by them and, according to her, she knew at that point that
that
would be the end of their working relationship.
[13] After the meeting at which Van der Berg was given the letter
dated 15 April 2009 (i.e. the second letter) the appellant, through
the agency of Beukes, purported to follow a retrenchment procedure.
In a letter dated 16 April 2009 Llewellyn intimated that the
reasons
stated in the letter of 15 April 2009 were reasons relating to the
appellant’s operational requirements. It was common
cause that
Hayward on behalf of Van der Berg, wrote to Llewellyn on 17 April
2009 stating that the appellant’s actions were
unlawful, but
since it was obvious that the appellant intended to terminate Van der
Berg’s employment, he should make her
a reasonable offer.
[14] On 20 April, Van der Berg received a letter, purportedly written
by Llewellyn. This letter was also e-mailed by Beukes to
Hayward on
22 April 2009. In it Llewellyn sought to justify the termination of
Van der Berg’s employment on the basis of
an alleged telephonic
agreement that he (i.e. Llewellyn) had with Van der Berg on 7 April
2009 to that effect and confirming the
invitation to consult. Van der
Berg received another letter, purportedly from Llewellyn, on 24 April
2009 stating that consultations
should conclude by the end of April
2009. However, subsequently, on 25 April 2009 Van der Berg received
an electronic message from
Llewellyn stating,
inter alia,
that
he had been travelling back from Hawaii for 26 hours and would call
Van der Berg the next week to agree on something. Because
of this it
did not appear to Van der Berg that Llewellyn had written the letter
dated 24 April 2009.
[15] However, in the next development, Van der Berg received a letter
of termination from the appellant dated 5 May 2009. The letter
was
purportedly written by Llewellyn. In the letter, Van der Berg was
advised that she would receive notice and leave pay, but
no severance
pay as she had worked less than a year for the appellant. After
receiving the letter, Van der Berg received a telephone
call from
Llewellyn and he feigned ignorance about the letter of 5 May. He
expressed surprise that she was no longer employed by
the appellant
and denied writing any of the letters that she had received from him.
[16] According to Van der Berg, which evidence was also not disputed,
she returned the appellant’s property to it, but was
not
allowed to collect her personal items from the appellant. She only
received payment up to 5 May 2009, but was not paid any
notice pay.
At the time her monthly salary was R44 197,00. Van der Berg also
testified that she was aggrieved by this treatment
and that her
dismissal by the appellant had a serious negative effect on her. She
not only faced serious financial issues, but
also could not find
other employment. Consequent upon her dismissal, she referred an
unfair dismissal dispute to the Commission
for Conciliation Mediation
and Arbitration (“
CCMA
”). The matter was
eventually set down for arbitration before the second respondent.
[17] In the arbitration award, which is dated 1 October 2009, the
second respondent, having analysed the evidence and arguments
presented, concluded,
inter alia
, that the evidence shows that
the appellant had taken a decision on the redundancy of Van der
Berg’s position before commencing
the consultation process with
her; that this was contrary to section 189(1) of the Labour Relations
Act 66 of 1995 (“
the Act
”) which requires that
consultation commences when ‘
the employer contemplates and
not when the decision is a fait accompli
’. The second
respondent referred for this finding, in particular, to an e-mail
from Llewellyn to Van der Berg, dated 8 April
2009 wherein, Llewellyn
recorded that he had told her that she would be the last general
manager; that the job was to be made redundant
and inviting her to
negotiate an ‘agreed redundancy’.
[18] The second respondent also found that it was ‘
equally
obvious
’ that the reason for the decision to terminate Van
der Berg’s employment related to her alleged poor performance
and
not to ‘
any economic rationale
’; that the
appellant’s decision to dismiss Van der Berg was a way to avoid
the responsibility of managing her and that
that was not a fair, nor
genuine, reason to terminate her services in terms of section 189 of
the Act. The second respondent further
concluded that the
consultation process was ‘
no more than a sham
’ and
that Van der Berg was justified in refusing to participate in it. He
ruled that her dismissal was substantively and
procedurally unfair
and ordered the payment of the compensation referred to in the first
paragraph of this judgment, since Van
der Berg did not want to be
reinstated.
[19] The appellant brought an
application in the court
a
quo
to review the
award of the second respondent. It cited several grounds, apparently
relying on the decision in
Sidumo
and Another v Rustenburg Platinum Mines Ltd and Others
1
.
The main ground being that the decision of the second respondent was
one which a reasonable decision-maker would not have reached.
Having
considered the facts, the court
a
quo
concluded that the
second respondent properly considered the evidence and made an award
that a reasonable decision-maker could
have made on the facts. The
court
a quo
confirmed the findings that there was no
bona
fide
commercial
rationale for the dismissal and that Van der Berg had been presented
with a
fait accompli
that her position would be made redundant; and that the appellant’s
conversion of her failed performance management process
into a
retrenchment process was a sham.
[20] The appellant submits that
the court
a quo
erred in that it endorsed ‘
erroneous
and effective
’
material findings of the second respondent and more in particular,
the findings that the decision to terminate Van der Berg’s
employment for operational reasons was a “
sham
”
and “
fait
accompli
”; the
finding that the real reason for Van der Berg’s dismissal was
her performance; that the decision to dismiss Van
der Berg was
substantively and procedurally unfair ( since there was allegedly
only a finding with regard to substantive fairness);
and the second
respondent’s failure to have regard to the fact that Van der
Berg refused to participate in any consultation
process. It was
further submitted that the second respondent could not find that the
general manager position was not redundant
because no proof to the
contrary had been produced.
[21] It was submitted on behalf of Van der Berg, in essence, that the
second respondent’s findings and decision were rational
and
reasonable and that the court
a quo
did not err in confirming
them and further, that it could not be said that the second
respondent’s findings and decision
were such that a reasonable
decision-maker could not have arrived at on the facts.
[22] I am of the view that there is no merit in any of the grounds
raised by the appellant. I shall traverse them shortly. As a
general
point, a fundamental weakness of the appellant’s position
resides in the fact that neither Llewellyn, nor Bubenicek,
came to
give evidence, or refute Van der Berg’s evidence pertaining to
their conduct and motives. Beukes was merely a consultant
for the
appellant and he could not refute Van der Berg’s evidence of
the direct and personal interactions which she had with
Llewellyn and
Bubenicek. Beukes was employed for his own account, did not have
first hand knowledge of crucial facts, could not
make any decisions
without either Llewellyn, or Bubenicek, and followed their
instructions. Van der Berg’s version, including
her view on the
conduct and motives of Llewellyn and Bubenicek was not contested.
[23] It was incumbent on the appellant to prove that the dismissal of
Van der Berg was fair and that it followed a fair process
before
terminating her employment. This included proving that the redundancy
of her position and the termination of her employment
was not a
fait
accompli
, before trying to engage Van der Berg in a consultation
and, further, that the alleged process followed was not a sham. In my
view,
the appellant failed to discharge the
onus
.
[24] It was held in
SACTWU
and others v Discreto (a Division of Trump and Springbok Holdings,
2
that it was not the function of the court in scrutinising the
decision to retrench workers to determine whether that decision was
wise, but only whether it was a rational commercial or operational
decision taking into account what emerged from the consultation
process that preceded the retrenchment. The requirement of
consultation is a formal and procedural requirement, but it has a
substantive
purpose. That purpose is to ensure that the ultimate decision arrived
at (i.e. to retrench) was genuine and proper due to operational
requirements, i.e. justified by a commercial or business rationale.
With regard to the consultation process, it was held there
that
consultation must precede a final decision on retrenchment since it
is impossible to determine beforehand what might emerge
from the
consultation and to what extent that might influence a final
decision. Allowing for representations after the decision
has been
made, cannot inform the decision already taken and will be met by a
justification of the decision which had been taken
before the
consultation.
[25] In this matter, no one of the appellant, who had direct and
personal knowledge of its commercial or financial dealings,
testified.
Beukes was clearly not such a person. Consequently, the
appellant could not even establish a proper and legally acceptable
rationale
for the decision to dismiss Van der Berg. In any event, and
more basic than that, and without even taking into account the
contested
email, the admissibility of which was objected to, the
evidence clearly established that a decision had been taken even
before
Beukes advised that a consultation process be followed, to
terminate Van der Berg’s employment.
[26] There is no reason not to accept Van der Berg’s evidence
of what Llewellyn told her, namely,
inter alia
, that Bubenicek
wanted to get rid of her. Llewellyn did not mention to Van der Berg
that he had problems with her performance.
Bubenicek, on the other
hand, seemingly tried to raise performance issues, no doubt as a
reason to get rid of Van der Berg. When
the performance- issue –
approach did not help, Llewellyn tried to rely on an alleged
agreement of Van der Berg to resign.
It is only when Beukes realised
that there was no such agreement that he advised a retrenchment
process. By then Van der Berg’s
fate had been sealed. The
appellant simply sought a method of facilitating this. The proposed
consultation process was clearly
not genuine and
bona fide
,
and Van der Berg was justified in not participating in it. She cannot
be faulted for not wanting to participate in a sham.
[27] It is clear from the correspondence, and the various
interactions Van der Berg had with Llewellyn and Bubenicek, that they
were not
bona fide.
Both, Llewellyn and Bubenicek, were
playing a game of pretence with Van der Berg. Llewellyn pretended not
to have had any part in
the decision to terminate her employment and
pointed to Bubenicek, but then he, opportunistically, alleged that
Van der Berg had
agreed to resign. Letters were written in
Llewellyn’s name, but he, in effect, denied having written
them. The fact that
Van der Berg could not dispute that the appellant
had not employed a General Manager does not assist the appellant.
There was no
proper, admissible proof that such an appointment had
not been made and even if one accepts that the appointment was not
made that
does not amount to proof that the post was redundant.
Lastly, even though the email of 8 April 2009 was objected to, the
second
respondent did not uphold the objection. In any event, the
email was not relied upon to prove that Llewellyn had told Van der
Berg
that she would be the last general manager and that the job
would be made redundant, but that the email including statements in
those terms, or to that effect, was sent to Beukes. It is also clear
from the evidence that Beukes relied,
inter alia
, on the
contents of that email to conclude that Van der Berg’s position
had become redundant – and it must have been
part of the basis
of Beukes’ advice to Llewellyn and Bubenicek. In my view, the
second respondent’s assessment of the
evidence and his
conclusions were correct and clearly findings that a reasonable
decision-maker could have made. The court
a quo
cannot be
faulted in finding accordingly.
[26] There is no reason in fairness and in law why the costs should
not follow the result. The appeal is dismissed with costs.
_______________
P Coppin
Acting Judge of the Labour
Appeal Court
I agree:
__________________
B Waglay
Judge President of the
Labour Appeal Court
I agree:
________________
L P Tlaletsi
Acting Deputy Judge President
of The Labour Appeal Court
APPEARANCES:
FOR THE APPELLANT: Mr Aggenbach
Instructed by Werksmans Inc Attorneys
FOR THE THIRD RESPONDENT Mr Kantor
Instructed by Schneider Attorneys
1
Sidumo
and Another v Rustenburg Platinum Mines Ltd and Others
(2007) 28
ILJ 2405 (CC) para [110].
2
SACTWU
and others v Discreto (a Division of Trump and Springbok Holdings)
[1998] 12 BLLR 1228
(LAC) paras
[8] and [9].