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[2014] ZALAC 36
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Elliot International (Pty) Ltd v Veloo and Another (DA12/11) [2014] ZALAC 36; [2014] 10 BLLR 955 (LAC); (2015) 36 ILJ 422 (LAC) (23 July 2014)
REPUBLIC
OF SOUTH AFRICA
THE
LABOUR APPEAL COURT OF SOUTH AFRICA, DURBAN
JUDGMENT
Reportable
Case
no. DA 12/11
In
the matter between:
ELLIOT INTERNATIONAL
(PTY)
LTD Appellant
and
MOONSAMY
VELOO First
Respondent
VINODA
VELOO Second
Respondent
Heard:
25 February 2014
Delivered:
23 July 2014
Summary
:
Respondents (employees) alleging that they were dismissed because of
joining a union and, therefore, dismissals
automatically unfair, ito
s187 of LRA. Alternatively, dismissals were non-compliant with s189.
Appellant (employer) denied that
employees were dismissed - alleged
that employees elected voluntary retrenchment. Respondents refused to
sign voluntary retrenchment
agreement but banked money for
retrenchment packages – no repayment or tender thereof.
Held
:
On the facts, inference could not be drawn that respondents elected
voluntary retrenchment .
Held
:
Dismissals were automatically unfair. Appeal dismissed.
Coram:
Ndlovu JA et Molemela AJA
et
Sutherland AJA
JUDGMENT
NDLOVU JA
Introduction
[1]
The appellant, Elliot International (Pty) Ltd, conducts business in
the furniture removal industry and has various branches
established
throughout the Republic. The first and second respondents, Mr
Moonsamy Veloo and his wife, Mrs Vinoda Veloo (collectively
“the
respondents”) were formerly employed by the appellant at the
appellant’s branch located at Springfield Park,
Durban, until
their dismissal on 31 October 2004. At the time of their dismissal
they were earning R6865,00 per month and R2650,00
per month,
respectively.
[2]
Mr Veloo commenced employment with the appellant on 8 April 1989 as
an operations clerk and Mrs Veloo started on 1 July 2002
as a
receptionist. They were dismissed together with other two former
employees, Ms Yvonne Heather Kruger and Ms Belinda Lee Coetzee.
The
four of them (collectively “the employees”) were
aggrieved with their dismissals which they claimed were automatically
unfair.
[3]
The employees initially referred their dispute to the CCMA for
resolution. However, when it transpired that the parties to the
dispute belonged to the National Bargaining Council for the Road
Freight Industry (“the bargaining council”), the CCMA
referred the matter to the bargaining council in terms of section
147(2)(a)(i) of the Labour Relations Act (“the LRA”).
[1]
The bargaining council attempted to conciliate the dispute but
without success and, on 10 February 2005, issued a certificate of
outcome to the effect that the dispute remained unresolved.
Consequently, the employees referred the matter to the Labour Court
for adjudication.
[4]
In its judgment handed down on 23 December 2010, the Labour Court
(per Cele J) found the dismissals of Ms Kruger and Ms Coetzee
to have
been fair, but that of the respondents to have been automatically
unfair and ordered their reinstatement retrospectively
from the date
of their dismissals, namely, 31 October 2004. It is that part of the
judgment of the Court
a quo
that relates to the respondents
(i.e. that they were automatically unfairly dismissed) against which
the appellant now appeals
to this Court, with leave of the Court
a
quo
. On this basis, the dispute pertaining to Messrs Kruger and
Coetzee falls outside of the purview of this appeal.
The factual matrix
[5]
On or about 25 June 2004, the employees, together with a few other
colleagues in the appellant’s administration section,
joined a
registered trade union known as the National Federal Trade Union of
South Africa (“FEDTUSA” or “the
union”).
During this period, the appellant’s Durban branch manager was
Mr Gordon Lentz who, according to the appellant,
had since emigrated
to Australia.
[6]
On 30 August 2004, a notice was issued by the appellant and addressed
‘
To all Administration Staff,’
containing the
following message:
‘
RE:
RETRENCHMENT CONSULTATION NOTICE BASED ON OPERATIONAL REQUIREMENT
1.
We regret to advise and inform you in
writing that we the company is (
sic
)
contemplating dismissing certain administration employees based on
operational requirements.
2.
The company will, in terms of its
retrenchment procedure, hold a meeting with all affected employees;
this meeting will take place
September 3, 2004 during which employees
will be advised of this decision. Before implementation, we must
reach consensus on (
sic
):
1.1
to avoid the dismissals;
1.2
to minimize the number of dismissals;
1.3
to discuss the timing of the dismissals;
1.4
to mitigate the adverse effects of the
dismissals;
1.5
the method for selecting the employees to
be dismissed;
1.6
the severance pay for the dismissed
employees.
Should you have any
queries, please consult the writer.
Yours faithfully
Christine Lind (Mrs)
(signed).’
[7]
Ms Lind was the appellant’s human resources official based at
the appellant’s head office in Johannesburg. The administration
staff (including Mr and Mrs Veloo) received the retrenchment notice,
which had also been copied to the union by the appellant.
A
consultation meeting was proposed by the appellant to take place on 1
September 2004. However, that date was not suitable to
the union
which pointed out that on the same date it would be holding its
central committee meeting. The meeting was eventually
held on 8
September 2004 and all parties were present, including the union
representative, Mr Roy Bhengu.
[8]
At that meeting, Ms Lind pointed out that the appellant’s
business operational costs were getting too high, occasioned
especially by the expenditure on salaries. For this reason, she said,
the appellant had decided to consider the possibility of
retrenchment
of some of the administration staff. Particularly, she announced,
amongst others, that the employees would be affected
by the
contemplated retrenchment. Ms Lind further stated that if the
affected employees agreed to a voluntary retrenchment, they
would be
paid more than what was otherwise prescribed by the law. After the
meeting, each of the employees was presented with a
copy of the
voluntary retrenchment agreement to consider and sign.
[9]
The material terms of the voluntary retrenchment agreement included
the following:
9.1
That the appellant and the employee agreed that the employment of the
employee with the
appellant would terminate on 31 October 2004 due to
the employee having accepted voluntary retrenchment. (Clause 1.1)
9.2
That the employee voluntarily and of his/her own accord entered into
the retrenchment agreement,
without being forced or coerced to do so.
(Clause 1.3)
9.3
That the retrenchment agreement was entered into in full and final
settlement of all claims
of whatever nature arising from the
termination of the employee’s employment with the appellant.
(Clause 2.1)
9.4
That the appellant undertook to pay the employee a retrenchment
package as follows:
9.4.1
R5660,00 notice pay subject to normal taxation deductions.
9.4.2
R5330,00 non-taxable gratitude pay.
9.4.3
R16979,95 non-taxable severance pay (for 13 weeks).
9.4.4
R5747,00 outstanding leave (for 22 days) subject to normal tax
deduction.
9.4.5 Medical
aid would be deducted until 31October 2004.
9.5
That the abovementioned amounts would be paid to the employee by 31
October 2004, together
with any leave pay or other amounts due to the
employee. The first payment would be made by 30
September
2004.
9.6
That the employee would not be required to work out his/her notice of
termination of employment
in terms of this agreement. Medical Aid
would be deducted until 31 October 2004 and the Medical Aid cover
would expire in October
2004.
9.7
That the employee’s Pension Fund would be terminated on 30
September 2004.
9.8
That this agreement constituted the entire contract between the
parties who, by their signature
thereon acknowledged that no
representations were made or warranties given or conditions or
stipulations attached, to any of the
matters referred to in this
agreement, save as set out in the agreement.
9.9
That no variation of this agreement would be of any force or effect
unless recorded in writing
and signed by or on behalf of the parties
by their duly authorized representatives.
[10]
Copies of the voluntary retrenchment agreement were delivered to the
respondents by registered post under cover of a letter
dated 10
September 2004, which read as follows:
‘
Dear
Mr & Mrs Veloo,
RE:
RETRENCHMENT
Enclosed please find
Voluntary Retrenchment Agreement, as negotiated and agreed by all
concerned including the Union representative
and Shopstewards.
Yours faithfully
Christine Lind
LLR’
[11]
It is common cause that whilst Ms Kruger and Ms Coetzee signed the
voluntary retrenchment agreement, the respondents declined
to sign.
The employees’ last day on duty was 8 September 2004, in line
with the notice of retrenchment which stated that
they did not have
to work for the remainder of the days until 31 October 2004, that
being the effective date of their dismissals.
[12]
On 16 September 2004, the appellant addressed a letter to the union,
which read as follows:
‘
Dear
Roy [Bhengu],
I would like to thank you
for your meritorious help and input of the unfortunate, unavoidable
retrenchment negotiations. I appreciated
your understanding and your
help to keep the negotiations on an unemotional level to reach
consensus to all parties’ satisfaction.
Formula used for
packages:
1)
Notice Pay until 31
st
of October 2004 not required to work;
2)
Gratitude payment part of Retrenchment
R2500,00 each and two weeks partial salary and commission average
where applicable;
3)
Severance Pay according BCE (BCEA ?) and
LRA 189(a)-(j)
4)
All outstanding leave even when excessive;
5)
Transport allowance one’s off (sic)
where applicable.
Kind regards
Christine Lind.’
[13]
In its response, on 20 September 2004, the union expressed
dissatisfaction about the termination of the employees’
services,
alleging that it was unfair. The union’s letter to
the appellant reads as follows:
‘
We
are informing you that the union feels the retrenchment was not fair
and the company did not follow proper procedures, because
of the
following reasons:
§
The company did not open a voluntary
retrenchment to all administration employees.
§
The company did not consult the union in 30
days before any retrenchment, as our recognition agreement
stipulates.
§
The company did not form a committee to
establish whether retrenchment was necessary and make recommendations
and alternatives regarding
the details of the retrenchment, as clause
17.2 of our recognition agreement stipulates.
§
The company consulted our members first,
and then invited us to observe, which is contrary to section 189 of
the Labour Relations
Act.
§
The company did not use (the) last in first
out (LIFO) method.
We take the failure of
the company to comply with the above points as instance (
sic
)
dismissal of our members.
We therefore propose a
meeting on 23 September in order to find alternative ways to resolve
this issue.
Please confirm your
availability on or before 21 September 2004.
Nhlanhla Nyandeni
National Organiser.’
[14]
The appellant responded to the union’s letter, above, and
expressed surprise at the union’s allegation that the
employees’ dismissals were unfair. The appellant insisted that
“
after a long and intensive negotiation we reached agreement
to satisfy all parties. Not once has there been concern voiced that
it is unfair, or and procedural(ly) incorrect, or that the employees
where (sic) instantly dismissed.”
The letter continued and
stated that “
[a]s soon as we all agreed on the package we
drafted the letters handed those to your Union Official to check for
mistakes; satisfied
we went ahead and called the relevant employees
into the office handed out the letters and Pension withdrawal forms
to complete
section 7 (seven) return us in order to follow their
wishes.”
The appellant further stated that 23 September
2004 was not suitable to it for the proposed next meeting, “
as
it was too short (notice) to arrange transport to Durban”
,
and suggested a date in mid-October 2004.
[15]
No further meaningful communication appeared to have taken place
between the appellant and the union. All affected employees,
including the respondents, were accordingly paid their retrenchment
packages on the basis of the formula and calculations appearing
in
clause 3.1 of the voluntary retrenchment agreement.
Proceedings in the
Labour Court
[16]
In their pleadings, the employees raised a number of factual and
legal issues against the appellant, which included the following:
1.
That after the appellant received a
notification from the union concerning 11 administration employees
who had joined the union,
Mr Lentz called the union members
(including the employees) to meetings at which he interrogated and
victimized them. As a result,
some of the union members subsequently
resigned their union membership, but the employees did not resign.
2.
That the employees were coerced to accept
and sign the voluntary retrenchment agreement, but which the
respondents refused to do.
3.
That the appellant failed to enter into any
meaningful consultation process with the employees and, therefore,
failed to comply
with the provisions of section 189 of the LRA.
4.
That the appellant’s real reason for
selecting the employees for termination of their services was because
of their union
membership.
5.
That the dismissals of the employees were
therefore automatically unfair in terms of section 187 or unfair in
terms of section 188
read with section 189 of the LRA.
[17]
The appellant denied that the respondents were dismissed in the first
place. It also denied that the respondents were victimized
in any
manner because of their union membership. According to the appellant,
during the consultation meetings held between the
appellant, the
respondents and their union representative on the issue of possible
retrenchments, the respondents decided freely
and voluntarily to
accept retrenchments, which were based on the appellant’s
legitimate economic and operational rationale.
The fact that they did
not sign the voluntary retrenchment agreements did not affect the
position that they agreed to the arrangement.
This was confirmed by
the fact that the respondents received the retrenchment packages paid
out to them and they never returned
or tendered to return the same,
which they were expected to do if they were opposed to voluntary
retrenchments.
[18]
The appellant further contended that in the event of the Court
finding that the respondents were indeed dismissed such dismissals
were only for operational reasons and were both substantively and
procedurally fair.
[19]
Mr Veloo, Ms Kruger and Ms Coetzee testified on behalf of the
employees and sought to support their claim that the real reason
for
their dismissal was because of them having joined the union. On this
basis, they submitted that their dismissals were automatically
unfair.
[20]
Given the non-availability of Mr Lentz due to his reported emigration
to Australia as aforesaid, the evidence on behalf of
the appellant
was adduced only from Mr Kevin James Miller, the appellant’s
current regional manager for KwaZulu-Natal region.
However, Mr Miller
had no personal knowledge of what transpired that had culminated in
the termination of the employees’
employment, because he was
not personally involved in the process. In fact, according to his
evidence, at the time of this dispute,
he was based at the
appellant’s head office in Johannesburg. He further testified
that the whereabouts of Ms Lind (the appellant’s
human
resources official) and the person who personally handled the matter,
were unknown, hence she could not be secured to give
evidence.
[21]
The learned Judge
a quo
pointed to this fact that nobody with
personal knowledge of the circumstances surrounding the dismissal of
the employees testified
for the appellant. Mr Miller possessed no
such knowledge and, therefore, was not in a position, on an
evidential basis, to counter
the factual allegations raised by the
employees, particularly the allegation that the real reason for their
dismissal was because
they had joined the union. The Court
a quo
accordingly found that the probabilities strongly favoured the
acceptance of the account given by the respondents that their refusal
to sign the voluntary retrenchment agreement was sufficient proof to
demonstrate their non-acceptance of the voluntary retrenchment
deal.
Hence, the Court
a quo
concluded that the termination of the
respondents’ employment constituted their dismissals as
envisaged in the LRA and that,
in the circumstances of the case, such
dismissals were automatically unfair. Thereupon the following order
was issued by the Court
a quo
:
‘
1.
The respondent is ordered to re-instate the first and second
applicants to the positions
they held before their dismissal on 3
October 2004 with no loss of earnings and benefits, with the
exception stated in paragraphs
2 below.
2.
The respondent is entitled to deduct from
the back pay of the first applicant [Mr Veloo], such of the earnings
as he received from
another employment since his dismissal by the
respondent.
3.
The respondent is ordered to pay costs of
this claim, including those of counsel, but only for the first and
second applicants.
4.
The first and second applicants are to
report for duty with the respondent on 10 January 2011 at 8h00.
5.
No costs order is made against the third
and fourth applicants.
6.
Any party proved to have caused a two year
delay in filing the pre-trial minute is liable for the costs reserved
on 9 June 2006.
In the absence of such proof, no costs order is
made.’
The appeal
[22] The appellant’s
grounds of appeal can be summarised as follows:
1.
That the Court
a
quo
erred in failing to properly
consider the fact that the appellant’s business was long
unionised under the auspices of the
same union which the respondents
joined and the fact that the appellant had made immediate arrangement
for the deduction of union
subscriptions shortly after the
respondents joined the union, which was not the conduct of an
employer that victimised union members.
2.
That the Court
a
quo
erred in failing to conclude that
the reason for the retrenchment was the drastic downturn in finances
of the appellant for the
last two years and the actual loss for the
period within which the retrenchments took place.
3.
That the Court
a
quo
erred in failing to appreciate the
fact that the respondents, duly assisted by their union, made no
reference in their dispute
referral to the CCMA that they were
dismissed for reason of their union membership.
4.
That the Court
a
quo
erred in failing to properly
consider the fact that the respondents actually accepted payment of
the severance package in terms
of the voluntary retrenchment
agreement and that they never returned or tendered to return the
same, as indication that they were
against the retrenchment
agreement.
5.
That the Court
a
quo
erred in failing to appreciate that
in terms of the pre-trial minute, the respondents did not institute a
claim of an automatic
unfair dismissal in terms of Section 187(1)(d)
and that the Court
a quo
was, therefore, only required to determine whether the respondents’
alleged dismissals were substantively and/or procedurally
fair and
not to decide the issue of an automatic unfair dismissal, which the
Court
a quo
did.
6.
That the Court
a
quo
erred in failing to consider that
reinstatement was impracticable on the basis that there had been
substantial delay in finalising
this matter, which was not caused by
the appellant; the appellant’s existing dire financial position
and the fact that Mr
Veloo had in the meantime obtained suitable and
better alternative employment.
Submissions on
behalf of the appellant
[23]
Initially, Mr Sn
yman
,
for the appellant, argued from the premise that the respondents never
alleged in their referral papers that their joining of the
union had
anything to do with their dismissals. However, it later transpired
that counsel was mistaken in that regard and he immediately
conceded
that the issue of union membership was indeed alleged by the
respondents in their referral papers.
[2]
[24]
Whilst acknowledging that the respondents’ statement of case
referred both to unfair dismissal for operational requirements
and
automatically unfair dismissal, Mr
Snyman
submitted that it
was clear, based on the parties’ pre-trial minute, that the
respondents had made an election to pursue
the former complaint as
their cause of action and not the latter. He submitted that the
pre-trial proceedings were there for a
reason and limited the issues
which the Court
a quo
was called upon to decide.
[25]
On this basis, counsel submitted that the Court
a
quo
was not entitled to determine the dispute of automatic unfair
dismissal, which he suggested formed the core basis of the Court
a
quo’
s
finding against the appellant. In support of this submission, he
referred us to
National
Union of Metalworkers of SA and Others v Driveline Technologies (Pty)
Ltd
[3]
in which this Court held that a pre-trial minute binds the parties
and the court to deal with and determine only those issues as
defined
in the minute.
[26]
Counsel further pointed out that the retrenchment agreement documents
were posted to the respondents under cover of a letter
which
specifically recorded that the retrenchment payments were in ‘
full
and final settlement’
of their claims. Therefore, their acceptance of the payments meant
that they accepted settlement of the dispute in terms of the
voluntary retrenchment agreement and that, for this reason, their
signatures were not necessary. In this regard he referred us
to
Andy's
Electrical v Laurie Sykes (Pty) Ltd
[4]
,where
the Court stated
[5]
:
“
Once
it is evident that the payment’s real purpose is the settlement
of the whole dispute, the product is an offer of compromise,
not the
mere discharge of an acknowledged liability, and the condition
characterizing it as such is its very essence, which the
creditor
disregards at his peril.”
Submissions
on behalf of the respondents
[27]
In supporting the remark made by the Court
a quo
that “
the
[respondents] did not contribute either to their dismissal or to the
delay in finalizing this matter”,
Mr
Seery
,
appearing for the respondents, pointed out that the appellant
contributed to a delay during the pre-trial stage when the appellant
switched attorneys. The appellant was initially represented by Snyman
Attorneys; then changed to Garlicke and Bousfield; and then
changed
back to Snyman Attorneys. This indecisiveness contributed to the
delay. Thereafter, a further delay was caused when the
trial was
postponed twice at the instance of the appellant and, once at the
instance of the Court
a quo
. In other words, there was no
occasion when the matter could not proceed for reason pertaining to
the respondents.
[28]
Mr
Seery
submitted that, in the circumstances of this case, it
was not impracticable to reinstate the respondents to the appellant’s
employ. He further noted that in seeking reinstatement, the first
respondent was not motivated by the money factor but by the fact
that
he would feel more secure working at the appellant than at his
current employer where employees had already been warned of
imminent
retrenchments.
[29]
Concerning the retrenchment package, Mr
Seery
submitted that
whilst Ms Lind had informed the employees that if they accepted the
deal they would get something extra, she had
also made it clear to
them that whether they accepted or not they would be retrenched
anyway. That was the evidence of the employees
which stood
unchallenged. Mr
Seery
further submitted that the respondents
were not warned of the consequences of accepting the retrenchment
packages and/or not repaying
or tendering repayment thereof. After
all, as Ms Lind had told them that whether they accepted the deal or
not they would still
be retrenched, they had no option but to accept
and bank the money.
Analysis and
evaluation
Did
the respondents accept voluntary retrenchment or did the termination
of their employment constitute dismissal, as envisaged
in the LRA?
[30]
As already indicated, it was common cause that the respondents
persistently denied ever agreeing to their retrenchments, which
was
consistent to their refusal to sign the voluntary retrenchment
agreement. It would appear from the appellant’s correspondence
that, at best, the appellant negotiated with the union on the issue
of the employees’ proposed retrenchments and not directly
with
the employees
[6]
– albeit
the union, less than a week later, seemed to distance itself from the
proposed retrenchment settlement.
[7]
Among other things, the union complained that the appellant had, in
any event, failed to follow the ‘Last-In-First-Out’
(LIFO) principle in selecting the employees to be retrenched.
Seemingly, in this regard, the union had in mind the position of
Mr Veloo who had nearly 16 years’ service with the appellant
and who would most probably not have been selected for retrenchment,
had the LIFO principle been properly applied, if at all. This
sentiment by the union further gives the impression that the union
might have thought that this exercise was all about compulsory
retrenchment, which is not what the appellant is presenting its
position to be. The appellant’s case is premised on its claim
that the respondents voluntarily agreed to be retrenched.
[31]
It is trite that a registered trade union may act on behalf of its
members
[8]
and that any dispute
settlement negotiated and concluded between such trade union and an
employer party is binding on members of
the union concerned. However,
it seems to me logical and common sense that in a proposed voluntary
retrenchment scenario a settlement
proposal negotiated by a trade
union may bind the employee members only if such members have agreed
to the settlement proposal
and specifically mandated the union to
accept the proposal on their behalf. In the present instance, the
respondents did not sign
the retrenchment agreement and it is clear
to me that they never gave any mandate to the union to accept the
agreement on their
behalf. That being the case, the respondents
did not, in my view, agree to be retrenched and, therefore, the
termination
of their employment constituted a dismissal in terms of
the LRA.
[32]
In my view, the fact of the respondents having been paid the
retrenchment packages which they received and never tendered to
return, should be understood in the context of this case. It is noted
that the decision in
Andy’s
Electrical,
as well
as
the other related cases referred to us
by Mr
Snyman
(save
Van As)
,
involved commercial transactions between corporate litigants and not
lay individuals, such as the respondents in this case. None
of those
cases involved an employer paying to an employee certain monies under
similar circumstances as it obtained here, or as
an offer of
compromise, in a supposed labour dispute settlement.
[33]
It also seems to me that the facts in
Van
As
are clearly distinguishable from the
facts in the present case. In that case,
the employee, Mr Van
As, brought an urgent application seeking an order interdicting and
restraining the employer from dismissing
him in breach of a
retrenchment agreement. On 12 August 2004, the employer instituted
disciplinary proceedings against Mr Van As
and suspended him from
duty pending the outcome of a disciplinary hearing. However, on 5
October 2004 the employer forwarded to
Mr Van As a signed
retrenchment agreement for consideration. Mr Van As handled the
matter himself and was not represented by a
union. Upon due
consideration, he also signed the retrenchment agreement, thereby
indicating his acceptance of the terms of the
agreement. However and
despite the retrenchment agreement, the employer proceeded with the
disciplinary proceedings and dismissed
Mr Van As. The Court
concluded that the parties had clearly intended that the retrenchment
agreement be in full and final
settlement of all disputes and claims
between them. Therefore, whilst in
Van As
the employee signed
the retrenchment agreement and sought to rely on it, in the present
case the direct opposite obtained, in that
the respondents refused to
sign the retrenchment agreement and they do not seek to rely on it.
[34]
At any rate, it seems to me that, whereas in a business transaction
scenario between business people or corporate entities
certain
patterns of conduct are expected, the same set of expectations cannot
ordinarily be applied to circumstances where employees,
who are
generally ignorant of business conventions, make decisions.
Therefore, if the indications from the facts suggest that banking
the
money was not intended to be a waiver, on the part of the party
banking the money, then the inference cannot be drawn from
the facts,
against such party, that the transaction was a full and final
settlement of the claim or dispute between the parties.
Each case
would have to be determined on the basis of its own specific facts.
It is significant that even in
Andy's
Electrical,
relied
upon by Mr
Snyman
,
the Court further stated as follows
[9]
:
“
A
payment’s description as one ‘in full settlement’
is not necessarily decisive. The circumstances may show that,
despite
the description, the payment is intended to satisfy nothing more than
an admitted debt. If that is its true rating, the
words ‘in
full settlement’ are of no further consequence and may safely
be ignored.” (346B-C)
[35]
Therefore, in the present instance it would be important to examine
whether any facts exist on the record which suggested that
the
respondents grasped and appreciated the significance and potential
negative implication that by not returning or offering to
return the
payments they would thereby be deemed to have made an election to
subscribe to the retrenchment agreement as voluntary
participants. In
my view, such facts did not exist, for the reasons that appear in
this judgment. Therefore, in my view, an inference
in favour of the
appellant cannot properly be drawn.
[36]
Besides, it is significant to bear in mind that, irrespective whether
the union acted on behalf of the respondents in negotiating
a
settlement with the appellant, the product of those negotiations was,
on the appellant’s own case, intended for a voluntary
retrenchment agreement to be concluded between the appellant and the
respondents. It was not an agreement between the appellant
and the
union, the latter acting on behalf of the respondents. Indeed, the
impugned voluntary retrenchment agreement purports to
be an agreement
between the appellant and the respondents. The union is not a party
to it, either in a representative capacity
or otherwise. Although the
respondents attended the meeting on 8 September 2004, it is common
cause, nevertheless, that they refused
to sign the voluntary
retrenchment agreement. It would appear from the appellant’s
letter of 16 September 2004
[10]
that the appellant suggested that the union agreed to the so-called
voluntary retrenchment deal on behalf of the respondents. On
this
basis, it is, in my view, illogical and inconceivable to suggest that
the respondents, being the affected parties in a proposed
voluntary
retrenchment exercise, should not be party to the ultimate
decision-making process leading to their retrenchment, just
for the
suggested reason that their union acted on their behalf. Such
retrenchment cannot, in my view, correctly be termed
voluntary
retrenchment, but rather, compulsory or forced retrenchment which,
remarkably, is not the appellant’s case in this
instance.
[37]
As already stated, the respondents were lay individuals who not only
persistently refused to sign the retrenchment agreement,
but also
remained steadfast throughout in strongly opposing the agreement.
They clearly did not know and, in my view, were not
reasonably
expected to have known, that by receiving and banking the money paid
to them by the appellant they had snookered themselves
into being
deemed to have made the election to accept the voluntary retrenchment
agreement. Significantly, there was also no evidence
or suggestion
that the appellant ever demanded them to repay the money and that
they refused or failed to do so - let alone warning
them about the
implications thereof.
[38]
It also appears that should the respondents be reinstated, no
financial prejudice would be suffered by the appellant to the
extent
of the retrenchment monies paid to the respondents because such
payments could be set off against any arrear salary payment
which the
respondents could be entitled to in terms of the reinstatement order.
Alternatively, the appellant could recover such
monies by way of
deduction from the respondents’ salaries.
Whether the Court a
quo was entitled to consider and decide on the issue of automatic
unfair dismissal, instead of dismissal for
operational requirements
[39]
In my view, it is clear from the respondent’s pleadings and
throughout their case that they remained adamant that the
real reason
for their dismissal was because they had joined the union. This
standpoint went to the root of their dispute with the
appellant. For
instance, in their referral form filed at the CCMA they alleged,
amongst others, as follows
[11]
:
‘
The
company
had employed new people and
reshuffled the employees and then
dismissed
those who joined the union
. Members’
jobs are being performed by other people.’ (My emphasis)
And,
in their statement of case, they alleged:
‘
The
Respondent’s conduct in terminating the Applicants’
services amounts to their victimization as
the
real reason for their termination was the Union membership
.’
(My emphasis)
[40]
There was unchallenged evidence adduced by the employees during the
trial to the effect that soon after their joining the union,
Mr Lentz
called them one by one in his office where he expressed his
unhappiness with the development and somehow intimidated them,
which
resulted in some other employees resigning their union membership. As
branch manager at the time, Mr Lentz was acting in
the name of the
appellant. It could not be said that such conduct on the part of the
appellant was consistent of the appellant
pleasantly and
wholeheartedly accepting the employees’ union membership.
[41]
The fact that Ms Lind undertook to process the deduction of union
membership subscriptions in respect of the employees was,
in my view,
not necessarily an indication of the appellant’s change of
heart in this regard. After all, once the employees
joined the union,
the appellant was obliged by law, upon request of the union, to
process the implementation of such deductions.
[42]
It is trite that trade union membership in a workplace is any
employee’s right protected under section 5 of the LRA and,
hence, a “
dismissal
is automatically unfair if the employer, in dismissing the employee,
acts contrary to section 5.”
[12]
It
is clear, in my view, that this is not one of those cases where the
respondents can be said to have abandoned their right of
claim for
automatic unfair dismissal.
[13]
There is no evidence to suggest that they consciously decided to
waive their right to pursue a dispute of automatically unfair
dismissal. This Court, in
Driveline
Technologies
,
stated
[14]
:
‘
[64]
At any rate,
it matters not for purposes
of jurisdiction whether at the time of the conciliation of a
dismissal dispute, the reason alleged for
the dismissal was
operational requirements or an automatically unfair reason. The
dispute is about the fairness of the dismissal.
Therefore, provided the alleged reason is one referred to in s 191
(5)(b), the Labour Court will have jurisdiction to adjudicate
the
real dispute between the parties without any further statutory
conciliation having to be undertaken
as
long as it is the same dismissal
.’
(My emphasis)
[43]
Therefore, on the facts of this case, the respondents’ claim of
automatically unfair dismissal does not raise a new cause
of action
vis-à-vis
the claim of unfair dismissal for operational requirements. Both
claims derive from one and the same dismissal whose fairness is
in
issue.
[15]
[44]
I think that the pre-trial minute had to be read and understood
holistically and not in a compartmentalised and restrictive
fashion
in relation to the headings used therein. It is significant to note
that whilst under the heading: ‘
The
issues that the Court is required to decide’
(in the pre-trial minute) the allegation of automatically unfair
dismissal was omitted, it was nevertheless raised elsewhere under
the
heading ‘
Facts
that are in dispute’
where
it is couched thus: “
Whether
the Respondent victimized and retrenched any of the Applicants on
account of their union membership.”
[16]
Therefore, regardless of the heading under which this issue was
raised, it was clearly still part of the employees’
facta
probanda
in their pleadings. Section 5(1)(c) of the LRA specifically protects
the right of an employee to the freedom of association, including
joining a trade union of his or her choice. On the facts of this
case, I am satisfied that the respondents succeeded in demonstrating
that the dominant reason of their dismissal was because they had
joined the union, which was a violation of their right protected
by
the LRA. Consequently, the conduct of the appellant constituted an
automatically unfair dismissal of the respondents in terms
of section
187 of the LRA.
Whether the
appellant’s operational financial downturn, if any, warranted
and justified the dismissal of the respondents for
operational
requirements
[45]
Mr
Snyman
conceded that the appellant’s case did not
really focus on this issue as a ground of the respondents’
termination of
employment. The appellant had based its case on the
ground that the respondents accepted voluntary retrenchment. However,
there
were financial statements in the court bundle purporting to
illustrate that for the financial period 1 March 2004 to 28 February
2005, in particular, the appellant’s financial condition showed
a drastic downturn from a profit of R5 952 114 to a
loss of
R1 797 455. Mr
Snyman
submitted that these
statements were properly audited and, therefore, constituted public
documents. On this basis, he submitted
that the Court
a quo
ought
to have considered the statements as constituting a fair reason for
the respondents’ dismissal for operational requirements,
in the
event of the Court not accepting the appellant’s version that
they accepted voluntary retrenchments.
[46]
However, the fact of the matter was that no financial auditor who
conducted an audit of the appellant’s company and compiled
these financial statements was called to testify that the statements
reflected the true and correct financial condition of the
appellant
at the relevant time. The admissibility of the statements was,
therefore, placed in some doubt. Significantly, despite
the
respondents’ non-objection to the financial statements, the
parties’ pre-trial minute reflected, in this regard,
that the
status of all documents in the bundles was what the documents
purported to be and that the interpretation and contents
thereof
would remain in dispute and the issue of their veracity be the
subject of cross examination.
[17]
[47]
In any event, the mere existence of the financial statements
aforesaid was not even put to any of the employee witnesses during
cross-examination at the trial. Indeed, Mr
Snyman
correctly conceded that the appellant’s case fell short on this
particular point. Be that as it may, it still remained that
if the
retrenchment was founded on
bona fide
economic operational rationale, there was no plausible explanation
whatsoever as to why a long-serving staff member such as Mr
Veloo
would have been selected for retrenchment.
[48]
There was another controversial issue pertaining to the position
vacated by Mr Veloo on his dismissal. He held the position
of
operations clerk, reporting to the operations manager who at the time
was Mr Ravi Moodley. According to the appellant’s
own
records,
[18]
a Mr Dave Charles
was appointed to the position of operations manager with effect from
1 October 2004. In other words, he took
over the post of Mr Moodley,
yet the latter was still retained in the appellant’s employ. Mr
Snyman
submitted
that Mr Moodley understandably took over the operations clerk’s
duties previously performed by Mr Veloo. However,
there was no
evidence on record to clarify this aspect. In any event, the
appointment of Mr Charles as operations manager with
effect from 1
October 2004 - within a few weeks before the respondents’
formal discharge on 31 October 2004 – begs
the question why he
was appointed in the first place, as operations manager, whilst Mr
Moodley was occupying the same post. At
any rate, it is not clear why
the apparently unnecessary appointment of Mr Charles affected Mr
Veloo, after all, instead of Mr
Moodley, at least.
[49]
Similarly, Mrs Veloo had occupied the position of receptionist since
1 July 2002. The appellant’s own records also reflected
that a
Ms D St Clair-Wicker was appointed as receptionist with effect from
14 June 2004 “
to replace Joelene Paterson who was promoted
to sales executive”
. This then again begs the question why
the appellant did not retrench or offer a voluntary retrenchment
package to Ms St Clair-Wicker,
instead of Mrs Veloo. Anyway, I may
hasten to acknowledge that Mr S
nyman
prudently conceded that,
from the perspective of any retrenchment exercise affecting the
respondents, such retrenchment would, in
the circumstances of this
case, have been unfair.
[50]
Accordingly, I am satisfied that the Court
a
quo
was correct in its conclusion that “
the
rationale underlying [the respondents’] dismissal was more than
just a business decision”
and
that the appellant “
was
motivated by their joining of the union in deciding to retrench
[them]”.
In
so doing, the appellant acted contrary to section 5 of the LRA.
[19]
The fact that the appellant’s production labour force had long
been unionised and the fact that Ms Lind appeared to have
co-operated
with the union by arranging for deduction of union subscriptions
shortly after such request was made by the union did
not, in my view,
detract from the appellant’s real and antagonistic attitude
towards union membership of its administration
staff. For these
reasons, I am of the view that the Court
a
quo
was correct in finding that the respondents’ dismissals were
automatically unfair, by virtue of the appellant having violated
section 5 of the LRA in dismissing them.
Was
the relief of reinstatement appropriate?
[51]
The respondents asked for reinstatement. Indeed, that was the primary
remedy for their unfair dismissal.
[20]
In this regard, Mr
Snyman
submitted
that in the exercise of its discretion, the Court
a
quo
ought to have considered that the effluxion of time in finalising
this matter (i.e. the six year delay) constituted a
non-reinstatable
condition
justifying a departure from the primary remedy of reinstatement. He
submitted that at least an award of compensation would
have been
appropriate.
[52]
Mr
Snyman
referred us to the decision of this Court in
Mediterranean
Textile Mills v SACTWU and Others
[21]
in
support of his proposition that the order of reinstatement should not
be confirmed. In
Mediterranean
Textile Mills
this Court stated as follows
[22]
:
‘
By
its use of the word “
must”
in section 193(1)(a) of the LRA, the Legislature clearly intended
that upon the finding in a given case that the employee concerned
was
substantively unfairly dismissed, such employee
must
be reinstated, if the employee so wished, unless either or both of
the conditions referred to in paragraphs (b) and (c) of subsection
(2) of the said section (hereinafter, for the present purpose,
referred to as “the
non-reinstatable
conditions
”)
are present.
[23]
….
It is notable that in terms of the earlier decisions, section 193(2)
was construed as placing an
onus
on the employer to establish the existence of any of the
non-
reinstatable
conditions,
[24]
but since
Equity
Aviation
there has been a constitutional paradigm shift in this regard.
Rather than departing from the premise of a legal
onus
,
the focal point and overriding consideration in this enquiry should
be the underlying notion of fairness between the parties and
that
“[f]airness ought to be assessed objectively on the facts of
each case bearing in mind that the core value of the LRA
is security
of employment.”’
[25]
[53]
Indeed, the Court
a quo
was entitled to make a factual finding
on the issue of whether any of the so-called non-reinstatable
conditions existed, as envisaged
in section 193(2) of the LRA, which
would render an order for the reinstatement of the respondents
inappropriate. The Court
a quo
found that such conditions did
not exist. It is trite that an appeal court may not lightly interfere
with a trial court’s
discretion on factual finding unless the
appeal court is satisfied that such finding is based on misdirection
or is clearly wrong.
On the conspectus of evidence in this case, I
cannot fault the finding of the Court
a quo
in that regard,
for the reasons that follow.
[54]
In his evidence, Mr Miller could not deny the fact that the entire
current administration personnel (comprising some 11 employees)
were
appointed during 2005, that is, just after the dismissal of the
respondents. These positions, all in the appellant’s
administration department in Durban, were filled pursuant to some
numerous job advertisements which were published and circulated
internally, mostly during April 2005.
[26]
It would appear therefore that, despite the alleged economic
downturn, the appellant was still able to advertise for and fill
those administrative posts, which apparently included similar
positions as those vacated by the respondents.
[55]
Mr Miller testified that in the event of a reinstatement order being
granted, the appellant would need to make some alternative
arrangements to accommodate that situation; although he conceded that
he had not actually inquired into the practicability thereof.
On that
basis, nevertheless, there seemed to have been no evidence to suggest
that reinstatement of the respondents would be impracticable.
Further, from the appellant’s own version of its professed
tolerance of unionisation of staff within its workplace, the
continued employment of the respondents should not be a problem,
after all.
[56]
Granted, there has been a long delay in the finalisation of this
matter since the respondents’ dismissal on 31 October
2004.
However, the cause of such long delay cannot be attributed to the
respondents. There was evidence to the effect that during
the
pre-trial stage the appellant changed attorneys three times, which in
itself contributed to the delay. Further, it was not
in dispute that
on three previous occasions the trial had been adjourned twice at the
instance of the appellant and once at the
instance of the Court
a
quo
. In other words, in all these instances, the respondents were
not responsible for the delay, or for the matter not proceeding.
[57]
However, according to Mr
Snyman
there was an unexplained delay
of 2 years (between 2006 and 2008) which could not be accounted for
by either party and for which
the appellant should, therefore, not be
blamed. Of course, besides the instances referred to by Mr
Seery
as having contributed to the 6 year delay (i.e. from 2004 to 2010),
the Court was not presented with a chronology setting out specific
occurrences that contributed to the delay. On this basis, I agree
with Mr
Snyman
that it cannot rightfully be said that the
entire 6 year delay was attributable exclusively to the appellant. Be
that as it may,
there was no legal impediment present, as envisaged
in section 193(2) of the LRA, which justified a departure from the
respondents’
primary remedy of reinstatement, which they were
entitled to.
[58]
It was common cause that Mr Veloo acquired new employment, only three
months after his dismissal and that at the time he gave
evidence
(i.e. 7 October 2010) he was earning some R14 000 per month,
which was more than double his salary at the time of
his dismissal
from the appellant’s employ. It is settled that the Court has
discretion on the question of the extent of arrear
salary or back-pay
to be awarded to an unfairly dismissed employee, in light of the
circumstances of each case. In this instance,
the Court
a quo
took into account the fact that Mr Veloo’s financial loss as a
result of his unfair dismissal was mitigated by the earnings
received
by him from his new employment and the Court
a quo
ordered
that the amount of the earnings so received be deducted from his
back-pay in terms of the Court order. In my view, the
Court
a quo
properly exercised its discretion in this regard, in terms of its
consideration of fairness to both parties.
[59]
To my mind, the appeal must fail. In consideration of law and equity,
there should be no order as to costs of prosecuting the
appeal.
[60]
Accordingly, the following order is made:
1.
The appeal is dismissed.
2.
No costs order is made for prosecuting the
appeal.
Molemela
AJA
et
Sutherland AJA concur in the judgment of Ndlovu JA
______________________
Ndlovu
JA
APPEARANCES
:
FOR THE
APPELLANT:
Mr S Snyman
c/o
Snyman Attorneys
Parktown,
Johannesburg
FOR THE
RESPONDENTS:
Adv T Seery
Instructed
by Jay Reddy Attorneys
Morningside,
Durban
[1]
Act
66 of 1995.
[2]
CCMA Referral, a
t
p177 of the indexed record. The bottom part of this page (which
originally formed part of the bundle) was truncated and the
reference to the issue of union membership was not visible. The new
complete page was subsequently replaced, which reflected
the missing
portion.
[3]
(2000)
21 ILJ 142 (LAC).
[4]
1979
(3) SA 341 (N)
[5]
Andy’s
Electrical
,
at 346A-B; See also
Odendaal
v Du Plessis
1918 AD 470
;
Van
Breukelen en ’n Ander v Van Breukelen 1
966
(2) SA 285
(A) at 290C-H;
Blumberg
v Atkinson
1974 (4) SA 551
(T);
Paterson
Exhibitions CC v Knights Advertising and Marketing CC
1991 (3) SA 523
(A) at 528F-H;
Van
As v African Bank Ltd
(2005) 26 ILJ 227 (W).
[6]
See the appellant’s letter dated 16 September 2004, at
p159-160,Vol 2 of the indexed record.
[7]
See
the union’s letter dated 20 September 2004, at p162 Vol 2 of
the indexed record.
[8]
Section
200 of the LRA
[9]
Andy’s
Electrical
,
at 346B-C
[10]
See
para 12 above.
[11]
CCMA
Referral dated 30/10/04, at p177 of the indexed record.
[12]
Section187
of the LRA.
[13]
Driveline
Technologies
,
above.
[14]
Driveline
Technologies
,
a
t
para 64. See also:
Sondorp
and Another v Ekurhuleni Metropolitan Municipality
(2013) 34 ILJ 3131 (LAC);
[2013] 9 BLLR 866
(LAC), at para 51.
[15]
Driveline
Technologies; Sondorp,
above.
[16]
Item
3.5 of the Pre-Trial minute.
[17]
See
indexed record, at p106, Vol 2 (Para 6.5 of Pre-Trial Minute),
[18]
See
indexed record, at p237-8, Vol 3.
[19]
See also: Code of Good Practice: Dismissal ‘Operational
Requirements’,
Item
12(8).
[20]
Equity
Aviation Services (Pty) Ltd v Commission for Conciliation, Mediation
and Arbitration and Others
[2008]
29 ILJ 2507 (CC);
[2008] 12 BLLR 1129
(CC) at para 36.
[21]
Mediterranean
Textile Mills v SACTWU and Others
(2012)
33 ILJ 160 (LAC); [2012] 2 BLLR 142 (LAC).
[22]
Mediterranean
Textile Mills
,
at para 28.
[23]
Equity
Aviation,
at
para 33.
[24]
Kroukam
v SA Airlink
(Pty) Ltd
[2005] 12 BLLR 1172
(LAC) at 1203 para 94;
Rustenburg
Platinum Mines Ltd
(Rustenburg
Section) v CCMA and others
[2006] 11 BLLR 1021
(SCA) at para 45.
[25]
Equity
Aviation,
at
para
39.
[26]
See
indexed record, at pp191-236, Vol 3.