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[2015] ZALAC 27
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CMH Luxury Motors (Lyndhurst) Pty Ltd T/A Lyndhurst Auto v Motor Industry Staff Association and Another (JA65/14) [2015] ZALAC 27 (24 June 2015)
IN
THE LABOUR APPEAL COURT OF SOUTH AFRICA, JOHANNESBURG
Not reportable
Case no: JA 65/14
In the matter between:
CMH LUXURY MOTORS
(LYNDHURST) PTY LTD
T/A LYNDHURST
AUTO
Appellant
and
MOTOR INDUSTRY STAFF
ASSOCIATION
First Respondent
SANJEEV
CHOTAN
Second Respondent
Heard:
21 May 2015
Delivered:
24 June 2015
Summary: Reinstatement
of appeal and condonation for the late filing of practice note and
heads of argument – retrenchment
– employer contending
that employee agreeing to be retrenched – probabilities
favouring employee as to what led to
his retrenchment –
employer witness not credible - evidence proving retrenchment a
fait
accompli
– employee’s dismissal substantively and
procedurally unfair – Labour Court correct in favouring
employee’s
version – no merits on appeal - application
for condonation dismissed.
Coram: Waglay JP,
Ndlovu
et
Landman JJA
Neutral citation:
CMH
Luxury Motors (Lyndhurst) Pty Ltd v Chotan and Another
(LAC
:
JA 65/14)
JUDGMENT
LANDMAN JA
Introduction
[1] The appellant, CMH
Luxury Motors (Lyndhurst) Pty Ltd t/a Lyndhurst Auto, appeals against
the whole of the judgment of the Labour
Court (Gaibie AJ) that found
that Sanjeev Chotan, the second respondent, a member of the Motor
Industry Staff Association, the
first respondent, had been unfairly
retrenched and awarded him compensation and costs. The appeal is with
leave of the court
a quo
.
Reinstatement of the
appeal
[2] The appellant filed
an application for condonation and reinstatement in September 2014, a
further application for condonation
in April 2015 and a third
application in May 2015. The appellant was remiss in failing to
deliver timeously the record, the power
of attorney, its practice
note and heads of argument concerning the applications for
condonation.
[3] The appellant has
provided an explanation for its failure to comply with the Rules of
this Court and directives issued concerning
the appeal. The
explanations are not altogether satisfactory but, if the merits of
the appeal favour the appellant, condonation
should be granted. I
turn to consider the merits of the appeal.
The basic facts
[4] The second respondent
was a trained motor vehicle diagnostic technician. He was employed by
the appellant as a workshop foreman
in what was known as the
appellant’s Formula 1 and Mini workshop. He had been in the
employ of the appellant for just less
than a year. Mrs Natasha
Petersen, a consultant and after Sales Manager, was assigned by the
holding company to deal with problems
at the appellant’s
dealership. By 24 May 2011, she had investigated certain matters and
drafted a new structure for the dealership.
[5] On 24 May 2011, she
spoke to the second respondent and handed him a letter advising him
that the appellant was restructuring
and that he could possibly be
retrenched. She also followed the same procedure as regards Ms
Silvaggi (now Mrs Dos Santos), a booking
clerk. No other employees
were in danger of being affected by the proposed restructuring.
[6] It is the appellant’s
case that on 24 May 2011, the second respondent informed Mrs Petersen
that he no longer wanted to
work there and that she should seek a
position for him elsewhere in the group. He was dismissed on 2 June
2011.
[7] Notwithstanding the
narrow issues, the parties generated a record of 628 pages and the
appellant and the respondents filed heads
for the purposes of this
appeal of 31 pages and 121 pages respectively.
The judgment of the
court a quo
[8] The court
a quo
dealt with the matter succinctly. The court found that prior to the
interview on 24 May 2011, the appellant had decided to retrench
“non-productive staff” and that either Ms Silvaggi or the
second respondent would be retrenched. The organogram drafted
by Mrs
Petersen showed that the second respondent’s post would be
abolished and replaced by a newly created lower level post
of junior
workshop controller. The restructuring process was a
fait accompli
when the second respondent was given the letter on 24 May. The
trade union, the first respondent, was not informed of the
restructuring
process. The court
a quo
found that the
appellant had not proved that the second respondent agreed to be
retrenched. The court
a quo
found that the dismissal was
procedurally and substantively unfair and awarded the second
respondent compensation equivalent to
12 times his monthly
remuneration and costs.
The grounds of appeal
[9] Reading through the
appellant’s heads, the following complaints about the judgment
emerge. It is alleged that the court
a quo
erred:
(a)
in
finding that the retrenchment was a
fait
accompli
.
(b)
in
rejecting the evidence of Mrs Petersen.
(c)
in
not rejecting the evidence of the second respondent.
(d)
in
not finding that, even if the decision was final, the second
respondent was not prevented from persuading the appellant that
there
were other viable and acceptable alternatives to retrenchment.
(e)
in
failing to find that the second respondent volunteered for
retrenchment.
(f)
in
awarding compensation to the second respondent.
[10]
Mr Van der Westhuizen, who appeared on behalf of the appellant,
directed his main
challenge to the finding by the court
a quo
that the second respondent did not tell Mrs Petersen that he did not
wish to be employed by the appellant but asked whether there
was
another place for him in the Group. The court
a quo
rejected
Mrs Petersen’s evidence and found the second respondent’s
evidence to be credible.
Evaluation: Did the
second respondent decline to work at Lyndhurst?
[11] In evaluating the
evidence of the witnesses on the issue whether the second respondent
indicated that he no longer wished to
work at Lyndhurst, I do so
against the background of all the evidence tendered during the trial.
[12] On 24 May 2011,
during what Mrs Petersen describes as a quick meeting, she handed a
letter to the second respondent which advised
him that there was a
possibility that he would be retrenched and that the process would be
completed by 31 May. According to Mrs
Petersen, she said to the
second respondent that he must bring his ideas to prevent his
retrenchment to the meeting on 30 May.
He, in turn, said to her that
she should speed up the process as he no longer wanted to work at
Lyndhurst Auto. He also asked her
to please find him another position
within the Group. She asked him to give her his CV and he undertook
to do so the following
day. She asked him what position would he
require and he replied that he sought a position as a service
advisor. The second respondent
then left her office and went to the
service adviser for Formula 1, Mrs Chetty. Mrs Chetty fainted when he
showed her the letter.
[13] Mrs Petersen said
she received the second respondent’s CV on 24 or 25 May and she
told him that she would talk to Mr
Roger Manthey, an external HR
consultant, about finding a possible position for him. She said he
handed the CV to her. The proposed
meeting on 30 May was cancelled as
Mrs Naidoo, an employee of the HR consultant, was not available that
day.
[14] She received, by
email, information about vacancies in the Group. She mentioned the
vacancy for a service advisor in Hatfield
Pretoria to the second
respondent on 31 May at the lift. He said it was too far from where
he lived in Lenasia.
[15] The second
respondent submitted a form requesting two days leave in the week
following 31 May. She declined it because it was
on short notice. The
second respondent approached her and said she is slowing down the
process and stopping him from going to Durban
for interviews.
[16] She advised the
second respondent and Ms Silvaggi that there was to be a meeting on 1
June. At this meeting, she informed them
that the retrenchment would
continue and that the second respondent’s last day would be the
next day. Ms Silvaggi accepted
the position of junior workshop
controller. The second respondent was instructed to effect the
handover to her and explain certain
functions to her. He then left
the office.
[17] The second
respondent did as he was instructed and before noon on 2 June, he
reported to Mrs Petersen and said he was leaving.
He would return on
Monday to collect his documentation. But she did not see him again.
[18] The second
respondent, who testified before Mrs Petersen did, denied that he had
said he did not want to work at Lyndhurst.
He did not request her to
find him another position. She did not ask for his CV. He did not
provide his CV to her. He requested
leave and queried its refusal but
did not say to her that she is slowing down the process or stopping
him from going for interviews.
He did inquire about the cancellation
of the meeting. Mrs Petersen told him he would know his fate by the
end of the next day.
This utterance was not challenged in
cross-examination.
[19] Mrs Petersen did not
keep a note of the alleged conversations. No emails between her and
Mr Manthey were disclosed. It was
put to the second respondent that
she inquired about a position for him but in her evidence she said
she became aware of the Hatfield
position through an email circulated
within the Group. The alleged CV was not discovered. Mrs Petersen
informed Ms Silvaggi that
the second respondent had resigned. Some of
the propositions put to the second respondent as to what Mrs Petersen
would say were
refuted when she testified eg that severance pay was
discussed on 2 June. Other relevant aspects of her evidence were not
put to
the second respondent. It was not put to him that on 31 May,
he asked Mrs Petersen why she was slowing down the process and
stopping
him from going to interviews in Durban. Later, Mrs Petersen
said that she does not remember whether the second respondent asked
her on 31 May when he was going to hear from her and when they would
be proceeding with the meeting.
[20] Apart from the
testimony of Mrs Petersen, the appellant tendered some evidence to
demonstrate that the second respondent was
unhappy and was seeking
other employment. The appellant sought to draw corroboration for Mrs
Petersen evidence that the second
respondent said he no longer wanted
to work there. Mrs Ramman was one such witness but her testimony is
unreliable in several respects.
It is unsafe to drawn this inference
and in any event even if the second respondent was not entirely happy
at Lyndhurst Auto, it
cannot be found that he wanted to leave without
the prospect of another position.
[21] This issue depends
upon the credibility of the two principal witnesses. The court
a
quo
accepted the evidence of the second respondent and rejected
the evidence of Mrs Petersen. There are no grounds for doubting the
correctness of these findings. There is ample evidence of the
unreliability of Mrs Petersen’s testimony and unexplained
discrepancies between the case put to the second respondent and her
evidence. Consequently this ground of appeal must fail.
Fair retrenchment
[22] Strictly speaking,
it is unnecessary to canvas the remaining issues because the second
respondent was not meaningfully informed
of the reasons for the
retrenchment and consequently was not placed in a position, nor given
the time; nor the opportunity to suggest
alternatives. This
deficiency could not be cured at the trial although considerable time
and effort was expended on it. Nevertheless
I shall briefly address
these issues.
[23] Mrs Petersen
established that the appellant had one so-called “non-productive”
person more than the Group bench
mark indicated it should have had.
The result is that one “non-productive” person would have
to go.
[24] Mrs Petersen
identified a problem with processing of job cards as regards the
second respondent’s workshop that impacted
on warranty claims.
But the second respondent was not told about this nor given an
opportunity to defend himself. Mrs Petersen
said that the customer
satisfaction index showed complaints about the Mini workshop services
but conceded that the second respondent
could not be blamed for this.
Later she retracted this concession.
[25] Mrs Petersen said
that the service department of the appellant (that of the second
respondent and the other foreman) made a
loss; their productivity was
low. No investigation into poor performance regarding second
respondent had been conducted. The productivity
issue was not
discussed with him at company level.
[26] The appellant had
two workshop foremen; the second respondent and another. It was
decided that in future one foreman would
be sufficient. A template
was altered on 1 May 2011 depicting this. The appellant decided that
it would retain the other foreman.
Mrs Petersen said that the other
foreman had better qualifications than the second respondent had. She
did not discuss this with
the second respondent. This was also not
put to him under cross-examination. The second respondent was not
asked for comment on
this issue.
[27] At the meeting on 24
May 2011, Mrs Petersen knew that it had been decided that either the
second respondent or Ms Sivaggi would
have to be retrenched. It seems
that the second respondent earned more than Ms Sivaggi. Mrs Petersen
did not disclose that the
structure after retrenchment would exclude
his position. She did not discuss the customer satisfaction index
with him. There was
no alternative position for him. She said the
appellant also did not consider bumping a service advisor, a
technician and a booking
clerk (each having lesser service than the
second respondent) in order to retain the second respondent. She did
not offer the position
of junior workshop controller to him. But it
was her view that the second respondent could have persuaded the
appellant to find
an alternative position for him. This is simply not
credible.
[28] The appellant
decided that Ms Silvaggi would perform the clerical side of the
second respondent’s workshop functions.
The appellant required
the second respondent to give her basic training on an aspect of his
job function before he left. After
the second respondent had been
dismissed, the appellant hired one Van Heerden as workshop controller
to perform a similar function
as the second respondent had done. Van
Heerden was remunerated at R17 500 pm; this remuneration was
comparable to that paid to
the second respondent.
[29] The appellant did
not take the second respondent into its confidence about the need to
restructure. He may have been able to
explain, as he did during the
trial, why a qualified mechanic was needed to perform his function.
His explanation may have convinced
the appellant not to dispense with
his services.
[30] Nothing, save for a
remark in passing at the lift about a position at Hatfield, was said
or done to accommodate the second
respondent. All the evidence points
to the dismissal of the second respondent being a
fait accompli
before the letter of the proposed restructuring was handed to him.
[31] The retrenchment was
substantively and procedurally unfair.
The award of
compensation
[32] The appellant
submits that the award of compensation equivalent to 12 months’
salary is excessive. No suggestion is made
in the heads as to what
would be a suitable amount but counsel submitted that an amount
equivalent to six months remuneration would
have sufficed. The
appellant complains that the court
a quo
did not provide
reasons for granting the full extent of compensation permitted by the
Labour Relations Act 66 of 1995
. But the second respondent’s
evidence is that he was unable to obtain employment for a period of
12 months. The appellant’s
answer to this is that the second
respondent was employed by the appellant for less than a year and
that his evidence that he was
unable to find employment is “seriously
questionable”. When the second respondent told his
cross-examiner that he had
emails concerning his job hunting, his
cross-examiner took the view that they had not been discovered.
[33] The appellant is at
pains to point out to this Court that the second respondent was paid
one week’s compensation more
than required but concedes this
was payable in terms of the collective agreement. The second
respondent was also paid two weeks’
notice pay more than he was
entitled to. It does not appear that this was conveyed to the court
a
quo
.
[34] I may have
considered that slightly less than 12 month’s compensation
would have been appropriate but it has not been
shown that the court
a quo
did not decide this issue judicially on the basis of the
evidence and representations made to it.
[35] It follows that as
there are no merits in the appeal, the applications for condonation
should be refused.
Order
[36] In the result I make
the following order:
“
The
applications for condonation are dismissed with costs but the costs
associated with the respondent’s heads of argument
are limited
to the costs of drawing 30 pages of heads.”
_______________
A A
Landman
Waglay
JP and Ndlovu JA concur in the judgment of Landman JA
APPEARANCES:
FOR THE
APPELLANT:
Adv Van Der Westhuizen
Instructed
by Crafford Attorneys
FOR THE RESPONDENTS:
Mr Gerrie Ebersöhn of Gerrie Ebersöhn Attorneys