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[2016] ZALAC 53
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Havemann v Secequip (Pty) Ltd (JA91/2014) [2016] ZALAC 53 (22 November 2016)
IN THE LABOUR
APPEAL COURT OF SOUTH AFRICA, JOHANNESBURG
Case no: JA 91/2014
In the matter between:
WYNAND WILHELMUS
HAVEMANN
Appellant
and
SECEQUIP (PTY)
LTD
Respondent
Heard:
16 August
2016
Delivered:
22 November 2016
Summary:
Dismissal of appellant on grounds of operational
requirements
following the transfer of business as a going concern found not
automatically unfair under s 187(1)(g) by the Labour
Court, with
alternative claims of procedural and substantive unfairness dismissed
with costs. On appeal held that dismissal not
automatically unfair
but with alternatives to retrenchment not appropriately considered, a
process of meaningful joint consensus-seeking
had not occurred and
dismissal on grounds of operational requirements was substantively
unfair. Compensation of six months ordered
with costs.
Coram: Waglay JP, Savage
et
Phatshoane AJJA
JUDGMENT
SAVAGE AJA
Introduction
[1]
This is an appeal, with the
leave of this Court, against the judgment of the Labour Court
(Maenetje AJ) in which the appellant’s
claim that his dismissal
was automatically unfair and his alternative claim that his dismissal
on grounds of operational requirements
was both procedurally and
substantively unfair were dismissed with costs.
[2]
The appellant, Mr Wynand
Wilhelmus Havemann, was employed by Texecom SA as its Regional
Manager, Gauteng from 1 May 2004. On 1 April
2010 the business of
Texecom SA was transferred to Secequip Supplies (Pty) Ltd as a going
concern in terms of s197 of the Labour
Relations Act (LRA). The
appellant was transferred into the position of Group Operations
Director and served as a member of the
Secequip Board of Directors
and Executive Committee. On 1 October 2011, the business of Secequip
Supplies was transferred as a
going concern to Greater Gauteng Alarm
Networks (Pty) Ltd, trading as Secequip Supplies (Pty) Ltd (the
respondent), a wholly owned
subsidiary of Amalgamated Electronic
Corporation Ltd (Amecor). The appellant’s contract of
employment was transferred under
s 197 to the respondent into the
same role but re-designated as Operations Manager.
[3]
During a meeting of
shareholders on 25 November 2011, the appellant was requested by the
respondent’s managing director, Mr
John Rogers, to grant Mr
Rogers his proxy to vote on the acquisition of shares by the
respondent from Mr Rogers and Mr Brian Anderson.
The appellant
refused to provide the proxy and in due course voted against the
resolution.
[4]
At a management meeting on 23
January 2012 a new company structure proposed by Mr Rogers was
adopted. In the new structure, which
was to be implemented by 1
February 2012, the appellant retained the position of Operations
Manager but Johannesburg-based staff
no longer reported to him.
[5]
On 30 January 2012 the
respondent gave all employees notice of its intention to rationalise
operations following a 50% drop in profit
over a six-month period. In
an email on the same day Mr Rogers asked to meet the appellant on 1
February 2012 so as to define his
role going forward.
[6]
On 31 January 2012 in a letter
headed “Restructure” the appellant was informed that his
reporting structure would change
on 1 February 2012 and that he would
report to Mr Rogers. A letter also dated 31 January 2012 and headed
“Notice of Consultation”
was received by the appellant in
which he was informed that his position may be affected by the
restructure and that the respondent
sought to consult with him on 1
February 2012 so as to avoid the need to restructure and/or retrench
employees.
[7]
Three meetings were held
between Mr Rogers and the appellant. At the first meeting on 1
February 2012 Mr Rogers informed the appellant
that Amecor had not
previously employed and did not need an Operations Manager given that
Mr Keith Vieira was employed as the Group
Operations Director of
Amecor. Mr Rogers indicated that the appellant was not being
retrenched but that his package needed to be
restructured from R60
000 per month to a lower basic salary of R15 000 plus commission. The
appellant enquired into the selection
criteria used to identify
employees for salary reduction and was advised that top earners,
being the appellant, Mr Chris Bell and
Mr Ahmed Bhabha, had been
identified together with three other employees, including contract
staff.
[8]
At the second meeting with Mr
Rogers on 24 February 2012 the salary restructure was again
discussed, with Mr Rogers indicating that
the salaries of employees
earning more than R15 000 per month needed restructuring due to the
company’s poor sales performance.
The appellant proposed as an
alternative that all employees take a 10% salary cut to prevent
retrenchments, indicating that he
was only prepared to participate in
the proposed salary reduction scheme if all employees were involved.
Mr Rogers undertook to
work on some numbers which he was to present
to the appellant on 27 February 2012.
[9]
At the third meeting on 27
February 2012 the appellant was told that his 10% salary reduction
proposal was not accepted by all employees
earning more than R30 000
per month, that there was no alternative but to inform him that his
position was redundant and that the
only alternative position
available was a Sales Executive CCTV position based in Pretoria (CCTV
position) with a monthly salary
of R12 700 plus commission.
[10]
On 1 March 2012, a written
offer was left on the appellant’s desk in which he was given
until 2 March 2012 to inform the respondent
if he intended to accept
the CCTV position, failing which he would be given one month’s
notice of termination of his services.
The appellant, who lacked a
sales background and lived in Meyerton which is a distance from
Pretoria, indicated that he would not
accept the offer. He was not
required to attend at work from 5 March 2012 until the date of
termination of his employment on 31
March 2012. There is no dispute
that a junior debtor’s clerk was the only other employee
retrenched at the time.
[11]
On 17 April 2012 the appellant
referred an unfair dismissal dispute to the Commission for
Conciliation Mediation and Arbitration
(CCMA) for conciliation and
thereafter to the Labour Court for adjudication. He claimed that his
dismissal was automatically unfair
in that in terms of s 187(1)(g) of
the LRA it related to “a transfer, or a reason related to a
transfer, contemplated in
section 197 of 197A”. In the
alternative, the appellant claimed that his dismissal arose as a
result of an ulterior purpose
and was
mala
fide
. As a further
alternative, the appellant alleged that his dismissal on grounds of
operational requirements was substantively unfair
in that it was for
reasons unrelated to the respondent’s operational requirements,
alternatively without valid, bona fide
or fair reason. The appellant
also took issue with the procedural fairness of his dismissal on the
basis that the provisions of
s189(3) of the LRA had not been complied
with, the respondent had not consulted with him in the
bona
fide
manner required and
there had not been a meaningful joint consensus-seeking process
engaged in, alternatively that the selection
criteria used had not
been agreed between the parties and were not fair and objective.
Judgment of the Labour Court
[12]
Maenetje AJ found that the
appellant had failed to prove that his dismissal was automatically
unfair in that the reason for his
dismissal was not related to a
transfer in terms of s187(1)(g). By virtue of the operation of s197,
the Court found that the appellant’s
contract of employment was
automatically transferred to the respondent and that that it was only
when it became evident that cost
cutting was required to improve
profitability that retrenchment was contemplated.
[13]
Turning to the claim that the
appellant had been victimised for refusing to provide a proxy to Mr
Rogers related to the proposed
acquisition of shares from Mr Anderson
and Mr Rogers, the Court found that no victimisation had taken place
since two other employees
remained employed despite them also not
supporting Mr Rogers on the issue.
[14]
Concerning the dismissal of the
appellant on grounds of operational requirements, the Court found
that his retrenchment was substantively
fair on the basis of the
evidence of Mr Bell and Mr Rogers that the increased costs of doing
business and drop in profits required
cost-cutting measures to be
adopted. While the appellant rejected the restructured salary package
offered to him, Mr Bell and Mr
Bhabha who were in a similar position
to him had accepted restructured packages as part of such
cost-cutting measures.
[15]
The Court found that the
appellant’s dismissal was procedurally fair with adequate
consultation for purposes of section 189
having taken place. The
Court found that “(t)he counterproposal of 10% salary reduction
could only imply a rejection by Havemann
of the option of reducing
his basic salary to R15 000.00, with the rest of his income to be
derived from commission.” When
the 10% salary reduction option
was rejected, the appellant was informed that his position would be
redundant and that his retrenchment
would follow unless he was
willing to accept the Pretoria CCTV position available. This
alternative was found not to have been
unreasonable when in his
operations role the appellant had worked with sales people and the
respondent had offered assistance to
the appellant in the position
given his lack of direct sales experience. Although he would have
earned less in the sales position,
the Court took the view that
dismissal would have been avoided in circumstances in which the
appellant had presented no evidence
of an acceptable alternative
available to him.
[16]
The appellant’s claim was
consequently dismissed with costs.
Issues in the appeal
[17]
The appeal against the judgment
of the Labour Court turns on whether that Court erred –
17.1
in finding that there was no
merit in the appellant’s claim that his dismissal had been
automatically unfair in terms of s187(1)(g)
of the LRA;
17.2
in finding, in respect of the
appellant’s alternative claim, that his dismissal had not been
based on ulterior motives under
the guise of operational
requirements;
17.3
in finding, in respect of his
further alternative claim, that his dismissal on grounds of
operational requirements had been both
procedurally and substantively
fair; and
17.4
in imposing costs against the
appellant when he had acted neither vexatiously or frivolously in
prosecuting his claim.
Discussion
Automatically unfair dismissal
[18]
A dismissal is automatically
unfair if the reason for the dismissal is, in terms of s187(1)(g), a
transfer or a reason related to
a transfer as contemplated in s197 or
197A. The applicant is required in such a claim to prove the
existence of a dismissal and
establish that the underlying
transaction is one that falls within the ambit of
s197
.
To do so requires that the applicant adduces some credible evidence
that shows that the dismissal is causally connected to the
transfer.
This is an
objective enquiry to
be conducted with reference to all of the relevant facts and
circumstances.
[1]
[19]
The evidence before the Labour
Court was that the respondent embarked upon a restructuring and
cost-cutting exercise in order to
improve its profitability and
reduce its costs following a drop in profits over the previous
six-month period. This six-month period
spanned both the period
before and after transfer of the business, with the difficult trading
conditions that existed before transfer
continuing to exist after
transfer. While the proximity of the dismissal to the date of the
transfer is a relevant factor, it is
not determinative. Having regard
to the evidence put up, the Labour Court cannot be faulted for its
conclusion that the appellant’s
dismissal was not causally
connected to the transfer. The evidence showed that the true reason
for the appellant’s dismissal
was the respondent’s
operational requirements. There was no indication that the dismissal
would not have taken place but
for the transfer; nor that the
transfer was the main, dominant, proximate or most likely cause of
the dismissal.
[20]
It follows that the Labour
Court found correctly that the dismissal of the appellant was not
automatically unfair under the provisions
of s187(1)(g).
Dismissal on account of ulterior
motive or mala fide reasons
[21]
In his statement of case, the
appellant claimed in the alternative that his -
‘…
dismissal
was substantively unfair in that the Respondent terminated the
Applicant’s employment on account of an ulterior
motive or
ulterior motives or for mala fide reasons under the guise of a
dismissal for operational requirements of the Respondent
’
[22]
The ulterior motive relied upon
related to the appellant’s refusal to provide Mr Rogers with a
proxy in relation to proposed
resolutions concerning the acquisition
of shares from Mr Brian Anderson and Mr Rogers. While the appellant
testified that he “felt
victimised” and was “walloped”
and “nailed” by Mr Rogers, no facts were put up by him to
substantiate
his allegation of victimisation.
[23]
The Labour Court’s
finding cannot be faulted that the evidence before the Court did not
show that the appellant was victimised
as a result of his conduct in
relation to the proposed resolutions or that his dismissal was
motivated in this regard by ulterior
purpose or
mala
fides
. It was of direct
relevance that two other employees, Mr Shaun Kaplan and Mr Vaughn
Tempelhoff, who had taken a similar stance
to the appellant did not
share a feeling of victimisation and were not dismissed with Mr
Kaplan in fact promoted. No evidence placed
before the Labour Court
indicated that any other ulterior purpose or
mala
fides
existed or that an
occupational impediment had been suffered by the appellant as a
result.
[24]
It follows that the Labour
Court did not err in rejecting the appellant’s alternative
claim that his dismissal was motivated
by ulterior motive or
mala
fide
conduct under the
guise of a dismissal on grounds of operational requirements.
Dismissal on grounds of operational
requirements
[25]
Turning to the fairness of the
appellant’s dismissal on grounds of operational requirements,
the appellant’s further
alternative claim was that his
dismissal was unfair in that “the Respondent had no valid
and/or fair and/or bona fide reason
to terminate [his] employment”.
[26]
Section 192(2) requires the
employer to prove, on a balance of probabilities, the fairness of its
decision to dismiss. S188 read
with s189 recognises the employer’s
right to dismiss on grounds of its operational requirements where
there is a fair reason
for the dismissal and the dismissal is
undertaken in accordance with a fair procedure. This requires that an
employer prove on
a balance of probabilities the cause or reason for
the dismissal; the defined operational requirements that the
dismissal was based
on; the facts upon which a finding that the
dismissal was substantively fair can be made; and that a fair
procedure in accordance
with s 189 had been complied with.
[2]
[27]
The term “operational
requirements” is defined in s 213 to mean “requirements
based on the economic, technological,
structural or similar needs of
an employer’. Item 1 of the Code of Good Practice makes it
clear that “(a)
general
rule, economic reasons are those that relate to the financial
management of the enterprise. Technological reasons refer
to the
introduction of new technology that affects work relationships either
by making existing jobs redundant or by requiring
employees to adapt
to the new technology or a consequential restructuring of the
workplace. Structural reasons relate to the redundancy
of posts
consequent to a restructuring of the employer’s enterprise”.
[3]
[28]
A fair reason is one that is
bona fide
and rationally justified,
[4]
informed by a proper and valid commercial or business rationale.
[5]
The enquiry is not whether the reason put up is one which would have
been chosen by the court but whether the reason advanced considered
objectively is fair.
[6]
[29]
The respondent’s evidence
was that its profits had declined over the previous six-month period,
spanning both before and after
the transfer of the business which
required cost-cutting measures to be implemented in order to improve
profitability. The appellant
did not dispute or challenge this
evidence and there was nothing before the Labour Court to suggest
that the restructure and possible
retrenchment process embarked upon
was not based on a
bona fide
rational commercial and operational need to cut costs so as to
improve profits. It follows that considered objectively on the
evidence before the Court this decision was reasonable,
bona
fide
and informed by a
proper and valid commercial rationale.
[30]
Section 189(1) requires that
the employer, when contemplating the dismissal of one or more
employees for reasons based on the employer's
operational
requirements, consult the employees likely to be affected.
[7]
S 189(2)
[8]
requires a meaningful joint consensus-seeking process with the
parties engaging constructively in an attempt to agree on appropriate
measures
inter alia
to
avoid and minimise dismissals; and identify the employees to be
retrenched. This requirement has both a procedural and a substantive
content. The proper approach of the Court is to ascertain whether the
purpose of the section, being the occurrence of a joint
consensus-seeking process, has been achieved.
[9]
[31]
Consultation must be genuine
and may not be a sham with the purpose of seeking alternatives to
dismissal being to avoid dismissal
if reasonably possible.
[10]
Doing so requires that alternatives put forward by consulting parties
should be appropriately considered, with the employer obliged
by
s189(6) to respond to those alternatives to dismissal proposed by an
employee or consulting party. In
SACWU
v Afrox Ltd,
[11]
it was stated that:
‘
If
an employer wishes to show that it considered appropriate options
other than dismissal it must present evidence to that effect
and
explain why it chose a particular course and not another. If an
employee wishes to challenge that evidence it must do so by
proper
cross-examination on the relevant issues and, if considered
necessary, by leading rebutting evidence. If this shows up the
untenability of the employer’s position, it will have a
material effect on the final assessment of fairness . . .
As assessment on ‘moral’ considerations not based on
evidence led at the trial will be impermissible.’
[12]
[32]
A key purpose behind
consultation is the protection of employment, with security of
employment being a core constitutional value
protected through the
LRA.
[13]
In
Supergroup Trading (Pty)
Ltd v Janse van Rensburg
[14]
this Court criticised the consultation undertaken by an employer as a
“charade” and “purposeless insofar as it
deprived
the Respondent of a chance to save his post or avoid his being
selected for retrenchment. His representations on that
score were to
be fruitless because restructuring was a
fait
accompli
.” It was
emphasised that –
‘…
the
purpose
of consultation is to try and save a job or position. If this cannot
be done the next aim is to avoid dismissal by placing
the person,
whose post has become redundant, elsewhere. And if avoidance is not
possible consultation concerns the extent to which
the consequences
of the retrenchment can be mitigated
.’
[15]
[33]
In
Chemical
Workers Industrial Union and Others v Latex Surgical Products (Pty)
Ltd,
[16]
this Court distinguished between fairness in a general and specific
sense in asking whether there was a fair reason for the dismissal
of
any employees and for specific employees in particular. While a
retrenchment process may be legitimate insofar as there exists
a
bona
fide
commercial rationale
to restructure, where alternatives to the dismissal of an employee
exist these are to be considered in a meaningful
fashion by the
consulting parties. These are to be judged on their merits based on
the evidence before the Court. Fairness dictates
that the solution
which preserves jobs is to be preferred over the one that does
not.
[17]
This is so in that it is unfair to choose retrenchment where another
rational solution exists which can
satisfactorily address the operational need to retrench.
[34]
The respondent gave written
notice on 30 January 2012 to all employees of its intention to
rationalise operations following management
approval of a new
organisational structure on 23 January 2012. On 31 January 2012 the
appellant received a letter headed “Restructure”
in which
he was informed that:
‘
As
per the restructure discussed at the Management Meeting on Monday, 23
January 2012, your reporting structure will change as of
tomorrow, 1
February 2012, reporting to John Rogers...Our immediate challenge is
to get sales and GP’s back up to expected
levels…’
[35]
The second letter headed
“Notice of Consultation” received by the appellant on 31
January 2012 informed him that his
position may be affected by
contemplated restructuring and/or retrenchment and that he was to be
consulted in this regard. This
letter constituted written notice
inviting consultation as envisaged by s 189(3). It referred to the
letter of 30 January 2012
and continued that –
‘
As
mentioned the economic downturn and poor trading climate requires
that we introduce changes in Secequip in order to improve the
financial position of the company. It appears as though we may have
to cut down on employee numbers and/or restructure.
Although
no final decisions have been made yet you and the position you
currently occupy may well be affected. We, however first
wish to
consult you with a view to either avoiding the need to restructure
and/or retrench or alternatively minimizing the number
of possible
retrenchments, changing the timing thereof as well as mitigating the
effect on those affected.
The
following will be dealt with at the consultation:
·
The
reasons for the need to reduce costs by rationalization, restructure
and/or retrenchment.
·
Alternatives.
·
Method
of selection.
·
Severance
pay (where applicable).
·
Proposed
assistance to retrenchees (where applicable).
·
Possibility
of future re-employment (where applicable).
·
Number
of employees affected.
·
Past
retrenchments…’
[36]
The letter assured in
conclusion that “the meeting will be held in a spirit of joint
problem-solving”.
[37]
During the ensuing
consultations between Mr Rogers and the appellant on 1, 24 and 27
February 2012, three alternatives were discussed.
The first was
advanced by Mr Rogers who informed the appellant that his
retrenchment was not contemplated but that “we just
need to
restructure your package to a lower basic and a higher commission”.
This option sought the appellant’s consent
to a salary
reduction from R60 000 per month to R15 000 per month plus
commission. (In due course it became apparent that two other
employees, Mr Bell and Mr Bhabha, had agreed to a pay reduction
although in respect of at least one this reduction was not
implemented,
while the other in due course resigned.) As an
alternative to the first option, the appellant advanced a second
option on 24 February
2012 that all employees accept a 10% salary
reduction. The third option took the form of an offer made to the
appellant of an alternative
position in Pretoria, a distance from his
Meyerton home, as Sales Executive CCTV earning R12 700 per month plus
commission.
[38]
Fairness requires that the
alternatives to dismissal proposed in good faith by consulting
parties are reasonable having regard to
the employer’s
operational requirements.
[18]
An employee is not required to accept a change to terms and
conditions of employment simply because a change to employment terms
and conditions is advanced as an alternative to dismissal.
[19]
In the context of a meaningful joint consensus-seeking process, a
change to terms and conditions proposed as an alternative to
dismissal must be reasonable when judged on its merits based on the
evidence before the Court. If it is not, the risk arises that
the
conclusion may be drawn that meaningful consensus has not been sought
with appropriate alternatives to dismissal overlooked.
[39]
While both Mr Bhabha and Mr
Bell faced a salary reduction, the respondent provided scant rational
basis for singling out three employees
from a number of senior
employees for such a dramatic change to their terms and conditions of
employment or for the proposal that
the appellant accept a dramatic
75% salary cut. Furthermore, with the profit constraints faced by the
respondent the suggestion
that the loss in salary could be made up by
commission earned was unsubstantiated. The 75% salary reduction
option was a dramatic
change to terms of employment. Judged on its
merits from the evidence before the Court
a
quo
it was not shown to be
a rational and
bona fide
alternative aimed at trying meaningfully to save the appellant’s
position, as opposed to one which sought to force his hand.
This
conclusion is bolstered by the respondent’s attitude to the
appellant’s proposal of an across the board 10% salary
reduction. The evidence showed that the respondent provided a bland
rejection of the appellant’s 10% proposal, without evidence
that it had engaged meaningfully with this proposal as a reasonable
alternative.
[40]
The third option of the CCTV
position, while the only vacant position on the respondent’s
infrastructure, required the appellant
to accept an even greater
reduction in salary with the hope that the remainder of his salary
loss would be made up by commission
from sales. This position too
would have resulted in a very substantial change to the appellant’s
terms and conditions of
employment. While it constituted an
alternative to retrenchment, it was not a rational or reasonable one
on the facts given that
the post was substantially junior to his own
and when regard is had to further considerations of practicality and
expertise required
for the position.
[20]
[41]
While it is permissible to
retrench in order to cut costs so as to improve profitability,
[21]
or as a consequence of the reorganisation of a business,
[22]
the dismissal must accord with the requirement of fairness
contemplated in s189. The proper approach is to determine whether the
purpose of the section, being meaningful joint consensus-seeking, has
been achieved.
[23]
This required the respondent to show that it appropriately considered
alternatives to dismissal so as to avoid and minimise the
effects of
retrenchment.
[24]
[42]
While the fact that the Court
would have preferred a particular alternative to dismissal does not
in itself render the dismissal
unfair, the dismissal risks being
unfair where consensus has not been sought in a process which
considers reasonable alternatives
in an appropriate and meaningful
manner.
[43]
The evidence showed that the
consensus-seeking process engaged in by the respondent was flawed.
This is so in that the respondent
failed to engage in a meaningful
manner with the appellant concerning reasonable alternatives to
dismissal. It relied on alternatives,
which considered on their
merits, were not reasonable given that they were premised on a
dramatic amendment to terms and conditions
of employment, while
rejecting the reasonable alternative proposed by the appellant
without further engagement. The result was
that the respondent failed
to prove that meaningful joint consensus-seeking had occurred. This
coupled with the failure to produce
sufficient evidence to justify
the selection of the three employees singled out for salary reduction
resulted in the respondent’s
failure to prove that the
dismissal of the appellant was substantively fair.
[44]
In his statement of case the
appellant detailed that his dismissal was procedurally unfair in
that:
‘
5.3.1
The Respondent failed to comply with the provisions of section
189(3) of the LRA, either substantially or at all.
5.3.2
The Respondent failed to consult with the Applicant on the redundancy
of his position, as it was obliged in law to do.
5.3.3
The Respondent failed to engage with the Applicant in a meaningful
joint consensus-seeking process in an attempt to reach
consensus with
the Applicant in a bona fide manner or at all in respect of the
issues as contemplated in section 189 of the LRA,
particularly in
respect of:
5.3.3.1
the reasons for the retrenchment;
5.3.3.2
appropriate measures to avoid the retrenchment and alternatives to
the retrenchment considered by the
Respondent before proposing the
retrenchment and its reasons for rejection each of those
alternatives;
5.3.3.3
the proposed method of selecting employees to be retrenched;
5.3.3.4
the timing of the retrenchment;
5.3.3.5
the possibility of future re-employment;
5.3.3.6
severance pay;
5.3.3.7
measures to alleviate the adverse effects of the dismissal.
5.3.4
The Respondent did not allow the Applicant any or sufficient
opportunity to make representations about the matters set out
in
5.3.3 supra.
5.3.5
The Respondent failed to consider the representations made by the
Applicant and/or failed to state the reasons for rejecting
them.
5.3.6
The meetings held between the Applicant and Rogers did not constitute
consultation meetings as envisaged by section 189 of
the LRA.
5.3.7
The Applicant’s retrenchment was presented as a
fait accompli.
5.3.8
The Respondent selected the Applicant for retrenchment without any
selection criteria alternatively the selection criteria
used by the
Respondent in selecting the Applicant for retrenchment was neither
agreed upon by the parties nor fair and objective
.’
[45]
A mechanical, “checklist”
approach to a determination as to whether s189 has been complied with
is inappropriate.
[25]
While the letter of 31 January 2012 did contain the reasons for the
proposed restructure and/or retrenchment in general terms,
it is so
that it did not contain written information regarding alternatives to
dismissal, the number of employees likely to be
affected, their
positions, how it is proposed they are selected or issues of timing,
severance pay, assistance or possible re-employment
in future.
Instead, consultation on these issues was invited. While it is
apparent that there were clear shortcomings in the s189(3)
notice
provided to the appellant, these were not of such a nature as to
render the process unfair in circumstances in which the
appellant was
given notice of contemplated restructuring and retrenchment and had
the opportunity to engage with the respondent
regarding the issues
set out in s189.
[46]
It follows for these reasons
the dismissal of the appellant was substantively unfair. I am not
persuaded that the maximum compensation
should be granted in this
matter on the facts and given the commercial rationale which existed
to justify operational restructuring.
The appellant did not seek
reinstatement into his employment with the respondent. In the
circumstances, I consider an order of
six months compensation to be
fair and appropriate.
[47]
Having regard to considerations
of law and fairness, given that the appellant has been successful in
this appeal it is appropriate
that the respondent bear the costs of
both this appeal and of the proceedings before the Labour Court.
Order
[48]
In the result, the following
order is made:
1.
The appeal succeeds with costs.
2.
The order of the Court
a
quo
is set aside and
substituted with the following order:
‘
(1)
The
dismissal of the applicant on grounds of the respondent’s
operational requirements was substantively unfair.
(2)
The respondent is to pay to the applicant six (6) months’
compensation within
14 days of the date of this judgment.
(3)
The respondent is to pay the applicant’s costs.’
___________________
Savage AJA
Waglay JP and Phatshoane AJA concur in
the judgment of Savage AJA.
APPEARANCES:
FOR THE APPELLANT:
Mr P Grundlingh
Instructed by Nothnagel Attorneys.
FOR THE RESPONDENT:
Mr B M Jackson
Instructed by Tricker Inc.
[1]
SA Chemical Workers
Union and Others v Afrox Ltd
(1999)
20 ILJ 1718 (LAC)
at
1726E;
Kroukam
v SA Airlink (Pty) Limited
(2005)
266
ILJ
2153
(LAC)
at
paras 102-103 and 26 – 28;
Van
der Velde
v
Business & Design Software (Pty) Ltd and another
[2006] 10 BLLR 1004
(LC).
[2]
SACWU
v Afrox Ltd
[1999]
10 BLLR 1005
(LAC) at para 38.
[3]
Code of Good
Practice on Dismissal Based on Operational Requirements (GenN 1517
in
GG
20254
of 16 July 1999).
[4]
Johnson
& Johnson (Pty) Ltd v CWIU
[1998] 12 BLLR 1209
(LAC)
.
[5]
CWIU
and Others v Algorax (Pty) Ltd
[2003]
11 BLLR 1081
(LAC);
Kotze
v Rebel Discount Liquor Group (Pty) Ltd
(2000) 21 ILJ 129 (LAC) at para 36.
[6]
BMD
Knitting Mills (Pty) Ltd v SACTWU
[2001] 7 BLLR 705
(LAC) at para 19.
[7]
Section 189(1)(d).
[8]
“
(2)…
engage in a meaningful joint consensus-seeking process and attempt
to reach consensus on –
(a)
appropriate measures-
(i)
to avoid the dismissals;
(ii)
to minimise the number of dismissals;
(iii)
to change the timing of the dismissals; and
(iv)
to mitigate the adverse effects of the
dismissals;
(b)
the method for selecting the employees to be dismissed;
and
(c)
the severance pay for dismissed employees”.
[9]
Johnson & Johnson
(Pty) Ltd v CWIU
[1998]
12 BLLR 1209
(LAC) para 29.
[10]
SA
Clothing and Textile Workers Union and Others v Discreto A Division
of Trump and Springbok Holdings
(1998)
19 ILJ 1451 (LAC) at para 8;
Supergroup
Trading (Pty) Ltd v Janse van Rensburg
[2012] ZALAC 7
(25 April
2012)
at
para 20.
[11]
[1999] 10 BLLR 1005
(LAC).
[12]
At para 43. See also
BMD
Knitting Mills (Pty) Ltd v SACTWU
[2001]
7 BLLR 705
(LAC);
General
Food Industries (Pty) Ltd v FAWU
[2004]
7 BLLR 667 (LAC).
[13]
National
Education Health and Allied Workers Union v University of Cape Town
and Others 2003 (3) SA (1 (CC).
[14]
[2012]
ZALAC 7
at
para 20.
[15]
[2012] ZALAC 7
at para
4.
[16]
(2006) 27 ILJ 292 (LAC)
at para 55.
[17]
Enterprise Foods
(Pty) Ltd v Allen
[2004]
7 BLLR 659
(LAC) at para 17.
[18]
See
Entertainment
Catering Commercial and Allied Workers Union of SA and Others v
Shoprite Checkers t/a OK Krugersdorp
(2000)
21 ILJ 1347 (LC) at para 28.
[19]
Forecourt
Express (Pty) Ltd v SATAWU
(2006)
27 ILJ 2537 (LAC) at paras 28 and 39.
[20]
See
Viljoen
v Johannesburg Stock Exchange Ltd
[2016] ZALCJHB 361 at para 92;
Arthur
Kaplan Jewellery (Pty) Ltd v Van De Venter
[2006]
ZALAC 7
at
para 18.
[21]
Fry’s
Metals (Pty) Ltd v NUMSA
and Others
[2003] 2 BLLR 140
(LAC) at para 33 and
Mazista
Tiles (Pty) Ltd v NUM and Others
[2005] 3 BLLR 219
(LAC) at para 57.
[22]
Plaaslike
Oorgangsraad van Bronkhorstspruit v Senekal
(2001) 22 ILJ 602 (SCA) at para 27.
[23]
Johnson (supra)
at para 29.
Maharaj
and Others v Rampersad
1964 (4) SA 638
(A)
at
464.
[24]
County
Fair Foods (Pty) Ltd v OCGAWU
[2003] 7 BLLR 647 (LAC).
[25]
Johnson (supra)
at
para 29.