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[2009] ZALCJHB 88
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South African Chemical Workers Union v Unitrans Supply Chain Solutions (Pty) Ltd t/a Unitrans Freight And Logistics and Another (J2608/08) [2009] ZALCJHB 88 (19 March 2009)
LOM
Business Solutions t/a Set LK Transcribers
IN
THE LABOUR COURT OF SOUTH AFRICA
BRAAMFONTEIN
CASE
NO
: J2608/08
2009-3-19
REPORTABLE
In the matter
between
SOUTH AFRICAN
CHEMICAL WORKERS
UNION
Applicant
And
UNITRANS SUPPLY
CHAIN SOLUTIONS (PTY) LTD
1
st
Respondent
t/a Unitrans
Freight and Logistics
BP SOUTH AFRICA
(PTY)
LIMITED
2
nd
Respondent
J U D
G M E N T
PILLAY
J
: Thirteen
employees claim reinstatement, alternatively compensation, for being
dismissed substantively unfairly.
The second respondent
employer, BP South Africa (Pty) Limited (BP), transferred its
warehouse and distribution business as a going
concern to the first
respondent employer, Unitrans Supply Chain Solutions (Pty) Limited,
trading as Unitrans Freight and Logistics.
BP
notified the employees on 7 December 2005 that it was
negotiating the transfer of the business with Unitrans and that
their
contracts of employment would be transferred to Unitrans in terms of
section 197 of the Labour Relations Act number
66 of 1995
(LRA). The effective date for the transfer was initially 1
February 2006. But it did not take place on that day.
On 1
April 2006, BP met with SACWU, the first applicant trade union, and
informed it that the transfer would take place on 1 May 2006.
On
20 April 2006, Unitrans presented the employees with a slide show of
its business and activities. On 17 May 2006, some
of the
employees discovered that their payslips from BP did not reflect the
salaries payable to them; they also did not receive
electronically
generated payslips from BP. At the same time, several employees
found that they were no longer covered for
medical aid.
At
teatime that day, the employees met in the canteen to discuss their
concerns. They remained in the canteen well after tea.
At
11:00, the general manager, Mr Martin, the operations manager, Mr
Glass, the human resources officer, Mr Sekano and Mr Rosen
of
Unitrans, and Alford Ngubo, the human resources officer of BP,
went to the canteen to inform the employees that BP had
transferred
their contracts of employment with effect from 1 May 2006 to
Unitrans. Unitrans also intended to use the occasion to
inform the
employees of their conditions of employment with Unitrans.
There
was a dispute as to whether the employees refused to talk to Unitrans
staff and whether they informed Unitrans what their
grievances were.
SACWU’s witnesses were evasive about whether they recognised
Unitrans as their employer. The
court prefers the evidence of
Unitrans’s witnesses on this issue as it is corroborated by
documentary evidence.
The
letter dated 18 May 2006
[1]
confirms SACWU’s stance that Unitrans did not have jurisdiction
over its members. The employees did not recognise Unitrans
as their
employer that day. Spokesperson and employee, Mr Modise and the trade
union official Mr Samela, who testified for SACWU,
reluctantly agreed
that the employees rejected their transfer. The court finds,
therefore, that the employees refused to
listen to the presentation.
They also refused to discuss their problems with Unitrans and Alfred
Ngubo. They insisted
on discussing their problems with BP.
The
Unitrans managers instructed the employees to return to work
and
take up their grievances in due course with BP. They left the
canteen.
Several
attempts to persuade the employees to return to work were
unsuccessful. Eventually, Unitrans issued an ultimatum at
14:10
that they return to work by 14:30. When they did not comply,
Unitrans issued another ultimatum at 15:00 that they return
to work
the following morning. The following morning, the employees
reported to the workplace but they refused to work.
Unitrans
issued them with notices to attend disciplinary enquiries on 22 May
2006. The employees refused to attend the
enquiries.
SACWU’s attitude was that Unitrans had no jurisdiction to
discipline the employees. Following the
disciplinary enquiries,
the employees were dismissed on 24 May 2006.
Following an appeal, their dismissal was upheld
on 6 June 2006.
SACWU
alleged that BP breached the contracts of employment by not paying
the employees for April 2006 and by withdrawing their medical
aid.
As a result of that breach, they were entitled to withhold their
services from Unitrans. Furthermore, the penalty
of dismissal
was too harsh.
The
employees resisted the transfer to Unitrans for three reasons:
Firstly,
they alleged that they were not paid their salary for April;
secondly, their medical aid had been suspended or terminated;
thirdly, they were opposed to the transfer, in particular, the way it
was implemented.
Until
Mr Modise testified, SACWU’s case was that the April salaries
of the employees had not been paid. It transpired
under cross-
examination of Mr Modise that the complaint about non payment of the
salary was a complaint about the employees not
receiving payslips
from BP for their May salary.
Mr
La Grange submitted that payment of salaries fell due only on 25
th
of each month. As at 17 May 2006, the salaries were not due.
Therefore, the reason for the work stoppage could not
have been the
non payment of the employees’ salary for May.
As
regards the medical aid, the employees were required to sign an
acceptance of the medical aid options with Discovery, the company
Unitrans engaged to provide medical aid. As the employees had
not signed the documentation, for this reason too, the employees
were
not justified in withholding their services from Unitrans.
With
regard to the transfer itself, Mr La Grange submitted that BP had
informed the applicants that their employment with Unitrans
would
take effect on 1 May 2006 and that it would be in terms of
section 197 of the LRA. That meant that the employees
were
engaged on substantially the same terms and conditions of employment.
For
all three reasons, therefore, Mr La Grange submitted that the
Unitrans had not breached the contracts of employment. If the
contracts were breached at all it was by BP. Therefore the employees
were not entitled to strike against Unitrans. Their withholding
of
their services was unlawful and unjustified. Accordingly, the
penalty of dismissal was also not harsh.
With
regard to the non payment of salaries, the court finds that the
applicants were owed a month’s salary as at 17 May 2006.
They instituted proceedings against BP and Unitrans on 26 May 2006.
A flurry of correspondence between the legal
representatives of
SACWU and BP preceded an urgent application to secure payment of
their salaries. From the correspondence,
it emerged that the
representatives of BP undertook to investigate the non payment of the
salaries and urged the applicants not
to proceed with the
litigation. Nevertheless, SACWU instituted these proceedings
against both BP and Unitrans. BP paid the
employees. They settled the
entire dispute with BP.
With
regard to the medical aid, there was no evidence that the employees
were informed before 14 June 2006 that they were required
to sign any
documentation to activate their medical aid.
The
entire transfer itself
was plagued with poor communication
amongst all stakeholders: BP, Unitrans, SACWU and the employees.
For instance, Mr Martin
learnt only on 14 May 2006 that the employees
were transferred with effect from 1 May 2006. The employees
were not given
their terms and conditions of employment with Unitrans
before the transfer took place. Furthermore, as the transfer
proposed
for 1 February 2006 had not occurred, the employees were
understandably unsure of the identity of their employer as at 17 May
2006.
They worked in the same place doing the same jobs; ostensibly,
nothing had changed.
Both
BP and Unitrans had an obligation to inform the employees before 1
May 2006 who their employer would be, what their terms and
conditions
of employment would be, what their remuneration and benefits would
be, who would pay it, and when and how it would be
paid. They
should also have been informed about their medical aid, who would
provide medical aid and whether they were required
to sign any
documentation to activate the medical aid with a new company.
If there was to be a three month suspension of
the medical aid
because of the transfer to a different medical aid company, they
should also have been informed that they would
be joining a new
medical aid provider and of any arrangements that were made to cover
their medical costs during the period of
suspension and transfer from
the old medical aid provider to a new medical aid provider.
There is no evidence that any of
that information was communicated to
SACWU and the employees.
BP
and Unitrans had a mutual duty to inform the employees fully.
Their failure to do so brought about the impasse on 17 May
2006.
The employees’ refusal to communicate with Unitrans did not
help the situation either. Their stance exacerbated
the
problems that had started with BP and Unitrans not communicating
fully the information relating to the transfer. The
employees
held BP accountable and wanted BP to explain the situation to them on
17 May 2006.
In
a letter dated 13 April 2006
[2]
,
BP informed SACWU as follows:
“
I
refer to the above matter and in particular the two engagements
between BP and SACWU on Tuesday, 28 March and Wednesday,
12 April 2006
respectively, and advise the following:
1.
The date of transfer of the affected
employees from BP to Unitrans will transpire as at 1 May 2006;
2.
Individual Section 197 Transfer letters
will be issued to each affected employee on Wednesday, 19 April 2006;
3.
In addition to the above letter, specific
terms and conditions currently enjoyed by each employee as at April
2006, will be set
out as an addendum to the letter, which will be the
transferring terms and conditions;
4.
BP has engaged Unitrans Management and
their Human Resources team, and the following communication and
interaction with the affected
transferring employees has been
scheduled:
A.
Roodekop
–
Slide
presentation by Mr Titus Sekana (HR Manager)
Tuesday
18
th
April at 14:00.
Should
you require any additional information please do not hesitate to
contact either myself on the above numbers or alternatively
Mr. Alfie Ngubo.”
Mr
Modise denied receiving the notice of the promised section 197
transfer. Copies of the notice appear in the respondent’s
bundle from page 20 to page 46. This denial only emerged during
the trial and was not dealt with effectively at the pre trial
conference. As a result, Unitrans was not aware that it had to
prove delivery of these letters.
However,
the court is satisfied by the fax transmission to the trade union
[3]
that, at the very least, SACWU was aware of the letter dated 13 April
2006. It should therefore have notified its members,
the
employees, of its contents. If each employee had not received a
letter informing him or her of the transfer as alleged
in the second
paragraph of that letter, then SACWU should have reacted. There
is no evidence that it did so.
The
probabilities are therefore that the employees did receive individual
letters from BP notifying them of the section 197 transfer;
even if
they did not receive such letters, they were aware of the intended
transfer. However, BP was not forthcoming about
securing
SACWU’s full participation in resolving the grievance about the
transfer. This is especially evident in the
exchange of emails
on 22 May 2006. BP had refused to allow SACWU to meet with the
employees because it had derecognised SACWU
by that stage.
There
is also no evidence that Unitrans took any steps before issuing the
ultimatums or dismissing the employees to secure the intervention
of
SACWU to break the impasse. They left it to the employees to make
their own arrangements to communicate with SACWU.
It
was common cause that the employees did not use pre strike
procedures before they embarked on the work stoppage. That there
was
a work stoppage was not in dispute. That there was a strike was in
dispute.
The
first question for the court to decide is whether the employees were
entitled to withhold their services. Non compliance
with
pre strike procedures renders the work stoppage an unprotected
strike. The purpose of the work stoppage was to
remedy a
grievance and resolve a dispute. The employees had grievances
and disputes to resolve with BP concerning Unitrans
taking transfer
as the employer.
Unitrans
dismissed the employees following a disciplinary enquiry on charges
of “refus(ing) to obey a reasonable request or
instruction and
refusal to work”. The conduct complained of falls
typically within the conduct for a which a strike
dismissal is
contemplated in section 68(5) of the LRA. For such dismissal, the
court is required to have regard to the Code of
Good Practice:
Dismissal in Schedule 8 to the LRA to determine the fairness of the
dismissal. To that end and in response
to the second leg of the
applicants’ case, namely that the penalty was too harsh, the
court takes into account the following
factors:
The
13 employees had service ranging from 8 to 31 years with BP. BP
owed them better communication about the transfer to Unitrans.
Unitrans also owed them a duty to communicate effectively to
establish a relationship of trust. In this tripartite
relationship,
the employees were the most vulnerable party. BP
and Unitrans should have made a better effort to assure them of their
job
security.
Mr
Martin began his testimony by informing the court that Unitrans
valued the employees because of their product knowledge and
experience. Even though this was not challenged, his conduct exposes
his insincerity. Unitrans made no attempt to solicit
the
intervention of BP to break the impasse. Its best effort to get
the employees back to work was to demand that they return
to work,
issue two ultimatums, hold a disciplinary enquiry, dismiss the
employees and dismiss their appeals. The haste with
which it
accomplished all of this counteracts Mr Martin’s evidence that
Unitrans valued the employees.
For
their part, the applicants were driven by their anticipation of
securing retrenchment benefits from BP. That is one of
the
reasons the court finds for the employees withholding their services:
they wanted a better deal with BP. Their refusal
to communicate
with Unitrans was unhelpful; however they were unequivocally
apologetic at the appeal stage.
Their
contrition would have been manifest. As employees with such long
service, they were unlikely to throw away their investment
in their
tenure at a whim. They were unlikely to jeopardise their
contracts of employment if Unitrans reinstated them.
By
dismissing the employees, Unitrans wiped out a debt which it owed the
employees for one year’s severance pay for each year
served. It
would have had to pay severance pay if it had to retrench the
employees. Dismissing them and rehiring new employees
was more
profitable. A rough estimate of the total service of all the
employees amounts to about 250 years. The remuneration
of the
employees averaged R1 000 per week. Effectively the
dismissal of the employees resulted in a saving for Unitrans
and BP
of R250 000.
One
of Unitrans’s reasonsfor dismissing the employees was that its
contract with BP was at risk; 40 percent of its business
came from
contracts with BP. As the party largely responsible for
mismanaging the transfer, BP could hardly complain about
poor service
from Unitrans. Furthermore, the employees had been out of work
since 17 May 2006. At the stage of
the disciplinary enquiry
they were out for not more than two days with a weekend before the
enquiry. Once they were dismissed,
they could also not have posed any
risk by the time their appeals were heard. Reinstating them should
not have posed a risk, especially
if they were valuable as Unitrans
would have the court accept.
The
duration of the industrial action was short. If Unitrans had
not acted so precipitously, the employees could have been
at work
within a few days after the impasse had occurred. Instead, Unitrans
shunned concerted efforts by SACWU and its legal representatives
after they received notices of the dismissal to resolve the dispute.
This too leaves the court unconvinced that Unitrans
valued the
employees.
This
entire dispute could have been avoided with minimal cost and hardship
for all concerned; this trial itself could have been
avoided if all
the parties had communicated more effectively. The court finds
that each of the parties contributed to a breakdown
in the
relationships.
In
the circumstances, the court finds that the work stoppage was an
unprotected strike and that the conduct of the employees was
unlawful
and unjustified. However, the court finds that the dismissal was too
harsh.
SACWU
has not made out any case for reinstatement. Nor did it present
the court with adequate information about the status
of the employees
since their dismissal. In the exercise of its discretion and,
taking account of the respective contributory
conduct of all the
parties concerned, the court elects to award an amount in
compensation.
With
regard to one of the employees namely Mr Bruce May, the court was
informed that he had passed away. No arrangements were
before
the court as to what has transpired with his estate and in regard to
the award in relation to him. The court directs that
the Unitrans
pays his claim into his estate or, with the permission of the Master
of the High Court, to his beneficiaries.
Taking
all of these factors into account, the court makes an order in the
following terms:
The
dismissal of the employees was substantively unfair. Unitrans
is ordered to pay each employee the equivalent of four month’s
pay. Unitrans is ordered to pay the applicant’s costs.
PILLAY
D, J
Edited: 30 March 2009
On behalf of the
Applicants:
Mr D Brown instructed by SACWU
On behalf of the
Respondents:
Mr W La Grange instructed
by Tabacks Corporate Law Advisors
[1]
A26 of the bundle.
[2]
A11 of the bundle.
[3]
Pages
B17 and 18 of Unitrans’s Bundle