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[2009] ZALCJHB 81
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National Union of Mineworkers v De Beers Group Services (Pty) Ltd and Another (J737/09; J726/09; J829/09) [2009] ZALCJHB 81 (9 June 2009)
IN
THE LABOUR COURT OF SOUTH AFRICA
HELD
AT JOHANNESBURG
CASE NO: J737/09,
J726/09 and J829/09
In
the matter between:
NATIONAL
UNION OF MINEWORKERS
Applicant
and
DE
BEERS GROUP SERVICES (PTY) LTD and
DE
BEERS CONSOLIDATED MINES
Respondents
JUDGMENT
BHOOLA
AJ:
Introduction
[1]
These are my reasons for the orders I issued on 9 June 2009 in the
above three matters. For purposes of convenience, in respect
of the
two matters heard on 4 June and the one matter heard on 5 June, and
given the similarity of issues and the parties, I have
prepared one
set of reasons and distinguish the matters on the facts where
necessary. I describe these matters as follows for purposes
of ease
of reference in these reasons:
NUM v De Beers Group
Services (Pty) Ltd, case no. J737/09 (“Exploration”);
NUM v De Beers
Consolidated Mines, case no. 726/09 (“DBCM”); and
NUM v
De Beers Group Services (Pty) Ltd, case no. J829/09 (“DTC SA”).
[2]
On 9 June I issued orders declaring the notices of termination issued
to the applicant’s members’ on 13 March 2009
(in
Exploration), on 26 and 30 March and 7 April 2009 (in DBCM), and 27
March 2009 (in DTC SA ), to be of no force and effect,
and ordering
the respondent to pay the costs of all three applications.
[3]
My orders were made pursuant to hearing the parties in the three
applications brought on an expedited basis in terms of sections
189A(13) and (14) of the Labour Relations Act, 66 of 1995 (“the
LRA”). The applications were prompted by the respondent’s
failure to comply with a fair procedure and the requirements of
section 189A (8) (and in DTC SA, section 189A (7)), prior to
purporting
to issue notices of termination to the applicant’s
members.
[4] The applicant sought
orders in the three matters,
inter alia
, in the following
terms:
(a)Declaring that the
notices of termination of the applicant’s members’
contracts of employment issued [on various
dates] to be of no force
and effect;
(b)Alternatively,
directing the respondent to reinstate the applicant’s members
purportedly dismissed in terms of the notices
issued on [the
respective dates] until it has complied with a fair procedure, and
further alternatively, awarding the applicant’s
members
compensation
.
[5]
I am satisfied as to the inherent urgency of the matters and that
more than sufficient notice had been given to the respondent,
and
accordingly proceeded to hear the applications on an expedited basis.
Background
facts
[6]
De Beers Corporate Services and De Beers Consolidated Mines (Pty) Ltd
(“DBCM”) are members of the De Beers Group
in South
Africa. DBCM owns and operates a number of mines, including
Kimberley, Venitia, Finsch, Namaqualand, and Voorspoed, and
employed
about 3700 employees prior to the retrenchments. The applicant has
organisational and collective bargaining rights at
each DBCM mine,
except for Voorspoed, at which it has only organisational rights. It
also participates in the Central Negotiating
Committee (“CNC”)
at company level with representatives from each mine to consult and
negotiated about company-wide
issues. A Central Forum has also
been established in a separate collective agreement between DBCM and
the applicant, with
the purpose being to promote communication and
engagement on appropriate matters of mutual interest. The Central
Forum comprises
the Chairperson of the applicant and the full-time
shop stewards of each specified mine, together with an equal number
of company
representatives.
[7]
De Beers Group Services (Pty) Ltd principally provides services to
DBCM and is split into various business units, including
De Beers
Group Exploration (“Exploration”), Diamond Trading
Company South Africa (“DTC SA”), Shared Services,
Corporate Services, Global Mining, Debtech, De Beers Supply Chain
Centres, and De Beers Marine RSA. De Beers Group Services employs
some 600 employees after the retrenchments. The applicant has
organisational rights at DTC SA, De Beers Supply Chain Centres, and
De Beers Marine RSA. Since 2006 substantive agreements between DTC SA
and DBCM, on the one hand, and the applicant on the other,
have been
entered into at the Central Forum.
[8]
The respondent pleads that the retrenchments are necessitated by the
global economic crisis which has had a significant effect
on the
diamond industry since 2008, and which is expected to continue over
the next few years. As a result the De Beers Group worldwide
has been
forced to re-prioritise its strategic focus to conserve cash and
preserve equity, which has prompted the need to reorganise
and
restructure all business units worldwide. This process has resulted
in significant job losses and scaling down of operations
internationally.
[9]
The retrenchments at Exploration involve four members of the
applicant; at DBCM 570 (152 at Kimberley, 95 at Finsch and 323
at
Namaqualand) and at DTC SA approximately 30 members of the applicant.
Exploration
[10]
On 21 January 2009, the respondent issued notices in terms of section
189(3) to individual employees, including the applicant’s
members, of its contemplated retrenchment of 61 employees from the
Exploration division. The notices stated that the respondent
anticipated issuing notices of retrenchment to affected employees
from 23 March 2009.
[11]
It is common cause that section 189A of the LRA was applicable to the
process, and that the respondent did not issue a notice
in terms of
section 189(3) to the applicant.
[12]
No facilitator was appointed to the process in terms of section 189A
(3) or (4).
[13]
Following the 21 January notices the respondent held briefing
feedback sessions with its employees in which it conveyed information
about its plan to restructure its operations given the impact of the
global financial crisis. As a result of this process employees
were,
inter alia
,
invited to submit their CVs for consideration by a panel established
to select employees for retrenchment. Although the respondent
contends that the process of selection was significantly more complex
than the applicant sets out in its founding papers, for present
purposes it is sufficient to note only that four members of the
applicant were not selected for placement in the restructured
operation, and that the reasons for their non-selection are the
subject of factual disputes in respect of which I need not engage
for
present purposes.
[14]
On 13 March 2009 the respondent issued notices of termination to four
members of the applicant employed at Exploration. The
notices stated
that they had not been placed in the new structure and were being
retrenched on 23 April 2009, and the notice periods
applicable to
their termination would run from 22 March to 23 April 2009.
[15]
On 14 April 2009, 30 days after the notices in terms of section
189(3) were issued, the applicant referred a dispute to the
Commission for Conciliation, Mediation and Arbitration (“CCMA”).
The referral described the dispute as one “
in
terms of section 64 (1)(a) read with section 189A(8)(a)”.
Prior to this referral, neither of the parties had referred a dispute
to the CCMA in terms of section 64(1) read with section 189A(8)(a).
[16]
On 19 May 2009 a conciliation meeting was held at the CCMA and a
certificate of non-resolution was issued.
[17]
It is common cause that there was no collective agreement in place at
Exploration that required the respondent to consult
with a
person or body when contemplating retrenchments. The respondent
pleaded that the applicant only represented 13.6% of Exploration’s
workforce and had no organisational rights at Exploration. The
applicant’s case is that the respondent was obliged in terms
of
section 189(1)(b)(ii) and (c) of the LRA to consult with it in
respect of the proposed retrenchment of its members and failed
to do
so. The respondent contends that while this may be the case, it did
not
per se
render the process unfair.
[18]
The applicant pleads that at no stage had consensus been reached
regarding the retrenchment of its members, and that discussions
regarding severance pay and measures to mitigate the adverse effects
of the retrenchments had not been concluded at the Central
Forum, at
which all of the mines in the De Beers Group and the applicant were
represented. The respondent, in its Answering Affidavit
(para 21),
avers that at no stage at the Central Forum consultations (where only
one business unit participated, the rest of the
business unit
consultations having been undertaken at business unit level together
with the applicant where it was recognized)
did the applicant raise
the fact that retrenchment consultations were being undertaken at
Exploration in its absence or that Exploration
was not represented at
the Central Forum.
DBCM
[19]
On 19 January 2009, the respondent issued notices in terms of section
189(3) regarding the contemplated retrenchment at its
Kimberley,
Finsch and Namaqualand mines (“the individual mines”) of
approximately 1467 employees. The notices stated
that the respondent
anticipated issuing notices of retrenchment to affected employees
from 19 March 2009.
[20]
Attached to the notices were requests for facilitation in terms of
section 189A of the LRA. It was recorded in these requests
that in
the context of the central collective agreement the parties had
agreed to schedule a Central Forum meeting before consultations
commenced at mine level.
[21]
On 6 February 2009 the respondent addressed a letter to the CCMA in
which it withdrew the requests for facilitation at the
individual
mines. On 16 February it addressed a letter to the applicant
informing it that the request for facilitations at individual
mines
had been withdrawn and that the applicant’s agreement to
appoint a facilitator would again be sought in due course.
It is
common cause that this was not done.
[22]
On 26 March and 30 March 2009 Kimberley and Finsch mines issued
notices of termination to applicant’s members, and on
7 April
2009 Namaqualand mine followed. In terms of these notices the
applicant’s members were subjected to notice periods
ranging
from 1 April to 30 April 2009.
[23]
The retrenchment notices were issued without requesting the applicant
to agree to the appointment of a facilitator.
[24]
At the time the notices were issued the parties had not reached
consensus regarding severance pay and measures to mitigate
the
adverse effects of the dismissals at the Central Forum.
[25]
On 17 April 2009 the applicant referred disputes to the CCMA as
contemplated in section 189A (8)(a) of the LRA in respect of
the
individual mines. Prior to these referrals, neither of the parties
had referred a dispute to the CCMA in terms of section 64(1)
read
with section 189A (8)(a) of the LRA.
[26]
On 26 May 2009 a conciliation meeting was held at the CCMA and a
certificate of outcome stating that the disputes remained
unresolved,
was issued.
DTC
SA
[27]
On 27 January 2009, the respondent pleads that a presentation was
made to all employees at DTC SA highlighting the economic
downturn
and its impact on diamond sales. Employees were informed that
production levels for 2009 were going to drop by 60% and
as a result
of this DTC SA had to restructure its business from sorting 12.5
million carats to sorting 4.5 million carats.
[28]
On 28 January 2009, DTC SA gave notice in terms of section 189(3) of
the contemplated retrenchment of 66 to 95 employees, in
terms of
which it was anticipated that notices of retrenchment would be issued
on or before 31 March 2009, or earlier should the
parties agree.
[29]
On the same day DTC SA also delivered a request for facilitation to
the CCMA, and on 29 January 2009 the CCMA indicated that
a
facilitated meeting in respect of the contemplated retrenchments
would be held on 5 February 2009.
[30]
At a Central Forum meeting on 4 February 2009, the applicant raised a
concern regarding the non-participation of DTC SA’s
management
in the Central Forum consultations. Following this, according to the
applicant, it was agreed that facilitation processes
at operations
would be halted until consensus had been reached at Central Forum.
The respondent disputes that such agreement
was reached, and states
that the DBCM Group Industrial Relations Manager, Wayne Smerdon,
agreed that the facilitation requests
for DBCM operations would be
withdrawn but that insofar as DTC SA was concerned, the facilitation
process would continue and would
not be replaced by Central Forum
consultations (see Answering Affidavit, para 21 page 6). The first
facilitated consultation was
scheduled for 5 February 2009. The
respondent alleges that the applicant did not attend any of the
facilitation consultation meetings.
Disputes of fact exist in regard
to the reasons for its non-attendance.
[31]
On 26 March 2009 a meeting was held between DTC SA and
representatives of the applicant at which a presentation was made by
DTC SA. The management of DTC SA indicated that retrenchment
notices would be issued the following day and the applicant’s
representatives suggested that a further consultation meeting should
be held the following day.
[32]
On 27 March 2009 the respondent issued affected employees with
notices of retrenchment effective from 30 March 2009.
[33]
The facilitator issued a letter dated 14 April 2009 in terms of which
she set out the attempts to consult with the applicant
and indicated
that DTC SA was entitled to issue notices of termination from 29
March 2009.
Grounds
of challenge
[34]
The applicant seeks to challenge the retrenchments on the grounds
firstly, that the notices of termination were issued in breach
of
section 189A (7) or 189A (8), and were invalid, and secondly that the
retrenchments were not effected in accordance with a fair
procedure.
I consider each of these grounds below.
Invalidity
of termination notices
[35]
Mr van der Riet, SC, the applicant’s counsel, contended that
the notices of termination issued to the applicant’s
members
are premature, unlawful and invalid, and accordingly of no force and
effect
.
[36]
The basis for this contention is that,
inter
alia,
section 189A (2) (a) provides
that “
an employer must give notice
of termination in accordance with the provisions of
”
section 189A. Furthermore, section 189A (8) (b) (i) provides that an
employer may only give notice to terminate the contracts
of
employment “
once the periods
mentioned in section 64(1) (a) have elapsed”.
Section 64(1) (a) relates to the right to strike and the recourse to
lock-out if the dispute has been referred to a council or
the CCMA
and a certificate of non-resolution has been issued or the period of
30 days (or a period extended by agreement) has elapsed
since the
referral of the dispute was received by the council or CCMA.
[37]
Mr van der Riet further advanced in support of his contention the
Explanatory Memorandum on the object of the 2002 amendments
to the
LRA, which states that one of the purposes of introducing section
189A was “
to prevent employers
from dismissing employees until after the conclusion of facilitation
or conciliation”
(Memorandum on
the objects of the Labour Relations Amendment Bill, 2001, in Thompson
and Benjamin,
South African Labour Law,
page AA2-183, at para 2.45).
[38] Mr van der Riet
further cited as authority the decision of Freund AJ in
National
Union of Mineworkers v De Beers Consolidated Mines (Pty) Ltd
(2006) 27 ILJ 1909 (LC), where the court found a notice of
termination in breach of the provisions of section 189A(8)(b)(i) to
be invalid and of no force and effect. Counsel referred the court to
the following
dicta
from the judgment (at [37]):
“
If
the employer gives notice that it is contemplating retrenchments and
if the union is unwilling to agree thereto within 30 days,
I see no
reason why the employer cannot treat this as a dispute and refer it
for conciliation in terms of s 189A(8)(a)”,
and
(at
[48]):
“
In
my view, the scheme of these provisions [ss 189A(7)(a) and
189A(8)(b)] is to prevent the employer from giving notice to
terminate
the contracts of employment until a fixed period of 60 days
(or a longer period controllable by the employer) has elapsed. In a
case where a facilitator is appointed, the employer is required to
wait no more than 60 days, regardless of the progress made by
the
facilitator. If a facilitator is not appointed, the employer must, in
my view, wait 30 days from the date of the s 189(3) notice
to be able
to refer the dispute for conciliation and for up to a further 30 days
thereafter (if no agreement is reached to extend
the relevant period
and no certificate of outcome has been issued) before being entitled
to give notice to terminate the contracts
of employment
”
.
[39]
Mr Myburgh SC, appearing for the respondent, opposed the relief
sought on two grounds. Firstly, nothing in section 189A(8)
compels an
employer, where a facilitator is not appointed, to first refer a
dispute to the CCMA and wait for the expiry of the
periods in section
64(1)(a) before issuing notices of termination. Secondly, even if the
respondent is wrong on the first ground,
an employer is obliged to
make the referral only if a “
dispute”
as contemplated in section 189A(8)(a) exists. An interpretation to
the contrary, he submitted, relying on
Leoni
Wiring Systems (East London) (Pty) Ltd v NUMSA & others
((2007) 28 ILJ 642 (LC)), will result in an absurdity.
[40]
In regard to the first ground, Mr Myburgh submitted that while he
could not dispute that the two judgements relied on by the
applicant
i.e.
NUM v De Beers Consolidated Mines
(Pty) Ltd
(supra) at paras 35 and 36,
and
Leoni Wiring Systems (East London)
(Pty) Ltd v NUMSA & others
(2007)
28 ILJ 642 (LC) at para 19-31), have held to the contrary they are
clearly wrong. Moreover they conflict with commentaries
by various
leading labour lawyers. In support of this submission Myburgh
referred the court to the following academic authorities:
Brassey
Commentary on the
Labour Relations Act
(RS
2/2006) at A8-116 at para 4(b); Grogan “The new law on
retrenchment – Practical effects of the amendments to
section
189
and
197
” (2002)
18
(4)
Employment
Law
4 at 6; Bosch “A Survey of
the 2002 Labour Legislation Amendments: Is there really ‘Something
for Everyone’?”
(2003) 24 ILJ 23 at 34; and Thompson
‘Labour-Management Relations’ in Cheadle et al
Current
Labour Law 2001
at 37).
[41]
Furthermore, Mr Myburgh contended, the duty imposed on the employer
by
section 189(2)
is to “attempt” to reach consensus, and
at some point the employer is entitled to call off the process
(particularly
where the union frustrates the process, as it submits
was clearly the case in DTC SA discussed below), and proceed to act
unilaterally.
This is pertinent given the fact that the Labour Appeal
Court has eschewed a mechanical checklist approach to
section 189
(in
Johnson & Johnson (Pty) Ltd v CWIU
[1998] 12 BLLR (LAC)), and the correct approach is to view the
consultations preceding the retrenchment in a broad and
all-encompassing
manner in order to determine whether the objectives
of
section 189
and
189A
have been met. In this regard,
section 189A
and
189
must be read together. Mr Myburgh submitted that
section 189A
introduced three innovations in dealing with large scale
retrenchments i.e. permitting an election on the part of the union to
strike over a retrenchment dispute; introducing facilitation: and
developing a process to deal with a procedural logjam. The latter
is
relevant to the present matter, and permits the employer to elect for
strategic reasons not to use a facilitator, and requires
the union to
elect whether to strike in respect of a dispute of interest once
notice of the retrenchment has been issued, or to
refer the dispute
to the CCMA. The applicant’s submissions, Mr Myburgh contended,
amounts to introducing new wording into
section 189A(8)(a)
to the
effect that where consensus is not reached on
all
aspects of a retrenchment the employer is prevented from issuing
notices of retrenchment before a dispute is referred to the CCMA
by
either party. This, it was submitted, was clearly incorrect in that
section 189A
(8) envisaged a situation where
no
notice had been issued
and the parties
could accordingly choose to refer the dispute to the CCMA or the
union could elect to strike.
Section 189A
(8), counsel submitted,
does not prevent an employer from issuing notice to terminate,
although the risk to the employer is that
it can attract a
retaliatory strike.
[42] In my view however,
even if this submission is correct, the period contemplated in
section 189A
(8) (a)
and
(b) (i) are still applicable and the
employer would at least have to wait for the expiry of the 60-day
period clearly contemplated
therein. This is consistent with the
approach of Freund AJ in
NUM v De Beers
(supra) and accords
with the view of Thompson where he makes the point that the union, if
it has not previously attempted to refer
a matter to statutory
conciliation, can force the retraction of termination notices (supra,
at page 37). He states as follows:
“
(9)
If the parties do not agree to statutory facilitation, they are still
frozen out of termination action, industrial action or
referrals to
Court for an equivalent 60 day period. This is because
section 189A
(8) bars any such action –
·
until statutory conciliation has run its
course (typically a 30 day process), but in addition
·
no party can refer a dispute to
statutory conciliation until 30 days after the issue of the
section
189(3)
notice.
(10)If, after the
issue of a
section 189(3)
notice, no facilitator is agreed and no one
refers the dispute to statutory conciliation, the employer will
presumably have to
proceed with the standard consultation efforts and
exhaust that process before issuing termination notices”.
I
do not agree with the respondent that this envisages that the
employer could take its chances and issue notices of termination
once
it feels that the process is exhausted, despite the risk the union
would not be in agreement that the process has in fact
been
exhausted. It is clear in my view, as expressed above, that this
approach is incorrect and the employer has to wait out the
minimum
statutory 60 day period prior to issuing the termination notices.
This is pertinent to the facts in all three matters,
in that notices
of termination were issued prior to the expiry of the 60 day period.
[43]
In regard to the second ground, the respondent, relying on
Leoni
Wiring
Systems
(supra, at paras 23-26) submitted that in circumstances where
consensus was reached; or in the absence of a clear dispute between
the parties; or where the employer reasonably believed there was no
dispute between the parties; the employer may give notice of
termination without first referring a dispute. Furthermore, for a
dispute to exist in this context, it must be clearly identified
and
the union’s solution for resolving it must have been
unambiguously stated. The fact that the union was simply unhappy
could not be relied upon by it to state at a later stage that it was
in dispute with the employer (
Leoni
Wiring Systems
supra at para 27. See
also
City of Johannesburg v SAMWU &
others
(2008) 29 ILJ 650 (LC) at para
18). The notices of termination issued by the employer accordingly
remained valid in circumstances
where it was issued by the employer
unaware of a dispute that manifests itself later in a referral by the
union. Support for this,
Mr Myburgh contended, is found in
Leoni
Wiring Systems
(supra at para 31).
Therefore, Mr Myburgh submitted, the facts
in
casu
on the respondent’s version,
which on first principle this court must accept, it is patently clear
that there was no dispute
about union representation (which is the
only dispute pleaded by the applicant in its Founding Affidavits) at
the time the notices
were issued. I agree however with the replying
submissions by Mr van der Riet to the effect that the dispute was an
interest dispute
concerning the failure to reach consensus on the
retrenchment. This is clearly stated in the referral form to the
CCMA. Moreover,
our jurisprudence is clear on the issue that a
dispute includes an “alleged dispute” : see Halton
Cheadle and Shamima
Gaibie,
Current
Labour Law 2008
, page 114 where in
regard to the
dictum
relied
upon by the respondent in City of Johannesburg (supra), the following
is stated in regard to the definition of dispute in
section 213
:
“
[t]here is a very good reason for
this definition – it was inserted precisely to avoid litigation
over the existence of a
dispute as a jurisdictional prerequisite for
conciliation. That the employer is not informed of the alleged
dispute before the
referral is not good labour relations practice but
no harm is done as long as the referral clearly identifies what the
referring
party alleges to be in dispute. The conciliation process
will give the other party the opportunity to respond. That process
is,
in a collective bargaining context, a form of induced negotiation
assisted by a conciliator – to provide a process where none
exists, or is defective”.
[44]
The respondent accordingly submitted that, on the first,
alternatively the second grounds advanced above, the notices of
termination
were valid. In addition, even if they were issued
prematurely, this did not render them of no force and effect,
notwithstanding
the
dictum
to the contrary in
De Beers
(supra), which this court was urged to find was incorrect. At worst,
the respondent submitted, this would render the dismissals
procedurally unfair.
[45]
I do not agree with the respondent in this regard. I am bound by the
dictum
in
NUM v De Beers
,
and insofar as Nel AJ in
Leoni Wiring
Systems
(supra) agreed with Freund AJ
but chose to qualify the 30 day requirement by stating that the
employer did not have to wait until
30 days before declaring a
dispute when the parties had reached consensus, I agree with Mr van
der Riet that he contemplates a
dispute about the fairness of the
dismissal, which is not of relevance here. Mr van der Riet submitted
that this was not the dispute
that the legislature had in mind and
that
section 189A(8)(b)(ii)(bb)
provides that where the periods
mentioned in
section 64(1)
have elapsed the union may refer a dispute
concerning whether there is “
fair
reason
” for the dismissal in
terms of
section 191
(11). The present matter is distinguishable on
the facts in that the dispute is an interest dispute concerning the
failure of the
union to accede to the employer’s proposals
regarding retrenchment. In other words, what the legislature intended
in respect
of a mass retrenchment, is that the parties must be forced
to involve a facilitator as a third party, and that this must
continue
for 60 days, unless they reach agreement in the interim.
Alternatively, where no facilitator is appointed, there must
be a
period of 30 days where the parties engage and if they are unable to
reach agreement then there is an interest dispute which
should be
referred to the CCMA in terms of
section 64
(1)(a). Only after the
certificate of non-resolution or the expiry of the second 30 day
period can the substantive fairness of
the dispute be referred by the
union or can the employer validly issue notices of termination in
accordance with
section 37(1)
of the
Basic Conditions of Employment
Act, 75 of 1997
. Mr van der Riet submitted that Nel AJ’s
approach was based on two errors, firstly that the nature of the
dispute which
the legislature had in mind was incorrectly seen to be
about substantive fairness, but was in fact an interest dispute about
the
failure to agree to the retrenchments; and secondly if the
parties reached agreement regarding the retrenchment, the assumption
is that this was an exception to
section 189A(8)(b)(i)
and that the
employer could issue notices without first referring the dispute.
However, if there was no “
dispute”
then there would be no need to issue termination notices. Mr van Der
Riet submitted that
section 189(A)
(8) (b) (i) had nothing to do with
the first 30 day period contemplated in
section 189A
(8)(a), and that
Nel AJ conflated the two. Freund AJ, on the other hand, contemplated
a situation where the employer could elect
to exhaust conciliation or
speed up conciliation by reaching agreement with the union on the
retrenchment, but where no agreement
was reached the dispute had to
be referred before termination notices could be issued. In either
instance however, the full 60
day period would be applicable. The
reliance by the respondent on the proviso of Nel AJ is thus not
sustainable, and the approach
of Freund AJ must be preferred.
[46]
Furthermore, I am in agreement with Mr van der Riet that the
imperative “must” in
section 189A
(2) (a) means that
compliance with the provisions of
section 189A
are peremptory. This
means, in the words of Freund AJ (
NUM v
De Beers
supra, at [40]), that “it
would flout the intention of the lawgiver and the policy underlying
section 189A
to recognize the validity of notices given in
contravention of
section 189A(8)
”. I do not agree with
the submission by Mr Myburgh that “
must
”
(and the concomitant declaration of lack of force and effect) is an
administrative law concept not applicable to labour
law which
incorporates a fairness jurisprudence. It is clearly applicable and
that
section 189
and
189A
have little to do with fairness and set out
rights and obligations which have legal consequences. In this regard
I agree that the
dictum
of
Brassey AJ is applicable: see
Sikhosana
v Sasol Synthetic Fuels
2000 (1) BLLR
101
(LC). This court cannot decide whether a failure to comply with a
peremptory statutory period in the LRA is fair. I do not consider
the
authority cited by the respondent in respect of correcting
short-notice (
Honono v Willowvale Bantu
School Board & Another
[1961] (4)
AD 414)
to be applicable, which in effect would amount to any notice
issued prematurely being remedied by being considered to take effect
on the date when it could have been validly issued.
Honono
emanates from an era when the common
law of master and servant characterised our labour law jurisprudence
and is not applicable.
This was confirmed by the Appellate Division
(as it then was) in a subsequent decision in
GWU
and others v Industrial Tribunal and Minister of Labour,
1963
(4) SA 775
(A), where at 787 A-C the court states as follows :
“
Honono’s
case, limited as it is to the
position of common law servants, is no authority, by analogy or
otherwise, for the proposition
that, where the Minister has fixed a
date earlier than six months after the date of publication, that
would take effect as if he
had fixed a date in accordance with the
requirements of this section”.
[47]
I accordingly agree with Mr van der Riet in that the meaning of
section 189A
(8) (b) (i) is clear – the applicant had referred
a dispute (in Exploration and DBCM), and certificates of
non-resolution
were issued. The respondent in such circumstances
could not have issued notices of termination prior to the periods
referred to
in
section 64(1)
(a) having elapsed. The earliest date
therefore, it could have been entitled to issue valid notices of
termination would have been
from the dates on which the certificates
of outcome were issued. In the case of Exploration this would be 19
May 2009 and in DBCM,
26 May 2009.
[48]
The facts in DTC SA differ from the other two matters. In DTC
SA it is common cause that notice in terms of
section 189(3)
notice
was issued on 28 January 2009 that the respondent contemplated
retrenchment of between 66 and 95 employees. Notices of termination
were then issued on 30 March 2009. Mr van der Riet submitted that the
60 day period referred to in
section 189A(7)
would have expired on 30
March 2009, and that, relying on section 4 of the Interpretation Act,
33 of 1957, the reckoning of number
of days is exclusive of the first
and inclusive of the last day. Therefore the earliest day on which
the respondent could have
given notice would have been at the end of
the working day on 30 March and therefore notice could only have
validly been given
on 31 March 2009. Mr Myburgh submitted that
the relevant date was when the company purported to issue the notices
in terms
of the
Basic Conditions of Employment Act, and
that in
actual fact notice was given for a period that would run until the
end of April and accordingly only took effect on 1 April
2009.
Mr van der Riet submitted that it was not the notice period envisaged
in the
Basic Conditions of Employment Act that
was relevant, but the
section 189A
(7) notice and that insofar as respondent contends
notice was given on 1 April 2009, this is clearly wrong in that the
requirement
was that 60 days had to elapse from the appointment of
the facilitator and only
after 60 days
could the employer validly give notice.
I agree with this submission.
[49]
Mr Myburgh submitted that this court should not deal with
s189
in
terms of invalidity more apt to administrative law. To say that if
something is one day out of time and is invalid and leads
to it being
set aside it anathema to labour law. If the respondent miscalculated,
at worst he submitted, this constituted procedural
unfairness and to
construe it as an act of invalidity which led to it being of no force
and effect was wrong. Mr Myburgh
argued that even if this court
were to find the notice to be invalid, it should not be said to have
no force and effect, but should
instead be considered to have become
valid on the date it could have been validly issued, on the
Honono
test. Mr van der Riet contended,
inter
alia,
that
Honono
was not applicable since we are not
concerned in the present matter with “
short
notice”,
and it was
distinguishable. I have dealt with
Honono
a
bove, save to say that Mr van der Riet
referred me to a more recent judgment in which it was found to have
no application :
Stocks and Stocks
Holdings Ltd and Another
v
Mphelo
(1996 (2) SA 864
(T)). There
Botha J found that where notice was defective (on the grounds that
one calendar month’s notice had not been given),
it was invalid
and had not terminated the contract.
Honono
accordingly, Mr van der Riet
submitted, had no application to statutory periods that are
peremptory under
section 189A.
[50]
The notices of termination
in casu
are tainted by prematurity and, as decided by Freund AJ (in
NUM
v De Beers
supra, at [40]), are
accordingly invalid and of no force and effect. Valid notices
could accordingly only have been issued,
at the earliest, from the
dates of issue of the certificates of outcome in Exploration and
DBCM, being 19 and 26 May 2009 respectively,
and with effect from 31
March 2009 in DTC SA. The applicant is accordingly entitled, for the
reasons set out herein, to a declaratory
order to this effect. In
considering the consequences of such an order, and given the
submissions by the parties in this regard,
I am in agreement with Mr
van der Riet that reinstatement is still the primary remedy envisaged
in terms of the fairness jurisprudence
envisaged under the LRA. I do
not agree with Mr Myburgh that reinstatement would be an exceptional
remedy. It is considered to
be an appropriate remedy for procedural
fairness in terms of
section 189A(13)
, and a finding of invalidity of
the notices goes beyond mere procedural unfairness. This matter is
moreover distinguishable on
the facts from
NUM
v De Beers
(supra) where the mine in
question had already closed by the time the matter was heard, and the
court did not order relief other
than the declaratory order, and
declined to interdict the issue of notices where a certificate of
outcome had not been issued but
30 days had expired since the
referral of the dispute. In the premises, in my view, the
reinstatement of the applicant’s
members from the date of their
purported termination of employment would be a justifiable remedy
given the invalidity and unlawfulness
of the termination notices,
until such time as valid notices are issued.
Procedural
unfairness
Exploration
[51]
The applicant seeks alternative relief on the grounds of the
procedural unfairness of the retrenchments in that the respondent
failed to consult with it, as required by
section 189
(1) (b) (ii)
and (c), in respect of the retrenchment of its members. To the extent
that it is necessary for me to decide whether
there was adequate
consultation as required by the LRA, I deal with this issue below.
[52] Mr van der Riet
relying on
NUM v Alexcor Ltd
((2004) 25 ILJ 2034 (LC),at paras
85 and 100), submitted that
section 189(1)
creates a hierarchy of
parties and that an employer is required to consult in terms of this
prior to effecting a retrenchment.
Section 189
(1) provides
as follows:
“
(1)
When an employer contemplates dismissing one or more employees for
reasons based on the employer’s
operational requirements, the
employer must consult-
(a)
any person whom the employer is required to
consult in terms of a collective agreement;
(b)
if there is no collective agreement that
requires consultation-
(i)
a workplace forum, if the employees likely
to be affected by the proposed dismissals are employed in a workplace
in respect of which
there is a workplace forum; and
(ii)
any registered trade union whose members
are likely to be affected by the pr opposed dismissals;
(c)
if there is no workplace forum in the
workplace in which the employees likely to be affected by the
proposed dismissals are employed,
any registered trade union whose
members are likely to be affected by the proposed dismissals; or
(d)
if there is no such trade union, the
employees likely to be affected by the proposed dismissals or their
representatives nominated
for that purpose.”
[53] It is common cause
that the respondent did not consult with the applicant in regard to
the retrenchment of its members at Exploration.
The respondent
accepts that, in terms of
section 189
(1), where union members
belonged to the applicant (albeit that it was unrecognized at
Exploration), the respondent was obliged
to consult with the
applicant over their retrenchment:
Baloyi v M & P
Manufacturing
([2001]
4 BLLR 389
(LAC) at para 20). However, the
respondent submits it does not follow axiomatically that a failure to
do so would render the retrenchments
unfair, and that this court is
required to consider procedural fairness in the context of the
totality of circumstances that existed.
In this regard, taking
account of the following, the respondent submitted that the
retrenchments of applicant’s members was
not procedurally
unfair:
(i)Section 189(1)(c) is
not “unwavering and immutable” : see
FGWU & others
v Irvin & Johnson Ltd
([1999]
7 BLLR 683
(LC) at para 22);
(ii)On the respondent’s
version the applicant elected not to be consulted at Exploration;
(iii)There was an
obligation on the applicant to inform the respondent that it wished
to be consulted and to intervene timeously;
(iv)In the absence of an
adequate explanation for why the applicant did not do so, it stands
to be inferred that it frustrated compliance
with
section 189
(relying on
Johnson & Johnson (Pty) Ltd v CWIU
[1998] 12
BLLR 1209
(LAC) at para 28), or otherwise acted negligently;
(v)The respondent
consulted with Seefane who was effectively a shop steward; and
(vi)Through
Seefane’s participation in the Central Forum consultations the
members of the applicant also had a voice at central
level in that it
was agreed that any decision taken there would also apply to them.
[54]
In essence the submission was to the effect that the process was not
perfect but was not procedurally unfair simply on account
of the
non-involvement of the applicant. In this regard however the
respondent conceded that it had thought the applicant was not
entitled to be notified in terms of
section 189
(3) and consulted in
terms of
section 189
(1) (b) (ii) or (c). The so-called “shop
steward” (Seefane) appears to have made the same mistake as the
respondent’s
Human Resources Manager in assuming that the
applicant was not entitled to participate in the consultation
process. Moreover,
even at Central Forum level, the process of
consensus-seeking had not been exhausted in that there were still
outstanding issues
at the time the notices of termination were
issued. They were issued furthermore in the light of a pending
Central Forum meeting.
The failure to involve the applicant
constitutes a fatal procedural error, and I agree with the submission
by Mr van der Riet that
it cannot be contended that it was not clear
to the employer that consensus had not been reached. Whatever
the reasons however,
it is not disputed that a
section 189(3)
notice
was not issued to the applicant in respect of its members at
Exploration, and that it was not invited to participate in
the
ensuing consultation process at Exploration. While I accept the
respondent’s version that Seefane participated at the
Central
Forum and liaised with it in regard to Exploration, in my view this
is not sufficient to remedy the defect occasioned by
non-involvement
of the applicant in the consultation process, which the respondent
concedes. In my view, the failure to consult
with the applicant in
respect of Exploration is a patent and irredeemable error.
DBCM
[55] In its Founding
Affidavit the applicant submits that notices of termination were
issued in circumstances where:
(i)The respondent failed
to seek consensus with the applicant over the appointment of a
facilitator after the respondent’s
initial request for
facilitation had been, by agreement between the parties, withdrawn;
(ii)The respondent failed
to select applicant’s members for retrenchment using the agreed
criterion of LIFO;
(iii)A dispute over the
interpretation or application of a Memorandum of Understanding
concluded at Namaqualand dealing with selection
criteria had been
referred to the CCMA by the applicant;
(iv)Agreement had not
been reached on severance pay (albeit only in relation to the terms
of payment of the R7000- training allowance
component thereof); and
(v)Discussions
regarding a social and labour plan agreement had not been finalised.
[56]
The applicant’s case is that the respondent decided to end the
consultation process prior to it being exhausted. Mr van
der Riet
submitted, relying on Enterprise
Foods
(Pty) Ltd v Allan
([2004]
7 BLLR 659
(LAC) paras 23, 32 and 33), and
Highveld
Steel & Vanadium Corporation v NUMSA
([2004]
1 BLLR 11
(LAC) at para 26I-27D and 30F-G), that it on this
basis alone it was clear that a fair retrenchment procedure had not
been followed
prior to the decision to dismiss being taken. In
the result, the applicant pleads that the respondent failed to engage
in,
alternatively conclude, a meaningful joint consensus-seeking
process with the applicant prior to retrenching its members. In the
circumstances the dismissals were premature and procedurally unfair.
[57] The respondent’s
version, however, which I am obliged to accept where material
disputes of fact exist (as per
Plascon- Evans
Paints v
(Pty) Ltd v Van Riebeeck Paints (Pty) Ltd
[1984] ZASCA 51
;
1984 (3) SA 623
(A)),
was that :
(i)Neither party sought
to recommence the facilitation process (which was withdrawn at the
applicant’s insistence and which
the applicant did not
participate in another process at Diamond Trading Company);
(ii)The selection
criteria were not limited to LIFO and were multifaceted;
(iii)On the Memorandum of
Understanding the document itself reflects that LIFO was not the sole
selection criterion; the referral
of the dispute to the CCMA was made
in terms of
section 24(2)
(and not 189A(8)); and the referral of the
dispute was made after the termination notices were issued (albeit on
the same day);
(iv)In regard to
severance pay, the parties were not making progress;
(v)In
regard to the labour plan issue it was not relevant to the
retrenchment exercise in question (such a plan was already in place),
and the applicant had been invited to table a plan for the future.
[58] In short, the
respondent submitted, a dispute had not manifested itself on any of
the aforesaid issues at the time that the
notices of termination were
issued. Therefore there is no merit to applicant’s
complaints. Furthermore, a strict checklist
approach was not
applicable (having been eschewed by the LAC in
Johnson &
Johnson
supra) and this court was obliged to have regard to the
overall process, which reflected a genuine attempt by the respondent
to
reach consensus. Furthermore, Mr Myburgh submitted, Freund AJ had
also endorsed an overall approach in
SACCAWU v Sun International
SA Ltd
((2003) 24 ILJ 594 (LC) para 46) and had made it clear
that the issue was whether an “attempt” had been made to
reach
agreement. The court expressed this as follows:
“
Section
189(2)
of the LRA imposes a duty on an employer to attempt to reach
consensus but it does not impose a duty to reach consensus. It
follows,
in my view, that a time may be reached in a consultation
process when the employer is entitled to call off the consultation
process
and to act unilaterally (albeit fairly, in terms of the
requirements of the LRA). Since this is so, depending on what has
gone
before, it is in my view not necessarily unfair or contrary to
the requirements of the LRA, for an employer to decide that it is
only prepared to attempt to reach consensus on one more occasion and
to decide that, if necessary, it will act unilaterally thereafter”.
[59]
I was also referred in this regard to Thompson and Benjamin (supra,
at AA1-508). Mr Myburgh submitted that furthermore, the
two judgments
relied on the by the applicant did not assist it. Unlike
Highveld
Steel
(supra) here the respondent did
not “close the door on further consultations on the issue of
the selection criteria”,
but in fact reached agreement thereon,
and then issues arose on the application thereof, and
Enterprise
Foods
(supra) was also distinguishable
in that,
inter alia,
it did not deal with a “spill and fill” exercise (this
being the restructuring model chosen by the parties in the present
matter).
[60]
Although it is clear that the parties had not been able to reach
consensus on a number of the issues contemplated in
section 189
, I
agree with Mr Myburgh however, that this on its own does not mean
there was procedural unfairness. Furthermore, Freund AJ found
in
NUM
v De Beers
(supra at [55]) that
notwithstanding the failure to reach agreement on severance and some
of the detail regarding community involvement
post-retrenchment,
there was no procedural unfairness. I agree with the respondent that
the consultation process had been exhausted.
DTC
SA
[61]
Mr van der Riet submitted that the respondent was in a position at
the meeting on 26 March 2009 between the parties to finalise
consultation in good faith before the 60 day period expired and
refused to do so, and acted in contravention of the statutory 60
day
notice period. The respondent urged the court to find that where
there are material disputes of fact these must be resolved
in its
favour. In the present matter DTC SA felt that the consultation
process could continue; DTC SA was not part of the Central
Forum but
sent two shop stewards as a compromise; the applicant knew full well
that the respondent was not calling off the facilitation
and implored
it to attend but it said it was not in a position to consult and it
was responsible for the delay. On these facts
in its version, the
respondent submitted, there can be no procedural unfairness, and in
fact this was a prime example of when,
on the
Sun
International
(supra)
dictum
,
an employer was entitled to say enough is enough.
[62]
Mr van der Riet submitted that the applicant is entitled to relief on
both grounds of its complaint i.e. the notices are invalid
in that
they were issued in breach of
section 189A(7)
and secondly the
conduct of the employer indicates it that it refused to engage in
consensus seeking when it could have done so.
It is entitled to
relief, Mr van der Riet submitted, even if the respondent’s
version is accepted on the
Plascon-Evans
(supra) test. Alternatively, if this court finds the material facts
are not common cause it should refer the issue to oral evidence.
[63]
I agree with the respondent that
Plascon-Evans
being applicable, I am required to
decide any material dispute of fact in its favour to the extent that
this is relevant. However,
on the material facts it is common cause
that the applicant did not participate in the facilitated
consultation (the reasons for
this are in dispute) process and by the
time it decided to do so, the employer had clearly formed a view that
it was deliberately
attempting to frustrate the process and was
entitled to call it to a halt. I agree with Mr Myburgh’s
submissions in this
regard. There is accordingly no procedural
unfairness.
Final
relief
[64]
In applying the facts to the law in the three matters
in
casu
, I am cognisant of the fact that
the applicant seeks final relief in motion proceedings. The applicant
has not submitted any evidence
to gainsay the rationale for the
retrenchments, and I accept that this is not contested (at this stage
at least although it may
do so at a later stage after the
terminations). Furthermore, where there are material disputes of fact
which are relevant to the
relief sought, I have accepted the version
of the respondent in line with the test articulated in
Plascon-Evans
and in
Continental Tyre SA (Pty) Ltd v
NUMSA
((2008) 29 ILJ 2561 (LAC)). This
is only relevant in regard to procedural unfairness contentions in
DBCM and DTC SA, and particularly
DTC SA where there are factual
disputes regarding the reasons for non-participation of the
applicant. Resolving the factual disputes
in the respondent’s
favour in both DBCM and DTC SA, I have concluded that it is common
cause that the applicant did not participate
in the facilitated
process at DTC SA, and that in DBCM the consultation process was
exhausted, and that save for the five outstanding
issues, consensus
was reached.
Costs
[65]
Counsel were in agreement that costs should follow the cause.
Although the applicant has not succeeded in regard to procedural
fairness in the DBCM and DTC SA matters, the notices of termination
in all three matters have been declared to be invalid and of
no force
and effect. Accordingly it is appropriate that the respondent is
ordered to pay the costs as I have ordered.
Conclusion
[66]
In the premises, I confirm the orders issued in the three matters to
the effect that the notices of termination were issued
prematurely
(albeit in DTC SA by one day) in terms of
section 189A(7)
and (8),
and are of no force and effect. In addition, the notices issued at
Exploration are furthermore invalid on the ground that
they were not
preceded by compliance with a fair procedure in as required by
section 189A(13)
read with
section 189A(14).
In consequence of the
orders, for the reasons set out above, the applicant’s members
are reinstated until such time as valid
termination notices may be
issued, and, in the Exploration matter, until the respondent has
complied with a fair procedure.
____________________
Date
of hearing : 4 and 5 June 2009
Date
of order : 9 June 2009, followed by reasons delivered on 24 June
2009.
Appearance:
For
the Applicant : Adv J G van der Riet SC instructed by Cheadle,
Thompson and Haysom
For
the Respondents: Adv A T Myburgh SC instructed by Perrott Van Niekerk
Woodhouse Matyolo Inc.