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[2009] ZALCD 7
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National Union of Metal Workers Union of SA v Aunde South Africa (Pty) Limited (D102/09) [2009] ZALCD 7 (20 May 2009)
IN
THE LABOUR COURT OF SOUTH AFRICA
HELD
AT DURBAN
CASE
NO:D102/09
REPORTABLE
In
the matter between:
NATIONAL
UNION OF
METAL
WORKERS UNION OF SA
Applicant
and
AUNDE
SOUTH AFRICA (PTY) LIMITED
Respondent
JUDGMENT
Molahlehi J
Introduction
[1]
The respondent in this matter dismissed the
members of the applicant, NUMSA for operational reasons and a day
thereafter re-employed
them on different terms and conditions. NUMSA
has now brought this application in terms of section 189A(13) of the
Labour Relations
Act 66 of 1995 (the LRA), in terms of which it seeks
an order compelling the respondent to comply with the fair procedure
and further
ordering their reinstatement on terms and conditions
applicable prior to their dismissal.
Background
facts
[2]
The respondent falls under the scope of the
Metal Industries Bargaining Council (MIBCO) which regulates the
employees’ salaries
and other terms and conditions of
employments in the sector. At some stage the relationship between the
respondent and NUMSA was
governed by both the recognition agreement
and an agency shop agreements. It would appear that the agency shop
was cancelled but
not the recognition agreement.
[3]
During September/October 2008, the
respondent engaged in a consultation process in terms of section 189
of the LRA with NUMSA, facilitated
by the Commission for
Conciliation, Mediation and Arbitration (the CCMA). The end result of
this process was that a number of employees
were retrenched by the
respondent. It was also during the same period that the respondent
indicated to NUMSA that it intended in
addition to embark on a
retrenchment exercise to terminate the employment of all its weekly
paid employees and to reengage them
afresh and with rates of pay and
conditions of service determined by the minimum levels as prescribed
by MIBCO’s Main Agreement.
Although NUMSA indicated that this
would be a very drastic measure, it was agreed that the issue would
be held over until the completion
of the retrenchment exercise which
was in process at the time.
[4]
On 5
th
November 2008, the respondent invited NUMSA to a meeting to discuss
the restructuring of the terms and conditions of employment
of the
hourly paid employees and suggested that a meeting be held on the
11
th
November 2008. NUMSA respondent and indicated that they were
available on the 14
th
November 2008. For whatever reason this meeting did not take place
but on the 19
th
November 2008, the respondent addressed a letter to NUMSA proposing
the restructuring of the terms and conditions of the hourly
paid
employees.
[5]
The parties met on 26
th
November 2008, where the respondent firmed up its intention to
retrench and reemploy the weekly paid employees. Having failed on
that day to reach consensus NUMSA proposed a further meeting before
the end of the year but that proposal was rejected by the respondent
who proposed that a meeting should be convened at the beginning of
the following year.
[6]
On 9
th
December 2008, NUMSA addressed a letter to the respondent informing
it that it had received information from its members indicating
that
the respondent had concluded an agreement with UASA on the proposed
restructuring. The respondent responded in a letter dated
10
th
December 2008, and enclosed therein the agreement it had concluded
with UASA signed on 5
th
December 2008. The respondent further proposed a meeting with NUMSA
for the 8
th
January 2008, which did not materialised because of availability
problem of the parties. A further correspondence from the respondent
to NUMSA is that of the 21
st
January 2009, wherein the respondent indicated that the membership of
NUMSA has dropped to “approximately 33%” and
that of UASA
was “approximately 60%” of the hourly paid employees. It
is further indicated in this letter that UASA
had gained majority
representation amongst the hourly paid employees and was therefore
the sole bargaining agent “for all
matters relating to plant
level issues including any consultation required by the LRA.”
[7]
Thereafter, the respondent concluded an
agreement with UASA on the 22
nd
January 2009, in terms of which it was agreed that all the hourly
employees would be dismissed and reemployed on different terms
and
conditions. Pursuant to this agreement members of NUMSA were
dismissed on the 25
th
January 2009 and reemployed on 26
th
January 2009. Subsequent to concluding the recognition on the 21
st
January 2009, a day thereafter the respondent concluded a
retrenchment agreement with UASA on 22
nd
January 2009.
The
governing retrenchment
[8]
A dismissal based on operational
requirements of the employer is governed by section 189 of the Labour
Relations Act 66 of 1995
(the LRA). That relevant part of that
section provides as follows:
“
Dismissals
based on operational requirements
(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;
The
section then provides for other possible parties with whom the
employer should consult with in the event there is no collective
agreement that requires consultation with any other party.
[9]
If an employer in a retrenchment exercise
that meets the threshold set out in section 189A, fails to follow a
fair procedure, a
union party may approach the Labour Court by way of
an application for an order -
“
(a)
compelling the employer to comply with a fair procedure;
(b) interdicting or
restraining the employer from dismissing an employee prior to
complying with a fair procedure;
(c) directing the
employer to reinstate an employee until it has complied with a fair
procedure;
(d)
make an award of compensation, if an order in terms of paragraphs (a)
to (c) is not appropriate.”
[10]
In the present
instance the crisp issue is whether or not the respondent had a duty
to consult with NUMSA after it lost its majority
membership and after
the respondent signed a recognition agreement with UASA. It is this
recognition agreement which the respondent
relied on in supporting
its case that there was no duty to consult NUMSA once this agreement
was concluded.
[11]
In its heads of
argument the respondent relied on
Maluleke
& Others v Johnson Tiles (Pty) Ltd (2008) 29 ILJ 2606 (LC
),
in support of its case that it was not obliged to consult with NUMSA.
In that case the Court held that the hierarchy governing
the
consultation process in section 189(1) (a)-(d) did not require an
employer party to consult with any other union or individual
employees where the consultation was done in terms of a collective
agreement which provides for consultation in the event of an
anticipated retrenchment.
[12]
The Court in
SACCAWU
&
Another v
Amalgamated Retailers (Pty)
[
2002] 1
BLLR 95
(LC),
seems
to have adopted a much broader approach to the issue of whether or
not an employer party has a duty to consult with the parties
identified in section 189(1)(a)-(d) of the LRA. In that case the
Court in dealing with the issue of consultation in a case where
the
employer consulted with the recognized trade union which was however
not mandated to represent non-union members affected by
the proposed
retrenchment held at para 26 that:
“
The
identification of a consulting party by applying the criteria
established in s 189(1) (a) , (b) and (c) might confer exclusive
rights on the partner with first claim in relation to other potential
partners listed in those paragraphs, but it does not relieve
the
employer of an obligation to consult in terms of subsection(d)with
affected employees or their representatives for the purpose
if those
employees are not represented in some manner or form by a collective
bargaining agent, workplace forum or registered trade
union
respectively.”
[13]
In
Mahlinza &
Others v Zulu Nyala Game Ranch (Pty) Ltd
[2004] JOL 12459
(LC),
the
Court held that it is only where there is no collective agreement in
existence which regulates consultations in respect of a
retrenchment,
that an employer is under an obligation to consult with another
registered union or individual employees.
[14]
Although in
Nomalongelo
Thobeka Surprice Moyo v Knight Watch Security unreported case number
JS 117/08
, the Court was faced with an
individual who complained that she was not consulted prior to her
dismissal for operational reasons,
the principle enunciated therein
is apposite the present case. In that case the employer party claimed
to have consulted with the
majority union before effecting the
retrenchment. In dealing with whether or not the employer party had a
duty to consult with
the employee despite having consulted with the
majority union, the Court had this to say:
“
In
the present case whilst there is evidence that suggest that SATAWU
was a majority union, there is no evidence that the consultation
was
done in terms of a collective agreement regulating the consultation
process in case of a retrenchment. In the absence of a
collective
agreement regulating consultation in the event of retrenchment, the
Respondent was in my view obliged to consult with
the Applicant…”
[15]
In the present instance it is common cause
that NUMSA lost its majority membership to UASA in a process which
seem to have happened
in the midst of a retrenchment consultation
between NUMSA and the respondent. It is also common cause that on
21
st
January 2009, UASA and the respondent concluded a recognition
agreement and strangely enough they then a day thereafter on 22
nd
January 2009, concluded a retrenchment agreement. In terms of that
agreement the hourly paid employees who were not members of
UASA were
retrenched on 25
th
January 2009, and reemployed on different terms and conditions of
employment on 26
th
January 2009.
[16]
The second introductory paragraph of the
agreement states:
“
ASA
(the respondent) has concluded consultation with UASA, as
contemplated by section 189(1)(a), on its operational requirements.
As a consequence of the consultations, UASA and ASA have agreed that
the terms and conditions of employment of ASA changed with
the terms
of this agreement.”
[17]
It is clear that the above clause was
intended to relief the respondent from its duty to consult with NUMSA
and any other consulting
party identified in section 189(1)(a)-(d) of
the LRA. The question that arises in this respect is whether at the
time this agreement
was concluded the respondent had a collective
agreement regulating the consultation process in case of a
retrenchment. The answer
in my view is clearly in the negative. The
recognition agreement which the respondent sought to rely on in
support of its argument
that the procedure it followed was in line
with the provisions of section 189(1) (a) of the LRA, is silent in as
far as the regulation
of the consultation process in case of a
retrenchment was concerned. Thus in the absence of this provision in
the recognition agreement
between the respondent and UASA or any
other collective bargaining agreement between them, the respondent
was in my view obliged
to consult with NUMSA before the dismissal of
its members for operational reasons.
[18]
The respondent in its closing argument
contended that NUMSA delayed in bringing this application. This issue
was never raised in
any of the respondent’s papers and
therefore NUMSA never had the opportunity of responding thereto and
providing an explanation
if indeed there was a delay.
[19]
In my view the respondent was obliged to
consult with NUMSA and therefore having failed to do so the
retrenchment of NUMSA members
on 25
th
January 2009, was procedurally unfair. I am also of the view that
there is no reason in law and fairness why costs should not follow
the results.
[20]
In the premises the following order is
made:
1.
The retrenchment of the applicant’s
members was procedurally unfair.
2.
The respondent is ordered to reinstate the
applicant’s members, on the same terms and conditions, without
loss of benefits
and salary as applicable to them prior to their
dismissals, on 25
th
January 2009, until such time that the respondent complies with a
fair procedure.
3.
All or any amounts paid to the applicant’s
members as severance and or notice pay after the dismissals in
January 2009, must
be repaid to the respondent, together with
interest thereon a
tempore morae
before any payments in terms of this order is made.
4.
The respondent is to pay the costs of the
applicant.
______________
MOLAHLEHI
J
Date
of hearing: 11 May 2009
Date
of Judgment: 20 May 2009.
APPEARANCES
For
the Applicant : Adv. Schumann
Instructed
by Brett Purdon Attorneys
:
For
the Respondent: Adv Posemann
Instructed
by Shepstone & Wylie
Attorneys: