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[2010] ZALCJHB 342
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Burger v Aether Energy CC (J2536/09) [2010] ZALCJHB 342 (1 October 2010)
IN
THE LABOUR COURT OF SOUTH AFRICA
HELD
AT JOHANNESBURG
CASE
NO J2536/09
In
the matter between:
BURGER,
MARTIN MARIUS
Applicant
and
AETHER
ENERGY CC
Respondent
JUDGMENT
TIP
AJ:
1.
This matter comes before me in default
judgment proceedings pursuant to a statement of claim made under
section 191(6) read with
section 187 of the Labour Relations Act 66
of 1995 (“LRA”). The applicant contends that the
termination of his
services amounted to an automatically unfair
dismissal in that it occurred in the context of a transfer as
contemplated in section
197 of the LRA. The claim is
unopposed. An affidavit of service of the claim on the
respondent by prepaid registered
post is on file.
2.
The applicant gave evidence. He was
previously employed at Vaal Reefs and during February 2009 was
approached by Mr Gary Woolley,
whom the applicant understood was the
owner of the respondent, to come and work for it as a sales
consultant for South Africa and
areas of Africa. He accepted
and took up that position from 1 April 2009 at a gross monthly
remuneration package of R53,800.
Clause 1.1 of the contract of
employment provides: “
This
contract will begin on 1
st
April 2009 and continue until 1
st
April 2010 that will be renewably by the board on a yearly basis if
set-performance mentioned here in are adhere too or exceed.
”
[sic]
3.
Clause 16.1 deals with performance and
provides that sales contracts to the value of at least ten million
rand should be concluded
every three months. In respect of the
remuneration package, clause 5 sets out that the basic wage would be
R36,960 per month
and that the balance would comprise allowance for
transport, meals and accommodation when travelling, as well as cell
phone usage
for business calls. Mr Woolley said that the
package had been structured in this way for tax reasons. Mr
Burger testified
that he had achieved the ten million rand target and
that he had every expectation that his contract would have been
renewed after
the initial year. Indeed, Mr Woolley had said as
much to him.
4.
However, Mr Burger’s new position did
not unfold smoothly. His salary for April and May were not
paid. Mr Woolley
told him that there were complications with
finance. Then, on 15 June 2009, Mr Burger was handed a letter
by Mr Woolley advising
him that the respondent had been in
negotiations and that a new BEE company called Lesdi Energy (Pty) Ltd
had been formed which
would come into operation on 17 June 2009.
It was stated that all contracts and commitments that the respondent
had made
would be transferred to the new company. Seemingly,
this would include Mr Burger’s contract of employment.
The
letter also noted that the outstanding salary for three months
plus an extra three weeks, amounting in all to R161,400 would be
paid
out within the next two to four weeks. As it happened, none of
that was paid out, but that does not form the subject
matter of the
present claim. It should be noted that the promised amount is
based on the full monthly rate of R53,800.
5.
The statement of claim states that Mr
Burger’s services were terminated through the letter of 15 June
2009 but that appears
not to be correct. In any event, in his
evidence, Mr Burger said that he continued to work into July 2009.
There was
a renewed promise from Mr Woolley about the payment of the
remuneration but, again, nothing came of that. Mr Woolley also
said that the directors of the new company had said that they did not
require the services of Mr Burger and the other international
sales
consultants because, he went on, they had their own people. Mr
Burger then left. Throughout these events, there
had been no
consultation whatsoever, whether in terms of section 189 or section
197 of the LRA.
6.
Section 187(1)(g) is in these terms: “
A
dismissal is automatically unfair ... if the reason for the dismissal
is ... a transfer, or a reason related to a transfer, contemplated
in
section 197 ...
”. In this
case, the facts clearly fall within the ambit of this provision.
There was undoubtedly a transfer of
the business of the respondent as
a going concern. Equally plainly, the applicant’s
employment came to an end because
the directors of the new entity had
their own staff to perform the work that the applicant had been doing
– although the
substantive viability of that view has not been
factually demonstrated. Although the thus stated wishes of
those directors
evidently precipitated the termination of Mr Burger’s
employment, the instrument thereof was Mr Woolley and on balance I am
satisfied that he was thus acting on behalf of the respondent.
In effect, Mr Burger was retrenched because of the transfer
and
without the semblance of any proper process.
7.
The applicant testified as to the impact
upon him of the loss of his employment. It has been severe.
He has been unable
to maintain bond repayments on the family home,
which accordingly had to be disposed of. His car and furniture
have suffered
the same fate. Considerable stress has resulted
not only for him, but also his wife and his daughter. The
latter’s
performance at school has dropped drastically.
Psychological intervention is needed, but he has no funds for that.
Although he has tried hard to secure new work, that has been
unsuccessful and he resorts to doing odd jobs if he can find them.
He estimates that his losses stand at over R1,5 million.
8.
In terms of section 194(3) of the LRA an
award of compensation for an automatically unfair dismissal must be
just and equitable
in all the circumstances and not more than the
equivalent of 24 months’ remuneration. I have set out
above the factors
that tend to be of an aggravating nature, including
the abruptness of the manner in which Mr Burger’s employment
was brought
to an end and the entire absence of due process and
regard to considerations of fairness.
9.
Against that must be weighed the facts that
his tenure as an employee had been relatively brief and that there
was no certainty
that it would have been extended beyond 1 April
2010. However strong Mr Burger’s expectations might have
been, it remained
so that it would have been up to the board to make
a decision whether or not to renew his contract at the appropriate
time and
various contingencies may have played a role at that stage.
10.
Having regard to all these circumstances,
it is my conclusion that an award should be made of 16 months’
remuneration.
Order
11.
Accordingly, I make the following order:
1
It is declared that the applicant’s
dismissal was automatically unfair.
2
It is declared that the applicant’s
dismissal was both substantively and procedurally unfair.
3
The respondent is to pay compensation to
the applicant in the amount equivalent to 16 months’
remuneration, calculated at
the full package rate of R53,800 per
month.
4
The respondent is to pay the costs of this
application.
____________________________
K
S TIP
ACTING
JUDGE OF THE LABOUR COURT
DATE
OF HEARING:
23 September 2010
DATE
OF JUDGMENT:
1 October 2010
FOR
APPLICANT:
Mr W P Schöltz
of
Jansens Incorporated