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[2010] ZALCCT 21
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Piggot v Silvercross Helicopter Charters (Pty) Ltd (C924/2009) [2010] ZALCCT 21 (19 October 2010)
IN
THE LABOUR COURT OF SOUTH AFRICA
(HELD
AT CAPE TOWN)
CASE
NUMBER: C924/2009
DATE:
19 OCTOBER 2010
In
the matter between:
KEITH
PIGGOT
Applicant
and
SILVERCROSS HELICOPTER
CHARTERS
(PTY)
LIMITED
Respondent
J U
D G M E N T
STEENKAMP,
J
:
INTRODUCTION
This
matter was referred as a dispute about an alleged unfair dismissal
for operational requirements. The applicant, Mr Keith
Piggot,
is represented by Mr Graham
Leslie
,
instructed by Raymond McCreath Attorneys. The respondent,
Silvercross Helicopter Charters (Pty) Limited, was initially
represented by Bagraims Attorneys. Bagraims filed a notice of
withdrawal of attorneys of record and they were replaced by
Gillian &
Veldhuizen Incorporated on 29 July 2010. Prior to that date, on
24 June 2010, Bagraims Attorneys had been notified
that this matter
would be heard from 18 to 20 October 2010. However, subsequent
to their withdrawal, the registrar notified
the new attorneys of
record, that is Gillian & Veldhuizen, that the matter would
proceed today, that is 19 October 2010.
That notice was sent to
the respondent’s attorneys of record on 27 September 2010.
When
the matter was called this morning, neither the respondent nor its
attorneys of records were present. Neither had they
filed any
notice or any other correspondence with this Court to explain their
absence. Mr
Leslie
informed me from the bar that his attorneys had also not been
notified that the respondent would not be present here this morning.
Mr
Leslie
did, however, quite properly, alert me to an application for
provisional liquidation that the respondent had filed with the
Western
Cape High Court under case number 22599 on 12 October 2010,
that is a week ago. However, the respondent has not sought to
suspend these proceedings and has not filed any such application.
Effect
of application for liquidation
In
terms of section 358 of the Companies Act
[1]
,
at any time after the presentation of an application for winding up
and before a winding-up order has been made, the company concerned
or any creditor or member thereof may, where any action or
proceeding by or against the company is pending in any court in
the
Republic, apply to such court for a stay of the proceedings.
However, as I have stated, no such application for a stay
of these
proceedings has been brought in this court, or for that matter in any
other court, as far as I’m aware. Furthermore,
section
359(1) of the Companies Act reads as follows:
“
When
the court has made an order for the winding-up of a company or a
special resolution for the voluntary winding up of a company
has been
registered in terms of section 200 -
(a)
all civil proceedings by or against the
company concerned shall be suspended until the appointment of a
liquidator.”
In
this regard it is clear that no court has made an order for the
winding up of the respondent company. The company has merely
launched an application for such winding up. Apart from the
clear wording of that section, I also refer to the judgment of
Davis
,
J in the Cape Provincial Division in
L L Mining
Corporation Limited v Namco (Pty) Limited (in liquidation) &
Others
2004(3) SA 407 (CPD). In
that case the first respondent had approached the Western Cape High
Court for an order suspending
proceedings in terms of section 359(1)
of the Companies Act and Judge Davis said the following at page 413
F-H:
“
None
of the authorities cited by fourth respondent appear to contradict
the finding that the literal wording of section 359(1) should
apply,
that is that the suspension applies once the Court has made an order
of liquidation. The very wording of section 359(1)(b),
which
includes the phrase ‘after the commencement of the winding up’,
supports the conclusion that the legislature
was alive to the
application of section 348 and that in respect of the balance of the
section, the critical date was the actual
date of the order as
opposed to the lodging of the application, in which case section 348
would have applied.”
In
the case before me, as I have stated, even though an application for
winding up has been made, no order has been granted and,
therefore,
there is nothing in the Companies Act to suggest that the proceedings
before me should be stayed. Also, as I have stated,
the respondent
has not brought any such application. In these circumstances I
rule that the matter should proceed in the
absence of the respondent.
Condonation
The
second preliminary point concerns an application for condonation by
the applicant. The referral of the statement of case
was one
week late. The explanation for that is, in short, that the
applicant, who is a single employee, had initially referred
a dispute
to the CCMA in circumstances where he had been told in terms by the
respondent that he was the only employee to be retrenched.
To
his surprise, at the CCMA, the respondent raised a jurisdictional
point that it contemplated dismissing more than one employee
for
operational requirements and, therefore, that the CCMA did not have
jurisdiction. He then consulted his attorneys and
they referred
the matter to this court. That is the reason why the referral was
referred one week late. I accepted, at the
beginning of these
proceedings, that the delay was not extensive, that there was a good
explanation for the delay and that it did
not cause any prejudice to
the respondent. In those circumstances I granted condonation
and ruled that the matter should
proceed.
The merits
That
brings me to the merits of the claim that comprises both a prayer for
compensation for unfair dismissal, as well as a number
of contractual
claims. The background, in brief, is that the applicant, Mr
Piggot, was employed by the respondent as chief
operations officer.
He commenced employment on 1 June 2008, but did not sign a contract
of employment at that stage.
Instead he drafted what was called
a
memorandum of agreement
to apply to the employment relationship and sent it to the respondent
in January 2009. Despite further correspondence and
discussions
between the parties, this contract was never signed. However,
Mr Piggot stated under oath that the parties conducted
the employment
relationship according to the material terms of that contract of
employment. In the absence of any evidence
to the contrary, I
accept that.
The
terms of that contract that are material for the purposes of the
dispute before me, are the following:
(1)
The applicant’s basic salary was to be R55 000,00 per
month.
(2)
The applicant was entitled to commission which was to be worked out
according to a formula, setting out minimum
and maximum parameters,
but was, in short, to be calculated to be equal to 1% of the
respondent’s “field operations
income”.
(3)
Termination of the contract was subject to three calendar months’
written notice.
(4)
Dismissal for operational requirements would entitle the applicant to
severance pay of one month’s salary
for each completed year of
continuous service and not the statutory minimum of one week’s
remuneration for each completed
year of continuous service.
(5)
The applicant was entitled to 28 calendar days’ paid annual
leave.
I
pause to note here that the applicant’s testimony is that he
was not paid his salary for June 2009, although he was dismissed
with
effect from 30 June 2009. I will return to that aspect.
Dealing
with the circumstances of his dismissal, as I have said the applicant
was dismissed with effect from 30 June 2009.
The respondent
stated that this was on account of its operational requirements.
However, the applicant was first informed,
in writing, by the
respondent on 9 April 2009 that his employment contract would
be terminated with effect from 30 June 2009.
The respondent
sent this letter without having complied with any of the requirements
of
section 189
of the
Labour Relations Act 66 of 1995
.
The
applicant consulted his attorneys and on 4 May 2009, his attorneys
sent the respondent a letter, pointing out its failure to
act in
terms of the Act. The respondent, quite wisely, took legal
advice as well and its attorneys, in a clear attempt to
rescue its
client, sent the applicant’s attorneys a letter on 21 May 2009,
informing them that the retrenchment was “lifted
with immediate
effect” and asking the applicant to return to work on 25 May
2009.
After
his return to work, on 26 May, the respondent sent the applicant a
notice that purported to be in compliance with
section 189(3)
of the
LRA. Mr
Leslie
submitted, and I agree with him, that at this stage the retrenchment
of the applicant was already a
fait
accompli
. This became clearer in
the ostensible consultation process that followed. There was a
consultation meeting on 8 June
2009. The meeting was attended
by the applicant, his attorneys and the respondent’s
attorneys. According to the
applicant, it was clear that there
was no attempt on the side of the respondent to go through a joint
consensus seeking process,
but that it was merely going through the
motions in order to attempt belated compliance with
section 189
of
the LRA.
After
the meeting of 8 June, the company responded to the applicant with a
written document entitled “Company Response to
Cursory Minutes
of First Consultation at Silvercross”. In this document
the company responded to certain issues raised
by the applicant in
the meeting of 8 June. The document concluded by stating:
”
Considering
the above, management are (
sic
)
of the view that retrenchment is necessary and that a final
consultation needs to be engaged on in respect of the remaining
points
of the
section 189
notification.”
The
document was signed by one Dalia Lichtenstein, who called herself
“facilitator”. It did not mention that Ms
Lichtenstein was in fact the respondent’s attorney and was its
attorney of record until their withdrawal that I alluded to
earlier.
Following that letter, a second and final meeting was held on 30 June
2009. This meeting was again attended
by the applicant, his
attorneys and the respondent’s attorneys. On the same
date the respondent sent the applicant
a “letter of
retrenchment”, indicating that he would be retrenched from that
day, i.e. 30 June 2009. In that
letter, the respondent also
undertook to pay the applicant’s salary for June 2009;
one month’s notice;
15 days’ leave pay; and
severance pay equal to one week’s remuneration. However,
to date, the respondent
has not paid any of these amounts.
The onus is, of course,
on the respondent to show that the dismissal of the applicant for
operational requirements was fair.
In the absence of any
evidence by the respondent, I can rely only on the evidence by the
applicant. From that evidence the
dismissal was blatantly
unfair. This is so for,
inter alia
, the following
reasons:
(1)
The respondent has not given any evidence of a need in general to
retrench.
(2)
The respondent presented the applicant with a
fait
accompli
in circumstances where it had
already decided to dismiss him, despite its belated attempt to comply
with
section 189.
(3)
The respondent did not apply selection criteria that were either
agreed upon or that were fair and objective.
(4)
The respondent failed to consider alternatives to retrenchment.
The
dismissal was also procedurally unfair in that the respondent failed
to comply with the requirements of
section 189.
I say so in the
light of the evidence given by the applicant that points to a belated
attempt by the respondent to pay lip
service to
section 189
without
attempting to reach consensus. The respondent has also failed
to pay the applicant what is due to him in terms of
the contract of
employment and I have to accept, in the light of the evidence
by the applicant, that those terms are included
in the unsigned
contract of employment to which I alluded earlier.
The
applicant indicated that he is no longer interested in
reinstatement. He asked instead for compensation to the maximum
of what the Act allows, i.e. 12 months’ remuneration. In
response to a question from the Bench, he told me that he
managed to
find employment with an acquaintance, operating under the name and
style of Litson & Associates, as an aviation
consultant after
some consultations in the beginning of this year, 2010. He
was employed on a “when needed”
basis, as he explained,
and in the first six months of this year, that is from January to
July 2010, he managed to earn, on average,
about R30 000,00 per
month. That amount has improved subsequently to about R45 000,00,
but I am concerned mainly about
the period of 12 months from his date
of dismissal, that is from 30 June 2009 until 30 June 2010.
Although
I am enjoined by the Act to order compensation and not damages, I
have to apply my mind to what is just and equitable.
In those
circumstances I do think that I need to take into account the income
that the applicant has managed to generate during
the first six
months of this year. That amounts to approximately half of what he
was earning with the respondent. In my mind
it would be just
and equitable to order compensation equivalent to nine months’
remuneration. The applicant has also
shown that he is entitled
to the contractual amounts sought.
I,
therefore, make the following order:
(1)
The dismissal of the applicant is procedurally and substantively
unfair.
(2)
The respondent is ordered to pay the applicant compensation
equivalent to nine months’ remuneration,
calculated on the
basis of R55 000,00 per month.
(3)
The respondent is also ordered to pay the applicant the following
contractual amounts:
(i)
Applicant’s June 2009 salary in the amount of R55 000,00.
(ii)
Payment of commission in the amount of R23 343,95.
(iii)
Severance pay in the amount of R55 000,00.
(iv)
Leave pay in the amount of R50 769,00, being the equivalent of
28 calendar days’ leave.
(v)
Notice pay in the amount of R165 000,00, being the equivalent of
three months’ notice pay.
These amounts must be
paid to the applicant or into his attorneys’ trust account
within 10 days of the date of judgment.
Respondent
is ordered to pay the applicant’s costs on a party and party
scale, including the cost of one counsel.
______________________
STEENKAMP,
J
Date
of hearing and judgment:
19 October
2010
For
the applicant:
Adv GA
Leslie
Instructed
by:
Raymond
McCreath Inc.
For
the respondent:
Gillian &
Veldhuizen
[1]
that
is the Act currently in force, namely Act 61 of 1973