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[2011] ZALCJHB 253
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Phoffu and Others v Quest Flexible Staffing Solutions (JS 822/08) [2011] ZALCJHB 253 (15 October 2011)
THE LABOUR COURT OF SOUTH AFRICA
(HELD AT BRAAMFONTEIN)
Case: JS 822/08
In the matter between:
STRATI PHOFFU & 3 OTHERS
Applicant
and
QUEST FLEXIBLE STAFFING
SOLUTIONS Respondent
JUDGMENT
LAGRANGE, J:
Introduction
This is an application to rescind a
default judgement handed down on 10 June 2009 by Justice Molahlehi J
in favour of the applicants
in the main matter (the respondents in
the rescission application). The application is brought in terms of
section 165 of the
Labour relations act 66 of 1995 (' the LRA').
Background
The applicant (the respondent in the
default judgment) is a temporary employment service provider in
terms of section 198 of the
LRA which supplied the services of the
individual respondents to work as direct sales agents for ABSA. The
individual respondents
were employed on fixed term contracts by the
applicant and were all so engaged on learnerships which were due to
end sometime
in November 2008. The fixed term contracts of the three
respondents were due to end between November 2008 and February 2009.
For the purposes of this judgment the parties’ designations in
this rescission application will be used rather than their
designations as applicants and respondent in the main matter.
The bank instructed the applicant to
reduce the number of staff assigned to it drastically from 1000 to
291 by the end of August
2008. The applicant alleges that it engaged
the affected person now in a consultation process and sought to give
them an opportunity
to finalise their learner ships. As a result of
the termination of their assignment by the applicant to the bank the
respondents
referred an unfair dismissal case to the CCMA, which was
conciliatory on 7 October 2008 without success.
The applicant claims that it engaged
with the bank to try and avoid the drastic reduction in the number
of staff assigned to it,
but during August 2008 the bank rejected
all the alternatives proposed. Following this the applicant claims
it started a detailed
consultation process during August 2008 with
the affected employees, the main object of which was to find
alternative positions
for them and to minimise the impact of
retrenchment as well as the completion of their learner ships
notwithstanding the termination
of the assignments by the bank. The
respondents dispute the applicant’s claims about a
consultation process, saying that
in fact they were simply advised
to stop working. Insofar as there was any attempt by the applicant
to assist them in finalising
their learnerships, they claim only one
of them was contacted with a promise of remedying this issue and it
never came to fruition.
The applicant says it has been
successful in re-deploying the majority of the affected employees in
the Polokwane region but the
respondents did not make themselves
available for such redeployment. Accordingly, it submits that the
retrenchment process was
substantively and procedurally fair, and
even if there had been any procedural unfairness it was not so
serious that would have
justified the 12 months compensation which
was awarded, particularly taking into account the fact that the
fixed term contracts
were due to expire within a few months of them
being retrenched.
In November 2008, the respondents
sent a statement of claim to the applicant's office in Polokwane.
The original statement of
claim did not have a case number but
another copy of the statement- this time containing a case number-
was sent to the applicant’s
Polokwane office on 26 February
2009. The first referral was made within the 90 day period after the
unsuccessful conciliation,
but the second referral fell outside the
time limit.
The applicant states that no further
documentation was received concerning the case until on or about 15
June 2008 when it received
a copy of the default judgement.
Grounds
of rescission
The applicant claims that the default
judgement was granted in error. The basis for it saying so is that
because the original
statement of case did not contain a case number
it was invalid and the subsequent referral of the corrected
statement of case
was outside the time limit for such a referral and
in the absence of a condonation application being brought the court
did not
have jurisdiction to hear the unfair dismissal dispute.
Wilful
default
The applicant concedes that the
dispute concerned its local Polokwane office. It offers no
explanation on affidavit why it did
nothing about the first referral
which lacked the case number, but focuses on its failure to respond
to the second referral.
In this regard it claims that nothing was
done because the Polokwane office was "unfamiliar with the
processes involved."
It claims that previously the local office
had only dealt with CCMA disputes. Consequently it claims that it
was unaware that
Labour Court disputes could be initiated by telefax
rather than by service of a sheriff. Likewise it was supposedly
unaware that
it needed to file a response to the referral, and also
that it would not be notified of the hearing date if the matter was
not
formally opposed. As a result of these factors and the
‘disputed’ the veracity of the papers it received, as
well
asnot receiving notice of a trial date, the applicant claims
that it assumed that the referral had been incorrect. It was only
after receiving the default award that it sought legal advice and
became aware of what was required of it. On this basis, the
applicant says that it was not wilfully in default.
The respondents dispute the
applicant's attempt to justify its failure to do anything on account
of the ignorance of staff at
its Polokwane office. They point out
that the company has a legal department which could have advised
them and that they too
were not familiar with Labour Court processes
but managed to seek and obtain help when necessary. The respondents
also rightly
query why the Polokwane staff could not have contacted
the head office for assistance as they obviously did subsequently.
In
its replying affidavit, the applicant does not dispute the
respondent’s claims about the in-house expertise that was
available
to the Polokwane office, nor does it offer any explanation
why no assistance was sought from the head office or the legal
department.
The respondents dispute the applicant’s
bona
fides
in the matter and submit that the rescission application
is merely a delaying tactic.
Evaluation
The first reason why the applicant
says it did not file a notice of opposition was the alleged
unfamiliarity of the branch manager
at the Polokwane office with
Court processes, and the manager’s alleged assumption that
court proceedings could only be
initiated by the sheriff. The
difficulty with this contention is that the respondents used the pro
forma statement of claim which
is annexed to the rules of the Labour
Court, and paragraph 2 of the pro forma document clearly states
that: "If a party
intends opposing the matter, the response
must be delivered within 10 days of service of the statement in
terms of sub rule 6
(3) of the Rules of the Labour Court, failing
which the matter may be heard in that party's absence and an order
for costs may
be made against the party." There is no
explanation by the Polokwane manager why he did not understand this.
If he had bothered
to read this paragraph, it is inconceivable that
he would not have realised that it appeared that it was necessary
for the applicant
to respond. If he did not understand precisely
what this entailed there is no explanation why he didn't seek
further clarity
from the applicant's head office or legal
department. The reason the applicant was not notified of the matter
being set down
was because no notice of opposition was filed.
The other reason relied on for the
applicant’s inaction after receiving the second statement of
claim is the manager's alleged
belief that court process could only
be initiated by service by the sheriff. No explanation is provided
for this selective legal
knowledge on the part of the manager nor,
if he was uncertain of Labour Court processes generally, why he did
not seek advice
on this point either from the head office. Looked at
in its totality, the applicant's explanation for its in action is a
curious
combination of ignorance and selective knowledge of legal
processes. It is an explanation that fails to convince.
On the other hand, it cannot be said
with any degree of certainty that if the applicant had received
notice of the set down for
the default hearing from the court that
it would not have attended and sought belatedly to oppose the
matter. Moreover, there
does appear to be a genuine dispute about
the fairness of the respondents’ retrenchment. On the face of
the affidavits
filed, the applicant appears to have a
bona fide
case. If it is able to prove what it alleges in its affidavits, it
should succeed in defending itself against the respondents’
claim of unfair retrenchment.
I also accept that, in the context of
employees who were engaged on fixed term contracts and whose service
was terminated early
for operational reasons, the question of
compensation for an unfair retrenchment might be materially affected
by the consideration
that their contracts were due to expire in any
event in less than 12 months.
Was
the judgment granted in error?
Even though the applicant’s
bona fides in the conduct of its opposition to the respondents’
claim is questionable,
I must still consider whether the default
judgement was granted in error. There is case authority for the
proposition that a
statement of case which does not contain a case
number issued by the registrar does not qualify as a statement of
case that complies
with the Labour Court rules, for the purpose of
determining if a valid referral of a case has been made to the
Labour Court.
In
Kungwini
Residential Estate & Adventure Sport Centre Ltd v Mhlongo NO &
others
(2006)
27 ILJ 953 (LAC)
,
McCall AJA, said, in relation to a failure by an applicant to put a
case number on his rescission application in contravention
of CCMA
rules:
“
[21] ...
There
is no reason why an applicant should not obtain a case number from
the commission and insert it in the notice of application
before
serving the application on the other party or parties. Moreover, for
practical reasons, this is what should be done
. The alternative
would mean that the respondent will either have to endeavour to
obtain the case number from the office of the
commission, after the
application has been delivered to the commission, or that the
respondent will deliver a notice of opposition
without a case number
on it. The first possibility could present difficulties, bearing in
mind that documents may, in terms of
rule 7, be filed with the
commission
by sending a copy by
registered post or by faxing it. Without a case number as a reference
the office of the commission may have
difficulty in tracing a case in
order to furnish the respondent with the case number. The second
possibility could result in the
opposing documents, without a case
number, being
mislaid. I do not
understand the first respondent's reasons for criticizing what the
appellant's representative did and why he considers
that what he did
was unfair. Be that as it may, he found that the appellant's
representative used the absence of a case number
'as an excuse not to
oppose the application in order to proceed with holidays which was
done after receipt of the application (sic)'.
He said
that: 'In light of rule 10, I find that the applicant had no
bona fide defence to oppose the application for condonation.'
These findings by the first respondent
were, in my view, a gross misdirection. Firstly,
the
respondent was perfectly entitled to refer to rule 31(3) and to rely
upon the absence of a case number as a reason for not filing
a notice
of opposition
.”
1
(emphasis added)
In
Windybrow Centre for the
Arts v SA Commercial Catering & Allied Workers Union on behalf
of Gina & Others
(2007)
28 ILJ 1343 (LC)
,
Mohlahehi J, considered the principle applied in
Kungwini’s
case in the context of a
failure to include a case number on a statement of claim as required
by the Labour Court Rules:
“[19] ...
[T]he fact is that the respondent's service of its documents on the
applicant failed to comply
with the requirements of both rules 3(1)
and 6(1)
(c)
of the rules of this court. If the approach in
Kungwini
Residential Estate
were
referred to above was to be adopted, then it would mean that the
respondent never served its papers on the applicant. In terms
of this
approach it could be said that because of the defect in the service
by the respondent, the applicant was not obliged to
file a response.
[20] The
other approach, which seem to me in the circumstances of this case to
be the most appropriate, is to
regard the date of service as being
the date on which the applicant's attorneys were informed of the case
number by the respondent.”
2
In this instance, the respondents had
not complied with the requirements of Rule 6(1)(a)(ii) of the Rules
of the Labour Court,
by failing to include a case number in their
statement of claim. I appreciate that, at that stage, the applicants
might have
been prosecuting their case as lay persons without
assistance. However, the failure to include the case number is not
merely
a formal ‘technical’ disqualification, but one
which can seriously hamper the administration of cases by the
registrar’s
office. The practical significance of the
requirement is no less important in the context of labour court
proceedings as it is
in the case of the CCMA, which McCall AJA
referred to in
Kungwini
’s case.
In this case, the original statement
of case did not contain a case number and this was only rectified
when the second referral
was made in February 2009. In the
circumstances, I believe it is appropriate to follow the approach of
Molahlehi J in the
Windybrow
matter, which means that the
true date of referral, for the purposes of calculation of time
limits, is the date of the second
lodging of the referral with the
court in February 2009.
It is a requirement of section 191
(11) of the LRA that a late referral of a dispute over an unfair
dismissal for operational
reasons in terms of section 191 (5) (b)
(ii) must be made within 90 days of the unsuccessful conciliation of
a dispute, and a
late referral may be condoned by the Labour Court
on good cause shown. Without an application for condonation being
granted by
the court, the court simply has no jurisdiction to
consider the referral. It is evident from the default judgment that
no such
condonation was granted. Had the court being aware that
condonation was required, it would undoubtedly have considered and
made
a ruling on this question. Accordingly, I can only conclude
that the court considered the referral and made a default order in
circumstances where the learned Judge was not aware of the need for
condonation.
Therefore, for this reason alone it
is clear the default order was made in error and must be rescinded
on that account.
Costs
Even though the applicant is
ultimately successful in this application, these proceedings would
have been unnecessary had it acted
properly on receipt of the second
referral. The applicant, upon obtaining proper legal advice, should
have filed an answering
statement in accordance with the provisions
of Rule 6(3) of the Labour Court rules, noting as a preliminary
objection the failure
of the respondents’ to file a
condonation application for the late referral of the case. Instead
it did nothing, but remained
silent. It is not correct that it can
simply fold its arms and take the view that until a condonation
application is filed it
can ignore the referral.
In the circumstances, it was
perfectly reasonable for the respondents to have taken the view that
the applicant was not opposing
the matter. The only reason the
default judgement is being rescinded is owing to the error made in
relation to the question of
condonation. Had the applicant noted its
opposition properly, the matter would probably be on its way to
trial by now, and neither
the default proceedings nor the rescission
application would have been necessary for this matter to progress.
Accordingly, I
believe it is fair and equitable in the circumstances
for the respondents to be compensated for the legal costs and they
might
have incurred.
Order
The court order handed down in this
matter on 10 June 2009 is rescinded on the basis that it was made in
error in the absence
of the applicant, because no application for
condonation was made for the late referral of the case in February
2009.
The applicant is ordered to pay the
respondents’ costs incurred in opposing the rescission
application.
The respondents are directed to file
a condonation application for the late referral of their dispute on
26February 2009, within
10 days of the date of this judgment.
The applicant is directed to file its
answering statement within 15 days of the date of this judgement.
R
LAGRANGE, J
JUDGE
OF THE LABOUR COURT
Date
of hearing: 24 November 2010
Date
of judgment: 15 October 2011
Date
of variation to clarification designation of parties: 07 November
2011.
Appearances:
For
the applicant: Ndumiso P Voyi Attorneys
For
the third respondent:
Wayne
Hutchinson
Kirschmanns Incorporated
1
At 964
2
At 1348