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[2011] ZALCCT 81
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G E Security (Africa) v Airey and Others (CA02/2009) [2011] ZALCCT 81 (8 April 2011)
IN
THE LABOUR APPEAL COURT OF SOUTH AFRICA
(HELD
AT CAPE TOWN)
CASE
NO: CA02/2009
In
the matter between:
G
E SECURITY
(AFRICA)
Appellant
and
ROGER
AIREY
First
Respondent
DAVID
DENOON-STEVENS
Second
Respondent
VINCENT
WATTERS
Third
Respondent
JUDGMENT
Waglay
DJP:
[1]
This is an appeal and cross appeal against the judgment of Cele J in
terms of which it was found that the retrenchment of the
first to
third respondents was procedurally unfair because of the appellant’s
failure to follow an agreed selection criteria.
The relief granted by
the Court
a quo
was to order the appellant to pay each
respondent compensation that was equal to the salary they would have
earned over five months
had they remained in the appellant’s
employ.
[2]
There was no dispute between the parties about the fact that the
appellant had a genuine need to restructure its business, nor
was
there a dispute about the fact that the parties had reached an
agreement about the application of the selection criteria. The
dispute between the parties was about the terms of the agreement
relating to the selection criteria.
[3]
The court
a quo
found the respondents dismissal to be
procedurally unfair on the basis that the appellant did not comply
with the agreed selection
criteria because of its failure to consider
the respondents for posts for which they did not apply. The Court
said that the appellant’s
action amounted to a failure to
consider reasonable alternatives to respondents’ dismissals.
[4]
The issues in this appeal and cross appeal are therefore
substantially narrow. They are the following:
4.1
Was the appellant obliged in terms of the
agreement, to consider the respondents for all positions to which
they were eligible in
its new structure, irrespective of whether they
applied for any position or not? The appellant answers the question
in the negative
while the respondents answer it in the positive. The
appellant argues that, in terms of the agreed selection criteria, it
had no
obligation to consider the respondents for positions for which
they did not apply unless the position had not been filled by a
successful applicant.
4.2
If the appellant did breach the agreement
concerning selection criteria, did this render the dismissal
substantively unfair, as
submitted by the respondents in the cross
appeal, rather than procedurally unfair as found by the Court
a
quo
? The second issue need only be
considered if the appellant fails on the first issue.
[5]
In consequence of the fact that the issues are substantially narrow,
it is not necessary to set out the general background facts
concerning the retrenchment of the respondents. These facts in any
event appear in the judgment of the Court
a quo
. It is,
however, necessary to set out those material facts bearing upon the
issues in this matter which were emphasised in this
appeal.
[6]
All of the respondents were employed in the appellant’s
Engineering Department. The first respondent was employed in the
position of a Certification, Validation and Test Manager. The
second respondent was employed in the position of Technical
Director
in charge of the technological development of new products. The
third respondent was employed in the position of
Engineering
Manager.
[7]
During the latter part of 2004 and the early part of January 2005,
the appellant’ s Human Resources Manager, Ms Susan
Berrington
(Berrington), conducted a “
brown paper exercise”
with
the staff in the appellant’s Engineering Department in order to
develop a new staff structure for that Department.
There is no dispute that there was a commercial rationale for the
appellant to change its staff structure in that Department.
[8]
As a consequence of that exercise on 29 June 2005, the appellant
issued a formal section 189(3) notice to all affected employees.
[9]
In the section 189 notice, which was received by each of the
respondents, the appellant
inter alia
, informed its employees
that employees would have to apply for posts in the new structure
which would be filled on the basis of
competencies assessed by way of
an interview and the best fit for the job requirement as defined. The
letter stated:
“
Those
employees who do not succeed in securing a position within the new
structure through the recruitment exercise will, unless
otherwise
employed through the recruitment exercise be retrenched due to
redundancy. It will accordingly be important to apply
for the posts
as and when they are advertised. Failure to apply or failure to
secure a position may lead to retrenchment.”
[10]
At the initial consultation meeting, employees were reminded that
they must apply for every post that may be of interest to
them as
their failure to apply for a post will possibly result in
retrenchment.
[11]
Each of the respondents only applied for the new engineering position
in the new structure and not for any other position.
None of them
were successful. The appellant communicated its decision to them and
also informed them that no position was found
for them in the new
structure and that it had filled all positions in the new structure.
Subsequent to being told that the
appellant had filled all positions
in the new structure and in response to a request by the appellant to
identify any other alternatives,
the first and second respondents
applied to be considered for the position of Product Manager which
fell outside the new structure.
This position was located
within the General Electric organization in Europe. The appellant is
part of the General Electric group.
[12]
The first and second respondents were not successful in their
application for the position of Product Manager.
[13]
Having failed to secure a position within the appellant’s new
structure the respondents were dismissed. They challenged
the
fairness of their dismissal claiming their dismissal to be both
substantively and procedurally unfair.
[14]
In the pre-trial minute, filed in preparation of the trial, the
parties recorded the following fact to be common cause:
“
In
the event that an employee was not successful in securing a position
in the new structure. He/she would be placed in a pool of
employees
who had not obtained positions and Appellants management would
evaluate all other possible alternatives with a view to
placing
him/her in any remaining vacant positions.”
[15]
One of the persons who testified at the trial, Berrington, the
appellant’s Human Resources Manager, gave evidence that,
at the
consultation meeting held on 26 July 2005, the employees were
informed that there would be a single interview process, with
unsuccessful applicants being considered for positions thereafter.
Her testimony was also that at the meeting on 23 August 2005,
she
emphasised that those applicants whose applications were not
successful, would be considered for alternative positions. Adding
that what she had meant was that the unsuccessful applicants would
only be considered for those positions which have not been filled
through a successful application.
[16]
The respondents dispute Berrington’s evidence persisting that
the agreement was that they had to be considered for all
vacant
positions notwithstanding the fact that they did not apply for those
posts and pointed to two pieces of evidence that they
submit was
subversive of appellant’s averments:
16.1
In a letter dated 20 July 2005 and in
response to questions posed by employees which asked: “
If
you do not apply for a position will it mean that you are
automatically retrenched, or will you be put into the pool that
management
will look at for other positions?
”;
the appellant response to that was: “
Not
necessarily, a person may be offered a reasonable alternative or may
be placed in a pool until all other alternative positions
have been
considered and then if there is no other suitable alternative the
person will be retrenched
.”
and,
16.2
The cross-examination of the appellant’s
CEO, Mr. R J McKenzie contains this important testimony:
“
I
am saying your evidence was to the effect that before there is a
pool, employees who have not applied for a position for a particular
position must be assessed for that position. Isn’t that so?
That was your evidence – as a suitable alternative?
As a suitable
alternative, yes. But the answer is Yes?-Yes
That
being so, Mr McKenzie , I put it to you that on your version the
applicants should have been considered for that position of
engineering manager, which later changed to team leader
Correct?-Correct”
[17]
Both the appellant’s written answer to the employee’s
questions as well as McKenzie’s concessions are, in
my view,
ambiguous. There are two possible interpretations. Firstly, as
contended for by the appellant, the respondents would only
be
considered for positions not filled through an application process:
that is, for any remaining vacant positions. The other
possible
interpretation, as supported by the respondents, is that an employee
who had failed in his application for a senior position,
would
automatically have to be considered for a junior one, even if he did
not apply for it.
[18]
In my view the first interpretation is far more probable and makes
common sense. If the respondents are correct in their interpretation
it would mean that an employee who may have applied for a post and
who was found suitable, could still not get the job simply because
there was another employee that may be able to be fitted into the
position, but who did not apply for it. Such a process
would
make no sense when viewed within the context of the express
requirement that people should apply for posts. The interpretation
sought by the respondents is also at odds with the wording of the
section 189 notice, as well as what took place at the initial
consultation meetings referred to earlier. The process contended for
by the respondent would have led to manifest confusion. Ordinarily
an
employer is entitled to assume, in the context where this method of
selection is agreed upon, that an employee who does not
apply for a
position is not interested in such position.
[19]
The appellant’s contentions are in addition strengthened by the
fact that other employees who were interested in more
than one
position applied for and were considered for all such positions.
[20]
More fundamentally, however, the respondents’ contention is at
odds with what was agreed to in the pre-trial minute referred
to
above. The pre-trial minute belies the suggestion that if any of the
respondents did not succeed in a senior position for which
they had
applied, the appellant would have an automatic obligation to consider
them for a lower position even though they did not
apply for it. In
short, the pre-trial minute made it clear: if an employee failed to
apply for a vacancy, he or she would be placed
in a pool from which
appellant would try and place them in the event of any remaining
vacancies. The key issue before this Court
had therefore been settled
in the pre-trial minute and the respondents were bound by the
admission they made therein. See in this
respect
Filta-Matix
(Pty) Ltd v Freudenberg and others
1998 (1) SA 606 (SCA) at 614B–D) and
Shoredits
Construction (Pty) Ltd v Pienaar NO & others
[1995]
4 (BLLR) 32 (LAC)
at
34C–F
[21]
The respondents’ counsel submitted, relying on the matter of
Shill
v
Milner
1937 AD 101
,
that
the issues in the pre-trial minute had been broadened because of a
lack of an objection to the questions put to McKenzie. Apart
from the
fact that I have found that McKenzie’s concessions are at best
ambiguous, I reject this submission for two additional
reasons.
21.1
Firstly, there was never any formal
application made to withdraw the admission.
21.2
Secondly, the appellant’s counsel was
not obliged to object to questions which sort to elicit an answer to
a common cause
fact which had been settled and was entitled to remain
silent and argue at the end that the Court could ignore the answer of
a
witness that was at variance with what were the agreed facts. A
Court does not have the power to go beyond the agreed common cause
facts in the absence of fraud or the granting of an application to
withdraw an admission.
See also
HosMed
Medical Aid Scheme v Thebe Ya Bophelo Healthcare Marketing &
Consulting (Pty) Ltd & Others
[2007] ZASCA 163
;
2008
(2) SA 608
SCA where it was held that the parties are bound to their
pleadings and that pleadings could not be amended or changed simply
because
of answers that were solicited during the conduct of a trial.
[22]
In these circumstances, I find that the appellant, in terms of the
agreed selection criteria, had no obligation to consider
the
respondents for positions for which they did not apply. In the
circumstances the dismissal of the respondents was neither
substantively nor procedurally unfair.
[23]
As the first issue has been answered in the appellant’s favour,
it is not necessary to consider the cross-appeal.
[24]
This then brings me to the issue of costs. In determining this I must
look at the record filed in this appeal. The issues in
this matter
were quite narrow and there was simply no reason to produce the
record the appellant has produced. The record runs
to almost 2000
pages added to this are the respondents rambling heads of over 64
pages as well as the additional paper handed in
during argument. This
meant that this Court had to wade through pages and pages of
documents most of which had no bearing on this
appeal. This sort of
conduct apart from being unacceptable should be visited by some
penalty lest this practise continues. While
I am of the view that
only about 20 percent of the record filed was necessary, both parties
suggested that only 7 of the 21 volumes
filed were irrelevant for the
appeal. I do not agree. In this matter the appellant filed the record
and there was no objection
by the respondents so both are equally at
fault in so far as this aspect of the matter is concerned. This
notwithstanding, I believe
that the appellant although successful and
who in my view is entitled to its costs in terms of law and equity
must however suffer
a penalty for not ensuring that a proper record
is filed. In this regard it appears just and equitable that the
appellant be disentitled
to the costs of preparing and perusing 75%
of the record.
[25]
In the result I make the following order:
(i)
The appeal is
upheld with costs which costs shall not include the preparation and
perusal costs of 75% of the record.
(ii) The order of the
court a quo is set aside and in its stead the following order is
substituted:
“
1.
The dismissal of the applicants was both substantively and
procedurally fair.
2.
The applicants are ordered to pay the respondent’s costs.”
(iii)
The cross appeal is dismissed with costs.
_____________________________
Waglay
DJP
I
agree
_____________________________
Mlambo
JP
I
agree
______________________________
Davis
JA
Date
of hearing:
08 September 2010
Date
of Judgment: 028 April
2011
For
the Appellant: Adv
A.C Oosthuizen SC
Assisted
by Adv G.A Leslie
Instructed
by:
Cliffe Dekker Hoffmeyer
Inc
For
the Respondent: Adv N.F Rautenbach
Instructed
by:
Justin Del Monte Attorneys