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[2011] ZALCCT 54
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Metshe v Public and Allied Workers Union (C727/2010) [2011] ZALCCT 54 (23 June 2011)
IN
THE LABOUR COURT OF SOUTH AFRICA
(HELD
IN CAPE TOWN)
CASE
NO: C727/2010
In
the matter between:
SAKHIWO
METSHE
.....................................................
Applicant
and
PUBLIC
AND ALLIED WORKERS UNION
.............
Respondent
JUDGMENT
__________________________________________________
LALLIE
AJ:
Introduction
[1] The applicant was
employed by the respondent as an organiser on 1 April 2008. He was
based in East London. After internal strife
in the respondent the
applicant was suspended on 25 October 2008 pending investigations
into allegations of misconduct against
him. He was dismissed on 19
November 2008 for operational reasons.
[2] He claims that his
dismissal was both substantively and procedurally unfair and seeks
reinstatement.
Facts
[3] Most of the
respondent’s witnesses are National Office Bearers as they are
members of its National Executive Committee
(NEC).
[4] The respondent is
based in Cape Town. It has branches throughout the country and is
affiliated to COSATU. The gist of the respondent’s
evidence was
that it experienced financial difficulties in February 2008 and
decided to attend to the anomaly between its income
and expenditure.
The NEC took a decision to employ more organisers to recruit more
members and generate more revenue. In a management
committee meeting
of 7 May 2008 it was discovered that the decision did not solve the
problem because the respondent was running
at a monthly deficit of
R255 000.00.
[5] A further management
committee meeting was held where the financial position of the
respondent was discussed and means of reducing
expenditure including
staff reduction were considered.
[6] When some staff
members became aware of the looming retrenchment they took a decision
to resist it. Their leader was Mr Charles
(Chales). They called an
unconstitutional extended NEC meeting in Bloemfontein in August 2008,
appointed the applicant as a Provincial
Co-ordinator and placed him
in Port Elizabeth. They suspended NEC members who did not attend,
attempted to open a new bank account
using fraudulent signatures and
prevented members of the NEC who were purportedly ousted at the
Bloemfontein meeting from entering
respondent’s offices in
different towns including Cape Town and Port Elizabeth. The applicant
denied the National Secretary,
Ms Roseberry (Roseberry) access to the
Port Elizabeth office by changing locks. He even threatened to harm
her. He also asked the
National Treasury to divert the respondent’s
funds into a new bank account.
[7] In a notice dated 11
November 2008 the applicant and other employees who were going to be
affected by the retrenchment were
invited to forward proposals on the
issues to be considered at a consultation meeting scheduled for 13
November 2008 in Cape Town.
Only 1 person who accepted a
reduction in income as an alternative to retrenchment
attended. The NEC took a decision that the rest of the staff who had
been
given notices to participate in the consultation had
deliberately and collectively stayed away and resolved to conclude
the consultation
process. On 19 November 2008 the NEC advised all the
affected employees including the applicant in writing that their
services
had been terminated for operational reasons.
[8] The applicant denied
any wrong doing or participating in the ousting of NEC members. He
stated that he only acted on the instructions
of Charles, his
immediate supervisor. He acknowledged receipt of the letter of
suspension from Roseberry. He received his letter
of dismissal by
chance from a fellow employee when he visited the Port Elizabeth
office. He denied receiving the notice to attend
consultation or to
forward his proposals in writing for consideration at the
consultation. His version was that upon receipt of
his letter of
dismissal for operational reasons he challenged his dismissal at the
CCMA. His arbitration was heard in the absence
of the respondent and
he was re-instated. The respondent applied for the rescission of the
arbitration award but allowed him to
resume his duties until the end
of June 2009 while awaiting the outcome of the rescission
application. He was promised that he
would retain his job if he did
not communicate with Charles and his reports were good. When the
rescission award in favour of the
respondent was issued on 2 June
2009, he was told to continue working but subsequently received a
letter advising him that the
30 June 2009 would be his last day on
duty.
[9] It was the
applicant’s evidence that his dismissal was unfair because
there were no operational reasons that warranted
it. It was not
preceded by consultation as he received the notice to attend the
consultation meeting after he had been dismissed.
He further stated
that his dismissal was influenced by his suspension. He asked for
re-instatement.
Test for fair dismissal
for operational reasons
[10] Section 188 of the
LRA requires a dismissal based on the employer’s operational
requirements to be substantively and
procedurally fair. Section 213
of the LRA defines operational requirements as “
requirements
based on the economic, technological, structural or similar needs of
the employer”.
The employer is therefore required to show
that the employee’s retrenchment was necessary to effect
savings. In this regard
see
Heigers v UPC Retail Services
[1998] 1 BLLR 45
(LC). In order to pass the test for substantive
fairness, the employer needs to prove that the decision to dismiss
for operational
reasons was genuine and not merely a sham. See
Kotze
v Rebel Discount Group (Pty) Ltd
[2000] 21 ILJ 129 (LAC).
[11] Section 189 (1) of
the LRA requires an employer contemplating dismissing one or more
employees for reasons based on operational
requirements to engage
with a party it has to consult with in a meaningful joint consensus
seeking process and attempt to reach
consensus on certain aspects
affecting the retrenchment. In interpreting the employer’s duty
to consult the courts have made
it clear that the consultation must
take place before the employer takes a firm decision to dismiss
employees for operational reasons.
In
Atlantis Diesel Engines
(Pty) Ltd v National Union of SA
(1994) 15 ILJ 1247 the purpose
of the employer’s duty is clarified as follows:
“
Consultation
provides employees or their union(s) with a fair opportunity to make
meaningful and effective proposals relating to
the need for
retrenchment or, if such need is accepted, the extent and implication
of the retrenchment process. It satisfies principle
because it gives
effect to the desire of employees who may be affec
ted
to be heard
,
and helps serve the underlying policy of the Act, to avoid or at
least minimize industrial conflict.”
[12] Section 189 (2) of
the LRA requires the consulting parties to engage in a meaningful
joint-consensus seeking process and attempt
to reach consensus on a
number of aspects affecting the retrenchment. Dealing with the issue
of consultation in
SA Chemical Workers Union v Afrox Ltd (1999) 2
0
ILJ 1718 (LAC) the Court stated as follows:
“
It
is implicit in the terms of s 189 (2) that an employer, apart from
taking part in the formal consultations on the aspect set
out in the
section, should also take substantive steps on his or her own
initiative to take appropriate measures to avoid the dismissal;
to
mitigate the adverse effects of the dismissal; to change the timing
of the dismissal; to select a fair and objective method
for the
dismissals and to provide appropriate severance pay for dismissed
employees.”
[13] The applicant denied
that the respondent had financial problems. He submitted that after
the respondent had allegedly noted
its financial difficulties it
employed more staff members including himself. He further submitted
that the respondent did not tender
its financials as evidence to
prove that there was a need to retrench him. Mr Jood (Jood) who
appeared for the respondent attempted
to use projections to prove
that the respondent was forced by financial difficulties to retrench.
He explained that 2 to 3 staff
members were employed in March and
April 2008 because it was believed that they would recruit more
members and generate more income.
[14] Mr Peters (Peters),
the respondent’s financial manager conceded that he had no
personal knowledge of the respondent’s
financial position at
the time of the recruitment as he had not been re-employed. Mrs
Roseberry conceded under cross-examination
that they retrenched the
individuals they wanted to get rid of. She further conceded that they
replaced disciplinary enquiries
with retrenchments.
[15] Roseberry testified
that the respondent took the decision to retrench in June 2008. She
gave no reasons for the retrenchment
exercise not to commence shortly
thereafter. Then there was the August 2008 Bloemfontein meeting which
divided the respondent and
caused mayhem which took a Court Order to
stop. On 25 October 2005 the applicant was suspended pending possible
disciplining action.
In a letter addressed to the applicant dated 11
November 2008 he was informed that at a meeting held in Johannesburg
on 7-8 November
2008, the NEC resolved to commence retrenchment
consultation urgently. The letter further advised the applicant that
the process
must be completed on 17 November 2008 and on 19 November
2008 the applicant received his letter of dismissal for operation
reasons.
.
[16] After the applicant
as a member of the group of employees who were going to be affected
by the retrenchment committed acts
of misconduct, it was up to the
respondent to decide steps to be taken against him. The respondent
decided to suspend him pending
the outcome of the investigation of
possible charges against him. That decision created an obligation on
the respondent to ensure
that the applicant was given a fair
opportunity to present a case before the decision to dismiss him was
taken. It did not do so
it dismissed him for operational reasons
instead. The operational reasons being the poor financial position of
the respondent.
However, Roseberry conceded that the retrenchment was
used to rid the respondent of trouble makers.
[17] A dismissal for
operational reasons is a no fault dismissal, it cannot be used to
justify an employee’s unfair dismissal
for misconduct. The real
reason for the applicant’s dismissal, by the respondent’s
admission, was misconduct. Further
no evidence was led to prove that
the respondent was in fact experiencing financial difficulties at the
time the decision to dismiss
the applicant was taken. The applicant’s
dismissal for operational reasons was therefore a sham and
substantively unfair.
[16] I now consider the
procedural fairness of the applicant’s retrenchment. It was the
respondent’s version that it
sent the applicant a notice dated
11 November 2008 inviting him to a consultation in terms of Section
189 of the LRA. The applicant
denied receiving the notice and the
respondent lead no evidence to prove that the notice was served on
the applicant. The notice
states reasons for the retrenchment and the
selection criteria. It has a sub-heading for positions to be
abolished and employees
to be retrenched. The applicant is listed
amongst the employees to face retrenchment. The notice goes further
and invites the affected
employees to submit proposals by 13 November
2008 on the issues mentioned in the notice in preparation for a
consulting meeting.
[17] The Section 189
notice reflects that the applicant will face retrenchment. The notice
is therefore inconsistent with the provisions
of Section 189 of the
LRA. Section 189 of the LRA requires the employer to consult when it
contemplates retrenchment. It further
requires the consulting parties
to engage in meaningful joint consensus- seeking process and attempt
to reach consensus on appropriate
measures to avoid dismissal,
minimise the number of dismissals, change the timing of dismissal,
mitigate the adverse effects of
the dismissal, the method for
selecting employees to be dismissed and severance pay for dismissed
employees.
[18] When drafting the
section 189 notice, the respondent had already taken the decision
that the applicant would face retrenchment.
The selection criteria
had already been decided. In the notice the respondent effectively
communicates its intention to retrench
the applicant. There is room
for consultation. The haste in which the consultation should have
been held also indicates that the
respondent was just going through
the motions. The respondent’s conduct in preparing for the
consultation was unacceptable.
The worst part is that it did not
deliver the notice to the applicant. In the circumstances the
applicant’s dismissal was
procedurally unfair.
[19] The applicant failed
to substantiate his claim that the respondent owed him a relocation
allowance in the amount of R15 000.00.
It was however common
cause that the applicant’s monthly income consisted of a basic
salary of R8 500.00, housing subsidy
of R645.00, car allowance
of R1 900.00 and a cellular phone allowance of R325.00.
Relief
[19] The applicant sought
re-instatement. Because of the acrimony surrounding the dismissal, I
am of the view that a continued employment
relationship would be
intolerable. Compensation will therefore be the appropriate relief. I
award the applicant’s compensation
equal to 8 months’
salary.
Order
[21] 1. The dismissal of
the applicant was substantively and
procedurally unfair.
2. The respondent must
pay the applicant compensation
equal to 8 months’
salary.
3. No order is made as to
costs.
____________
LALLIE AJ
Date of hearing: 4
February, 28 – 29 March 2011
Date of judgment: 23 June
2011
Appearances: For the
Applicant
Mr Metshe
For the Respondent: Mr
Jood
Of PAWUSA