About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Cape Town Labour Court, Cape Town
SAFLII
>>
Databases
>>
South Africa: Cape Town Labour Court, Cape Town
>>
2011
>>
[2011] ZALCCT 30
|
|
Abrahams v Drake & Scull Facilities Management (SA) Pty Ltd (C 1105/10) [2011] ZALCCT 30; [2012] 5 BLLR 434 (LC); (2012) 33 ILJ 1093 (LC) (11 November 2011)
REPUBLIC OF SOUTH AFRICA
Reportable
Of
interest to other judges
THE LABOUR COURT OF SOUTH AFRICA, CAPE TOWN
JUDGMENT
CASE
NO: C 1105/10
In the matter between:
FATIMA
ABRAHAMS
….....................................................................
Applicant
and
DRAKE
& SCULL
FACILITIES
MANAGEMENT (SA) (PTY) LTD
…...................
First
respondent
DRAKE
& SCULL FM, a division of
TSEBO
HOLDINGS & OPERATIONS (PTY) LTD
…........
Second
respondent
Heard
: 22-27 September; 4 November 2011
Delivered
: 11 November 2011
Summary:
Contract of employment – unilateral change –
claim for specific performance.
JUDGMENT
STEENKAMP J
Introduction
When an individual employee is faced with a unilateral change to her
terms and conditions of employment, what is she to do? Collective
power – as contemplated by s 64 of the Labour Relations Act
1
-- is not available to her. Can she claim specific performance of
her contract of employment?
This is the dilemma in which the applicant, Ms Fatima Abrahams,
found herself. She approached this court by way of application
on an
urgent basis on 13 December 2010. Basson J found that it was not
urgent and the matter was referred to the trial roll.
Oral evidence
and argument was heard from 22 to 29 September and on 4 November
2011.
Background facts
The applicant was employed by Clicks Group Limited for some 28
years, from 1997 to 2007. On 1 June 2007 her contract of employment
was transferred to the respondent, Drake and Scull
2
,
in terms of section 197 of LRA.
The applicant signed a new contract of employment with Drake and
Scull. In terms of that contract, she was employed as a “creditors
purchase order clerk" based at Clicks head office in Searle
Street, Woodstock. (Drake & Scull is a temporary employment
service that provides staff and "management solutions" to
retailers and other organisations, such as Clicks stores).
At the time of the transfer, the applicant's basic salary was
R23 551, 18 per month. On 10 November 2008, her job title
was
changed to that of financial administrator. She received further
salary increases, the latest being on 9 April 2010, when
her monthly
salary was increased to R 30 286, 33.
On 7 September 2010, the respondent's operations executive, Mr Colin
Bekker, addressed a letter to the applicant in the following
terms:
“
RE:
ALIGNMENT OF PACKAGES (CONSULTATIVE MEETING)
Please accept this communiqué
as confirmation that you are invited to a meeting to consult on the
possible realignment of
your package. At this stage no decision has
been made as to what the impact may be. The meeting shall take place
at Clicks head
office, Woodstock, conference room 1, ground floor at
9h00.
The Group National IR Manager
(Terence Lategan) and myself [
sic
] shall attend the meeting
from Drake & Scull side.
You are required to attend the
meeting as your input and contribution would be invaluable and would
allow the company to consider
any proposals you may put forward."
The meeting took place on 8 September 2010. The company was
represented by Bekker, Lategan and its human resources officer, Ms
Astrid Saaiman. The respondent's representatives informed the
applicant that she was earning 4 1/2 times the average remuneration
package within her department. They proposed that her salary be
reduced from R30 286, 33 to R8 500 per month. In a
letter
to the applicant on the same day, Bekker stated:
"The effective proposed
date of this change will be 01 October 2010."
Further meetings took place on 16 September, 21 September and 29
September 2010. The applicant did not accept the proposed change
to
her remuneration.
On 29 September 2010 Bekker wrote to the applicant in the following
terms:
"Further to our extensive
consultations you are herewith informed of your salary change
effective from 1 October 2010.
Your new salary will be
R8500,
00 TCOE.
All other terms and conditions
will remain unchanged."
The letter was signed by Bekker. Underneath his signature provision
was made for the following:
“
Accepted
by employee:__________________ Date: _____________”
However, the employee refused to sign acceptance and Ms Saaiman at
annotated a copy of the letter to that effect.
Legal proceedings
On 26 October 2010, the applicant referred a dispute concerning the
unilateral change to her terms and conditions of employment
to the
CCMA for conciliation. Conciliation was unsuccessful. On 15 November
2010 the CCMA issued a certificate of outcome reflecting
that the
dispute remained unresolved. The LRA form 7.12 contains a section in
the following terms:
“
If
this dispute remains unresolved, it can be referred to:
Arbitration / Labour Court /
Strike/lockout / None.”
The Commissioner clicked the box "none".
When cross-examining the applicant, Mr
Donen
, for the
respondent, suggested that the certificate of outcome had some kind
of binding force and that the effect of it was that
the applicant
was precluded from referring a dispute to the Labour Court. In
argument, he wisely abandoned that submission.
On 8 December 2010 the applicant delivered a notice of motion to
have an urgent application heard on 13 December 2010 and sought
relief in the following terms:
“
that the applicant's failure to comply
with the ordinary forms and time periods contained in the rules of
this honourable court
be condoned and that the honourable court
direct that the matter may be heard as a matter of urgency in terms
of rule 8;
that a rule nisi be issued, calling upon the first and/or second
respondent to show cause, on a date to be determined by this
honourable court or the registrar, why a final order should not be
made in the following terms:
that the first and/or second respondent be ordered and directed to
forthwith restore and comply with the terms and conditions
of
applicant's employment contract entitling her to receive monthly
remuneration in the amount of R30 286, 33;
that the first and/or second respondent be ordered and directed to
forthwith restore and comply with the terms and conditions
of
applicant's employment contract requiring the respondents to
deduct and pay the amount of R2 271, 47 as contributions
to
the Old Mutual Provident Fund;
that first and/or second respondent be ordered and directed to
forthwith, or within a period stipulated by the honourable court,
comply with the terms and conditions of the applicant’s
contract of employment and:
pay to the applicant an amount of remuneration constituting the
difference between the remuneration she received for the
months of
October and November 2010 and the remuneration the applicant was
lawfully entitled to receive by virtue of her
contract of
employment in the monthly amount of R 30 286, 33;
pay contributions on applicant’s behalf to the Old Mutual
Provident Fund being the difference between the contributions
paid
for the months of October and November 2010 (in the monthly amount
of R427,65) and the contributions that the respondent
was lawfully
required to deduct and pay in the monthly amount of R2 271,
47;
that the first and/or second respondent be ordered to desist from
any action or conduct which infringes the applicant’s
right
to fair labour practices and those rights and entitlements arising
from her employment contract;
that the first and/or second respondent be ordered to pay the costs
of this application on an attorney and own client scale.”
It then sought for the rule
nisi
to operate as an interim
order pending the return day.
The respondents delivered an answering affidavit on 13 December
2010. The matter came before Basson J on that day. She ruled
that
the matter was not urgent and struck it from the roll. She further
directed that the matter be referred to the trial roll
for oral
evidence; and directed the parties to file a pre-trial minute by 31
January 2011.
In the pre-trial minute the main issues in dispute are described as
follows:
“
Whether
the respondent’s decision to reduce the applicant’s
remuneration was unilateral and unlawful;
The nature and extent of any
damages due, owing and payable to the applicant by the respondent;
Whether, assuming that the
Honourable Court determines that the respondent wrongfully and
unlawfully altered the applicant’s
employment contract the
amounts, if any, that she is entitled to receive in respect of
damages.”
The practice note filed in terms of rule 9 by the applicant’s
attorney further described the issues involved as follows:
“
The
applicant seeks that the respondent comply with the contractual
obligations of her employment contract. The applicant seeks
an order
from the honourable court directing that the respondent:
reinstate her contractual right
and entitlements to receive monthly remuneration in the amount of R
30 286, 33;
be ordered to restore and comply
with the terms of her employment contract;
be ordered to pay to the
applicant the difference in the remuneration she would have received
had her conditions of employment not
been unilaterally amended in
October 2010, including paying the difference in the benefit
entitlements (provident fund) she was
entitled to receive."
The relief sought
Mr
Donen
pointed out that the exact relief sought was stated
in somewhat different terms in the notice of motion, the pre-trial
minute
and the practice note respectively. This, he said, made it
difficult for the respondent to know what case it had to meet.
In this regard, Mr Donan suggested that the relief sought was not
spelt out in the terms prescribed by rule 6(1)(b)(iii) and
(iv),
viz:
“
a
clear and concise statement of the legal issues that arise from the
material facts, which statement must be sufficiently particular
to
enable any opposing party to reply to the document; and
the relief sought."
The difficulty is that this matter was not referred to court in
terms of rule 6. The applicant launched an urgent application
in
terms of rules 7 and 8; the matter was then referred to the trial
roll for oral evidence to be led. The initial set of pleadings
that
spelt out the relief sought, therefore, is the notice of motion in
the urgent application.
It is clear from the notice of motion that the applicant seeks
specific performance to enforce the terms of her contract of
employment, specifically relating to remuneration. The respondent
has at no stage raised an exception to complain that the way
in
which that relief was set out is vague and embarrassing. In the
course of the trial it was quite clear that the respondent
knew what
the case was that it had to meet.
Jurisdiction
In his heads of argument, for the first time, Mr Donen submitted
that this court does not have jurisdiction to decide on the
pleaded
claim.
In support of this submission, he points out that the applicant –
in her founding affidavit – asked for “urgent
interim
relief in the form of an order as contemplated by sections
158(1)(a)(i) and 158(1)(a)(iii) of the Labour Relations Act,
which
directs the respondent to restore and abide by the terms and
conditions of thee employment contract properly concluded
between
us...”.
This, says he, means that the applicant’s relief is located in
the LRA; that the only primary object of the Act which is
relevant
in terms of section 158(1)(a)(iii) is to give effect to the right to
fair labour practices conferred by s 23(1) of the
Constitution; and
that this avenue has been closed to the applicant by virtue of the
judgment in
SAMSA v McKenzie
3
because specific performance arising from a unilateral variation of
a term of employment is regulated by s 64(4) of the LRA.
This argument is, with respect to Mr Donen, based on a fundamental
misreading of the purposes of section 64 of the LRA and of
the
SAMSA
judgment.
Section 64 is located in chapter 4 of the Act dealing with strikes
and lockouts in the context of collective bargaining. As an
adjunct
to the process outlined in order to give a strike (or lockout)
protected status, section 64(4) presents a trade union
with the
mechanism to obtain
status quo
relief for a period of 30 days
after referring a dispute about an alleged unilateral change to
terms and conditions of employment
to the CCMA or a bargaining
council. For the duration of that period, the employer must restore
the
status quo ante
; after that period (or a shorter period
after which a certificate has been issued stating that the dispute
remains unresolved),
the trade union may give 48 hours’ notice
and embark on a protected strike. That is the power play that the
union, using
its collective bargaining power, may use in order to
resist the efforts of the employer to change terms and conditions of
employment.
Similarly, the employer may embark on a protected
lock-out in order to persuade employees to accept a variation in
terms and
conditions of employment. What it cannot do, is to impose
those terms unilaterally, as the respondent did in this case.
The respondent could have locked the applicant out, had it followed
the prescribed procedure. But it elected not to do so. It
had four
meetings with her in order to persuade her to accept a 70% reduction
in remuneration; she refused; and the respondent
implemented it
unilaterally on the day on which it indicated from the start that it
would do so, ie 1 October 2010.
The applicant is a single employee. Mr Donen conceded that she could
not use the weapon of strike action. In the circumstances,
his
reference to s 64 is entirely misconceived.
The respondent’s reliance on
SAMSA
does not assist it
either. In that case, Wallis AJA was at pains to point out that the
question is whether the court has jurisdiction
over the pleaded
claim, and not over some other claim that has not been pleaded but
could arise from the same facts. In this
case, the applicant asks
for specific performance of her contract of employment. She does not
and indeed cannot, as an individual,
rely on section 64. There can
be no doubt that this court has jurisdiction to adjudicate her claim
for specific performance.
As Wallis AJA
4
remarked in
SAMSA:
“
As was
the case in
Fedlife
,
and in other cases purporting to raise similar challenges, the plea,
properly construed, does not raise a jurisdictional challenge
at all.
In substance what is alleged in the plea is that the Labour Relations
Act is the exclusive source of remedies for unfair
dismissal, with
the result that Mr McKenzie has no contractual claim. That is not a
challenge to the jurisdiction of the High Court
to consider the
pleaded claim. It is a challenge to the validity of the pleaded
claim. I can only echo, in relation to the facts
of this case, what
Nugent JA said in
Makhanya
5
in regard to special pleas purporting to be pleas to the jurisdiction
of the court, such as the present one. I adapt his words
to the facts
at present before us:
‘
Once
more, so it seems to me, [this case], like all the cases that
preceded it, [is] not about jurisdiction at all. It [is] about
whether there [is] a good cause of action. In my view the least said
about jurisdiction in such cases the better because, once
that red
herring is out of the way, courts will be better placed to focus on
the substantive issue that arises in such cases, which
is whether,
and if so in what circumstances, employees might or might not have
rights that arise outside the LRA.”
And lastly, the provisions of s 158(1)(a)(iii) does anything but
deprive this court of jurisdiction to adjudicate the claim as
pleaded. That section deals not with jurisdiction, but powers.
Section 158(1)(a)(iii) makes it clear in plain language that this
court may make any appropriate order, including –
“
an
order directing the performance of any particular act which order,
when implemented, will remedy a wrong and give effect to the
primary
objects of this Act”.
Such an order, widely framed as it is (ie “any appropriate
order”), must surely include an order for specific
performance,
directing an employer to remedy its breach of a
contract of employment and to abide by its terms.
That brings me the contractual claim for specific performance.
Contractual claim for specific performance
Mr Donen also submitted that the applicant has not specifically
located her claim in s 77(3) of the Basic Conditions of Employment
Act.
6
That section provides that:
“
The
Labour Court has concurrent jurisdiction with the civil courts to
hear and determine any matter concerning a contract of employment,
irrespective of whether any basic condition of employment constitutes
a term of that contract.”
That section makes it abundantly clear, once again in plain
language, that this court does have jurisdiction to hear and
determine
a matter such as the one before me. It clearly concerns a
contract of employment: the respondent has breached its terms by
amending
it unilaterally, and the applicant seeks specific
performance of the contract. Maybe the applicant would have done
better, through
her attorney, to spell it out; but the fact that she
doesn’t allege in so many words that this court has
jurisdiction in
terms of s 77(3) of the BCEA does not deprive the
court of that jurisdiction.
The powers of this court are further spelt out in s 77A(e) of the
BCEA, including –
“
making
a determination that it considers reasonable on any matter concerning
a contract of employment in terms of section 77(3),
which
determination may include an order for specific performance, an award
of damages or an award of compensation.”
The applicant in this case seeks specific performance of the terms
of her contract of employment relating to her remuneration.
The fact
that she has not specifically alluded to s 77(3) of the BCEA cannot
deprive this court of jurisdiction to hear the matter
in terms of
the provisions of that section, nor of the power to grant an order
of specific performance in terms of s 77A(e) of
the BCEA.
This provision should also be read with the provisions of s
158(1)(a)(iii) of the LRA quoted above and relied upon in the
founding
affidavit. Thus, in
Wiltshire & others v University
of the North
7
it was held:
“
Section
151(2) of the Labour Relations Act establishes the Labour Court as a
superior court with the authority, inherent powers
and standing in
relation to matters under its jurisdiction, equal to that which a
court of a provincial division of the Supreme
Court has in relation
to the matters under its jurisdiction. This read with section 158(1)
of the Labour Relations Act establishes
that this Court has
jurisdiction to make an order of specific performance.”
Alternative submissions by respondent
In the alternative, and should I decide (as I have) that this court
has jurisdiction and the power to order specific performance
of the
terms of the contract of employment, Mr Donen submitted that I
should exercise my discretion not to do so.
8
He suggests that it would be glaringly unfair to perpetuate a
situation where the applicant earns substantially more than other
similarly situated employees. He appears to suggest that the
respondent was
bona fide
in attempting to reach agreement
with the applicant; and even though they did not reach consensus, it
was somehow entitled to
implement the reduced salary unilaterally.
Inexplicably, he cites the
dictum
of the Labour Appeal Court
in
Mazista Tiles (Pty) Ltd v National Union of Mineworkers and
Others
9
for that submission. But that authority is destructive rather than
supportive of his case. Jafta AJA
10
succinctly and with respect correctly set out the relevant legal
principles as follows:
‘
An
employer who is desirous of effecting changes to terms and conditions
applicable to his employees is obliged to negotiate with
the
employees and obtain their consent. A unilateral change by the
employer of the terms and conditions of employment is not
permissible.
It may so happen, as it was the position in this case,
that the employees refuse to enter into any agreement relating to the
alteration
of their terms and conditions because the new terms are
less attractive or beneficial to them. While it is impermissible for
such
employer to dismiss his employees in order to compel them to
accept his demand relating to the new terms and conditions, it does
not mean that the employer can never effect the desired changes. If
the employees reject the proposed changes and the employer
wants to
pursue their implementation, he has the right to invoke the
provisions of section 189 and dismiss the employees provided
the
necessary requirements of that section are met.
The fact that the dismissal came
about after the employees’ rejection of the proposed changes
cannot affect the fairness of
the dismissal if the employer
established that it was effected for a fair reason relating to his
operational requirements and not
in order to compel the employees to
accept the proposed changes. The prohibition in section 187(1)(c)
cannot apply to it as long
as it was effected for a purpose other
than to compel the employees to accept the employer’s demand.
In
Chemical Workers Industrial Union v Algorax (Pty) Ltd
(2003) 24
ILJ
1917 (LAC) Zondo JP emphasised that what is most
important is to determine the purpose of the dismissal. The learned
Judge President
stated at paragraph [37]:
“
[37]
Such an employer may then dismiss the employees for operational
requirements in order to get rid of them permanently and employ
a new
workforce that will be prepared to work in accordance with the needs
of his business. In such a case the employer will be
dismissing the
old workforce because the contracts of employment he has with them
can no longer properly serve his operational
requirements. That was
the nature of the dismissal that the employer effected in
TAWU
& others v Natal Co-operative (Pty) Ltd
(1992) 13
ILJ
1154 (D) as well as in
Fry’s
Metals (Pty) Ltd v NUMSA & others
(2003) 24
ILJ
133 (LAC). However, in a case which requires the working of short
time, such as has been referred to above, the employer could
take the
attitude that for certain reasons such as their experience and skills
he does not want to get rid of his workforce permanently
but wishes
to retain them and for that reason dismisses them not for the purpose
of employing others in their positions permanently
but for the
purpose of compelling them to agree to work short time. If he did
that, he would be hoping that the implications and
consequences of
dismissal would be such that the employees would feel that they
should rather agree to the employer’s demand
and escape the
consequences of dismissal rather than not agree to the demand and
face such consequences. Under the repealed Labour
Relations Act 28 of
1956 (‘the old Act’), such a dismissal was permitted.
Under the current Act it is not permitted
and it is automatically
unfair. From this it must be abundantly clear that the existence of
valid operational requirements does
not prevent a dismissal being
effected for the purpose contemplated by section 187(1)(c). What is
most important is to determine
what the purpose of the dismissal is.”
...
‘
As it
appears above, the Labour Court’s conclusion to the effect that
the dismissal was substantively unfair was based on
two key findings.
The first finding was that the appellant had alternative options to
dismissal by means of which it could have
implemented its proposal.
As an example of such options the Labour Court suggested that the
appellant could have unilaterally implemented
the proposal and if the
workers resisted, it could have enforced the implementation by
disciplinary action or used a lockout. For
this finding reliance was
placed on the decision of the Labour Court in
National
Union of Metalworkers of SA & others v Fry’s Metal &
others (Pty) Ltd
(2001) 22
ILJ
701 (LC) and
SA
Chemical Workers Union & others v Afrox Ltd
(1999) 20
ILJ
1718 (LAC) at 1731. It needs to be noted that the decision of the
Labour Court in
Fry’s
Metals
has since been overturned by this Court on appeal in the
Fry’s
Metal
case referred to above. As to the reference to 731 of the judgment of
this Court in
Afrox
,
a reading of that page of the judgment does not reveal any support
for that finding of the Labour Court nor is there support for
that
proposition anywhere in the judgment of this Court in
Afrox
.’
This dictum restates the principle that an employer may not
unilaterally implement a change to terms and conditions of
employment
– which is exactly what the respondent did in this
case.
The Supreme Court of Appeal again restated these principles in
Fry’s
Metals
11
.
Following the judgment in
Fry’s Metals,
of course, the
respondent could have embarked on a process in terms of s 189 of the
LRA; but it elected not to do so, and nor
did it follow the lock-out
route in terms of section 64. The unilateral change was unlawful. It
was also unfair. I can see no
reason why I should exercise my
discretion not to award specific performance.
Costs
The applicant was represented on a
pro bono
basis. As I
explained at length in
Zeman v Quickelberge and another
12
,
that fact does not necessarily preclude her from obtaining a
costs order in her favour. I will not repeat my reasoning here; but
it is noteworthy that Wallis J
13
came to a similar conclusion via a different route in
Thusi v
Minister of Home Affairs and others
14
.
The principle must now be accepted as settled law.
The respondent has unilaterally changed the applicant’s
contract of employment. That is impermissible. There is no reason
in
law and fairness why it should not be ordered to pay the applicant’s
costs.
Order
For these reasons, I make the following order:
The respondents are ordered to forthwith restore and comply with
the terms and conditions of applicant's employment contract
entitling her to receive monthly remuneration in the amount of
R30 286, 33;
The respondents are ordered to forthwith restore and comply with
the terms and conditions of applicant's employment contract
requiring the respondents to deduct and pay the amount of R2 271,
47 per month as contributions to the Old Mutual Provident
Fund;
The respondents are ordered to pay the applicant, by no later than
30 November 2011, the difference between the remuneration
she
received for the period from 1 October 2010 to 30 November 2011 and
the remuneration the applicant was lawfully entitled
to receive by
virtue of her contract of employment in the monthly amount of R 30
286, 33;
The respondents are ordered to pay the contributions on applicant’s
behalf to the Old Mutual Provident Fund, being the
difference
between the contributions paid for the period of 1 October 2010 to
30 November 2011 (in the monthly amount of R427,65)
and the
contributions that the respondent was lawfully required to deduct
and pay in the monthly amount of R2 271, 47.
The respondents are ordered to pay the applicant’s costs.
_______________________
A J Steenkamp
Judge
APPEARANCES
APPLICANT: G Marinus of Werksmans Inc.
RESPONDENTS: M Donen SC
Instructed by Bagraims Inc.
1
Act
66 of 1995 (the LRA).
2
The
employer, who is cited as the first respondent, is Drake & Scull
Facilities Management (SA) (Pty) Ltd. The company is
a division of
Tsebe Holdings and Operations (Pty) Ltd, the second respondent. I
shall refer to the employer simply as “the
respondent”
or “Drake & Scull”.
3
(2010)
31
ILJ
529
(SCA);
[2010] 5 BLLR 488
(SCA).
4
(as
he then was) in
SAMSA v McKenzie
(supra)
at para [8].
5
2009
(2) SA 628
(ECD) para 66.
6
Act
75 of 1997 (the BCEA).
7
[2006]
1 BLLR 82
(LC) para [64].
8
That
a court has such a discretion is trite law:
Haynes
v Kingwilliamstown Municipality
1951
(2) 371 (A);
Benson v SA Mutual Life
Assurance Society
1986 (1) 776 (A);
Mafihla v Govan Mbeki Municipality
[2005] 4 BLLR 334
(LC) paras [46] – [51].
9
(2004)
25
ILJ
2156
(LAC);
[2005] 3 BLLR 219
(LAC).
10
(as
he then was) paras [48] – [51].
11
NUMSA
v Fry’s Metals (Pty) Ltd
2005
(5) SA 433
(SCA);
[2005] 3 AllSA 318
(SCA). In this judgment –
decided after the LAC judgment in
Mazista
Tiles –
the SCA dismissed an
application for leave to appeal the judgment of the LAC in
Fry’s
Metals.
Since the judgment of the LAC
in
Mazista Tiles
the
Supreme Court of Appeal declined leave to appeal to that court,
expressing the view that it was correctly decided by the LAC:
National Union of Mineworkers and
others v Mazista Tiles (Pty) Ltd
(2006)
3 All SA 337
(SCA); (2006) 27
ILJ
471 (SCA).
12
(2011)
32
ILJ
453 (LC).
13
As
he then was.
14
2011
(2) SA 561
(KZP) paras [104] – [114], dealing in the main with
contingency fees.