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[2011] ZALCPE 20
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Thabethe and Others v Lamprecht Properties (CC) (P544-09) [2011] ZALCPE 20 (26 October 2011)
LABOUR COURT OF SOUTH AFRICA
(HELD AT BRAAMFONTEIN)
Case: P544-09
In the matter between:
G R THABETHE & 2 OTHERS
...........................................................
Applicants
and
LAMPRECHT PROPERTIES (CC)
..........................................
First
Respondent
JUDGMENT
LAGRANGE, J:
Introduction
On
the face of it, this matter was a claim of unfair retrenchment,
though the main thrust of the applicants’ complaint
was that
their employment ought not to have terminated on 17 October 2008
but on 12 December 2008. Before addressing the merits
of the claim,
a preliminary issue needs to be addressed.
The
status of the applicants
The
four applicants who are party to these proceedings are Messrs G R
Thabeta, C Zulu, Q Khumalo and F Ndlovu. The applicants
have been
representing themselves in this matter. Only the first three
mentioned applicants attended the hearing of the matter.
Mr Thabeta
said Mr Ndlovu was unable to attend. The difficulty this presents
is that Mr Ndlovu had not signed any power of
attorney specifically
authorising anyone else to represent him in the matter.
Accordingly, insofar as his claim is concerned
it is struck of the
roll, owing to his non-appearance.
The
nature of the case
The
applicants claim that they were unfairly retrenched by the
respondent, a close corporation. The respondent, a building
contractor, admits it did not consult with the applicants before
their employment was terminated, but claims they were all employed
as painters on fixed term contracts, which were sanctioned by the
Building Industry Bargaining Council. The employer maintains
that
the applicants’ contracts of employment terminated in
accordance with the fixed term specified therein and, as a
result,
there was no need for it to have consulted with them in terms of
section 189 of the Labour Relations Act, 66 of 1995
(' the LRA').
The
factual issues
Mr
R Erasmus, a member of the close corporation and a project manager,
gave evidence for the employer. Mr Thabetha gave evidence
for the
second and third applicants and with the consent of Mr Zulu and Mr
Khumalo presented argument on behalf of all of them.
It
is common cause that the applicants were employed by the respondent
as painters on construction sites in Jeffreys Bay. In
particular,
on 25 June 2008 they were engaged on limited duration contracts
linked to two project sites known as Dromedaris
and Look Out. These
contracts were due to expire on 12 December 2008, or upon
completion of the work at the sites in question.
As it happened the
respondent ceased work on those sites on 17 October 2008. A week
before the respondent informed the applicants
that their contracts
would end on 17 October 2008.
The
pertinent terms of the limited duration contracts entered into
between the parties read as follows:
"
1. The employee shall be
engaged for the purposes of such work on the following construction
site: Dromedaris / Look Out.
2. The contract of employment
shall be for a maximum of 24 weeks/months from 25.0 6.08 - 12.12
.08,
alternatively until the completion of the
construction on site Dromedaris/Look Out
.
3.
On the completion of
the period or construction on the site as stated above, this
contract shall automatically terminate
and such
termination shall not be construed as being a retrenchment but shall
be the completion of the contract.
"
(emphasis
added)
All
the contracts were signed by the three applicants on 25 June 2008,
the same day the contracts commenced.
Mr
Thabetha’s evidence
Thabetha
testified that before the conclusion of the contracts in question
the applicants had been engaged under another contract.
He claims
that it was explained and accepted by the applicants that the
contract concluded in June would be the last contract.
He accepted
that the Dromedaris and Look Out sites were separate but were being
developed in parallel. Work on the Look Out
site began when the
work on Dromedaris site was half complete. Once work had been
finished on the Dromedaris site, work on
the Look Out site
continued. He did not agree that there was no work continuing on
the Look Out site, but conceded this was
based on gossip he had
heard. The normal sequence of operations at a site was that
building work would take place followed
by plastering and then
paintwork.
It
was put to Thabetha that, on the Look Out site, the work ended in
October because none of the housing units were being sold
and the
developer could not continue building at that stage. Thabetha was
adamant that, even if units were not selling, work
on the Look Out
site did continue and an outside contractor was used to finish the
painting work. Thabetha disputed the employer's
contention that
work on the Look Out sites only resumed in the new year: he
maintained that work on the site continued throughout
November and
December 2008. When pressed as to how he knew of this, he referred
to ‘rumours’ he had heard that
work was continuing. He
could not deny that it would have been more expensive for the
respondent to use subcontractors to do
painting work than to
continue using the applicants. Thabetha also confirmed that it was
the applicants’ expectation
that they would work until 12
December 2008.
He
did concede the other two applicants did obtain work after their
work for the respondent came to an end as a result of an
arrangement between the respondent and a Mr J Koen in terms of
which they were engaged on what Mr Grobler described as ‘piecemeal’
work on a project of Mr Koen’s known as the Boneyards
project. Thabetha did not work on this project.
Mr
Erasmus's evidence
Mr
R Erasmus was a member of the close corporation and a project
manager. He said that the work at the Look Out site had to
stop
earlier because no units had been sold. Subsequently, two or three
units were sold in December 2008 and work resumed at
the sites the
following June. He said that finishing work, stopped at the Look
Out site but structural work still continued
because subcontractors
had been engaged for that. When work ceased at the Look Out site in
October 2008, the painting team
had already applied a first and
second coat of paint. However, the painting work was only completed
at the end of February
2009, when the company used a contractor.
When
questioned by Thabetha why a subcontractor had been engaged to
finish the painting job, Erasmus responded that the contracts
with
the applicants had already expired the previous year. He explained
that the original termination date of 12 December 2008
came from a
bar chart setting out timelines of building projects, but because
there were no sales they could not finance further
work. He agreed
with Thabetha that the contract did not talk about the sale of
units, nor was that discussed when the contracts
were concluded.
Erasmus disputed that the applicants were forced to sign the
contracts and said they were allowed to take them
home, but
preferred the company to keep the copies at the office.
Argument
In
argument, Thabetha said that the crux of the complaint was that
they had been recruited in Johannesburg and it was very difficult
to find alternative work there in the space of five days. He felt
that the notice given to them had been inadequate and they
should
have been given at least 30 days notice before the contract was
terminated.
Mr
Grobler, who appeared for the respondent argued that it seemed as
if the claim pursued by the applicants was a contractual
one
whereas the claim before the court was a claim of unfair
retrenchment. The central issue he submitted was whether the
contracts did come to an end on 10 October 2008. In interpreting
the contract he argued that it would be meaningless to interpret
the phrase "the completion of the construction" to have
been a reference to all construction work irrespective of
whether
or not the painting work on all the sites had been completed. The
respondent submitted that the phrase should be interpreted
to apply
to the particular construction work which the applicants were
engaged in, namely painting. The respondent argued that,
as far as
the applicants were concerned, their construction work effectively
ended when they stopped painting in mid-October
2008.
Thabetha
did not dispute that it made sense to interpret the contracts in
such a way that if employees had finished the task
they were
engaged to perform, there was no reason for them to remain on site
after that. However, his contention was that in
the case of the
painting work the job was not finished, so they should have
remained in employment.
Evaluation
On
the Limited evidence available it appears that work on the
construction sites did not proceed as expected. In terms of the
timelines of the building project, the work ought to have been
completed by 12 December 2008. Work had to be halted before
the
completion of the housing units on the sites, because of a lack of
working capital which the developer had hoped to recoup
from sales
of the units. Had sales gone according to expectations, the
applicants would most probably have continued with the
painting
work until that work was expected to have been completed in
mid-December. At the time when they were told the work
had come to
an end in early October, it could not be said that the painting
component of the construction work had been completed.
What in fact
had happened is that the employer had decided for its own financial
reasons to put the project on hold until conditions
improved. When
conditions eventually did improve, the employer was able to
complete the project the following year.
In
effect, the employer seeks to argue that the contracts of
employment came to an end by virtue of the second part of clause
2
of the contracts, namely that they terminated automatically because
the applicants work on the sites had been completed.
If that
provision of the clause could not be invoked, then the dismissals
which occurred in mid-October cannot be said to have
simply been an
automatic consequence of the operation of the contracts.
In
order to rely on the alternative basis for the automatic
termination of the contract, which is a conditional one, the
employer had to demonstrate at the very least that the condition
had been met. It argues that for all intents and purposes the
condition had been met because the applicants work on the Look Out
site had been "completed" when it decided to suspend
operations. The Shorter Oxford English Dictionary describes the
noun ‘completion’ as follows:
“
1.
accomplishment, fulfillment. 2.gen. The action of or an act of
completing, the condition being completed.”
The
difficulty with the employer's argument is that the painting work
that was a component of the construction work on the sites
was
clearly not finished. In order to reconcile the termination
provision in the contract with the factual circumstances, the
respondent must necessarily contend that the phrase ‘until the
completion of the construction on sites’ also included
a
situation in which it simply decided not to finalise the
construction work at any particular point in time. In effect, this
would mean even though the contract was expected to last until
mid-December, the employer could simply decide not to continue
with
work and thereby bring the contract to an end.
It
is questionable whether the contract as it stands can even support
an interpretation that the phrase ‘completion of
the
construction on the sites’ applied narrowly to the particular
work in which the applicants were engaged and not to
the projects
as a whole. But the interpretation of the phrase which the
employer's case depends on requires an even more unusual
and narrow
interpretation of the phrase to even include circumstances in which
the painting work was clearly incomplete, but
the employer decided
to suspend that activity for an indeterminate period of time.
On
an ordinary interpretation of the contentious phrase, it seems to
me that the contract cannot sustain the employer's version
that the
applicants’ contracts of employment terminated automatically
when it decided not to complete the painting work
on the sites.
Consequently, the termination of the applicant’s services
with effect from 17 October 2008 was in fact
a dismissal and not a
termination by agreement. Furthermore, it was clearly a dismissal
for operational reasons and it is common
cause that no consultation
procedures were followed. It also appears clear that there was a
genuine economic reason at the
time for not continuing with the
construction work. As such, I must accept that the employer did
have a genuine operational
reason for ending the applicants’
employment. However, that did not relieve it of the duty to attempt
to try to mitigate
the consequences, nor did it relieve it of its
duties to consult with them.
It
appears that the respondent did make some attempt to find
alternative employment for the applicants with another contractor,
but it is unclear from the evidence whether this was offered to all
the applicants and to what extent it amounted to an adequate
alternative to the work they had with the respondent.
In
view of the above, I conclude that the applicants were retrenched
and that their retrenchment was procedurally unfair, because
of the
lack of consultation which resulted from the employer having taken
the view that it was entitled to regard the termination
of service
as an agreed termination which flowed automatically from the terms
of the contract.
Remedy
In
considering a remedy for the failure of the employer to consult,
account must be taken of the fact that when the contracts
were
concluded, it was not envisaged that the contract would lead to the
permanent employment of the applicants. When they
concluded the
contract in June neither party could have reasonably believed that
it was probable the applicants would be employed
beyond mid
December 2008. Accordingly, any discussion or consultation about
their retrenchment in October 2008 would have occurred
in the
context of an understanding that the employment relationship was
not been expected to endure indefinitely. In the circumstances,
it
is appropriate that compensation for the failure to consult should
take cognizance of the limited scope of their employment
relationship. Consequently, I believe that an award of six weeks’
remuneration would be sufficient to compensate them
for the
procedurally unfair termination of their employment in terms of
section 189 of the L RA.
Order
In
the circumstances, the termination of the Messrs G R Thabetha, Q
Khumalo and C Zulu’s services on 17 October 2008 was
a
procedurally unfair dismissal for operational reasons.
The
respondent must pay each of the applicants mentioned in paragraph
24 above, an amount equivalent to six weeks’ remuneration
at
the respective rates they were being paid when their services were
terminated on 17 October 2008, namely:
G
R Thabetha - R 5,100-00 (five thousand one hundred rands)
Q
Khumalo - R 5,250-00 (five thousand two hundred and fifty rands)
C
Zulu - R 5,250-00 (five thousand two hundred and fifty rands)
R L AGRANGE, J
JUDGE OF THE L ABOUR COURT
Date of hearing: 1 December 2010
Date
of judgment: 26 October 2011
Attendance:
For
the Applicants: (in person)
For
the Respondent: Mr M Grobler instructed by Van der Walt Attorneys.