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[2011] ZALCD 5
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NUMSA and Others v ADECCO Recruitment Services Ltd (D 534/09) [2011] ZALCD 5 (30 September 2011)
REDDY AJ
1
IN THE LABOUR COURT OF SOUTH AFRICA
HELD AT DURBAN
Reportable
CASE NO. D 534/09
In
the matter between:
NUMSA
…........................................................................................................
First
Applicant
P
MAZWANA & 26 OTHERS
…............................................
Second
and Further Applicants
and
ADECCO
RECRUITMENT SERVICES LTD
…...................................................
Respondent
Date of Hearing: 25 August 2011
Date of Judgment: 30 September 2011
______________________________________________________________________
JUDGMENT
REDDY AJ
Introduction
[1] These are interlocutory
applications by the applicants:
i. for condonation for the late
delivery of their statement of case and;
ii. to amend their statement of case.
The applications are opposed by the
respondent.
Factual Background
[2] The individual applicants (whom I
shall refer to as “the employees”) were retrenched on 25
January 2009.
[3] Their dispute was referred to
conciliation and a certificate of non-resolution dated 6 April 2009
was issued.
[4] The employees were employed by the
respondent - a labour broker - and performed their services at Man
Truck SA (Pty) Ltd - a
client of the respondent. For ease of
reference I shall hereafter refer to the respondent as the “labour
broker” and
to Man Truck SA (Pty) Ltd as the “client”.
[5] It is alleged by the applicants
that the retrenchment occurred without consultation with the
employees or their union. Severance
pay was not paid. Objective
selection criteria were not applied. New employees were employed in
the employees’ stead after
their retrenchment. The labour
broker denies that it is liable in any way as the employees were
employed in terms of limited duration
contracts and their contracts
had come to an end by operation of law.
[6] The dispute initially recorded
both the labour broker and the client as respondents. In August 2009,
the client excepted to
the statement of case because the employees
were not employed by it but by the labour broker. It submitted that
there was no cause
of action between the applicants and the client.
[7] The labour broker delivered its
reply to the statement of case around August 2009, after the
exception by the client was filed.
[8] At this point in time, the
applicants were represented by an attorney. During the course of the
relationship between it and
the attorney, the applicant union (whom I
shall refer to as the “union”) discovered serious
problems with his work
and proceeded to terminate his mandate around
September 2010.
[9] Upon inspection of the file in
this matter, the union’s legal officer discovered around
October 2010 that the statement
of case did not contain certain
relevant allegations and that an exception had been taken to the
statement of case.
[10] In October 2010, the union filed
a notice to amend its statement of case. In November 2010, the labour
broker delivered an
objection to the intended amendments. In November
2010, the union withdrew the action against the client, leaving only
the labour
broker as the respondent.
[11] In February and March 2011, the
applicants delivered an application to amend their statement of case
and an application for
condonation for the late filing of the
statement of case respectively. These applications are the subject of
this judgment.
Condonation
The delay
[12] It is common cause that the
statement of case was due on or before 5 July 2009. The statement of
case was served on 14 July
2009 (10 days after it was due) and filed
on 4 August 2009 (one month after it was due). The delays are to my
mind not excessive.
[13] The application for condonation
was only delivered on 4 March 2011 – 19 months after the
delivery of the statement of
case. The delay here is substantial. The
labour broker in its response to the statement of case recorded that
an application for
condonation for the 10 day delay was required.
Explanation for the delays
[14] As stated earlier, the applicants
were initially represented by an attorney who referred the matter to
this Court. There were
certain problems with his services and his
mandate was terminated around September 2010.
[15] The attorney incorrectly referred
the matter to arbitration to the motor industries bargaining council
after the conciliation
proceedings were completed. On 9 July 2009,
the bargaining council informed the attorney that it did not have
jurisdiction to hear
the dispute as it had to be referred to this
Court. The statement of case was drafted and served and filed on the
dates referred
to above.
[16] The union was at all times during
the existence of the attorney’s mandate informed by him that
this matter was being
properly prosecuted. It had no reason to
believe otherwise. It was only on the termination of the mandate in
September 2010 and
on inspection of the file in October 2010 that the
union discovered that certain omissions existed.
[17] A notice to amend the statement
of case to cure the lack of relevant allegations and a withdrawal of
the dispute against the
client followed in October and November 2010
respectively. These steps were taken within a reasonable time of the
union becoming
aware of the necessity to take these steps and the
applicants cannot be said to be in wilful default.
[18] The application for condonation
was only delivered in March 2011, 19 months after it should have been
delivered. Although a
separate application for condonation for the
late filing of the condonation application was not delivered to this
Court, the labour
broker’s representative raised this issue and
it was dealt with so that the matter need not be adjourned for a
separate application
for condonation to be filed. Both parties
addressed the Court on this issue. I have also had regard to the
pleadings in respect
of the late filing of the statement of case and
the Court file. The pleadings and the Court file were of assistance
to the Court
when deciding the further application for condonation.
[19] Apart from accepting that its
attorney was properly representing it, the union did not have any
further explanation for the
delay. I accept as reasonable that the
union believed that the matter was being properly prosecuted until it
went through the file
itself. This covers the period from the dates
the statement of case was served and filed (July and August 2009) to
the date of
discovery of the omissions in October 2010.
[20] For the period thereafter (from
October 2010) until the application for condonation was delivered (in
March 2011) there is
no explanation on affidavit that is before this
Court. This period is slightly longer than four months. Does the lack
of an explanation
evidence an abandonment of the matter by the
applicants?
[21] A perusal of the Court file
reveals the following:
1. On 15 April 2010, a Court order was
issued postponing the matter
sine die
and directing the
applicants to file an amended statement of case within 14 days. The
applicants were further directed to pay the
wasted costs occasioned
by the adjournment.
2. On 6 October 2010, a directive was
issued to the parties recording that the Court order dated 15 April
2010 had not been complied
with and that the parties were to appear
in Court on 5 November 2010 to explain why the matter should not be
dismissed.
3. On 5 November 2010, the parties
consented to an Order that defined the further litigation in respect
of the intended amendments
to the statement of case. The order
further directed the parties to file a pre-trial minute by 10
December 2010.
4. A letter dated 14 February 2011
from the labour broker’s attorneys addressed to the Registrar
of this Court, explains that
the parties had held a preliminary
pre-trial conference but that in light of the intended amendments to
the statement of case being
opposed, it was prudent not to finalise
the pre-trial minute until such time as the application for the
amendment to the statement
of case had been decided.
5. The Registrar was directed on 31
March 2011 to set down the applications for amendment and
condonation.
[22] The above summary must be read
with paragraphs 9 to 19 above. It is clear from these paragraphs that
the applicants did not
abandon the matter from October 2010 to March
2011. I am persuaded that the further steps taken by the applicants
to amend the
statement of case, apply for condonation, attend Court
on 5 November 2010 and attempt to finalise the pre-trial minute by 10
December
2010 show their interest in pursuing the matter.
Prospects of success
[23] As recorded above, this is a
dispute about an unfair retrenchment in circumstances where no
consultation occurred, the requirements
of section 189 of the Labour
Relations Act (LRA)
1
were not complied with, other workers
were employed after the termination of the employees’ services
and severance pay was
not paid to the employees. The labour broker
opposes the referral on the basis that the employees were bound by
limited duration
contracts. It alleges that rights in terms of
section 189 of the LRA did not accrue to the employees. It further
disputes that
there are 27 individual employees who are properly
before this Court.
[24] The labour broker alleges that
dismissals did not take place. Its reply to the statement of case
records bare denials to the
allegations in support of the unfair
dismissal dispute. Its entire defence is a reliance on a
point in
limine
that this Court does not have jurisdiction to determine
the dispute as the contracts record the following two clauses:
“
3(a)
Should the Client terminate the Agreement it has with Adecco;
(b)
Should the Client require Adecco to reduce its onsite resources”
[25] The defence as recorded by the
labour broker does not expressly state that either of the clauses was
used in terminating the
employment relationship. It merely records
that these two clauses existed. If the labour broker terminated the
employment of the
employees because one of the clauses applied it
would have recorded which of the two clauses applied and the
underlying facts that
gave rise to the terminations.
[26] The opposing affidavit to the
condonation application also fails to present relevant detail as to
the termination of employment
before this Court.
[27] Labour brokers and their clients
are not entitled to regulate their relationship in a manner that
enables the labour broker
or client to treat employees unfairly.
Public policy whilst recognising the freedom of parties to contract
also requires such contracts
to be fair and reasonable. [See
Nape
v INTCS Corporate Solutions (Pty) Ltd
2
and the authorities referred to
therein].
[28] There is therefore an
overwhelming presumption in favour of the employees that the
dismissals were indeed unfair. In addition,
the following further
considerations warrant recording.
[29] The 27 employees were employed on
various dates between 2005 and 2008. Had objective selection criteria
such as LIFO been applied,
it is probable that some of the retrenched
employees would not have been retrenched as other workers with
shorter years of service
may have been retrenched.
[30] The defence that the employees
were employed on limited duration contracts is not supported by the
years of service referred
to in paragraph 29. It is doubtful that the
employees would have been employed on limited duration contracts from
2005 to the date
of retrenchment in January 2009.
[31] Even if the limited duration
contracts are upheld as valid, it is not a foregone conclusion that
the provisions of section
189 of the LRA did not apply to them. There
is no provision in the LRA that specifically excludes employees from
the protections
of section 189 of the LRA if they are employed for a
limited duration. See Nape
supra.
[32] In addition to the above, it is
also alleged by the employees that after a period of four years, the
employees would have become
permanent employees of the client. This
is denied by the labour broker. The trial court would have to
determine whether the version
alleged by the employees is more
probable and if so whether some employees had become permanent
employees of the client despite
the existence of limited duration
contracts and despite the exception by the client that it was not the
employer.
[33] It is necessary for the trial
court to have regard to the terms of the limited duration contracts
to verify whether the employees
were indeed employed for a limited
duration and if so whether they agreed to the exclusion of the LRA
provisions or whether the
labour broker intended to avoid its
obligations in terms of the LRA by creating an impression that the
employees were employed
for a limited duration only.
[34] Also of fundamental importance to
the operational requirements dismissal is the labour broker’s
explanation for employing
workers in the employees’ stead after
they were retrenched.
Prima facie
, on this basis alone, there
appears to be no reason to have retrenched the employees.
[35] On the face of it, the applicants
appear to have sound prospects of success in the main dispute.
Prejudice
[36] I am satisfied that the employees
and the union will suffer immense prejudice should they not be
allowed to have their matter
heard. It is not apparent from the
pleadings that the labour broker will suffer any prejudice should the
matter be heard despite
the late referral and the late application
for condonation. The Court was also not addressed on this issue by
the labour broker’s
representative.
Importance of the matter
[37] The interests of justice require
that this matter be heard. Too often labour brokers have sought to
avoid the protections afforded
to employees by the LRA in relying on
terminations by “operation of law”. Limited duration
contracts are one such example.
This Court has previously and
consistently upheld the letter of the law when the LRA faced such
challenge.
[38] Despite the delay in applying for
condonation, I am persuaded on an evaluation of all the relevant
principles that the interests
of justice require this matter to be
heard
[See
Melane
v Santam Insurance Co Ltd
3
].
Application to amend the statement
of case
[39] It is not necessary to record all
the intended amendments to the statement of case. The amendments can
be summarised as follows:
i. recording the new address at which
service of process will be accepted post the termination of the
applicants’ attorney’s
services;
ii. referring to the labour broker
only as the respondent;
iii. setting out in greater clarity
the factual allegations that led to the dismissals.
[40] The legal issues that arise from
the facts are largely the same in the intended amended statement of
case. The only difference
is the removal of the following issues as
per the numbering in the original statement of case:
“
6.1.7.1
the reason for the proposed dismissal;
The
number of employees likely to be affected and the job categories
in which they were employed
The
time when, or the period during which, the dismissals are likely
to take effect.
the
number of employees employed by the employer and
The
number of employees that the employer has dismissed for reasons
based on its operational requirement [sic] in the preceding
12
months”
[41] The relief sought by the
applicants is the same save for the addition of the claim for
compensation in addition to reinstatement.
[42] The labour broker opposes the
application to amend on the basis that the applicants seek to
introduce a new cause of action
in that it originally recorded that
the client dismissed the employees and now records that the labour
broker dismissed the employees.
[43] The labour broker’s attack
on the intended amendments is not placed in context. The intended
amendments refer to a meeting
of the workers called on 29 January
2010, addressed by the client and attended by the labour broker. At
this meeting, the client
informed the employees that the labour
broker would be informing them if their services were to be
terminated due to a reduction
on the number of vehicles to be built.
It further records that the labour broker handed out letters of
termination to the employees
on the same day.
[44] It would be appropriate to
assume, given the labour broker’s defence, that both the client
and labour broker, would have
each in some way determined the
termination of the employees’ services and that, at least, one
of them participated in the
dismissals. The intended amendments
clarify that both the labour broker and the client were involved in
the dismissals.
[45] There is also an objection to the
intended amendments as it is alleged that new evidence has been
placed before this Court.
The intended amendments provide greater
clarity on the facts that led to the dismissal (as summarised above
in paragraph 43). Courts
will generally allow new evidence to be
placed before it where such evidence assists with the ventilation of
the true dispute between
the parties.
[46] I do not find that a new cause of
action has been introduced. Even if I am incorrect in this approach,
I am guided by the fact
that in allowing the amendment a proper
ventilation of the dispute between the parties will be facilitated.
The trial court will
be in a position to determine the real issues
and justice will be done. [See
Blaauwberg
Meat Wholesalers CC v Anglo Dutch Meat (Exports) Ltd
4
]
[47] Apart from the amended prayer
which includes a claim for compensation and reinstatement, I am
inclined to grant the application
to amend the statement of case. The
reason for the dismissal remains the same and the dispute remains the
same [See
NUMSA & Others
v Driveline Technologies (Pty) Ltd and Another
5
].
[48] I am satisfied that the
applicants are not
mala fide
in their application to
amend and that the labour broker suffers no prejudice or injustice as
a result of the intended amendments.
[See
Rosner
v Lydia Swanepoel Trust
6
].
The labour broker has sufficient time to file a response to the
amended statement of case and to have a full and proper hearing
of
its version.
[49] Further, the intended removal of
those issues listed in paragraph 40 above limits the ambit of the
dispute between the parties.
[50] Insofar as the claims for
reinstatement and compensation are concerned, this Court does not
have the power to grant both reinstatement
and compensation. The
applicants can either claim reinstatement with retrospective effect
or compensation or reinstatement with
retrospective effect and in the
alternative compensation. This amendment is not opposed however the
trial court would have in any
event been mindful of its powers in
determining the appropriate relief.
Costs
[51] The LRA promotes the speedy and
effective resolution of disputes. This Court has discouraged an
overtly technical approach
to dispute resolution. I am not persuaded
that the labour broker’s approach in this matter was of any
assistance to the Court
or that it was justified in opposing the
applications for condonation and to amend the statement of case. Its
opposition to both
applications are frivolous and vexatious. It has
also delayed the resolution of the main dispute. There is an
overwhelming sense
that the labour broker intended opposing the main
issue on technical legal points, which has subsisted in its approach
to these
two applications.
[52] The opposition to the
applications for condonation does not in any way assist the Court.
The response to the factual issues
in the main dispute is not dealt
with by the labour broker in any substantive manner. If its reliance
on a termination by operation
of law is
bona fide
, it would
have taken the Court into its confidence by explaining the
circumstances that led to the termination of the employees’
services. It did not do so.
[53] In respect of the application to
amend, there is no reason why the labour broker objected to the
amendments. It has an opportunity
to oppose the amended statement of
case. It would have suffered no prejudice or injustice had it not
opposed the intended amendments
and filed an amended response to the
amended statement of case. Its opposition not only delayed the
finalisation of the main dispute,
it added to an already overly
burdened court roll. For these reasons it would have been appropriate
that the labour broker pay
the costs of these applications, however
the applicants have not requested a costs order in their favour.
[54] In the circumstances, the
following order is made:
1. The application for condonation for
the late filing of the statement of case is granted;
2. The late filing of the application
for condonation is condoned;
3. The application to amend the
statement of case is granted subject to the following amendments to
paragraphs 6.2 and 6.3 of the
amended statement of case:
“
6.2
Directing the respondent to retrospectively reinstate the second and
further applicants from 29 January 2009 without loss of
earnings or
benefits; alternatively
6.3 Directing the respondent to pay
the second and further applicants just and equitable compensation”
4. Each party is to pay its own costs.
_______________
Reddy AJ
Appearances:
1. For the applicants: Mr S Montshiona
of NUMSA
2. For the respondent: Mr G
Kirby-Hirst of MacGregor Erasmus Attorneys
1
66
0f 1995.
2
[2010]
8 BLLR 852
(LC).
3
1962
(4) SA 531
(AD).
4
[2004]
1 All SA 129
(SCA) at 133H-I.
5
(2000)
21 ILJ 142 (LAC).
6
1998
(2) SA 123
(W) at 127 D-G.