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[2011] ZALCD 38
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South African Clothing and Textile Workers Union (SACTWU) and Another v South African Fibre Yarn Rugs (Pty) Ltd (D 25/10) [2011] ZALCD 38 (7 October 2011)
CELE J
IN THE LABOUR COURT OF
SOUTH AFRICA
HELD IN DURBAN
Not Reportable
CASE NUMBER: D25/10
In the matter between
THE SOUTH AFRICAN
CLOTHING AND
TEXTILE WORKERS UNION
(SACTWU) First Applicant
SIBUSISO NGWENYA
Second Applicant
and
SOUTH AFRICAN FIBRE YARN
RUGS
(PTY) LTD
Respondent
Date of Hearing: 23
February 2011
Date of Judgment: 07
October 2011
JUDGMENT
CELE J
Introduction
[1] The applicants’
claims are for an unfair dismissal of the second to the thirteenth
applicants due to the operational needs
of the respondent. At the
commencement of the trial, the claims of the 12
th
and the 13
th
applicants were withdrawn. The claims were opposed by the respondent
on the basis that it materially complied with the mandatory
provisions of the Act
1
pertaining to retrenchments.
Factual background
[2]
The
respondent is a company duly registered in accordance with the
Company Laws of the Republic of South Africa and it carries on
business as a manufacturer of polypropylene fibre, yarn and woven
polypropylene rugs at 16 van Eck Avenue, Hammarsdale, KwaZulu-
Natal.
Its premises were divided into two, one for the fibre plant
production process, called the Fibre Line Department and the
other
for the rug production. The Fibre Line Department started its
operations in 2002 and employed nine Operators, three Team
Leaders
and Two Staff employees. The second to further applicants (the
applicants) were employed as Operators and Team Leaders.
There were
other employees utilised by the respondent but through a labour
brokerage arrangement. Their positions were of a temporary
nature.
[3] On 13 June 2009, the
Fibre Line Department (the Department) was gutted down by fire. The
result was that the production process
in the Department had to be
halted for some time. In terms of good business sense and in
compliance with a Bargaining Council
requirement, the respondent had
insurance to cover the plant and gross profit in the event of fire.
On 26 June 2009, the respondent
wrote a letter to the first applicant
(the union) advising the union that: “The company has not made
any decision regarding
the future of that operation and all
employees”.
[4] The respondent then
issued another letter dated 8 July 2009, inviting the union to a
consultative meeting scheduled for 13 July
2009 to discuss the status
of the employees of the Department. A meeting was duly held on 13
July 2009. The respondent indicated
that it wanted to deal with an
issue by issue of section 189 of the Act. The union pointed out that
it behoved the respondent
to first issue a section 189 notice after
which the union would be able to take part in the consultation
process. The meeting
which lasted for only 20 minutes ended with the
respondent having to follow the proceedings in terms of the Act.
[5] The respondent issued
a letter on the same day to the union stating:
“
We refer to a meeting we had
with yourselves regarding the employees who were employed in the
Fibre Line Department which was destroyed
by the fire.
These employees were employed as Team
Leaders, Operators and Staff Employees and at present they have no
job. The Company cannot
carry them any longer.
The Company has tried to redeploy
them to the other departments but this was a temporary arrangement
and the Company cannot carry
them any longer.
Nine Operators, three team Leaders
and two staff employees.
No selection method because the whole
plant burnt down.
The process should be completed by
the 31
st
July 2009.
The Company proposes a severance pay
of one week for every completed year of service with the Company.
The Company proposes to give them
time off in cases where each person has to attend an interview.
These employees will get first
preference for positions that may be vacant in the future, provided
they have the necessary qualifications.
We therefore propose to meet again on
Friday 17
th
July 2009 at 10h 00..”
[6]
The
letter of 13 July 2009 was not responded to by the union, probing the
issue of another letter dated 20 July 2009 which reads
:
“
We refer to a meeting we had
with yourselves on 13
th
July 2009 and the notice to
consult in terms of
Section 189
of the
Labour Relations Act 1995
which was faxed to you on the same date.
We are deeply concerned that to-date
we have not received any response from yourselves. This is a serious
matter which requires
urgent attention, especially at this time when
all companies are affected by the global economic meltdowm. At
present we only have
the Rugs division operating and it cannot carry
such a large number of employees.
We have already indicated that we
would like to have this process completed not later than 31
st
July 2009.
We need your co-operation in this
matter because we don’t want to take unilateral decisions. It
is not our management style
to work without the co-operation of the
union, but this may be unavoidable in this matter if it is not given
the priority it deserves.”
[7]
On
27 July 2009, the union and the respondent met. The minutes captured
for that meeting recorded,
inter alia
that:
“
the reason for the proposed
dismissals were understood by both parties. Management also
explained that the Company is now left
with one business which is
the carpet business. This business cannot pay such a large number of
employees.
...
...
Both parties accept that last in
first out per department is a better selection method, but it must
take into account the skills
requirements of the business.
The union proposes that the
completion date be changed from 31
st
July 2009 to 14
th
August 2009
The union proposed three weeks
severance pay for every completed year of service with the Company.
....
The union demanded that the Company
must terminate all contractors instead of retrenching the permanent
employees.
The Company’s view is that
permanent employees cannot be saved by temporary positions. They will
be retrenched and will be
called for temporary positions if they have
the necessary skills. They must also be prepared to accept lower
rates of pay on their
re-employment.
It was also agreed that the Company
must also consider voluntary retrenchments...”
[8]
A
meeting scheduled for 31 July 2009 did not materialise due to the
non-availability of the respondent’s representative.
The next
meeting held by the parties was on 3 August 2009. The minutes
captured
inter alia
read:
“
He (Mr Ngubane) reminded the
union that the Fibre Line was burnt down on the 13
th
of
June 2009 and all along these employees have not been doing the job
that they were employed to do. This means that the Company
has been
carrying these people and the Company cannot afford that anymore.
The Company’s position is that
the process of consultation has to be completed as soon as possible
preferably on the 7
th
August 2009.
Mr Ndawonde stated that the union
believes that the 7
th
August 2009. He then proposed that
the Consultation process be finalised on the 14
th
August
2009.
Mr Ngubane replied by saying that if
this process cannot be finalised soon, the Company will be forced to
put these employees on
short-time until the matter is finalised.
Mr Ndawonde said that the union will
not accept that the people be put on short-time because they have
families to look after.
Mr Ngubane stated the final offer by
the Company is as follows:
A list of employees to be retrenched
will be sent to the Union as soon as possible.
The Company does not have positions
available to redeploy these employees.
Nine Operators and three Team Leaders
are affected since two staff members have been retrenched.
Nine Operators are on level 2 and
three Supervisors are on Level 4. The Company does not have ant
vacant positions available which
means that there is no selection
method to be used because the whole business unit burnt down.
The request to complete the
Consultation process on the 14
th
of August will be
discussed with Top Management.
The Company is offering 8 days for
every completed year of service as the severance pay. This is a once
off offer which may not
be taken as a precedent (sic) in the future.
The Company has taken into consideration the matter of the
incidence.
Under these difficult economic
circumstances, the Company will normally pay one week for every
completed year of service...”
[9] On 5 August 2009, the
respondent issued another letter to the union informing it that:
“
We wish to put it on record
that we were supposed to have a follow up meeting on 4
th
August 2009 to finalise this matter. As Management we set aside all
other businesses and made ourselves available for that meeting.
With
this we demonstrated that we are really committed to this process.
On the other hand the union has not
demonstrated any commitment.
Even though your Mr Ndwandwe arrived,
but only one shop steward arrived late for the meeting. The other two
shop stewards, including
the senior shop steward did not turn up for
the meeting. To-date there has been no communication from the union
since that scheduled
meeting did not take place.
This state of affairs is leaving us
with no other alternative but to carry on with the retrenchment
process. This is an undesirable
situation which cannot be avoided.
This is the final position of the
Company:-
A list of employees to be retrenched
will be sent to you as soon as possible.
The Company does not have positions
available to redeploy these employees.
Nine Operators and three Team Leaders
are affected since two staff employees have been retrenched.
There is no selection method because
the whole plant burnt down which affected this whole business unit.
The process will be completed on
Friday 7
th
August 2009.
The Company will pay a severance pay
of eight (8) days for every completed year of service. This will
only apply to this retrenchment
and it cannot serve as a precedent
in the future.
The Company will pay in lieu of
notice to enable the employees to start searching for jobs where it
is possible.
These employees will get first
preference for positions that may be vacant in the future, provided
they have the necessary qualifications.”
[10]
On
7 August, a further meeting was held by the parties. The union took
the position that the discussion could not be finalised
on that day
and proposed 14 August 2009 as the last date for a discussion. The
respondent said that as there was then only one
remaining business
unit, the company could not carry such a large number of employees.
The more the matter was prolonged further,
the greater were chances
that the whole company might collapse. The union suggested that the
employees in a labour brokerage arrangement
be replaced by the
applicants who would however retain their rate of pay. That position
was to be retained until the insurance
claim was processed and a
final decision could then be taken. The respondent conceded that it
had already filed the insurance
claim but pointed out that it could
not be predicted if the claim would be met. In the meantime, the
company would be bleeding
to death, an act that would be akin to
committing suicide. The respondent undertook to immediately stop
using labour broker employees
but to retain two who had been trained
as a weaver and a mender.
[11] The respondent had a
Twisting Department which it uses for temporary employees who are
paid a lower rate of income. They work
on a contingency basis,
depending on the number of orders received. The respondent offered
those positions to the applicants provide
they would accept a lower
income rate and that their permanency could not be guaranteed. The
union could not accept the conditions
of such employment.
[12] The last
consultative meeting was held on 14 August 2009. The respondent
could not agree to revise its offer on the severance
pay so that it
could be increased to two weeks instead of one week. The union
expressed its displeasure at the inflexible attitude
of the
respondent. At the end of the meeting the parties reached some
understanding as a result of which a draft agreement was
produced.
It reads:
“
MEMORANDUM OF AGREEMENT
ON
DISMISSAL BASED ON OPERATIONAL
REQUIREMENTS
entered into between
SOUTH AFRICAN FIBRE YARN RUGS (PTY)
LTD (SAFYR)
and
SOUTH AFRICAN CLOTHING & TEXTILE
WORKERS UNION (SACTWU)
It is regarded that the parties agree
in principal (sic) on the following issues:-
SAFYR being the employer undertakes
to provide the Union with a list of all employees who are affected
by the process of dismissal
based on operational requirements.
The
reason why these employees will be dismissed based on operational
requirements is because the whole Fibre Line burnt down.The
are no
positions available and therefore all of them will be dismissed.
The
whole process will be completed on Friday 14
th
August
2009, which will be last working day.
The
retrenchment package will be as follows:-
The
severance pay will be eight days for every completed year of
service. This is a once off and not a precedent.
The
company will pay in lieu of 4 weeks notice which starts on Monday
17
th
August 2009 up to Friday 11
th
September
2009.
The
company undertakes to pay for all accumulated leave due to the
retrenched employees.
The
annual bonus will be paid pro-rata of four weeks.
All these monies will be paid on
Friday 28
th
August 2009.
(e) These retrenched employees will
get first preference for positions that may be vacant in the future;
provided they have the
necessary qualifications. These provisions
will have force and effect for a period of six months.”
[13]
The
respondent finally terminated the employment of the applicants
through a retrenchment letter sent to each applicant which then
reads:
“
RE: NOTICE OF RETRENCHMENT
This letter serves to confirm that as
a result of the fire which destroyed the whole Fibre Line, your
position is non-existent.
We have had a number of consultation
meetings with Union regarding this situation.
We regret to inform you that your
services are to be terminated due to operational requirements.
In terms of the agreement with the
Union, your payment details will be as follows.
Four weeks pay in lieu of notice,
which is effective from Monday 17
th
August 2009.
Eight days (8) pay for every
completed year of service or part thereof (pro-rata)
Accumulated leave that is due to you.
Bonus pro-rata up to the end of
August 2009.
Payment will be made directly into
personal banking account.”
(sic)
.
[14]
The
union acted on behalf of its members referred a dispute of unfair
dismissal for conciliation. When the dispute could not be
resolved,
it was referred to this Court in terms of
section 191(5)
(2)(b) of
the Act.
The issue
[15] The applicants
conceded that as a result of the fire having gutted the Department,
there was a need for the respondent to resort
to retrenchment. At
the most general level, the applicants contended that the selection
of the individual applicants was premised
on the circumstance of
their being employees of that doomed Department. The applicants
contended that even
ex facie
the documentation submitted of
record, other than a suggestion in the meeting of 27 July 2009, that
“last in first out”
(LIFO) criterion would be employed,
the respondent did not give any thought to accommodate the affected
individual applicants within
its business. Simply stated, the
applicants contended that they could have been retained in the
employment while other employees
were retrenched in their places if
fair and proper selection criteria were applied. According to the
applicants, the respondent
retained employees with less service than
them and some performed jobs which the applicants were suitably
skilled to do.
[16] The respondent
contended that at all times the applicants were represented by a
trade union during the consultation process.
At no stage was any
objection raised to the process in any form or manner nor was there
evidence that skills were placed before
the respondent to enable them
to consider the applicants for alternative posts. The applicants
refused alternative positions albeit
at lower levels.
Evidence
[17] The respondent bore
the onus of proving that the dismissal of the applicants was
substantively and procedurally fair.
Respondent’s
version
The
evidence of Mr van Niekerk
[18] Mr
van Niekerk described the fibre plant's production process as being
an independent unit with no relationship with the rug
production
department. Different raw material was bought for the fibre plant
and its end products were sold into markets that
were different from
that of the rug division. The fibre plant operated separate
financial accounts. The fibre plant's production
process entailed
the extrusion of polypropylene granules creating filaments which were
gathered by hand and fed through a system
of rollers. The filaments
were stretched to a finer diameter and eventually cured. The
production process required knowledge
and control of temperatures as
well as the correct monitoring of the cool air, the speed of the
spinneret and rollers. Temperatures
on the surface of the rollers
ought to be monitored to manage the tension of the filaments.
[19] He
described the process as robust and that it entailed a lot of manual
work. The stretching, curing and cooling of the product
was all done
manually. He estimated that it would take between six to twelve
months of training before anyone would be competent
to work as an
operator in the fibre division. Mr van Niekerk said that the rug
production on the other hand was significantly
different and that the
process included weaving, mending as well as a backing process. The
rug operation also included yarn manufacturing
in which the
determination of the product colour was important as it involved an
extrusion process. The product was either sent
to heating and
twisting where it was wound onto bobbins or sent to weaving where it
was woven on a loom. That was a highly specialised
job which
required at least eighteen months of training. The entire rug
operation was far more automated than that of the fibre
line. Mr van
Niekerk disputed any suggestion that the applicants had previously
been employed in the rug division and had transferred
to the fibre
operation in 2002.
[20] Mr
van Niekerk testified that the issue of skills and suitability to
perform existing jobs was never raised during the consultation
process. He pointed out that the respondent offered level 1 posts to
the applicants provided they accepted level 1 rates of pay.
That
offer was refused. He said that he looked at the alternative posts
within the business and was satisfied that there were
no positions
available to the applicants which would allow them to operate
immediately without having a negative impact on the
efficiency of the
respondent. Mr van Niekerk said that the respondent wished to retain
skills suitable to the production of rugs
and on that basis he was
not prepared to accept the applicants’ proposal to use LIFO
across the board. He said that the
information that was placed
before him including that given to him during the consultation
process did not indicate that any of
the applicants had weaving or
BCF extruder experience. He believed that it was impossible to place
any of the applicants into
any skilled post in the rug division as
they did not have the appropriate skills and would therefore
negatively affect production.
The
evidence of Mr Ngubane
[21] Mr
Ngubane began working for the respondent on the 3
rd
August 1998 but left the company in April 2000 to rejoin it on 18
June 2001 as an HR Manager. His recollection was that except
for Mr
Ngwenya, all applicants had been employed by a labour broker known as
IRS prior to 2005 and were employed in the fibre plant.
Mr Ngubane
conceded that Mr Ngwenya did work in the rug division previously.
On
4 April 2005, there was a change. All labour broker employees became
permanent employees of the respondent, including the applicants
in
the fibre plant.
[22] Mr
Ngubane confirmed that the letters issued to the union before and
during the consultation process were issued by him and
the
respondent's proposals therein outlined were never cast in stone. He
said that he expected the union to provide counter proposals.
The
Respondent had been carrying the Applicants since 13 June 2009 in
that they were performing menial tasks but were paid at
their skilled
rates. The financial situation of the company was serious as the
economy was in recession and the textile industry
was suffering
enormously. One of the largest textile companies, Frame, had even
closed down due to such financial difficulties.
His understanding
was that consultation was a two way joint consensus seeking process.
His view was that the union was initially
dragging its heels which
required him to send another letter to them dated 20 July 2009. The
letter confirmed that the respondent
wished to avoid taking a
unilateral decision but that they would be forced to do so if the
union did not give this matter the priority
it deserves.
[23] Mr
Ngubane confirmed that all posts from skills level 2 and above
required a skill which the applicants did not have. In his
opinion,
the applicants' skills could not be used in weaving, the boiler house
or engineering. The remaining posts at the respondent
were level 1.
He understood that the parties had agreed that the selection criteria
would be LIFO subject to skills as this had
been the criteria used in
previous retrenchments. When parties met on 3 August 2009, the
applicants did not make any specific
representations in regard to the
selection process. He said that the offer of employment made by the
respondent for jobs at level
1 posts and level 1 pay, was rejected
out of hand by the union. Due to the urgency of the matter and a
need to finalise the process,
he warned the union that short time
would have to be considered as the company could not continue to pay
the applicants at the
skilled rate. The short time option was also
rejected by the trade union. When Mr Ngubane said that there were no
suitable posts
for the applicants' skills available in the company
that was not disputed by the applicants or the union. Nor did they
put up
any details of the applicants' experience at that time.
.
[24] The
minute of the meeting of the 3
rd
August 2009 indicates a
movement by the respondent in regard to the timing of the
retrenchment and to the amount of severance pay
to be paid. This is
indicative of the respondent's
bona fide
attempts to consult
properly.
[25] Again,
notwithstanding the urgency of the matter, a meeting arranged for 3
August 2009 resulted in only the union organiser
and one shop steward
arriving for that meeting. As a result, the meeting could not
continue and had to be reconvened on the next
day. The only
explanation given for not attending was that other shop stewards were
confused as to the time of the meeting. This
was not corroborated by
other witnesses called by the applicants. As a result, the
applicants’
bona fides
in regard to the consultation
process was questionable. As a result of that, Mr Ngubane addressed
a letter to the union setting
out what he described as its final
position. He confirmed that the words "final position"
were used in an attempt to
indicate to the union that the company
could not go on indefinitely with the consultation process and that
the matter had to be
concluded soon.
[26] When
the parties met on 7 August 2009 in a final attempt to finalise the
process, at no stage did the union point out the skills
set of the
individual applicants. Instead, the union emphasised that it could
not allow its members to be retrenched when the
respondent continued
to use employees through a labour broker. The respondent then
undertook to terminate the labour broker's
mandate. The union
responded that if any positions were to be taken up by individual
applicants, they would have to do so on their
existing rates of pay.
At that meeting an offer was made to the applicants to accept the
labour broking posts but to accept a
lower rate of pay. It was
further emphasised that the permanency of those posts could not be
guaranteed. The applicants suggested
in their evidence that all
except two, were prepared to accept those posts at the lower rate of
pay. Mr Ngubane testified that
none of the applicants came forward
with their particular skills. There was no evidence before him to
show that any of the applicants
could operate in the rug division
without supervision.
[27] Mr Ngubane said that
after each meeting, a copy of the minutes would be faxed to the trade
union and that the minutes were
never challenged as being incorrect.
Mr Govender’s
testimony
[28] The policy taken by
the respondent did not cover the direct costs of employees’
wages but wages as cost of turnover.
If the turnover was reduced
because there was no production the amount allocated to wages would
also be correspondingly reduced.
In calculating the pay out, the six
months trading period prior to the fire was to be considered and that
period had been extremely
poor. The result was that the pay out,
made only in November 2010, was very low and it barely covered the
retrenchment costs paid
to the individual applicants. As he
testified the claim was still being processed.
The applicants’
version
Mr
Sibusiso Ngwenya
[29] Mr
Ngwenya testified that he had been employed by the respondent in
various capacities since 15 July 1997.
He
had been an extruder operator for a period of six years from 1998 to
2004. He had never been employed by a labour broker while
tendering
his service with the respondent. At the time of his retrenchment
,
he was a shop steward working on the fibre line.
[30] During
the retrenchment consultations, the union had tried to raise the
issues of the peoples’ skills and length of service,
applicants
had more skills and longer service than some of the employees. The
issue was raised as a collective but individual
debate around each
person’s skills had not taken place due to the company having
adopted an attitude that employees in the
fibre line had to go. He
said that applicants felt that they were under suspicion of having
deliberately set the Department on
fire and Mr van Niekerk had made
words to that effect. The applicants felt that was the reason why
they were dismissed.
[31] He
said that he had knowledge of the skills of the various individual
applicants which predated 2005. The applicants who started
work on
the fibre line in 2002 had been employed in the carpet section before
the transfer. The applicants had been willing to
accept the lower
grade positions offered to them. During the negotiations, Mr
Govender had called him from the finishing line
to work at the
weaving section and had promised to keep him there. When the union
tried to raise the issue of skills, the company
had rejected
everything. He was part of the team that had prepared the schedule
setting out individual applicants’ experience
based on what
applicants told him but no documents were produced to support the
schedule.
[32] He
said that he attended the consultation meeting of 3 August 2009 when
his colleagues failed to attend due to confusion as
to its time. He
said that the minutes were largely accurate even though they did not
reflect everything discussed. He also accepted
that copies of the
minutes were faxed to the trade union after each meeting and that the
union never queried the minutes.
Mr
Kweyama
[33] Kweyama
testified that he was employed by the respondent in 1999 although it
was known as Lotus at that time.
He was in
the weaving department and had occupied various positions.
At the time of his dismissal, he was employed as a Shift
Leader. He produced documents he said he had obtained from the
Department
of Labour in Camperdown which indicated that he started
work in 2001. He also produced documents he said he had obtained
from
the respondent after he had queried his length of service
specified in his UIF claim form. He had gone to a Ms Sherona
employed
by the respondent and had spoken to Mr Ngubane about his
length of service. A letter dated 9 October 2009 was then issued by
the
Human Resources Administrator according to which his date of
engagement with the respondent was 25 September 2001. He conceded
though that in 2003
,
he was employed by a
labour broker IRS and that he assumed full time employment with the
respondent in 2005 in its fibre plant.
He insisted that he had
weaving experience with skills which were in short supply at the
respondent.
Mr
Noel Dlamini
[34] Mr
Dlamini gave evidence that he began work with the respondent in
1995.
He said he began employment in the BCF/CF
line as an extruder
operator.
He had an accident with the hyster and he
left the respondent’s employ in 1999 but he return
ed
to work in 2002, joining the fibre line. When he was retrenched, he
had worked as a Shift Leader. He said that if management
had agreed
to skills criteria, he would have indicated his skills level to them
to ensure that he was considered for appropriate
jobs. There
appeared to be very little discussion amongst the individual
applicants in regard to their individual skills.
Mr Dlamini said that no one told him that his skills were
unacceptable. His evidence was that he did not refuse any level 1
post.
.
Mr
Victor Sishi
[35] Mr
Sishi said that he was employed in 1999 as a casual employee in the
positions of a forklift Driver and a DCF Operator through
the
services of a labour broker IRS until 2001.
He
was then employed directly by the respondent as an Operator and a
Warehouse Manager. During 2006, he received a driver’s
licence
and he would sometimes thereafter drive company motor vehicles. He
had had a motor vehicle accident at the end of 2008
and then worked
as a Data Capturer and in the “colour” kitchen doing
quality control work. He indicated that he had
payslips from the
respondent.
He conceded that he did not
receive formal training on the extruder and simply was trained on the
job.
[36] He
also conceded that whilst he raised the issue of his skills during
consultations he did not get into the details thereof
as workers
raised LIFO and skills in the collective. He testified that all
applicants except him and Mr Ngwenya accepted to work
at a lower
rate. He said that employees with shorter service than his still
occupied level 2 positions.
Mr
Fortune Khomo
[37] Mr
Khomo testified that he was employed by the company when it was owned
by Lotus from Singapore. After six to seven years,
a new owner,
Zaraphina took over in about the year 2000 to later hand the company
over to Mr Govender and the Independent Development
Co-operation the
respondent. He was a weaver and also a shop steward since 1997. He
said that he was aware of all applicants'
skills and further that the
applicants Ngwenya, Gwala, Dlamini, Kweyama and Sishi had started
work at the respondent on a fixed
term contract of 3 years and they
were then employed on a permanent basis.
[38] Mr
Khomo conceded that the company had gone through a series of changes
since 1999. He testified that the company had taken
a final position
and did not approach the consultation process in a flexible manner.
He denied that alternatives to dismissals
were ever discussed and
that level 1 positions were offered to employees.
He said that the union had raised the issue of LIFO and
bumping but Mr Ngubane had said that bumping would be unfair to other
employees.
He said that his members were prepared to work at a lower
rate. He also conceded that the respondent's pay roll would reflect
a broken service and that Mr Govender took over the business and made
all labour broking employees permanent.
He
also conceded that the employees association with the Respondent
prior to 2005 might have been under the guise of a labour broking
arrangement.
He could not put up any
documents to support the periods of employment.
.
[39] He
said that the union received correspondences from the company in an
attempt to address the problems caused by the fire.
He said that
there was a feeling of general suspicion on the part of the
respondent that employees in the fibre line had been
the cause of the
fire. He indicated that he did not receive copies of the minutes.
He said that after a lengthy discussion, the applicants went
to management to say that they would accept the lower rated jobs at
the lower rate of pay except Messrs Ngwenya and Sishi. His evidence
was that the union had raised the issue of the insurance payment
to
be used to avoid retrenchment but that Mr Ngubane was very
destructive of whatever they had discussed. He also accepted that
no
jobs were guaranteed.
Mr
Sbusiso Ndawonde
[40] Mr
Ndawonde was the Branch Organiser of the first applicant in whose
employment he was for some 23 years.
The
union would prefer to use LIFO as the first point of departure in a
retrenchment exercise. The counter balancing factor would
be a
necessity to retain necessary skills. Although the company had
agreed to use LIFO across the board it reverted to its original
position that there were no selection criteria.
[41] He
testified that it was his impression that the respondent was
suspicious of the applicants having been involved in setting
up the
fire which destroyed the fibre line. He said that Mr van Niekerk had
remarked that he could not have peaceful nights while
the applicants
were at the premises of the respondent.
[42] He
conceded that until the time of the fire incident, the union had a
good relationship with the company and had no reason
to doubt its
bona fides
.
He admitted that he did
not respond to the company's correspondence immediately as he was
very busy at the time and accepted that
the first engagement with the
company was one month after being notified of the fire. Mr Ndawonde
accepted that the rrespondent
would not be able to carry employees
indefinitely. He said that the company was getting more and more
impatient as the retrenchment
process progressed. Mr Ndawonde agreed
that an agreement was reached with the company in regard to the
employment of Mr Moloi
and Ms Gloria Ndlovu.
Mr
Gwala
[43] Mr
Gwala testified that he was employed by the respondent from 1999 to
2000. He was then recruited when the respondent opened
the fibre
line. He handed in various pay slips and pay envelops which he said
were used by the respondent to pay him. He accepted
that none of the
brown envelopes purporting to be pay slips bore the respondent's
stamp or particulars.
Mr Gwala conceded
that one of the printed pay slips indicated that the employer was
Imvusa which was a labour broker. He confirmed
that the official pay
slips from the respodent bore the name SAFYR. He agreed that his
skill set was limited to level 1.
Evaluation
[44] In
this matter, the respondent accepted that it dismissed the applicants
and therefore that in terms of
section 192
(2) of the Act it had to
prove that a fair reason existed on the bases of which it dismissed
them and in doing so, it followed
a fair procedure. The issues
between the parties turn on whether there was a material compliance
with the provisions of
section 189
of the Act when the applicants
were retrenched.
[45] As
already pointed out, t
he applicants conceded that as a result
of the fire having gutted the fibre line, there was a need for the
respondent to resort
to retrenchment. At the most general level, the
applicants contended that the selection of the individual applicants
was premised
on the circumstance of their being employees of that
doomed department. There is a submission by the applicants that
retrenchment
might have been avoided through a recourse to the
insurance claim. This was their pleaded case. During the trial, it
was never
disputed that it took more than a year for the insurance
claim to be met and that the claim had not even been finalised when
the
matter was heard by this Court. It must therefore follow that
the position taken by the parties at the commencement of and during
the trial, that retrenchment was inevitable due to the guttering down
of the fibre line, was a correct stance in the circumstances
of the
case.
[46]
Section 189
(1) (b)
(ii) of the Act was applicable in this matter. To the extent
relevant, it provides that when an employer contemplates
dismissing
one or more employees for reasons based on the employer’s
operational requirements, the employer must consult,
in the absence
of a collective agreement that requires consultation, a registered
trade union whose members are likely to be affected
by the proposed
dismissal, in terms of.
[47] From 13 to 26 June
2009, there is irrefutable evidence that the respondent had not
decided on the steps it had to take after
the fibre line was
destroyed by fire. The letter of 8 July 2009 is an indication that
the respondent had then made up its mind
on how the problem it faces
had to be resolved. The letter dated 8 July 2009 issued by the
respondent was certainly a notice as
envisaged by
section 189
(3) of
the Act, even though it failed to disclose all relevant information
prescribed in that sub-section. In the first meeting
of the parties
held on 13 July 2009, the union correctly pointed out the deficiency
in the notice issued by the respondent. The
letter immediately
issued on 13 July 2009 by the respondent materially cured the defect
in the initial notice. Paragraphs (a) to
(d) of the second letter are
capable of an interpretation that the respondent approached the
negotiating table with a made up mind
on how it would resolve the
impasse as they read:
“
These employees were employed
as Team Leaders, Operators and Staff Employees and at present they
have no job. The Company cannot
carry them any longer.
The Company has tried to redeploy
them to the other departments but this was a temporary arrangement
and the Company cannot carry
them any longer.
Nine Operators, three team Leaders
and two staff employees.
No selection method because the whole
the whole plant burnt down.
The process should be completed by
the 31
st
July 2009.”
[48]
The
respondent and the union were obliged to engage in a meaningful joint
consensus-seeking process and to attempt to reach consensus
on a
number of factors including, but not limited to the method for
selecting the employees to be retrenched. Minutes were kept
of the
consultation process adopted by the parties. The letters written by
the respondent and the minutes it kept of the meetings
show without
doubt what the respondent brought to the negotiating table. There is
a glaring absence of what the applicants brought
to the table. All
that the applicants did during the trial, in showing what their
contribution was in the negotiations, was to
point out that the
minutes were incomplete. Even as the trial has come to a finish,
there is no evidence of what they were referring
to as not contained
in the minutes and what they did when they realised that the minutes
were not a true reflection of the discussion
they had had with the
respondent.
[49] There is certainly
nothing wrong in an employer approaching a negotiating table with a
made up mind on how it seeks to resolve
the problem when it
contemplates a retrenchment, provided it approaches the negotiation
table with a flexible mind that is open
to persuasion to other
solutions, such as avoiding or delaying retrenchment, minimising the
number of dismissals and mitigating
the adverse effects of the
dismissals. From the beginning of discussions, it was open to the
union to challenge the respondent
on its position that no selection
method was to be agreed upon because the whole plant had burnt down.
Instead, some of the shop
stewards stayed out of some of the meeting
for no clear reasons at all when their future employment was at
stake. Apart from parties
agreeing on LIFO as a selection criterion,
the scope of which is also in issue, the union failed totally to
identify the individual
skills of the applicants with a view to
showing the respondent during negotiations that some applicants could
have been retained
for being better equipped than those employees who
were in the rug production or any other line. As an afterthought,
the applicants
came to Court with a version of having raised their
skills as a collective, a clearly vague concept which they could not
even explain.
[50] It has to be borne
in mind that the joint consensus-seeking process required by
section
189
of the Act may be foiled by either party, where one of them
refuses to take a meaningful part in any of the stages of the
consultation
process or by deliberately delaying the process, see
Johnson
and Johnson (Pty) Ltd v Chemical Workers Industrial Union
2
[51] The probabilities of
this matter favour the acceptance of the respondent’s version
that during the negotiations, the
union did not raise the issue of
the applicants being better skilled than employees who were not
affected by the retrenchment.
The issue of skills in the collective
was raised for the first time in Court. It was not part of the case
pleaded by the applicants.
Bumping too was raised for the first time
during the trial as the applicants did not plead any fact in support
of its application
during retrenchment.
[52] The period of
employment of the applicants is another issue for consideration. The
version of the applicants was that apart
from skills, they had a
longer service dating before April 2005 with the respondent and
should have been retained instead of the
other unaffected employees.
The version of the respondent was that the fibre line was opened in
2002. According to Mr Ngubane,
all applicants except for Mr Ngwenya had been employed by a labour
broker known as IRS prior to 2005 and were employed in the fibre
plant.
On 4 April 2005, there was a change. All
labour broker procured employees became permanent employees of the
respondent, including
the applicants. It remained common cause that
the applicants did sign employment contracts with the respondent in
April 2005.
[53] There is undisputed
evidence that the respondent was utilising services of a labour
broker and that a number of applicants
worked for the respondent
through such arrangements. In this respect, there are two versions
that are contradictory. The numerical
superiority of one version
over the other, that is the number of witnesses, is not of assistance
in determining the probable version.
Even the mere say so of the
parties without documentary evidence will not produce reliable
evidence. A number of the applicants
testified that they commenced
employment with the respondent in 1999 but through a labour broker.
How and exactly when transition
came about from that arrangement to
being employed directly by the respondent, before April 2005, was not
testified to. The very
existence of a labour brokerage arrangement
creates an opportunity for the manipulation of the facts by either
party. In the absence
of any documentary evidence linking any
applicant’s employment prior to 2005 directly with the
respondent, other than through
a labour broker, the version of the
applicants has become weaker. The documents produced did not create
such a link. The version
of the respondent is favoured by the
probabilities and must accordingly be upheld.
[54] Mr Ngwenya’s
case is however different from that of other applicants. He said
that he was never employed through a labour
broker. His evidence was
never contradicted. Instead part of his evidence was corroborated by
Mg Ngubane who said that Mr Ngwenya
was an employee of the respondent
before April 2005. The respondent led no evidence to rebut Mr
Ngwenya’s evidence that
even before 2002, when the fibre line
was opened, he was not employed by the respondent. I hold therefore
that Mr Ngwenya was
at all times material to this matter, in the
employ of the respondent. This finding indicates that Mr Ngwenya
would have acquired
certain skills with the respondent before he was
transferred to the fibre line. His evidence stands uncontroverted
about himself.
As to the skills of other applicants he gave a bold
but unsubstantiated statement which left a room that he might have
been honest
but mistaken about them. He would probably know more
about himself than about others.
[55] The final issue
turns on whether the respondent attempted to avoid dismissing the
applicants by offering them an alternative,
albeit lower rate
employment. The respondent was under an obligation to attempt to
avoid a dismissal based in its operational
requirements if the
employees could perform either without any additional training or
with minimal training, see
Oosthuizen
v Telkom SA Limited
3
and
Sacwu and Others v Afrox Limited
4
.
[56] At the time of
retrenchment, the respondent had employees engaged through a labour
broker in temporary employment. The respondent’s
version was
that such positions were offered to the applicants but they declined
to accept them. The applicants said that all
except Messrs Ngwenya
and Sishi accepted the alternative employment. The respondent
conceded though that the offer was not for
permanent employment. It
is in this respect that the respondent failed in its obligation to
avoid a dismissal. In my view, had
the tender to alternative
employment been for permanent positions, the respondent would have
succeeded in discharging the obligation
on it. Added to this
consideration was the failure of the respondent to offer permanent
positions at the rate of pay which the
applicants were enjoying at
the time, when the respondent was well aware that it had filed a
claim for the loss it had incurred.
It had undertaken to terminate
the contract with the labour broker, another source of its financial
ability to retain the applicants.
Parts of the minutes captures for
the meeting held by the parties on 27 July 2009 reveal the following
recorded information:
“
The union demanded that the
Company must terminate all contractors instead of retrenching the
permanent employees.
The Company’s view is that
permanent employees cannot be saved by temporary positions. They will
be retrenched and will be
called for temporary positions if they have
the necessary skills. They must also be prepared to accept lower
rates of pay on their
re-employment.
It was also agreed that the Company
must also consider voluntary retrenchments...”
[
57
]
The
respondent can hardly describe itself as having been open to
persuasion from the stance it had initially adopted about
retrenchment.
It was common cause that temporary positions were
available after the applicants were retrenched and some of them were
employed.
That goes to show that the respondent acted with more
haste in retrenching when soon thereafter it was in need of labour.
Parties
are in dispute as to the applicants’ acceptance of the
alternative employment at level 1. If the acceptance, assuming there
was, included acceptance of a lower rate of pay, both parties would
have been in agreement and there would probably have been no
issue
between them in this regard. If there was acceptance, the
probability is that it did not include acceptance of a lower rate
of
earnings. In that case, the respondent might not have accepted the
counter- offer.
[58] No record of the
reaction to the offer was either kept or, if kept, it was not
produced in Court. It is surprising that the
respondent which had
been keeping records of the consultation process did not produce any
records of the reaction to its alternative
employment offer. While
the evidential burden has been shifting during the trial, the party
bearing the main burden has to carry
the consequences of there being
paucity of evidence in this regard. Put differently, the respondent
had to show Court that in
its obligation to avoid a dismissal, it
considered an alternative to dismissal but that it was the applicants
who rejected it.
Had the respondent succeeded in this regard, it
would have shown that a fair reason existed which justified it to
resort to a
dismissal of the 10 applicants, to the exclusion of other
employees, and in the absence of an alternative thereto. The
respondent
has clearly not been successful in this regard.
[59] The fairness of the
application of the selection criterion LIFO would come for
consideration had it been found that there was
no reasonable
alternative to dismissal. In my view, it is not necessary to embark
on this investigation. What needs to be considered
is the relief
which the applicants are entitled to.
Section 192
(2) of the Act
directs this Court to require of the respondent to re-instate or
re-employ the dismissed applicants who have asked
for that relief,
unless it is not reasonably practicable for the respondent to
re-instate or re-employ them.
[60] The reason for the
respondent to consider retrenchment has always stood beyond doubt as
the fibre line was burnt down. The
undisputed evidence of the
respondent was that insurance claim had not been finalised and that
the line had not been reconstructed.
The relationship between the
parties was never broken down. Even though there might have been
some suspicion on the cause of
the fire, the dismissal remained one
without blame. Yet the respondent never acted capriciously or with
mala fides
throughout the proceedings. In my view, and with
the exception of Mr Ngwenya, neither re-instatement nor re-employment
of the
other applicants will be practicable in the circumstances. As
for Mr Ngwenya, he should not have been included as a candidate for
retrenchment, due to his long employment by the respondent when
clearly there were employees of much shorter experience to his.
[61] In conclusion, the
dismissal of the 10 applicants by the respondent was substantively
unfair and the following order will consequently
issue:
The
respondent is directed to re-instate the employment of Mr Ngwenya
with retrospective effect from the date of his dismissal,
with no
loss of earnings or benefits;
The
respondent is directed to compensate each of the other 9 applicants
listed in annexure A of the pleadings, in an amount of
money
equivalent to six months of the salary each earned on the date of
dismissal.
Mr
Ngwenya is to report for duty on 17 October 2011, at 08h00.
Payment
of compensation in terms of paragraph 2 hereof is to be made to the
applicants on or before 21 October 2011.
No
costs order is made.
_______________
Cele
J.
Appearances:
For
the Applicants: Mr B Purdon
Instructed
by Brett Purdon Attorneys
For
the Respondent: Mr M G Maeso.
Instructed
by Shepstone & Wylie Attorneys
1
The
Labour Relations Act Number
66 of 1995.
2
(1999) 20 ILJ 89 (LAC).
3
(2007) 28 ILJ 2531 (LAC)
4
(1999) 2 ILJ 1718 (LAC).
31