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[2012] ZALCCT 46
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Hopley v Gijima AST (Pty) Ltd (C 1069/2010) [2012] ZALCCT 46 (9 March 2012)
THE
LABOUR COURT OF SOUTH AFRICA
HELD
AT CAPE TOWN
JUDGMENT
Not
Reportable
CASE NO: C1069/2010
In the matter between:
RAYMOND HOPLEY
..............................................................................................
Applicant
and
GIJIMA AST (PTY) LTD
....................................................................................
Respondent
Heard: 30 January 2012
Decided: 09 March 2012
JUDGMENT
RABKIN- NAICKER, J
Introduction
[1] Mr Raymond Hopley (Hopley) was retrenched by the respondent
company on 12 July 2010. He seeks an order declaring his dismissal
to
have been substantively unfair and that he be reinstated and/or
awarded compensation to the maximum amount provided for in the
Labour
Relations Act No.66 of 1995 (the LRA).
[2] Hopley was credited with 25 years
and three months of service with the respondent company, having been
subject to a section
197 transfer. He was retrenched in terms of a
process regulated by section 189A of the LRA.
[3] In terms of section 189A of the
LRA the court can find that the applicant was dismissed for a fair
reason if:
“
(a)
the dismissal was to give effect to a requirement based on the
employer's economic, technological, structural or similar needs;
(b)
the dismissal was operationally justifiable on rational grounds;
(c)
there was a proper consideration of alternatives; and
(d)
selection criteria were fair and objective.”
[4] This case turns on whether
selection criteria were fair and objective. I note that a material
issue in dispute recorded in the
pre-trial minute was respondent’s
allegation that all the candidates for posts in the new structure
established in the Western
Cape were subjected to ‘an objective
scoring process and interview’.
Background
[5] At the time of his dismissal,
Hopley occupied a senior position, that of Operations Manager. His
remuneration package was R
45,617.42 per month. It was common cause
that there had never been any problem with his work performance
during his years with
the respondent. He was employed in the
Distributed Computing Services component of the respondent (DCS) in
the Western Cape.
[6] It was also undisputed that there
was not enough work to justify the number of employees in DCS in the
Western Cape. On 6 May
2010, respondent called a meeting of the
employees affected by possible retrenchment advising them of a
proposed restructuring
to follow. A presentation was given to them
depicting how a new structure would look and the posts available in
it. The employees
were told that the consultation period would last
for 60 days and end on 12 July 2010.
[
7
]
In a notice of restructuring given to the affected employees, the
company set out the proposed method of selecting candidates
for the
posts in the new structure. The document stated that:
“
The
company proposes using the following selection criteria:
a.
Skills, knowledge, and/or
b.
Relevant qualifications and experience and/or
c.
Years of service
This
will be used to identify the employees who might be affected by the
possible reduction in headcount. The business unit may
consider any
additional selection criteria that are proposed in the course of the
consultations by you. The criteria the parties
then agreed to will be
used to identify those you (sic) might be affected by the possible
retrenchment."
[8] It was common cause that none of
the employees took any issue with, or disputed the proposed new
structure, nor were additional
selection criteria proposed. As a
result of the restructuring, there were a reduced number of positions
available. Applicant specified
the posts of Client Services Manager
(CSM) financial sector and Availability Services Manager (ASM)
financial sector in his application
for a post in the new structure.
There were 11 applicants for the CSM positions and 14 applicants for
the ASM positions.
[9] After the interviews were held and
on 28 May 2010, Hopley was advised that he had been unsuccessful in
his application for a
position in the new structure, and that the
next step in the restructuring process was that alternative positions
would be sought
for him in the respondent as a whole.
[10] His curriculum vitae was sent to
respondent’s human resources department on 6 July 2010
informing them that he was affected
by the recent DCS restructuring.
On 12 July 2010, Hopley was informed that his employment would
terminate on 12 August 2010.
Evidence on behalf of the Respondent
[11] The respondent called two
witnesses. Mr Hendrick Stephanus Strydom, (Strydom), divisional human
resources manager at the Johannesburg
headquarters of the respondent,
was a member of the four member interview panel. In his evidence in
chief, he dealt with the question
of the selection criteria applied,
and stated that each position advertised had specific requirements in
terms of skills, qualifications
and years of service which were
elaborated in the advert. According to him the panel, two of whom
were from Western Cape management,
conducted “normal”
interviews and discussions with the candidates, and then they ranked
them in posts in the new structure
in which they felt they would be
best suited. The adverts had been put out on the intranet in the
Western Cape only.
[12] He testified that all the
shortlisted candidates, including Hopley, could do the work required
for the posts. The panel had
to select the best candidates for the
posts based on the interviews. After the panel had interviewed the
candidates and ranked
the top three for each of the available
positions, there was a further discussion, and some changes were made
as to their placement.
[13] The explanation given by Strydom
as to the process whereby selection took place was that decisions
were made based on how people
fitted the criteria, and around the
normal interviewing process. The applicant had not interviewed well.
He had been ill-prepared
and his answers were not to the point.
[14] Strydom also dealt with the issue
of alternative positions offered to the retrenchees. He said that he
had heard that the applicant
had turned down a position in Gauteng.
Under cross-examination, Strydom initially testified that the
selection criteria used did
not include years of service- the
applicable criteria were the minimum requirements indicated in the
job specifications. The issue
of the applicant’s 25 years and
three months of service was not in the minds of the panel. Pressed on
the fact that “years
of service” was contained as one of
the criteria in the document presented to the affected employees,
Strydom conceded that
“years of service” was a factor to
be taken into account.
[15] Srydom also agreed that one of
the successful applicants Mr Skulk Visagie, (Visagie) who was
appointed into the position of
CSM for the retail sector, and who had
been an availability services manager (ASM) reporting to the
applicant in the Sanlam account,
had less than one and a half years
of service. He had no knowledge of the length of service of a Mr
Ernst Voordrum, (Voordrum)
appointed as ASM for Sanlam, but agreed
that it could have been about seven years.
[16] Pressed on the nature of the
selection methods used by the interviewing panel, Strydom conceded
that there was no scoring process
nor was there a process of
comparing years of service of the applicants. He explained that
questions were asked, and each candidate
was asked about their
experience. When questioned about whether Visagie was asked about his
experience in general business management,
Strydom said he could not
remember if he was asked that specific point because they did not
interview “bullet by bullet".
[17] Strydom further testified under
cross-examination that some interviews were 45 minutes in length. He
could not recall whether
the applicant's interview lasted 25 minutes,
but that if it had it was because the panel felt that they had all
the information
they needed. When it was put to Strydom that there
was no formal scoring and that the panel did not go through a proper
comparative
evaluation in selecting the candidates, weighing up the
criteria in a proper systematic way, Strydom did not agree. He stated
that
although there was no scoring, the panel had gone on the
impression the candidates made in the interview and their track
record.
The candidates whom the panel had measured against Hopley
were better than him.
[18] Under re-examination, Strydom
confirmed that although Hopley had specified only two positions in
his application letter, they
had interviewed him on the basis that
all the ASM positions were available. Regarding the length of
applicant’s interview,
he remarked that a candidate should do
80% of the talking which didn't happen because the applicant had not
elaborated and this
was the reason for the short interview. Strydom
denied that cost to company of the applicant’s package was any
consideration
in the decision to retrench him.
[19] The second witness called by the
respondent was Ms Marena Uys, (Uys), HR consultant for the respondent
based in the Western
Cape. She testified that she was involved with
the administration of the retrenchment consultations, and logistics
around the interviews.
She attended the presentation on the new
structure made to the employees. It was agreed that there would be
adverts for the posts
in the new structure and all the employees
could apply. The issue of bumping was never discussed.
[20] Uys testified that the adverts
had been compiled by management. She could not say whether years of
service of the applicants
had been considered by the panel as she was
not on the panel. She knew that of the successful candidates, Ian van
Staaden (van
Staaden) had about 18 years of service, Barbara Hare had
about 20 years and Visagie had been appointed in 2008. Regarding her
involvement
in the preparation for the interviews she stated that: “I
was the post box". Her colleague at head office sent the
applications
to her and she forwarded these onto the management team
who decided who was shortlisted. Under cross-examination, she agreed
that
the proposed method of selecting the candidates included years
of service with the respondent.
[21] Uys referred to an e-mail dated 6
July 2010 she had sent to Respondent’s HR management
consultants regarding possible
alternative positions, attaching
Hopley’s CV and stating that he had been affected by
restructuring. She said she had done
this with all the affected
employees.
[22] She further testified that she
had seen by means of respondent's intranet that there was a position
available in the ABSA account
in Johannesburg and had phoned Hopley
and asked him if he seen it. Hopley enquired where it was but said it
was not suitable because
it was in Johannesburg. She stated that he
had made it clear he was not interested in a position in
Johannesburg.
[23] Under cross-examination, she
agreed that van Staaden who was appointed as CSM, had been a customer
services coordinator before.
She could not comment on his experience
in business management because she was not part of the panel.
Regarding the telephone call
she made to applicant about the ABSA
account position in Johannesburg, she said she could not recall that
he told her had a daughter
in matric at that time and couldn't move
to Johannesburg at the moment. She stated that it was two years ago
and she could not
remember the conversation exactly.
Hopley’s testimony
[
24] Hopley testified that he
had had 10 years of experience as an ASM before he was promoted to
the operations manager function
in the old structure. Van Staaden was
not engaged in management and had played a pure customer services
coordinator function. Visagie
had reported to Hopley as ASM in the
SANLAM account. He had mentored and coached Visagie as part of his
responsibilities and there
was a wide area of development needed by
him.
[25] Hopley further gave evidence that
he had been headhunted by management in March 2009 to apply for the
operations management
position, he had held prior to the
retrenchments. In that position ASMs had reported to him. He was
successful in the application
as opposed to other candidates such as
Voordrum. He was very experienced as an ASM. He knew of nobody who
had longer service as
an ASM in the region.
[26] Regarding the telephone call from
Uys, she had mentioned that there was a position advertised on the
intranet in the ABSA account
in Johannesburg. At that time due to
personal circumstances with his children he couldn't apply. His
daughter was in matric. He
stated he would have considered any other
options in within the Western Cape.
[27] Hopley said that he did not
consider the panel to be ‘external’, he knew all the
people on it and two of them were
from management in the Western
Cape. It was difficult for him to believe that he was unsuccessful
based on his experience and history
in the company. He had asked Mr
Lange who was on the panel to make the scoring available to him and
he was told that he could not
do that. He knew that the company was
under financial pressure in the region and could only guess that he
was retrenched because
he earned a big salary.
[28] He testified that he had recently
found employment and was currently serving a probationary period of
three months as a service
delivery manager earning R23,000 per month,
half of his old salary. He sought reinstatement and compensation.
[29] Under cross-examination Hopley
emphasised that he did not have a problem with the new structure
proposed by the respondent,
but with the way the selection criteria
were applied. He still had no insight into how the selection panel
did their work. His
understanding was that years of service would
have an impact. He stated that looking at who was appointed to the
posts, he could
not believe that the panel looked at the skills of
the individuals concerned for the benefit of the company. It was
difficult for
him to accept that he had a bad interview and was
ill-prepared. He had been through many interviews.
[30] It was put to Hopley that he had
an opportunity to apply for the Johannesburg job and that it was
unreasonable to him to refuse
to accept a new position. He reiterated
his testimony in chief in this respect. It was put to him that his
severance package was
very high and that this belied his argument
that he was retrenched because he was being paid a higher salary than
others by the
company. Hopley replied that retrenchment is a one-off
and the respondent would have got a return in the second year after
his
retrenchment. His retrenchment package was thus a cost saving to
them.
Evaluation
[31] Based on the material dispute
between the parties in this matter, I must consider whether the
dismissal of applicant was for
a fair reason taking into account the
provisions of section 189A(19) of the LRA, and in particular, whether
the respondent has
met the onus of proving that “selection
criteria were fair and objective” (189A (19) (d)).
[32] The cumulative requirements for
substantive fairness set out in Section 189A of the LRA, which deals
with large scale retrenchments,
fall to be distinguished from those
contained in section 189(7). Section 189(7) provides that employers
must select employees to
be retrenched according to criteria that
have been agreed upon by the consulting parties; or, if no criteria
have been agreed upon,
criteria that are fair and objective. No such
distinction is found in section 189A. Simply put, to pass muster, the
selection criteria
applied in large scale retrenchments must be fair
and objective.
[33] In an article dealing with
corporate restructuring, Prof Alan Rycroft has noted that:
"The
Code of Good Practice: Dismissal warns of the use of subjective
selection criteria when it says: 'The less capable these
criteria are
of measurement against objective standards other than the opinion of
the person making the selection, the less likely
they are to be fair.
The less objective the proposed criteria for selection, the more
important the obligation to consult over
selection criteria becomes.'
It remains my contention that the criteria for appointment to the
restructured position have to be
clear and transparent. The tendency
to use vague, subjective criteria, such as 'team player', 'adding
value to the company' and
'corporate fit' are vague and often
subjective. The vaguer the criteria, the more likely it is that in
reality the selection committee
is really relying on each applicant's
track record and reputation within the company, often viewed through
the subjective lens
of a supervisor or colleague.”
1
[34] It is not necessary for me to
consider whether there was in fact an ulterior motive for the
non-appointment of Hopley to one
of the posts available. This is
because no discernible objective criteria were used to select the
candidates on Respondent’s
own case. It is therefore
unsurprising that no scoring took place or that, as Strydom put it,
there were no ‘bullet point
questions’ put to the
candidates.
[35] The method of selection on
respondent's own version at trial was based on the subjective
feelings of the panel as to the way
in which the candidates performed
at the interview. Selection was not based on “an objective
scoring process and interview”
as claimed by respondent and
reflected in the pre-trial minute. I find therefore that the
dismissal of applicant was substantively
unfair.
[36] Hopley seeks reinstatement into
the employ of the respondent with no loss of benefits. Respondent
submits that it would be
impractical to reinstate the applicant given
the restructuring, and the fact that Hopley’s old position was
in effect made
redundant. I note that the only reference to the
current financial health of the respondent’s Western Cape
operation in evidence,
was to the effect that after Hopley’s
retrenchment, Gerhard Lange the regional manager that headed the
first restructuring
was also retrenched.
[37] In
Equity
Aviation Services (Pty) Ltd v CCMA and Others
2
the Constitutional Court held that:
“
The
ordinary meaning of the word 'reinstate' is to put the employee back
into the same job or position he or she occupied before
the
dismissal, on the same terms and conditions. Reinstatement is the
primary statutory remedy in unfair dismissal disputes. It
is aimed at
placing an employee in the position he or she would have been but for
the unfair dismissal. It safeguards workers'
employment by restoring
the employment contract. Differently put, if employees are reinstated
they resume employment on the same
terms and conditions that
prevailed at the time of their dismissal…..”
[38] In this matter, it is undisputed
that the post that applicant occupied was abolished in the
restructuring. It is not possible
therefore to restore the employment
contract. I am therefore of the view that compensation is the
appropriate remedy in this matter.
On the issue of compensation,
respondent argues that given the severance package awarded to
applicant of R532 310.59 (being
2 weeks for each completed year
of service, and amounting to an amount equal to 11.66 months), that
he should not be entitled to
compensation at all. This submission
takes no account of section 195 of the LRA which provides that:
“
An
order or award of compensation made in terms of this Chapter is in
addition to, and is not a substitute for, any other amount
to which
the employee is entitled in terms of any law, collective agreement or
contract of employment”.
[39] There is no evidence to suggest
that the two week per year of service severance paid to retrenchees
was effected in terms of
a contract of employment, or collective
agreement. In terms of the BCEA, the applicant would be entitled to
one week salary per
year of service. Respondent has calculated that
applicant’s severance pay equalled 11.66 months of salary. For
the purposes
of my order, I therefore take into account that
applicant has received equivalent to 5.83 months of salary as part of
his severance
package.
[40] I do not take into account the
fact that applicant indicated he was not interested in the position
on the respondent’s
intranet based in Johannesburg. It was not
respondent’s evidence that he was offered that position, merely
that he was informed
that it was vacant.
[41] Given the extent to which the
respondent failed in its duty to apply fair selection criteria, the
long service of the applicant
and his efforts to mitigate his loss, I
consider it just and equitable to award him an amount of six months
compensation for his
unfair dismissal.
[42] I see no reason why costs should
not follow the result.
[43] I therefore make the following
order:
The dismissal of the applicant was
substantively unfair;
The respondent is ordered to pay the
applicant an amount equivalent to six months of his salary at the
time of his dismissal;
Costs to be paid by the respondent.
__________________
RABKIN-NAICKER J
Date of Hearing:
30/1/2012
Date of Judgment: 09
March 2012
Appearances:
For the Applicant: Louis
Van Zyl Attorney
For the Respondent:
Snyman Attorneys
1
Rycroft.
A. “Corporate restructuring - applying for your own job”
2003(24)ILJ 68 at 73-74
2
(2008)29
ILJ 2507(CC) at para 38