About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Johannesburg Labour Court, Johannesburg
SAFLII
>>
Databases
>>
South Africa: Johannesburg Labour Court, Johannesburg
>>
2015
>>
[2015] ZALCJHB 238
|
|
Khanyile and Others v Air Chefs (Pty) Ltd (JS 805/04) [2015] ZALCJHB 238 (4 August 2015)
THE
LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG
JUDGMENT
Case
no: JS 805/04
DATE:
04 AUGUST 2015
Not Reportable
BUSANI
KHANYILE &
OTHERS
.......................................................................................
Applicants
And
AIR
CHEFS (PTY)
LTD
.......................................................................................................
Respondent
Heard:
20 to 23 April 2015
Delivered:
4 August 2015
JUDGMENT
TLHOTLHALEMAJE,
AJ
Introduction:
[1]
The applicants brought this matter before
this Court by way of a statement of claim to challenge the procedural
and substantive
fairness of their retrenchment by the respondent,
which took effect from 31 July 2004.
[2]
The applicants’ main contention is
that there was in general, no reason to retrench as the respondent
was not in financial
difficulties, and further since their positions
were immediately replaced once they were retrenched. In response to
these allegations,
the respondent’s case is that there was a
need to retrench due to increased demands for its in-flight services
quality standard,
systems and procedures in its Johannesburg unit.
Accordingly, the unit under which the applicants fell had to be
outsourced.
[3]
The applicants further contend that there
were no proper consultations held with them or their union, UPUSA.
The respondent disputes
these allegations, and contends that the
applicants and UPUSA were invited to consultations, and that the
latter had essentially
refused to cooperate or participate
meaningfully in the consultation process.
[4]
The dismissal took place in July 2004. It
is not clear as to the reason it took this matter this long to be
finally determined.
What is however apparent from the file is that
there was an application for condonation in respect of the
respondent’s late
filing of its response, which was
considered and granted on 29 November 2005. Thereafter there were
further delays consequent
upon numerous removals from the roll and a
postponement.
Background:
[5]
The respondent as its name suggests is in
the business of preparation and supply of meals and other in-flight
services to airlines.
It has numerous departments responsible for
various aspects of its business. The affected area where the dispute
emanated from
is its cleaning department, where the dismissed
employees were employed as porters.
[6]
The respondent’s case was that its
business grew, and in order to ensure that the area for the
preparation of food was maintained
in an acceptable and a hygienic
state, its best option was to outsource the cleaning functions to
specialists, and to focus on
its core business being the preparation
and supply of meals on airlines.
[7]
As a result of the decision to outsource
the cleaning functions to an entity called Ecowise, all the porters
in the cleaning department
were to be taken over by Ecowise, with
their permanent employment being guaranteed on the same terms and
conditions as previously
enjoyed under it. The respondent further
contended that other alternatives were offered to the applicants, and
successful attempts
were made to consult with them and UPUSA on these
issues, until a decision was finally taken to effect the
retrenchments.
The Evidence
[8]
Notwithstanding the pre-trial agreement
that the respondent would begin, the applicants elected to assume the
duty to begin and
proceeded to lead oral evidence. The applicants had
initially indicated that only one witness, Ms S D Busaka (“Busaka”)
would testify on their behalf. Having closed their case, the
applicants’ counsel, during the course of cross- examination
of
the respondent’s sole witness, Adv. Lakale sought to postpone
the proceedings on the basis that an application was to
be made to
re-open the applicants’ case and to call a Mr. Luthuli of
UPUSA. After the evidence of the respondent’s
witness was
dispensed with, the applicants however chose not to pursue the
application to re-open their case. The respondent also
called a
single witness.
Busaka’s
evidence on behalf of the applicants:
[9]
Busaka was employed by the respondent for
about 20 years and at the time that she was retrenched, she was
employed as a supervisor.
She confirmed having received the initial
letter of notification in February 2004 in respect of the
contemplated retrenchments
and the reasons in that regard. She had
also attended a retrenchment meeting with UPUSA and the respondent on
19 March 2004. She
was further aware that Ecowise was to take over
the entire cleaning department and all the porters in that
department.
[10]
She however at the same time understood
that Ecowise would only take her and others if they satisfied its
minimum requirements of
a qualification, which she did not have. Her
understanding was further that even though they were supposed to go
over to Ecowise,
they had to apply for those positions.
[11]
Busaka further testified that she was aware
that in making appointments, Ecowise would consider employees’
skills, length
of service, service record and qualifications. As she
had no qualifications, it was apparent to her that she would not be
employed
by Ecowise, and further that the respondent was aware of
what Ecowise was looking for. She further believed that the selection
criteria Ecowise was using was not in good faith, and also understood
that Ecowise would take all the employees, but at a reduced
salary.
[12]
Under cross examination, she confirmed that
the applicants did not raise their concerns about the terms and
conditions during a
meeting with management where George Redman
(“Redman”) addressed the employees about the proposed
changes. She confirmed
that the applicants were represented in that
meeting by their union, and conceded that she believed that the
applicants would have
been willing to transfer to Ecowise if their
salaries remained the same.
[13]
Busaka further testified that she did not
know why the respondent had decided to outsource the cleaning
department, as there had
been no concerns raised previously about
their performance. Busaka was referred to the clients’
requirements expected to
be met by the respondent in the provision of
meals according to the increased number of flights which had to be
catered for. She
conceded that there was an indeed an increase in
work demands, and further that the respondent had to ensure that
certain quality
standards were met. She further conceded that the
retrenchments had nothing to do with their performance as this was
never at any
stage discussed with them or raised as an issue.
[14]
Busaka was again referred to copies of the
minutes of meetings held between the respondent, UPUSA, and other
employee representatives.
She conceded that the respondent had in
those meetings, indicated that the employees’ salaries would
not be reduced once
they were under the employ of Ecowise.
[15]
She further conceded that UPUSA had refused
to take part in the consultations until the respondent had made an
undertaking that
the applicants would all be absorbed into Ecowise.
She further acknowledged when it was put to her that it was difficult
to consult
when one of the consulting parties refused to participate
in consultations.
[16]
Busaka further conceded that alternative
positions were looked at including vacancies in the ESU; inventory,
dock and liquor departments.
She also acknowledged that the reason
for the retrenchments was not as a result of financial difficulties
experienced by the respondent,
but was due to an increase in its
workload and the requirements of the clients.
[17]
During re-examination, Busaka further
acknowledged that the employees were given letters relating to the
retrenchments, which they
had then taken to their union, and which
had in turn explained their contents to them.
[18]
Under re-examination however, Busaka
testified that it was specifically explained to the employees by
UPUSA that they would be taken
over by Ecowise on the same terms and
conditions as had applied under the respondent. She nevertheless
contended that this was
merely ‘talk’ from the
respondent, as she had not seen any confirmation of documentation in
that regard.
Linda Raoleka’s
evidence’s on behalf of the respondent:
[19]
Raoleka was employed by the respondent as
its Human Resources Manager from September 2003 until January 2005,
and was involved in
the restructuring process during 2004. Her
testimony was essentially that;
[20]
The decision to outsource the cleaning
functions to Ecowise was based on the increased demands on the
respondent. The transfer of
the employees to Ecowise would have been
on the same terms and conditions as they had enjoyed with the
respondent. All the employees
were to be absorbed and any selection
criteria applied by Ecowise would have only been in circumstances
where employees were competing
for a particular position.
[21]
Following discussions with employees and
their union, final letters were then sent to the applicants by the
respondent, wherein
the terms and conditions of the absorption into
Ecowise were clarified and the other options available to the
employees further
clarified. She had also personally handed the
letters to the employees and explained the contents of the letters to
them.
[22]
She further confirmed that UPUSA had
demanded to be provided with financial statements, and that these
were not provided as they
were not relevant to the retrenchments,
since the redundancies were not due to financial difficulties
experienced by the respondent.
[23]
Under cross-examination, Raoleka denied
that the retrenchment exercise was rushed and that the respondent was
pressurised to complete
it. She conceded that the timing of the
retrenchments was a factor, but that even though it was envisaged
that the process would
have been completed by April 2004, the
consultations and finalisation of the process continued into June
2004.
[24]
Raoleka confirmed that Ecowise was already
engaged by the respondent as early as March 2004. This however was
only for the purposes
of performing ‘Deep Cleans’, a
specialised function which was not ordinarily performed by the
employees affected by
the retrenchments.
[25]
Raoleka further acknowledged that the
contract between the respondent and Ecowise was for a period of 24
months. She however contended
that irrespective of the existence and
duration of the contract, the applicants would have remained employed
by Ecowise, and on
the same terms and conditions as previously
applicable to them.
[26]
Raoleka further testified that attempts
were made to consult with UPUSA between February and June 2004, but
that the latter was
not interested. Another union, SACCAWU was also
involved in the consultations, and some of its members were taken
over by Ecowise.
Eventually, the respondent had to consider the
consultation process as being finalised, hence the retrenchments were
effected with
the payment of severance packages.
The legal
framework:
[27]
Section
23(1) of the Constitution
[1]
provides that “
everyone
has the right to fair labour practices”.
The Labour Relations Act
[2]
(The
LRA) gives effect to this constitutional right, and provides in
section 185, that every employee has the right not to be unfairly
dismissed. Section 188(1) (a)(ii) of the LRA provides that a
dismissal is not fair if the employer fails to prove,
inter
alia
,
that ‘
the
reason for dismissal is a fair reason based on the employer’s
operational requirements’
.
Furthermore, section 188(1)(b) provides that a dismissal which was
not effected in accordance with the fair procedure is
unfair.
[28]
Section 213 of the LRA defines ‘
operational
requirements’
to mean
requirements based on economic, technological, structural or similar
needs of an employer. Item 1 of the Code of Good practice
on
dismissal based on operational requirements states that:
“…
..As
a general rule, economic reasons are those that relate to the
financial management of the enterprise. Technological reasons
refer
to the introduction of new technology that affects work relationships
either by making existing jobs redundant or by requiring
employees to
adapt to the new technology or a consequential restructuring of the
workplace. Structural reasons relate to the redundancy
of posts
consequent to a restructuring of the employer‘s enterprise.”
[29]
In
this case, it being common cause that the retrenchment had taken
place, the onus
[3]
is on the
respondent to show that these retrenchments were substantively fair
and further that they were effected in accordance
with a fair
process
[4]
. The onus will be
satisfied if the employer can show that its reasons are operationally
justifiable on rational grounds, and further
that all alternatives to
retrenchments were looked at and considered in earnest.
[30]
Central
to disputes pertaining to dismissals related to the employer’s
operational requirements is the substantive justification
provided by
an employer. The debates have always been whether the courts should
adopt a ‘hands-off’ approach when dealing
with employers'
reasons for retrenchments (On the basis that Courts did not want to
interfere in decisions of the organisation
due to the fact that they
do not possess the necessary expertise to make an informed decision
which is one that should be best
left with the employer)
[5]
,
or be interventionist.
[31]
In
NUM
and Another v Black Mountain Mining (Pty) Ltd
[6]
the Labour Appeal Court in addressing the correct approach to be
followed in determining the substantive fairness held that;
“
The
deferential approach is no longer part of our law. It was called into
question and rejected in
BMD Knitting
Mills (Pty) Ltd v SACTWU and in CWIU and Others v Algorax (Pty) Ltd
.
In
BMD Knitting Mills
,
this Court observed at paragraph 18 that the test enunciated in
Discreto was one amounting to the judicial review of an
administrative
action akin to that utilised in applications for
review under section 145 of the LRA as then understood following
Carephone (Pty) Ltd v Marcus NO and
Others
, namely that the courts should
not impose value judgments or concepts of correctness on
administrative bodies. The true test was
whether the decision was
rationally justifiable. The court then proceeded as follows at
paragraph 19:
‘
I
have some doubt as to whether this deferential approach which is
sourced in the principles of administrative review is equally
applicably to a decision by an employer to dismiss employees
particularly in the light of the wording of the section of the Act,
namely, ‘the reason for the dismissal is a fair reason’.
The
word ‘fair’ introduces a comparator, that is, a reason
which must be fair to both parties affected by the decision.
The starting point is whether there is a commercial rationale for the
decision. But, rather than take such justification
at face
value, a court is entitled to examine whether the particular decision
has been taken in a manner which is also fair to
the affected party,
namely the employees to be retrenched. To this extent the court
is entitled to enquire as to whether
a reasonable basis exists on
which the decision, including the proposed manner, to dismiss for
operational requirements is predicated.
Viewed accordingly, the
test becomes less deferential and the court is entitled to examine
the content of the reasons given by
the employer, albeit that the
enquiry is not directed to whether the reason offered is the one
which would have been chosen by
the court. Fairness, not correctness,
is the mandated test.’”
[7]
(Citations omitted)
[32]
The
Labour Appeal Court in
NUM
as above further made reference to
CWIU
and Others v Algorax
[8]
in concluding that the deferential approach to operational
requirements was to be rejected, preferring instead an objective
approach
where a court must determine what was fair. In this regard,
the LAC in
Algorax
had held that;
“
The
question whether the dismissal was fair or not must be answered by
the court. The court must not defer to the employer for the
purpose
of answering that question. In other words it cannot say that the
employer thinks it is fair, and therefore, it is or should
be fair .
. . Furthermore, the court should not hesitate to deal with an issue
which requires no special expertise, skills or knowledge
that it does
not have but simply requires common sense or logic.”
Outsourcing
as a reason leading to redundancies:
[33]
The basis for challenging the respondent’s
reasons for the retrenchment as gleaned from the statement of case
and the pre-trial
minute is materially different from the evidence
presented by Busaka and further submissions made on the applicants’
behalf
by their counsel. In the statement of case, the applicants’
case was that there was no reason to retrench as the respondent
had
not experienced financial problems and further since the applicants’
jobs were still available. Essentially, it was contended
that there
was no reason to retrench the applicants, and that the respondent had
simply replaced them with contractors.
[34]
When the proceedings commenced however, the
applicants’ case as elucidated by Adv Lekale on their behalf
took a different
tune. He contended that the applicants’ case
was that they were retrenched on the basis of performance issues,
and/or allegations
of misconduct, and/or on the basis of financial
considerations. The allegation that the applicants were replaced with
contractors
was not even pursued.
[35]
The
general purpose of pre-trial conferences was explained by the Labour
Appeal Court in
Peach
and Hatton Heritage (Pty) Ltd v Neethling & others
[9]
in
the following terms:
"Generally
speaking the function of a pre-trial conference is to limit issues
and not widen them. In so far as first respondent
contends in
paragraph 5 that he persists in his claim that there was no
commercial rationale for his retrenchment, such claim did
not form
part of his statement of case. Whilst it may have been the
respondent's legal representative's intention to raise the
substantive fairness of the dismissal of the respondents, it was not
an issue on the statement of case. The assertion by the respondents'
legal representative that the respondents persist in their claim that
there was no commercial rationale for his retrenchment in
the
pre-trial minutes, does not result in it being a triable issue. The
pre-trial minute does not go far enough to evidence the
existence of
an agreement to widen the issues. … in considering that the
reasons for the dismissal were not based on the
appellant's
operational requirements, the Court
a
quo
widened the dispute between the parties. It was not entitled to do
so."
[10]
[36]
In
Zondo
& others v St Martins School
[11]
,
Molahlehi J also held that;
“
It
is well established in our law that a pre-trial minute is no
different to any other agreement concluded consequent to
deliberations
between the parties or those that they may have
expressly or impliedly authorised to represent them. It follows
therefore that
a pre-trial minute constitutes a binding agreement
between the parties. It is for that reason that the courts ordinarily
hold the
parties to the contents of their pre-trial minute. A party
can only resile from a pre-trial minute on condition special
circumstances
exist to do so”. (Citation omitted)
[37]
It therefore follows from the above legal
principles that a party cannot seek to advance a case not
foreshadowed in its pleadings
or in the pre-trial minutes, nor can a
case be made out in written closing arguments. The pre-trial minute
as signed by the parties,
even in its supplementary form does not go
far enough to evidence the existence of an agreement to widen the
issues to include
a dispute surrounding whether the applicants’
retrenchment was as a consequence of performance issues, misconduct
or financial
constraints. In the absence of an application to resile
from the signed pre-trial minute, the applicants are therefore bound
by
those minutes, and no consideration shall be had to any
submissions made or evidence tendered that falls outside the ambit of
the
statement of case or the pre-trial minute.
[38]
The respondent’s basis for effecting
the retrenchments was that the positions in which the applicants were
employed following
the outsourcing of its cleaning functions to
Ecowise became redundant. It was further submitted that based on
Busaka’s evidence
and the concessions she had made, the only
issue for determination was whether or not alternative positions were
offered to the
applicants.
[39]
In this case, nothing from Busaka’s
evidence could gainsay the respondent’s contention that the
retrenchments were consequent
upon its decision to outsource its
cleaning unit in order to concentrate on its core function. This
decision also followed upon
the realisation that its business was
growing and it needed specialists to take over its cleaning
functions.
[40]
Notwithstanding the submissions made on the
applicant’s behalf that Busaka’s evidence should be
treated leniently on
account of her and others being of ‘
below
average literacy’
, it is my view
that on the facts, as pleaded and admitted, there is no reason to
doubt the respondent’s contentions in regards
to the reasons
that led to the outsourcing of the cleaning unit.
[41]
It was further common cause that the
applicants were informed individually on 27 February 2004 that as a
result of an increase in
demand for its in-flight services, the
respondent had considered outsourcing the cleaning functions to a
specialist company, Ecowise.
The letters were also forwarded to the
applicants’ union, UPUSA on the same date, inviting it to
attend scheduled consultation
meetings
[42]
Busaka confirmed attending consultation
meetings where the issue of outsourcing to Ecowise amongst other
things was discussed together
with other proposals. She confirmed
being informed of being taken over by Ecowise, and other than raising
issues of qualifications
which were conflated with other reasons as
to why she did not take up employment with Ecowise, her concern was
that she was not
prepared to go over to Ecowise as that would have
meant joining a new company. These issues nevertheless do not add any
value to
the dispute whether there was a need to outsource or not. Be
that as it may, there is no reason to doubt that in the light of the
requirements to adhere to health and safety, and quality standards as
set by the civil aviation, the respondent’s option
in the light
of the porters not offering a specialised service, was to outsource
these services. This was also meant to enable
it to ensure that it
met and maintained required cleaning and hygienic standards given the
increased demand for its services.
[43]
Other than contending that the porters
could have been trained to perform these tasks, nothing however
controverted the respondent’s
submissions and evidence that
there was indeed a need and reason to outsource.
[44]
The issue however remains whether the
decision to outsource, which led to the retrenchments was a genuine
decision linked to a rational
commercial or operational reason for
the purposes of the definition of operational requirements as
contemplated in section 213
of the LRA. To put it differently, the
question is whether an employer can dismiss employees for a reason
based on its operational
requirements even in circumstances where its
business was not struggling financially.
[45]
In
General
Food Industries Ltd v FAWU
[12]
,
the Labour Appeal Court, per Nicholson JA (Zondo JP and Jafta AJA
concurring), held that the LRA recognises the right of an employer
to
dismiss employees for a reason based on its operational requirements
without distinguishing between a business struggling to
survive and a
profitable business wanting to increase its profits. In this regard,
the LAC stated that;
‘…
.a
company is entitled to insist by economic restructuring that a
profitable centre becomes even more profitable’
[13]
[46]
In
Adcock
Ingram
[14]
this court in considering the same issue stated that:
“
If
an employer can show that a good profit is to be made in accordance
with sound economic rationale and it follows that fair process
to
retrench an employee as a result thereof it is entitled to retrench.
When judging and evaluating an employer’s decision
to retrench
an employee this court must be cautious not to interfere in the
legitimate business decisions taken by employers who
are entitled to
make a profit and who, in so doing, are entitled to restructure their
business”
[47]
It follows therefore from the above
principles that the employer’s quest to improve its profit
margins and its efficiencies
relate to the economic well-being of the
business. These are acceptable grounds to embark on a restructuring
process, as they would
ordinarily fall within the all-encompassing
concept of “economic reasons” as contemplated in the
definition of ‘operational
requirements’ in section 213
of the LRA.
[48]
In this case therefore, the respondent had
outsourced the cleaning unit as it did not form the core of its
business, and further
in order to meet the standards set by its
clients and civil aviation. In these circumstances, it is concluded
that there was a
sound and valid commercial and business rationale to
effect restructuring. The outsourcing was meant for the respondent to
realise
the need to meet its clients’ obligations. There is
therefore no merit in the applicants’ contention that there was
no need in general, to restructure or that the respondent was
motivated by other extraneous reasons to outsource.
The
reason for dismissals:
[49]
In the light of the conclusions reached
that the outsourcing of the cleaning unit had led to redundancies,
the next issue to be
considered is whether the dismissals were
substantively fair. The mere fact that an employer has a genuine
operational requirement
does not however necessarily imply that the
retrenchment that follows would be fair. As Francis AJA had stated in
NUM
;
“……
..An
employer must first establish on a balance of probabilities that the
dismissal of the employee contributed in a meaningful
way to the
realisation of that need. In my view, dismissals for operational
requirements must be a measure of last resort, or at
least fair under
all of the circumstances. A dismissal can only be operationally
justifiable on rational grounds if the dismissal
is suitably linked
to the achievement of the end goal for rational reasons. The
selection of an employee for retrenchment can only
be fair if regard
is had to the employee’s personal circumstances and the effect
that the dismissal will have on him or her
compared to the benefit to
the employer. This takes into account the principles that dismissal
for an employee constitutes the
proverbial “death
sentence”.
[15]
[50]
In this regard then, the question is
whether the ultimate retrenchments themselves were justifiable. The
respondent’s contention
was even on Busaka’s version, the
outsourcing of the cleaning function to Ecowise would result in the
positions of the employees
being redundant. Furthermore, unless the
employees could be accommodated elsewhere within the respondent, they
would have to be
retrenched.
[51]
Amongst the lengthy submissions made on
behalf of the applicants was that they were dismissed as a result of
their refusal to accept
unreasonable alternatives presented to them.
It was further submitted that the concessions made by Busaka were in
respect of collateral
issues and irrespective of same, the
consultation process followed did “not embrace the principle of
audi alteram partem
rule, as the whole process was too subjective, one-sided and without
regard to any counter-proposal made by the applicants. It
was further
submitted that concessions made by Busaka should be considered
irrelevant when determining the matter.
[52]
In regards to Busaka’s testimony, it
needs to be stated that other than the reluctant concessions she had
made, I had found
her to be extremely evasive even when confronted
with simple questions under cross-examination. Her cross-examination
proved to
be an excruciating affair in the light of her propensity to
either deny the obvious, or make concessions and retract from those
in one sentence, or even fail to directly answer simple questions.
She was indeed uncooperative and obstructive, and this could
not have
been as a consequence of her alleged average literacy or simplicity.
She confirmed under re-examination that she could
read and write in
English, and in the light of this concession I fail to appreciate any
contention that she is not literate. She
had deliberately chosen an
obstructionist and prevarication path during the course of her entire
cross-examination, and in the
end, had contradicted herself in
material ways, thus raising doubts about her credibility. There is
therefore no basis upon which
the damning concessions she had made
can be ignored, as she was chosen amongst the applicants to present
their case.
[53]
Busaka’s testimony under
cross-examination, and despite her equivocation, was that she
understood that the alternative of
Ecowise meant that they would be
employed on the same terms and conditions, or alternatively be
retrenched. She further understood
that being taken over by Ecowise
would not have impacted on her salary even though UPUSA did not give
the employees feedback about
what the respondent had said about their
salaries.
[54]
It was submitted on the applicants’
behalf that an offer of employment on the same terms and conditions
is impossible in law
unless made within the context of section 197 of
the LRA. This point was however raised in argument despite the fact
that it was
never the applicants’ case that there was a
transfer of a business as a going concern.
[55]
It was again submitted on their behalf that
the offers made to them outside of the consultation process
unreasonably placed enormous
pressure on them to consider and decide
on matters. In this respect it was contended that it was too complex
to expect an employee
to make an election as required by the
respondent in their final letter to the applicants, which had read;
“
I
_____________________ hereby declare that I wish/ do not wish (delete
what is not applicable) to be taken up in the Ecowise structure
as
from July 2004”.
In this regard,
it was further submitted that expecting the applicants to make an
election had the effect of “
undermining
constructive advice that should be given by the Union to the
employee”.
[56]
In the light of Busaka’s evidence and
concessions made, I have difficulties in comprehending how it could
be said that the
Ecowise alternative was unreasonable, or that the
applicants were placed in an invidious position in that the
respondent was not
bona fide
,
or even that they were faced with a decision which had already been
taken rather than an intention to discuss a proposal.
[57]
Raoleka had testified that the services of
Ecowise were previously engaged in order for it to perform ‘deep
clean’ services.
She had further confirmed that the respondent
had already signed a contract with Ecowise before issuing notices. It
is however
instructive to note that the discussions surrounding
Ecowise taking over had been ongoing since February 2004. Up to the
stage
that the retrenchments were effected, it was not apparent from
Busaka’s testimony as to what other alternatives they had
proposed other than that Ecowise must absorb all of them on the same
terms and conditions. This in any event was what the respondent
had
offered.
[58]
It is accepted that the retrenchments were
effected when the applicants refused to be taken over by Ecowise.
Prior to the eventual
retrenchments however, Busaka conceded that
other than the Ecowise alternative, the employees were offered other
alternative positions
within the respondent’s employ in other
various positions,
albeit
at
the rate of pay applicable to those positions. This was evinced by
correspondence to UPUSA on 28 April 2004, in terms of which
in the
light of UPUSA’s rejection of the Ecowise alternative, the
respondent had indicated that alternative positions existed
in the
Sanitation Department, ESU, Inventory, Dock and Liquor.
[59]
Following a meeting held with UPUSA on 9
June 2004, it was made clear to the respondent that no UPUSA members
would be transferred
to Ecowise, or agree to salary cuts, or agree to
be retrenched. Busaka had conceded that these alternative positions
were offered,
but her contention was that the employees would have
taken them up on condition that they would not have their salaries
cut.
[60]
On 10 June 2004 the respondent had made its
final offer to the employees by issuing the letters as already
indicated. Essentially,
employees were requested to make a choice
between being retrenched and being taken over by Ecowise. Busaka
conceded that she and
others sought advice from UPUSA on the offer,
and the response was that the union would represent them in respect
of payments to
be made to them.
[61]
In
the light of the consultations with UPUSA and the employees, the
various alternatives offered to the employees, and further in
the
light of the unreasonable rejection of each and every alternative
that the respondent had come up with, it cannot in these
circumstances be said that the retrenchments as a consequence of
outsourcing of the cleaning unit were substantively unfair. It
is
trite that an employee who unreasonably refuses to consider available
options to a retrenchment cannot claim unfair treatment
if the
employer ultimately retrenches him or her
[16]
.
In
the end the decision to dismiss the applicants was operationally
justifiable on rational grounds as it was suitably linked to
the
respondent’s achievement of the end goal for rational reasons.
Procedural
fairness:
[62]
The
requirements for fair procedure that apply in the case of a dismissal
based on a reason related to an employer’s operational
requirements are specified under section 189 of the LRA, and whenever
it applies, in section 189A of the LRA. The role of this
court in
circumstances such as these is to exercise a proactive and
supervisory role in relation to the procedural obligations
on the
employer prior to effecting retrenchments
[17]
.
The enquiry into whether the retrenchments were justifiable requires
a determination into whether the respondent had adopted a
fair
process as contemplated in section 189 of the LRA.
[63]
In disputing that any consultation took
place, or that the process was fair, the lengthy submissions made on
behalf of the applicants
can be condensed as follows;
a)
The whole process of retrenchment was
superficial and a sham.
b)
UPUSA was co-operative with the
Respondent throughout the consultation process and that it was
pro-active in suggesting alternatives.
This was despite the
contention that there was no genuine consultation or any attempt by
the respondent to attempt to reach consensus
on matters.
c)
The respondent failed to provide
relevant information in order for the Union to make an informed
decision.
d)
The respondent consulted or
communicated with the applicants themselves without their union being
present and that this was
mala fide.
e)
The respondent failed to afford them
the opportunity to consult, and denied several requests by UPUSA to
have proper consultations.
It was submitted that the decision was a
fait accompli
before the first consultation, and as a result, the unfair conduct of
the respondent left the applicants “
desperate
and confused without direction
”.
f)
Consultations did not occur, and the
meetings which took place did not constitute consultations in the
result that the applicants
were deprived of an opportunity to provide
representations, and that the cleaning department was not affected.
[64]
The
submissions made on behalf of the respondent on the other hand were
that it had tried to consult but that UPUSA’s conduct
in
refusing to participate, and refusing to suggest meaningful
alternatives made a joint consensus seeking exercise impossible.
Reliance was placed on
Johnson
& Johnson v CWIU
[18]
for the proposition that where an employee or a union frustrates a
consultation process to the extent that the employer is unable
to
consult with the employee on all the issues contemplated in section
189 of the LRA, the employer may be excused from any procedural
non-compliance arising from the employee’s recalcitrant
behaviour.
[65]
It was further submitted on behalf of the
respondent that the applicants and their chosen union representatives
were given sufficient
opportunity to consult and to make
representations, but that at the time, they had refused to
participate in consultations and
failed to engage in a joint
consensus seeking exercise. In this regard, it was contended that the
respondent could not have done
any more than it did, and that the
applicants’ dismissals were ultimately their own fault, and
also as a result of their
conduct or the conduct of their chosen
representatives, in refusing to participate meaningfully in the
consultation process.
[66]
In
Nhlamulo
Ndhela v Sita Information Networking Computing BV (Incorporated in
the Netherlands)
[19]
Ngcukaitobi
AJ stated that;
“
Section
189 of the LRA sits alongside a cluster of statutory rights which
give practical meaning to the right not to be unfairly
dismissed
which is contained in section 185 of the LRA. Although crafted in
procedural terms, the object of section 189 is substantive.
It is
aimed at the retention of jobs and if the jobs cannot be retained, at
ensuring that any processes resulting in job losses
are fair and the
adverse effects of job losses are mitigated. In
National
Education Health and Allied Workers Union v University of Cape Town &
Others
,
the Constitutional Court stated that the LRA must be interpreted in a
manner which respects security of employment as a “core
value”
of the Constitution” (Citations omitted)
[20]
[67]
I
am in agreement with the above principle that there is a substantive
component aligned to section 189 of the LRA, in that ultimately,
it
is from that process that it can be determined and decided whether
any effort was made to save jobs. It is however accepted
that
in order for a consultative process to achieve its objectives, this
requires an effort on both parties to ensure that ultimately,
if any
job losses occur, this would have been in a fair manner. As it was
held in
South
African Commercial Catering and Allied Workers Union (SACCAWU) and
Others v Gallo Africa
[21]
;
“
Consultation
in terms of section 189 of the Act, is a two-way process. No
meaningful consultation can take place if one party withdraws
from
the process. There should also ultimately be finality in the
consultation process. It cannot be held in abeyance by a party
who
insists that the process is not finalised when it is quite clear that
the process had been.”
[68]
The applicants’ contentions that the
respondent failed to properly consult with them or their union are
belied by the following
concessions made by Busaka;
a)
UPUSA and the individual employees were
notified as early as February 2004 of the contemplated retrenchment
and the need to consult.
b)
All the employees in the cleaning
department were affected by outsourcing, and Busaka understood that
the subsequent redundancies
could result in retrenchments;
c)
She had attended consultation meetings with
UPUSA where alternatives, including the move to Ecowise were proposed
by the respondent,
and where UPUSA had in turn proposed that the
employees should be transferred internally without a reduction in
salary;
d)
UPUSA failed to give employees feedback on
its discussions with the respondent. At some point, UPUSA had refused
to participate
or be involved in the consultation process as it was
of the view that the retrenchments were meant to get ‘rid of
black employees’;
e)
She confirmed that the claims by UPUSA that
no proper consultations were held were not true, and conceded that
between 27 February
2004 and 19 June 2004, the respondent had made
attempts to meet with the employees and UPUSA;
f)
She conceded that where the respondent
sought to consult, and UPUSA had not cooperated, this had created
problems for the respondent;
g)
The employees were issued with the final
letters in terms of which they were required to make an election. The
contents of those
letters were explained to them by Radney and
Raoleka. She however did not respond to the letter, and she and the
other expected
the union to do so on their behalf.
h)
Even under re-examination, she conceded
that the union informed them that they were to be transferred to
Ecowise on the same terms
and conditions. The letters from the
respondent were also explained to them.
[69]
In the light of the above concessions,
there is no basis upon which it can be concluded that the decision to
retrench was taken
without any meaningful attempts at engaging the
union and the employees in a consultation process. It was apparent
that the respondent
had explored all possible alternatives prior to
effecting the retrenchments, and the employees not only unreasonably
refused to
apply their minds to the alternatives, but their union
also failed to approach the consultation process with an open mind
and good
faith.
[70]
For the employees and the union, it was
either they were trained properly to perform cleaning functions as
specialists would do,
but this was however not an option in the light
of the respondent’s core business. When they were offered
alternative positions
within the respondent, their demand was that
they could accept those positions but without a reduced salary. This
was untenable
in that as porters, they could not have been offered
any other position commensurate with the salaries they had previously
earned.
When they were similarly offered continued employment on the
same terms and conditions with Ecowise, their response was equally
uncompromising and unreasonable.
[71]
An
employer cannot be held to have acted unfairly in circumstances where
the employees and the union’s approach to the consultation
process is erratic, unreasonable and not in the spirit of finding
common solutions. In these circumstances, where the purpose of
section 189 of the LRA, which is a joint consensus-seeking process
has not been achieve, this cannot be blamed on the respondent.
In the
light of the dictum in
Johnson
& Johnson
[22]
,
if
the employer was not at fault and did all it could, from its side, to
achieve consensus seeking, the purpose of the section would
also have
been achieved.
[72]
UPUSA’s approach to the consultation
process was detrimental to the applicants, and I have no hesitation
in concluding that
it simply went through the entire process with no
intention whatsoever of ever genuinely reaching agreement on the
issues discussed
with the respondent Even more detrimental to the
applicants was the fact that on Busaka’s version, UPUSA failed
at times
to give employees feedback in regards to its engagements
with the respondent.
[73]
The evidence of the respondent, and in
particular of Raoleka demonstrated that it was not its intention to
dismiss any of the applicants.
It was further not the intention of
the respondent to leave the applicants in a lurch following its
decision to outsource its cleaning
unit. All possible alternatives
were looked at and unreasonably rejected by UPUSA and the
applicants. Based on the evidence
adduced before me, I am
satisfied and persuaded that there was indeed a valid commercial and
business rationale for the respondent‘s
decision to retrench
the applicants, and that this was done in a procedurally fair manner.
[74]
There was no evidence adduced by Busaka in
particular to demonstrate that the respondent had acted in bad faith,
or that its decision
to outsource and ultimately retrench was meant
to serve an ulterior motive. Furthermore, it should be stated that
even though the
applicants were not entitled to any severance pay in
the light of their unreasonable rejection of alternatives offered,
they were
nevertheless still paid their severance packages. These
could not have been the actions of an employer that wished to act in
bad
faith or for ulterior motives. To this end, I am satisfied that
the respondent had proven on a balance of probabilities that the
dismissals were for a fair reason, and that all reasonable attempts
were made to ensure that the retrenchments were effected in
accordance with a fair procedure as contemplated in section 189 of
the LRA.
[75]
The respondent sought a cost order against
the applicants in the event that it was concluded that their case
should be dismissed.
In this regard, it was argued that the challenge
to the dismissal was not only without merit but was also spurious and
vexatious.
I am in agreement with the respondent that this case had
no merit whatsoever in the light of conclusions reached in that
regard.
Even though I am of the view that a cost order is warranted
in this case, having taken into account the history of this matter,
I
am of the view that considerations of law and fairness militate
against such an order. Accordingly, the following order is made;
Order:
i.
The applicants’ claim that their
dismissal on the grounds of the respondent’s operational
requirements was procedurally
and substantively unfair is dismissed.
ii.
There is no order as to costs.
Tlhotlhalemaje,
AJ
Acting
Judge of the Labour Court of South Africa
APPEARANCES:
On
behalf of the Applicants: Adv R Lekala
Instructed
by: Harry Ramatshimbila Attorney
On
behalf of the Respondent: Mr Ludwig Frahm-Arp of Fasken Martineau
[1]
Act
108 of 1996
[2]
Act
66 of 1995 as amended
[3]
Section
192 (2) of the LRA
[4]
4Seas
Worldwide (Pty) Ltd. v The Commission for Conciliation Mediation &
Arbitration & Others
Case no: CA15/2011 (13 November 2013)
[5]
See
SA
Clothing & Textile Workers Union & others v Discreto - A
Division of Trump & Springbok Holdings
(1998)
19 ILJ 1451 (LAC);
Forecourt
Express (Pty) Ltd v SA Transport & Allied Workers Union &
Another
(2006) 27 ILJ 2537 (LAC).
[6]
(CA22/2012)
[2014] ZALAC 78
(10 December 2014)
[7]
At
para [33]
[8]
[2003]
11 BLLR 1081
(LAC)at paragraphs [69]-[70]
[9]
[2001]
5 BLLR 528 (LAC)
[10]
At
paragraphs [16] and [17]. See also
Strauss
and Another v Plessey (Pty) Limited
(J2192/00)
[2001] ZALC 191
(29 October 2001) at para [7]
[11]
Case
no: J3020/12 at para [11]
[12]
[2004]
7 BLLR 667 (LAC)
[13]
At
para [62] See also
Hendry
v Adcock (Pty) Ltd
(1998) 19 ILJ 85 (LC);
Enterprise
Foods Ltd v Allen & Others
(2004) 25 ILJ 1251 (LAC);
CEPPWAWU
v Astrapak Manufacturing Holdings Pty (Ltd) t/a East Rand
Plastics Case no: JS878/10 at para [129] where the Labour Court (Per
Mokoena AJ) held that;
“
I
am therefore satisfied that an entity such as the Respondent is
entitled to retrench in order to make more profit and to avoid
closure of those entities which their profit margins has drastically
dropped”.
[14]
S
upra
[15]
At
para [37]
[16]
See
Irvin
& Johnson Ltd v Commission for Conciliation, Mediation &
Arbitration & Others
(2006) 27 ILJ 935 (LAC) at para [45]
[17]
See
Banks
and another v Coca Cola SA (A division of Coca Cola Africa (Pty) Ltd
[2007] 10 BLLR 929
(LC).
[18]
(1999)
20 ILJ 89 (LAC) at para [28]
[19]
CASE
NO: JS 960/12
[20]
At
para [31]
[21]
(JS1495/01)
[2005] ZALC 93
(17 October 2005) at para 29
[22]
ibid