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 342
|
|
National Union of Metalworkers of South Africa and Others v DC Steel Construction (JS 44/12, JS 62/12) [2015] ZALCJHB 342 (6 October 2015)
THE
LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG
JUDGMENT
Case
no: JS 44/12
JS
62/12
DATE:
06 OCTOBER 2015
Not
Reportable
NATIONAL
UNION OF
METALWORKERS
..............................................................
First
Applicant
OF
SOUTH AFRICA
PHILLEMON
BUTHELEZI & 37
OTHERS
.......................................
Second
to Further Applicants
And
DC
STEEL
CONSTRUCTION
............................................................................................
Respondent
Heard:
23 and 24 April 2015
Delivered:
6 October 2015
JUDGMENT
TLHOTLHALEMAJE,
AJ
Introduction:
[1]
This matter came before the court by way of
a statement of claim in terms of which the fairness of the dismissal
of the Second to
Further Applicants on account of the Respondent’s
operational requirements was challenged. The applicants seek an order
declaring
their dismissals to be substantively unfair. They further
seek an order of retrospective reinstatement, alternatively
compensation.
The retrenchments took place in October 2011. The claim
is opposed by the Respondent.
[2]
The matters under case numbers JS44/12 and
JS62/12 were consolidated as the disputes are based on the same set
of facts. At the
commencement of the proceedings, it was indicated on
behalf of the Respondent that of the original Applicants, five have
since
been re-employed.
[3]
The applicants allege that the
retrenchments were substantively unfair due to the selection criteria
applied when deciding which
employees the Respondent should retain
and which ones should have their services terminated. In this regard,
it was contended that
employees with lesser years of service were
retained instead of those with more years of service, and further
even those with more
skills were retrenched.
[4]
It was common cause that the selection
criteria applied was based on LIFO, taking into account specialised
skills and length of
service. The applicants set out in detail in the
pre-trial minutes who they believe should have been retrenched
instead of certain
applicants who were in fact retrenched. The
Respondent in the same pre-trial minutes equally gave an explanation
as to the basis
of differentiation and selection. The respondent’s
contention was that in considering which employees were to be
retained,
those with skills were favoured over unskilled employees,
even in the event where the unskilled employees had a longer
employment
history.
[5]
The issue for determination before the
court is whether the selection criteria applied by the Respondent was
fair and objective,
and if not, whether the individual Applicants
should be awarded any relief.
The evidence:
[6]
The Respondent called two witnesses, viz,
Ms JS Oosthuizen, its Payroll Administrator, and Mr J Oosthuizen, its
Managing Director.
The applicants called three witnesses, viz, Mr J
Masilela a Welder at the time of his retrenchment, Ms L Mahlangu a
shop steward
and Grinder at the time of her retrenchment, and Mr P
Buthalezi, a shop steward and semi-skilled Boiler Maker at the time
of his
retrenchment. A summary of the most pertinent aspects of the
respective witnesses testimony is contained hereunder:
The evidence of
Ms JS Oosthuizen:
[7]
Ms Oosthuizen as Payroll Administrator is
responsible for capturing the details of all employees onto a
computerised database from
the date that they are employed. She is
also responsible for ensuring that the data base is kept up to date,
and was also responsible
for the calculation of retrenchment
packages, and salaries due to employees where applicable, and all the
statutory payment due
to employees at the time that they were
retrenched.
[8]
Her evidence essentially was to give an
account in respect of employee records that were damaged as a result
of flooding that occurred
in the archives where they were kept. The
flooding was as a result of a leaking roof in the premises. For the
purposes of these
proceedings, the only employee records that could
be produced were those that were in the data base as captured on her
computer
system. The records for the period 2009 to 2013 were damaged
in the flooding. Her evidence was also in respect of the employees’
service since there was a dispute in regards to which ones had longer
service. In this regard, she had testified that prior to
the
retrenchments, there had been a transfer of other employees to a
separate company called DC Swart Maintenance, but that those
employees were ultimately transferred back to the respondent during
February 2011.
The evidence of
Mr J Oosthuizen:
[9]
Oosthuizen’s testimony was as
follows;
9.1
The Respondent draws, fabricates, cuts and
installs steel for clients as per specification and size provided by
clients. That process
also involves welding, assembling, galvanizing
and painting of steel as per drawings provided. Its operations
are inherently
intricate and technical, and its clientele is mainly
in the mining industry.
9.2
The retrenchments were effected after
consideration was given to the employees’ skills and length of
service, and were as
a result of the introduction of new technology
which had resulted in the need for less employees.
9.3
Prior to the retrenchments, a commercial
agreement was concluded with a company called DCS Construction, in
terms of which the latter
would manage the Respondent’s
fabrication operations. As a result of this agreement, a large number
of the Respondent’s
employees were transferred to DCS
Construction for the duration of the agreement. That agreement lasted
for three months and on
27 February 2011, some of the employees of
DCS Construction were transferred back to the Respondent.
9.4
Because of the specialized nature of the
welding required, all welders get tested by an independent company
which then certifies
the individual as compliant with certain
standards required for them to undertake specific procedures. This
certification is highly
specialized to a specific type of operation
or task, and only employees who had attained the specific standards
and been certified
as competent are permitted to undertake certain
procedures and tasks. There were varying types of welding, and each
was specific,
specialised and accordingly also certified separately.
Only the welders who had been certified as competent could perform
certain
functions.
9.5
The testing and certification was a
requirement of the Respondent as well as of its clients. If the
employees of the Respondent
were to perform work at Impala Platinum
Mines as an example, they would be required to undertake a further
competency test, in
order to be permitted to undertake procedures at
the mine premises. The process of testing employees and the
certification of competency
was conducted by a Mr Lottering who was
completely independent of the Respondent and qualified to test and
certify competency levels.
Lottering is registered with the relevant
professional body.
9.6
Having
been referred to various test results as contained the bundle
[1]
Oosthuizen testified that these results were indicative of the level
of skill of the relevant employee who had undergone the testing,
as
they reflected whether the employee had achieved acceptable ratings
in three aspects being the visual appearance of the work,
the
radiography and MPI. If an employee does not attain acceptable
standards in these areas, they do not pass the test.
9.7
Even though a person may have been
certified and utilised in a position, the level of skill differed
between employees. This was
also measured by the individual’s
key performance areas, exceptional skills, specialization,
qualifications, standard of
work, speed, accuracy, literacy,
understanding of steel and dynamics, knowledge of new technology, and
ability to take control.
In selecting employees for retrenchments,
these factors were looked at holistically, including reports from
clients on the level
of performance of the employees.
9.8
He testified that one employee may have
been more skilled and be more efficient than another one who was
equally qualified and not
underperforming. He stressed that the
relevant employees who were retrenched were in no way underperforming
but that the ones which
were retained were simply more skilled and
retained on that basis, as the need for skills goes to the heart of
the Respondent’s
business.
9.9
Even though underperformance was not
necessarily a consideration, in cases in the past where this may have
been an issue, this would
have been addressed through continuous
interaction between the employee and their superiors. Reports were
only compiled if there
were cases of serious concern about the
employee’s performance. Performance was monitored through
regular meetings with supervisors
and management where
inter
alia,
the employee performance, tonnage
and project performance were monitored. Deadlines were very important
and meetings were crucial
to ensuring that projects ran on time.
9.10
In regards to specific comparisons between
those employees retrenched and those kept, Oosthuizen further
testified that where vacancies
arose, attempts were made through shop
stewards to locate ex-employees identified for recall and where they
could not be found,
the next best skilled ex-employee would be
contacted. This had resulted in employees with lesser years of
service being recalled
as was the case between Mr. T Moyo and Mr R
Makhanya, who had a longer period of service than Mr Moyo. He
testified that when the
decision to employ someone was taken that was
in terms of the agreement for preferential re-employment of
retrenched employees,
and the intention had been to reemploy Mr
Makhanya. However since he could not be contacted within a reasonable
time, Mr Moyo was
contacted and thereafter re-employed. He testified
further that the agreement did not specify that service history
should be a
consideration when re-employing retrenched employees.
Evidence of Mr J
Masilela:
[10]
Masilela’s testimony was as follows;
10.1
He was employed by the Respondent as a
Welder since 19 June 2007. Upon his appointment he was already
certified as a Welder, but
was still tested for competency, which
test he had passed resulting in him being commencing his employment.
10.2
He was also tested once by Impala Platinum
when he was sent to perform work at the mine premises. He denied that
he had been tested
on any other occasion, including the test
reflected in the bundle of documents used at the trial which reflects
that he did not
pass the competency test. He testified that the said
test was fraudulent. He alleged that during the time period when the
test
was indicated as having been conducted that he was on short time
and accordingly was not at work to have had done the test. He
testified that while on short time an employee only worked for four
days in a month (which was disputed by the Respondent). He testified
that he could not remember which days he had worked that month but
that he wasn’t at work on the day of the test and even
if he
was he did not do the test. He could however not dispute that the
other employees had undertaken the test on the particular
day as he
was unaware of whether they were tested or not.
Evidence of Ms L
Mahlangu:
[11]
Mahlangu’s testimony was as follows;
11.1
She was employed by the Respondent on 2
February 2007 to perform grinding duties in the fettling department.
She was at some point
moved to the material control department where
she was based until her retrenchment. She further testified that she
was a shop
steward of NUMSA.
11.2
She and her fellow employees were all
assistants to a Mr Guntherie who operated the machines in the
department. Her responsibilities
essentially entailed cleaning cut
pieces of metal, and packing them for the Boiler Makers.
11.3
She denied the allegation that two of her
colleagues who were retained operated the punching and bending
machines and were accordingly
more skilled than the employees who
were retrenched. She nevertheless testified that she could not
operate those machines as she
did not know how to.
Evidence of Mr P
Buthelezi:
[12]
He was employed by the Respondent on 16
August 2006 as an Assistant Boiler Maker but was later promoted to
the position of a semi-skilled
Boiler Maker, he was also a shop
steward of NUMSA.
12.1
Two of his colleagues (Mthombeni and
Mahlangu) were appointed after him and they were retained when he was
retrenched. He testified
that the retained employees were currently
still doing the work which he had done, and that this was unfair
because he believed
that the Respondent had dismissed older employees
but retained younger employees with less service, and further that
that the Respondent
did not consider skills when retrenching.
12.2
He had conceded that a Mr. Sithole who was
retained in his stead had skills in managing the steel yard. He
further conceded that
other employees retained, viz, Mthombeni and
Mahlangu had also been promoted to his level of semi-skilled boiler
makers but emphasized
that he had been the person who had taught them
the work. He denied that the work done by semi-skilled boiler makers
was measureable
on considering the speed and the mistakes made on the
work on the basis that no one had approached him concerning the speed
of
his work. He also denied the proposition that one semi-skilled
boiler maker could be better than another one on the basis that they
did not compete with each other when performing their tasks.
Submissions:
[13]
In his closing arguments, Mr. Beaton on
behalf of the Respondent made the following submissions;
13.1
New technology was introduced to make the
respondent more efficient, which had resulted in the retrenchments.
The Respondent had
considered the principle of LIFO which it had
applied unless an employee with less service had more skills than one
with longer
service in which case the one with the most skills was
retained.
13.2
It was argued that employees were tested
and the evidence of Mr Masilela should be rejected as a result of the
accusation that his
test was a fraudulent document as he had never
done the test in circumstances where this aspect was never previously
challenged
or raised.
13.3
It was further argued that the retrenched
employees were not underperforming but that the ones which were
retained were simply better
than their retrenched colleagues in terms
of skills and experience.
[14]
Mr. Masutha on behalf of the Applicants
submitted that;
14.1
The Respondent only retained employees who
were employed later with skills, over unskilled colleagues with
longer service. It was
further argued that assessments done were
random and only in respect of welders and not boiler makers, and that
those assessments
were not based on the performance of employees. He
further argued that there was no form of assistance in place relating
to performance.
14.2
Emphasis was also placed on the fact that
employees who were employed later, and acquired skills while
employed, were retained over
others who had been employed for a
longer period of time such as in the case of Mr Buthelezi in relation
to Mr Mahlangu and Mr
Mthombeni.
Evaluation:
[15]
In
this case, it was common cause that there was no challenge to the
reason for and the procedure leading to the retrenchments.
Thus the
only issue for consideration is whether the selection criteria
applied by the Respondent was fair and objective. Item
9 of the Code
of Good Practice on Dismissal based on Operational Requirements
[2]
provides that selection criteria that are generally accepted to be
fair include length of service, skills and qualifications. It
further
provides that generally, the test for fair and objective criteria
will be satisfied by the use of LIFO principle.
[16]
It is further acknowledged in this Code
that there may be instances where the LIFO principle or other
criteria may need to be adapted,
including the retention of employees
based on the criteria mentioned, which may be fundamental to the
successful operation of the
business. It would therefore be
permissible to retain employees for example, with a skill that is
vital to the business of the
employer despite their years of service,
their production output and work record. This criteria is obviously
subject to the proviso
that it is fairly and objectively applied.
[17]
In circumstances where the fairness and
objectivity of the selection criteria is questioned, the onus is on
the Respondent to prove
on a balance of probabilities that it applied
the selection criteria fairly and objectively. In this case, having
had regard to
the evidence presented, the oral submissions made on
behalf of the parties, the documentary material before the court, and
the
circumstances that led to the retrenchment, I am satisfied that
the Respondent had on a balance of probabilities, discharged the
onus
placed on it to show that it had applied a fair and objective
criteria when retrenching the Applicants. My conclusions are
fortified by the following;
17.1
It was common cause that the final
retrenchments were preceded by a facilitation process under the
auspices of the CCMA in terms
of section 189A (3) of the LRA. It
appears from the bundle that two sessions were held with the
facilitator, and a further consultation
meeting took place internally
on 11 August 2011. It does not further appear that any agreement was
concluded in that after the
Respondent had issued its first notice of
the retrenchment of identified employees on 14 October 2011, NUMSA
had referred a dispute
to the MEIBC on or about the same date.
17.2
It can therefore be accepted that selection
criteria applied by the Respondent was that in accordance with the
provisions of section
189 (7) (b) of the LRA. From the signed
pre-trial minutes, the Respondent had three departments, viz,
workshop, construction and
administration. It contended in these
minutes that it had proposed that the selection criteria should be
based on length of service
and skills per department, and that the
proposal was accepted by the Applicants. The Applicants nevertheless
denied that there
was such an agreement.
17.3
Even if there was no such an agreement, the
criterial applied by the Respondent has to be assessed within the
context of the nature
of its operations. I did not understand it to
be seriously disputed that the Respondent runs its operations on the
basis of specialised
skills in the light of the demands of its
clients. Thus each Welder or Boilermaker had to be specifically
tested to ensure that
they possessed the necessary skills,
qualifications and expertise to perform the tasks required of them.
The Applicants did not
take issue with the level of skills and
expertise required of the employees. Their concern was mainly that on
a comparison of both
skills and years of experience, they ought to
have been retained.
17.4
The above contention required a painstaking
exercise of comparing the skills levels, years of service and
qualifications of those
employees that were retained and those that
were retrenched. This exercise was embarked upon in the course of
drafting the pre-trial
minute and also as can be gleaned from the
evidence presented by Oosthuizen.
17.5
At
paragraph 17.8 of the pre-trial minute
[3]
the individual employees alleged to have not been identified for
retrenchment or those that were retained were identified, including
in each department. It is not necessary to mention each of these
individuals as their names appears in the pre-trial minute and
the
basis upon which it was alleged that they should or should not have
been selected for retrenchment. However, central to the
Applicants’
contention was that those retained either had less skills or less
years of service.
17.6
The
Respondent in its response had in detail
[4]
explained the basis of retaining or identifying these individuals for
retrenchment. It had made detailed comparisons and explained
the
functions, skills, qualifications of each of these individuals, and
further explained with particularity the reasons why skills
in
certain areas were preferred over years of service. During his
evidence, and under extensive cross-examination, Mr Oosthuizen
had
further painstakingly made reference to individuals in regards to
their certificates of training (e.g. Magagula, Nkosi, Masondo,
Simelane, Van Virmen, Masilela, Mahlangu, Mthombeni, Mashinini, Xaba,
Mtshweni, Sithole, Maphanga, Gumbi, Sisho, Hlatswayo, Masuku,
Buthelezi, Biyela, Masina, Malaza, Vilakazi, Mkhatswa, Mayike etc.),
and justified the differentiation on the basis of qualifications,
on-going assessments, specialization, exceptional skills,
suitability, levels of skills, test results, the nature of work to be
performed, the quality of work produced and demanded, speed,
accuracy, literacy, product understanding, appreciation of dynamics,
familiarity with new technology, ability to take control, material
control, and management of storerooms. Oosthuizen conceded that
some
of the applicants were welders with skills, but having taken all
factors holistically, decisions had to be made as to who
was to be
retrenched depending on the considered factors.
17.7
Masilela’s main contention on the
other hand was that he had more years of service than others that
were retained. To be precise,
and in comparison to those that were
retained, he had more service by one year as compared to those
retained. It having been accepted
that the years of service was not
the only consideration, his contentions cannot therefore be
sustainable. The same argument was
advanced by Mahlangu. She had
conceded that her tasks involved the cleaning of cuts and could not
operate the bending or punching
machines. Nevertheless, it is not
known what other skills she possessed that could have made her better
suitable to her comparators.
Prima
facie
, her tasks appeared mundane and
required less skills.
17.8
Buthelezi was an assistant boilermaker and
was later converted to semi-skilled boilermaker. His complaint was
also that the Respondent
failed to take into account years of service
and skills. He nevertheless did not know the skills levels of his
comparator, Sithole
whom Oosthuizen had contended had more skills.
His only explanation was that Sithole had not shown him his
certificate to prove
the level of his skills. He could not dispute it
when it was put to him that he could not be at the same level of
skills as a Boilermaker.
[18]
In the light of the above, I am satisfied that the Respondent has
given a proper account of the reasons some employees were
retained
whilst the Applicants were retrenched. There is no basis to conclude
that the selection criteria applied was not fair,
objective, and
justifiable and based on rational grounds
[5]
.
In the circumstances, the Applicants’ claim should be
dismissed. The Respondent did not seek a cost order in the light of
the on-going relationship between the parties, and there is no reason
why a cost order should be made.
Order:
a)
The Applicants’ claim is dismissed.
b)
There is no order as to costs.
Tlhotlhalemaje,
AJ
Acting
Judge of the Labour Court of South Africa
APPEARANCES:
On
behalf of the Applicant: Mr Masutha of NUMSA
On
behalf of the Respondent: Adv R Beaton SC
Instructed
by: de Villiers & du Plessis Attorneys
[1]
Pages
26-36 of the Respondent’s bundle
[2]
As
contained in the
Labour Relations Act, 66 of 1995
as amended. See
also
Section 189A(19)
of the Act which provides that:
“
In
any dispute referred to the Labour Court in terms of
section 191
(5)
(b) (ii) that concerns the dismissal of the number of employees
specified in subsection (1), the Labour Court must find that
the
employee 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.”
See
also
section 189
(7) of the LRA which provides that :
“
The
employer must chose the employee to be dismissed according to a
selection criteria-
(a)
that have been agreed to by the consulting parties or;
(b)
if no criteria have been agreed, criteria that is fair and
objective.
[3]
Page
79 of the pleading
[4]
At
page 82 of the pre-trial minute
[5]
Van
Rooyen & Others v Blue Financial Services (SA) Pty Ltd
[2010] 10 BLLR 1119
(LC)