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[2015] ZALCJHB 346
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Ndaba and Others v T - Systems (Pty) Ltd and Others (JS788/2012) [2015] ZALCJHB 346; [2016] 1 BLLR 60 (LC) (7 October 2015)
THE
LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG
JUDGMENT
Not Reportable
Case no: JS
788/2012
In
the matter between:
LADY-
PEACE LINDI NDABA & 15 OTHERS
Applicants
and
T - SYSTEMS (PTY)
LTD
First Respondent
ARIVIA.KOM (PTY)
LTD
Second Respondent
Delivered:
7 October 2015
JUDGMENT
TLHOTLHALEMAJE,
AJ
Introduction:
[1]
The
applicants brought this matter before this Court by way of a
statement of claim. They alleged that the termination of their
services constituted an automatically unfair dismissal as
contemplated in section 187 (1) (g) of the Labour Relations Act
[1]
,
alternatively, that the dismissal on account of operational
requirements was substantively unfair. Preliminary points were raised
in regards to the nature of the Applicants’ claim. These
however are to be considered against the following background;
Background:
[2]
The
Applicants were all initially employed by the Second Respondent,
Arivia.Kom (Pty) Ltd (Arivia) in different capacities. Arivia
is a
state owned information technology company which came out of a merger
between Datavia, Eskom ITS and Ariel Technologies. Arivia
was
acquired by the First Respondent, T-Systems on January 2010 and the
Applicants’ employment was transferred to T-Systems
in terms of
the provisions of section 197 of the Labour Relations Act. All the
Applicants were then moved to the career centre
and had their
services terminated between December 2010 and January 2011. From the
initial sixteen applicants that had brought
the claim, only four are
still pursuing the claim before the court, viz Abel Galane, Valencia
Hoosain, Shadrack Poola and Patrick
Mnguni.
[3]
The
Applicants’ case was that they were told that within 60 days of
being placed in the career centre they would be retrenched
if they
had not been placed in alternative positions. They further alleged
that they were no consulted on severance pay, selection
criteria, the
timing of the retrenchments or alternative positions. They further
complained that other candidates with less skills,
experience and
years of service as compared to them were appointed in the positions
they should have been considered for; that
new staff were recruited
in the Applicant’s former positions after their retrenchment.
It was however conceded that the unions
were consulted on the
restructuring process.
[4]
T-Systems’
case is that it had entered into an agreement in March 2010 with
Arivia in terms of which it bought 100% of its
shares. Pursuant to
the sale, it became necessary for Arivia to comply with the
provisions of section 197 of the LRA. This necessitated
an automatic
transfer of the employment contracts of all the employees of Arivia
to the T-Systems. T-Systems had held various meetings
with the
Applicants’ union, SATAWU in respect of the section 197
process.
[5]
The
employees and SATAWU were then informed that with effect from 1
January 2010, their contracts would be transferred to T-Systems.
Subsequent to the transfers, T-System had realised that the model
applicable to Arivia did not fit with international standards,
and it
being an international company, it had commenced a process of
integration and restructuring. This process was informed by
duplications of positions as Aravia was already in business at the
time that T-Systems acquired the shares.
[6]
The
process ‘
People
Integration People Case for ICTO-CSS AO Integration’
commenced and had produced a final draft in August 2010. That process
also involved SATAWU and had ended with certain agreements
on
principles being reached. Each division was tasked with coming up
with a new structure to integrate the old structures of Arivia
and
T-Systems, which structure would be compatible with the business
model of T-Systems.
[7]
Each
division had completed its structure which was presented to the
employees by its divisional heads. Input was also sourced from
employees, and during presentation meetings, employees were made
aware that the new structure would be filled through a process
of
matching and placing, assessment, recruitment and interviews. In the
event that employees were unsuccessful for positions they
had applied
for, they were to be removed to a career centre to be empowered with
soft skills and be assisted in obtaining alternative
positions within
or outside of the company. The employees’ salaries were
guaranteed whilst they were at the career centre
until the end of
December 2010. In August 2010 a voluntary package was offered and a
number of employees including some of the
Applicants who have since
withdrawn from the dispute had accepted the offer.
[8]
In
October 2010, a process commenced to notify the employees at the
career centre of possible retrenchments. A consultation process
was
embarked upon and in November 2010 notices of retrenchment were
issued. A number of employees had their services terminated
on 31
December 2010, whilst others’ services were terminated in
January 2011.
[9]
T-Systems’
contention is that the termination of the Applicants’ services
was mutual and was followed by a proper separation
agreement. It
further contended that with effect from 1 January 2010 and pursuant
the section 197 process, the contracts of the
Applicants were
transferred to it. Furthermore, it was contended that the dismissal
of the Applicants was as a result of its operational
requirements and
a process contemplated in section 189 of the LRA was followed.
Preliminary
points:
[10]
At
the commencement of the proceedings, T-Systems had raised a
preliminary issue in regards to the nature of the Applicants’
claim. The complaint was that it was not clear from the statement of
case as to what case it had to meet. Other than this issue,
a further
contention was that the court could not adjudicate any dispute
pertaining to alleged procedural unfairness of the retrenchment
process.
[11]
An
order was issued in terms of which it was determined that the Court
had the necessary jurisdiction to determine both the alleged
unfair
dismissal dispute on account of operational requirements, and also in
respect of the alleged automatically unfair dismissal.
The Applicants
were granted leave to amend their statement of case, with the
Respondent having a right of reply.
[12]
In
the amended statement of claim, the Applicants contended that their
dismissal was unlawful, invalid and of no force and effect
on the
basis that the First Respondent had failed to comply with the
provisions of section 189A (2) of the LRA
[2]
pertaining to the giving of notice of termination. In this regard, it
was contended that the termination notice was issued on 26
November
2010 before the expiry of the 60 days period within the contemplation
of section 189A (7) of the LRA
[3]
.
It was argued that the provisions of section 189A of the LRA applied
to T-Systems and that it had to comply with those provisions
before
the Applicants’ contracts of employment could have been
terminated based on operational requirements.
[13]
A
further argument advanced on behalf of the Applicants was that they
were not pursuing a claim of procedural fairness by way of
the issues
raised in the amended statement of claim, and that they were pursuing
a claim for unlawful dismissal and a declaratory
order to that
effect, To this end, it was submitted that the Court had jurisdiction
to entertain such a claim by virtue of section
77 (3) of the Basic
Conditions of Employment Act, and section 158 (1) (a) (ii) and (iv)
of the LRA.
[14]
It
was further submitted that the Applicants’ complaint about
non-compliance with section 189A was not directed at the procedural
fairness of the dismissal, but at the lawfulness thereof, and the
court was not prevented from making a determination by the provisions
of section 189 (13), 189A (17) or 189A (18).
[15]
T-Systems
contends that that the issue raised in the amended statement of claim
relates to procedural unfairness and is incapable
of adjudication. It
was contended that T-Systems in its notice in terms of section 189
(3) of the LRA had not requested facilitation
within the
contemplation of section 189A (3) or agreed to facilitation within
the meaning of section 189A (4) of the LRA. It therefore
followed
that the issue of the appointment of a facilitator and the issuing of
notice in terms of section 189 (3) are issues of
process as opposed
to substance.
[16]
In
addition to the above amended pleadings and responses, the parties
had then compiled a Supplementary pre-trial minute wherein
the issues
for determination by the Court in line with the preliminary issues to
be raised were;
“
4.1
Whether the termination of employment contracts entered into by the
Applicants are void, alternatively
voidable, alternatively should be
cancelled and set aside and the said Applicants should be reinstated
in the employment of T-Systems
and/or awarded damages.
4.2
Whether the notice of termination of the Applicant’s services
was premature and invalid
for being in breach of section 189A (2) of
the LRA and whether the Applicants’ dismissals were accordingly
invalid and of
no force and effect”
[17]
Further
in accordance with the supplementary pre-trial minute, the parties
had agreed that the Applicants’ submissions that
the
retrenchments were unlawful, invalid and of no force and effect
should be dealt with first, and further to submit heads of
argument
in that regard. They further agreed that with leave of the Court,
should the Respondents be successful in proving that
the
retrenchments were lawful, the parties shall then lead evidence on
whether the reason for dismissal were related to a transfer
as
contemplated in section 197 of the LRA and for the court to make a
ruling on whether the reason for dismissal were related to
a transfer
as contemplated in section 197 of the LRA.
[18]
The
parties had further agreed that should the court rule in the
Respondents’ favour, it was requested that evidence during
the
proceedings form part of the record for the remainder of the trial,
and where the Respondents were to be successful, the court
should set
the matter down for the unfair dismissal matter.
Evaluation:
Re: Preliminary points:
[19]
In
this case, it was
common
cause that a facilitator as contemplated in section 189A (3) of the
LRA was not involved in the consultation process. Furthermore,
a
dispute had not been referred for conciliation by either of the
parties at the CCMA before the notice of termination was issued
to
the Applicants. It is further common cause that none of the
Applicants had brought an application to the Labour Court in terms
of
section 189A (13) alleging non-compliance with fair procedure. The
Applicants’ case is primarily that the dismissals should
be
declared unlawful, invalid and/or void on account of the provisions
of section 189A (2) of the LRA. Reliance in this regard
was placed on
NUM
v De Beers Consolidated Mines (Pty) Ltd
[4]
and
De
Beers Group Services (Pty) Ltd v NUM
[5]
,
where
it was held that where an employer issues notices of termination
before the period referred to in section 189A (8) (b) of
the LRA has
elapsed (i.e. prematurely), the ensuing dismissals are invalid, and
accordingly of no force and effect. (The
De
Beers principles
)
[20]
The
preliminary points raised in this case and the
De
Beers principles
relied upon received attention recently in in
Edcon
v Steenkamp and Others
[6]
,
and
these principles are no longer considered as correct
[7]
.
In
circumstances where a facilitator was not appointed, the applicable
provisions are those in section 189A (8) of the LRA
[8]
.
In this regard, the Respondents’ contention, and correctly put
is that once a notice of termination was received, an employee
could
only refer a dispute concerning whether there was a fair reason for
the dismissal to this court in terms of section
191 (11) of the LRA.
[21]
Further
in regards to the notice issued, it was submitted on behalf of the
Respondents that this was issued on 18 October 2010 and
the
termination notice was issued after 30 days on 21 November 2010.
Accordingly, the notice issued was in accordance with the
subsection
within the contemplation of section 198A (2) of the LRA, and was
therefore not premature.
[22]
In
Edcon,
the
LAC also reaffirmed that section 189A(18) of the LRA provides that
the Labour Court may not adjudicate a dispute about the procedural
fairness of an operational requirements dismissal referred to it in
terms of section 191(5)(b)(ii) of the LRA. Consulting parties
who
allege procedural unfairness in the consultation process are now
required to approach the Labour Court by way of an application
made
in terms of section 189A (13) of the LRA within 30 days after the
employer has given notice to terminate or, if notice of
termination
is not given, within 30 days of the date of dismissal
[9]
.
[23]
The
LAC further in
Edcon
reaffirmed that a premature notice of termination of employment,
where the termination was substantively fair, relates to the manner
in which the termination was effected and would found a cause of
action under section 189A(13) of the LRA that the employer had
not
complied with a fair procedure in the form of due notice
[10]
.
[24]
In
regards to arguments pertaining to whether the retrenchments were
unlawful, invalid and or of no force and effect as a consequence
of
termination notices being issued prior to the expiry, the LAC had
held that non-compliance with section 189A (8) of the LRA
was not
intended by the legislature to result in the invalidity or nullity of
any ensuing dismissals, and that the earlier decisions
to the
contrary in
De
Beers Group Services (Pty) Ltd v NUM
[11]
and
Revan
Civil Engineering Contractors and Others v NUM
[12]
were wrongly decided
[13]
.
[25]
It
therefore follows from the above that the claim brought before the
Court after the dismissal took place can only be in respect
of an
alleged substantive unfairness in terms of section 189A(18) and
section189(19) of the LRA. The Court therefore lacks jurisdiction
in
regards to any claim of procedural unfairness in respect of the
retrenchments. Furthermore, in line with the principles as set
out in
Edcon
,
there is no basis for any conclusion to be reached that the
retrenchments were unlawful, invalid and/or of no force and effect.
In accordance with the parties’ supplementary pre-trial minute
and the issues which it was required the court to decide,
the
following order is made;
Order:
i.
The
preliminary points raised by the Respondents are upheld.
ii.
The
termination of the Applicants’ employment contracts is not void
or voidable.
iii.
The
notice of termination of the Applicants’ services was not
premature and invalid.
iv.
The
dismissal of the Applicants was not invalid or unlawful.
v.
The
parties are to approach the office of the Registrar of this court in
respect of the disputes pertaining to an alleged unfair
dismissal and
automatically unfair dismissal of the Applicants if these claims are
still to be pursued.
vi.
Each
party is to pay its own costs.
__________________
Tlhotlhalemaje, AJ
Acting
Judge of the Labour Court of South Africa
APPEARANCES:
On
behalf of the Applicants: Mr J Rhoodie of Bester & Rhoodie
Attorneys
On
behalf of the Respondents: Mr G Moshoana of Mohlaba & Moshoana
Inc
[1]
Act 66 of 1995 as amended
[2]
Which provides
that;
‘
(2)
In respect of any dismissal covered by this section -
(a) an employer must give notice of
termination of employment in accordance with the provisions of this
section;
(b)
despite section 65(1)(c), an employee may participate in a strike
and an employer may lock out in accordance with the provisions
of
this section;
(c)
the consulting parties may agree to vary the time periods for
facilitation or consultation.’
[3]
Which provides
that;
‘
(7)
If a facilitator is appointed in terms of subsection (3) or (4), and
60 days have elapsed from the date on which notice was
given in
terms of section 189(3) –
(a) the employer may give notice to
terminate the contracts of employment in accordance with
section 37(1) of the Basic
Conditions of Employment Act; and
(b) a registered trade union or the
employees who have received notice of termination may either –
(i) give notice of a strike in terms
of section 64(1)(b) or (d); or
(ii) refer a dispute concerning
whether there is a fair reason for the dismissal to the Labour Court
in terms of section 191(11).’
[4]
(2006) 27 ILJ 1909
(LC)
[5]
(2011) 32 ILJ 1293
(LAC)
[6]
2015 (4) SA 247
(LAC)
[7]
See order of the
LAC where it was held that;
1.
“
It
is declared that the interpretation of section 189A(2)(a) read with
section 189A(8) of the LRA by this Court in
De
Beers Group Services (Pty) Ltd v NUM
[2011] 4 BLLR 319
(LAC) and
Revan
Civil Engineering Contractors and Others v NUM
[2012] 33 ILJ 1846 (LAC) that non-compliance with the provisions of
section 189A(2)(a) read with section 189A(8) results in the
invalidity of any ensuing dismissal is wrong and an erroneous
interpretation and therefore that non-compliance with these
provisions
does not lead to an invalid dismissal”
[8]
Which provide
that;
‘
If
a facilitator is not appointed –
(a)
a party may not refer a dispute to a council or the Commission
unless a period of 30 days has lapsed from the date on which
notice
was given in terms of section 189(3); and
(b)
once the periods in section 64(1)(a) have elapsed –
(i) the employer may give notice to
terminate the contracts of employment in accordance with section
37(1) of the Basic Conditions
of Employment Act; and
(ii)
a registered trade union or the employees who have received notice
of termination may –
(aa) give notice of a strike in terms
of section 64(1)(b) or (d); or
(bb) refer a dispute concerning
whether there is a fair reason for the dismissal to the Labour Court
in terms of section 191(11).’
[9]
At para [19] where
the LAC held that;
“
Having
carved out distinct alternative procedures for the resolution of
disputes about the substantive fairness of large scale
retrenchments, section 189A of the LRA additionally creates a
distinct procedure for disputes about procedural fairness in
dismissals falling within the ambit of the section. Section 189A(18)
of the LRA provides that the Labour Court may not adjudicate
a
dispute about the procedural fairness of an operational requirements
dismissal referred to it in terms of section 191(5)(b)(ii)
of the
LRA. Consulting parties who allege procedural unfairness in the
consultation process are now required to approach the
Labour Court
by way of an application made in terms of section 189A(13) of the
LRA within 30 days after the employer has given
notice to terminate
or, if notice of termination is not given, within 30 days of the
date of dismissal. In an application made
in terms of section
189A(13) of the LRA, the consulting party may seek an order, if need
be on an urgent basis”
[10]
At para [54]
[11]
[2011] 4 BLLR 318
(LAC).
[12]
[2012] 33 ILJ 1846
(LAC)
[13]
At para [56]