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[2015] ZALCCT 51
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Food And Allied Workers Union and Others v Cape Hospitality Services (Pty) Ltd t/a Savoy Hotel (C419/2007) [2015] ZALCCT 51 (18 August 2015)
THE LABOUR COURT OF SOUTH AFRICA,
CAPE TOWN
JUDGMENT
Not
Reportable
Case Number C419/2007
In the matter between:
FOOD AND ALLIED
WORKERS
UNION
First Applicant
VERONICA
MOGKOSI
Second Applicant
COLEEN-ANNE
JOUBERT
Third Applicant
and
CAPE HOSPITALITY
SERVICES (PTY) LTD t/a
SAVOY
HOTEL
Respondent
Date heard: 19
November 2014; Heads of Argument received 12 May 2015
Delivered:
18 August 2015
JUDGMENT
RABKIN-NAICKER J
[1] On the 19
November 2014, at the end of this trial, the respondent’s
attorney undertook to obtain instructions as to whether
the
respondent could arrange for the record to be obtained. This was as a
result of a request from the court for the parties to
obtain it. He
also undertook to inform the court to his instructions. Mr Spamer did
not revert and in March 2015 the court itself
obtained the record.
This was done because of the long history of the matter and the need
for the dispute to be resolved as expeditiously
as possible. This
judgment is therefore drafted with the benefit of the record before
me.
[2] The
second and third applicants claim that they were unfairly retrenched
during March 2007. They served and filed their statement
of case on
the 21st August 2007 after a certificate of non-resolution of the
dispute was issued by the CCMA. There followed an
order that default
judgment be granted, and a successful recission application of that
order. It is not necessary to detail the
permutations of the long
road to trial which included various skirmishes in respect of filing
a pre-trial minute. The dispute eventually
came to trial before me on
the 17 November 2014, and I refused an application for postponement
by the respondent who sought discovery
of documents pertaining to
employment of the individual applicants subsequent to their
dismissal.
Evidence
for the Respondent
[3] Mr
Williams (Williams), a director of the respondent testified that Cape
Hospitality Services (the company) was formed in 2006
and acquired
the Savoy in 2007. He confirmed that the company operated and owned
the property at the time of the dismissals and
that the hotel
business was bought in 2007. He employed a general manager, Mr
Richard Ndlovu (Ndlovu) who was managing the hotel.
Ndlovu had since
left his employ after certain misdemeanours on his part. When the
company acquired the hotel Williams testified
that it was necessary
to restructure the business to cut costs. There were about 47
employees at the time it was acquired as a
going concern.
[4] Williams
confirmed that second applicant was head cook and third applicant was
a senior bar lady and waitress at the time. In
order to deal with
financial challenges the company had had to obtain a R200,000
overdraft and reduce the staff and general costs
of the company.
Asked how identification of those to be retrenched was made he stated
that: “I think at the time we looked
at the costs to company
for every employee and also the areas where we felt we don’t
have a need for certain extra staff.
I recall very vaguely at the
time we had about five to six people in, doing the cooking in the
kitchen and we felt at the time
that we could do with less people in
the kitchen and also in the area, for example in the bar. We then
utilised the duty manager
to open the bar and then the waiters on the
floor to collect let us say the beverages from the counter if need
be. Apart from that
also we had other areas as well, for example in
cleaning areas and in the housekeeping where we had to reduce staff,
because we
reduced staff closely to about ten.”
[5] Williams
testified that as far as the kitchen staff were concerned that there
had been four people cooking in the kitchen: “I
think there was
two head cooks and two cooks and some other staff in the kitchen, so
we did not see, the need for four people were,
I think they were
superfluous at the time, so we then felt that what we could do, if we
have just, because we have two shifts every
day, a morning shift and
an afternoon shift, so we came to the conclusion …….if
we have a cook in the morning and
a cook in the afternoon and someone
senior to manage both we should, be fine.” Since the
restructuring there had been no
head cook or senior cook, just a cook
on each shift and someone to manage the kitchen. The third applicant
had been identified
to be retrenched.
[6] The staff
were called together and Williams testified he was at the meeting to
explain to them that there was a challenge facing
the business and
that: “we are going to look at restructuring the business and
some people will be affected. I explained
to the staff that they will
receive letters of retrenchments and we will identify the people who
will be affected and we have discussed
this in detail with the staff
at the time.” He testified that at the meeting, “we
discussed it with the staff in detail
to explain to them our
situation.” Asked by Mr Spamer whether he engaged the staff and
ask them their opinion, Williams testified
that: “I think the
challenge was such that we called the staff together, we explained to
them our dilemma. We told them that
we don’t have another
option unless someone else has another option. Nobody could provide
us with options, but that is the
only option we had at the time, so
it is not a matter of we, if we had a choice not to retrench people
we would not retrench people
but we sat with a dilemma, so we
discussed it with staff and explained to them what we are facing and
explained to them that we
have no choice other than, and if anybody
have other choice they are welcome to raise with us. Nobody had any
other options, but
that is all we could do at the time.”
[7] Mr
Williams confirmed that the employees accepted their statutory
severance packages. He explained that an advertisement placed
in a local newspaper (which had been annexed to the statement of
case) dated April 18 2007 after the retrenchments, was for a chef
to
manage the kitchen, but those who applied had salaries far exceeding
what could be afforded so the hotel never went ahead with
the
deployment of such a person. He explained this as follows: “..when
we went through the restructuring process, as I said
earlier we were,
we were at the time overstaffed in the kitchen. We then elected or
decided that if we are going to reduce the,
the two head chefs plus
other we might have to look, instead of looking for a manager we
might look for someone, a chef, to manage
the, to manage the
kitchen..” He testified that there was no replacement of the
individual applicants.
[8] Williams
was asked whether he recalls the individual applicants belonging to
FAWU in March 2007. He stated he recalled management
having meetings
with FAWU because they claimed to be members of the union. He was not
sure whether the union represented them.
According to him FAWU did
not represent the majority of employees at Savoy.
[9] Williams
also testified that Cape Hospitality Services is a property company
and that another company was established, the South
Africa Voy Group,
and since 2012 it manages the business but the assets still belong to
the respondent. On being asked for clarification
from the court as to
whether the hotel business was sold to the South Africa Voy Group
Williams stated that it had not. He
explained that: “…in
the hotel industry management companies, they run the businesses. The
assets belong to the company,
but the staff, the operation belongs to
the management company, but the assets still belong to Cape
Hospitality.”
[10] Under
cross examination, Williams conceded he could not dispute the
individual applicants were members of the union. It was
put to him
that at the time of their dismissals on 16 March 2007 the individual
applicants were the only employees to be dismissed.
Williams replied
that he had given his answer already. He could not recall the date of
the general meeting when he had addressed
staff but it must have been
in March. He did not have a copy of minutes of the meeting. The
general manager Ndlovu had meetings
with individuals after that. The
company did not follow LIFO but looked at cost to company and at
where they were overstaffed.
Williams then testified that LIFO had
also been used regarding some of those retrenched. There were a
number of engagements between
his manager and the union but he had no
documentary proof of this. It was put to him that the employees
would testify that
the only time he had a meeting with them was in
February when he was introduced to them all by the previous owner. He
disputed
this.
[11] It was
put to Williams that the reason third applicant had been chosen for
retrenchment was that Ndlovu had propositioned her
and she refused to
accept the proposal. Williams replied that this was news to him and
he did not know if it was true or not. Williams
was cross-examined on
the issue of LIFO and testified that he identified the individual
applicants for retrenchment on the basis
of costs to company and
overstaffing. It was put to him that while he allegedly retrenched
the two applicants based on financial
constraints, the company was
advertising for a chef in the same department. Williams stated that
“All we were trying to do
is to look for someone with skills as
a chef, who were trained as a chef, with some formal training as a
chef, to fulfil functions
that we saw at that time was needed. We
never filled that position because we could not afford the cost of a
person.”
[12] Asked
why the particular individuals were selected Williams answered that:
“The basis was that we restructured our business
because the
cost to company was exorbitant, so we look at the highest cost to
company. No. 2, the number of people. That was the
criteria.”
He testified that he was not able to employ the applicants again
because there were no positions for them. He
conceded that in another
case two employees had been reinstated and stated fortunately there
were positions at the time. It was
put to him that the applicants
were only earning around R3000 a month when they were
retrenched and was he suggesting that
the expenses of the business
were hinging on their salaries. Williams explained that at the time
of the restructuring there were
about five people reduced. Over the
last 5 years the staff had been reduced to a total of 29 people from
a staff complement of
49. It was put to Williams that over and above
the two cooks and one supervisor in the kitchen, and two full time
waiters and a
supervisor, there are other employees working in the
restaurant. Williams stated that the hotel has a number of interns
who work
at the hotel on a three month basis, funded by the
Department of Tourism.
[13] Williams
restated that they consulted with staff but not with the union
because it was not representative at the hotel at the
time. Not even
a third of the staff in the company at the time were members of the
union, according to him.
Evidence
for the Applicants
[14] Mr
Lekgamane who was a trade union official for FAWU covering Kimberley
in March 2007 gave evidence. He read out a letter he
had written on
the 16 March 2007 to Ndlovu requesting clarity about the employment
future of the two individual applicants. He
testified that he did
this because the two, who he knew were members of FAWU, visited the
union office. He stated that the hotel
were fully aware of the unions
presence at the Savoy at which the union had long secured
organisational rights and the hotel was
deducting trade union fees
for those workers who were members of the union. He referred to the
cashbook of the NEC of FAWU for
the month of February 2007 which
reflected that subscriptions were being paid. He said that the letter
of inquiry he wrote was
not responded to and no record of any
consultations with the individual applicants was ever forwarded to
the union.
[15] He
testified that the applicants had shown two documents- retrenchment
notice forms- when they came to the union office, and
had not signed
these. They informed him that they had been dismissed with immediate
effect. Under cross-examination Lekagamane
was asked whether he
checked the individual applicants were members when they approached
him. He said he did not have to because
he knew they were.
[16] The
third applicant testified she was dismissed from the hotel on the
night of 15
th
March 2007. Ndlovu called her in and said
tomorrow she must not come in to work but just come in for a meeting.
The next morning
she went to his office and he gave her the
retrenchment notice which read in part as follows:
“
Dear
Colleen
Due
to financial and operational constraints of the company, it has
become necessary to reduce staff. To this end we regret to inform
you
that you will be retrenched from 16 of March 2007.”
[17] The
letter then set out severance, notice pay etc. However she did not
sign it because she told him that she could not just
sign, “because
I needed to work and I had my children to support.” She went to
the union office and told Mr Lekgamane
she received the notice and
that she wouldn’t sign it because it was not fair. He told her
that he would see what he could
do and keep in touch with her. She
went back to the union offices to see if there was any feedback from
the hotel but there was
not. The case went to the CCMA and then the
labour court.
[18] She
testified that she had no knowledge of a consultation with the
general staff. She denied having any meeting with management.
She was
earning R2540.34 a month at the time of her dismissal. She was the
head cook and her main job was to oversee the cooking
with three
cooks working under her. She testified as to how Ndlovu had made a
pass at her and when she did not reciprocate he had
made her scrub
the floor the next day and told her not to cook. It went on in this
way and this was three weeks before the retrenchment
letter was
issued by him.
[19] She
testified she currently works in Postmansburg, 285 km from Kimberley
and her children are staying in two different family
members’
households in Kimberley. She want to be re-instated or get her job
back. She became a member of FAWU in 1996 when
she worked at the
hotel for previous owners. She was a member of the union at the time
of her dismissal. She was unemployed for
8 months and moved about a
lot so and she does not have documents to show what she earned during
that time. She currently works
as head cook in a pub and grill.
[20] Under
cross-examination she testified that she earned on average R3500 a
month in her current job. It was put to her that there
were two
competing versions of what happened when she went into Ndlovu’s
office i.e. Williams version that there was consultation
with her and
her own. She stated that Williams wasn’t even there. Mr Spamer
also put it to her that she ought to have called
another employee, Mr
Modise who was according to her evidence, the shop steward at the
time, and who was in Ndlovu’s office
at the time she received
the form to corroborate her version.
[21] The next
witness for the applicants was a Mrs Lenders who is employed at FAWU
head office as the bookkeeper in the accounts
department. She
referred to the document which she described at the NEC Cashbook
dated January 2007 i.e. the National Executive
Committee account
where the money for subscriptions goes in from the companies where
members of FAWU are employed. She read the
extract “Savoy Hotel
with an amount of R2020.74.” That amount had been received on
11 January 2007. Under cross-examination,
she agreed that the
extracts were taken from bank statements. She could not tell from the
information how many FAWU members were
employed by the Savoy Hotel or
which employees were members of the union.
[22] The
second applicant testified that on the 15
th
March 2007 she
went to work. On that night Ndlovu told her she must not come to work
the next day but come to a meeting: “He
was standing at the
door of his office and he gave me a paper telling me that the company
is retrenching me because the company
is not making enough money. As
he gave me the paper I told him that I am not going to sign this
paper. I must first consult with
my union as I am a member of the
union.” She then went straight to the union office and told Joe
Lekamane what had happened
and gave him the retrenchment notice.
After that she had communicated by telephone with him and he told her
that she should go
to the CCMA for the case.
[23] She
denied she was ever consulted with in the form of a meeting. The only
time she had seen Williams was when he was introduced
to the staff.
Ndlovu never consulted with her. She had worked in the
restaurant since 1997 until 2003 and then worked as
a bar lady and
waitress until 2007. At the time of her retrenchment, she had more
years of service than the other employees who
were waitresses or bar
ladies. Only she and Joubert were retrenched on 16 March 2007. She
testified that she was not working currently.
She had only found one
contract job since the retrenchment. She would like to be reinstated.
Her salary was R2308.84 at the time
of her dismissal. She said that
while she would not like other employees to lose their jobs, but in
terms of the law she should
get her job back. She needed the job
because for her and her family as her children were suffering. She
stated that “if I
am not mistaken as from 2001 all of us except
management were members of FAWU, even in 2007 we were members of
FAWU.”
[24] Asked
why she thought she had been targeted for retrenchment she testified
that she thought it was because of an argument when
Ndlovu didn’t
want her to cash up when she left at night: “I am supposed to
know exactly how much did I make for the
evening before I leave, I am
supposed to write it down and put it in the safe. He didn’t
want me to cash up or to count the
money, he wanted to do it
himself.” She had overheard Ndlovu saying to Charles Modise
that “this one I am going to
cut off his knees”.
[25] Under
cross examination, she testified that she was supposed to cash up
with someone else present and both were supposed to
sign for the
amount but Ndlovu wanted to do it alone. She said she did not
remember whether Modise was a shop steward or
member of FAWU. She had
worked on contract for a year after the retrenchment. Under
re-examination she said that Mr Modise was
a supervisor. Because she
was unemployed except for that year, she had had to leave her
accommodation and go to live in a shack.
Evaluation
[26] The
respondent’s submissions in its heads of argument essentially
boil down to the following: There was due consultation
with the
individual applicants; the respondent no longer manages the hotel and
is not in a position to reinstate anybody; the individual
applicants
have not proved their union membership and there was no reason to
consult FAWU because it was not the majority union.
[27] The
respondent’s evidence and submissions regarding the fact that
it doesn’t manage the hotel operation any longer,
appear to
have been directed towards convincing the court that reinstatement of
the applicants is not possible. Williams testified
that since the
business had been bought by the respondent, as a going concern, it
had not been sold to any other corporate entity.
Further the
respondent did not seek to join the managing company as the employer
to the proceedings. No witnesses other than the
director of the
respondent, Williams, were called to give evidence. In these
circumstances whether the respondent has a company
managing its
operations is really neither here nor there.
[28] The
absence of the testimony of Ndlovu regarding the alleged individual
consultations with the second and third applicants
is fatal to
respondent’s case. Williams was very vague about the
general meeting, had no recollection of the date and
the applicants
disputed that he had raised the issue of retrenchments when he had
addressed the staff. In so far as the respondent
believes that it
only had the duty to consult the union if it represented the majority
of the employees in the workplace, it is
wrong in law. Section 189(1)
of the LRA provides that:
189 Dismissals
based on operational requirements
(1)
When an employer contemplates dismissing one or more employees for
reasons based on the employer's operational requirements,
the
employer must consult-
(a)
any person whom the employer is required to consult in terms of a
collective
agreement;
(b)
if there is no collective agreement that requires consultation-
(i)
a workplace forum, if the employees likely to be affected by the
proposed dismissals
are employed in a workplace in respect of which
there is a workplace forum; and
(ii)
any registered trade union whose members are likely to be affected by
the proposed
dismissals;
(c)
if there is no workplace forum in the workplace in which the
employees likely to be
affected by the proposed dismissals are
employed, any registered trade union whose members are likely to be
affected by the proposed
dismissals; or
(d)
if there is no such trade union, the employees likely to be affected
by
the proposed dismissals or their representatives nominated for
that purpose.”
[29] In
addition, the evidence of the union officials which included stop
order records as late as January 2007, in respect of the
Savoy hotel,
reflected that the union had long been recognised as a representative
union in the workplace of the employer. Mr Williams
was unable to
explain why there was no response to the union’s queries
regarding the retrenchment of their members, the second
and third
applicant. All in all the evidence of Williams did not impress
the court. On his own version he was unable to give
direct evidence
of a fair retrenchment process.
[30] His
explanation regarding the selection criteria applied, which goes to
the issue of substantive fairness of the retrenchments,
was also
contradictary and sketchy as reflected in my summary of his evidence
above. The notion that retrenchment of the two employees
who earned
less than R3000 a month was critical to the operational costs of the
company was unconvincing. While other employees
were also retrenched
at various times, they were not dismissed at the same time as the
individual applicants.
[31] I have
no hesitation therefore in finding that the retrenchment of the two
applicants was both procedurally and substantively
unfair. The issue
I have to consider is that of remedy. The retrenchments took place in
2007 and Williams denied there were
any positions available at
the respondent. He testified that full time staff had dramatically
shrunk since 2007 and that interns
were used in addition to full-time
staff. His evidence in this regard lack detail and corroboration and
did not persuade the court
that reinstatement and or re-employment
were not reasonably practicable. The second and third applicants both
seek the primary
remedy of reinstatement. One to be with her children
in her hometown and the other to be employed again, having only been
employed
for one year since the retrenchments.
[32]
The Constitutional Court has stated in
Equity
Aviation Services (Pty) Ltd v Commission for Conciliation, Mediation
B & Arbitration & others
[1]
,
that when it comes to the retrospectivity of any award of
reinstatement and/or any backpay relating to such an award of
reinstatement, the arbitrator or the judge hearing the matter
exercises a discretion in terms of s 193(1):
“
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. As the language of s
193(1)(a) indicates, the extent of retrospectivity
is dependent upon
the exercise of a discretion by the court or arbitrator. The only
limitation in this regard is that the reinstatement
cannot be fixed
at a date earlier than the actual date of the dismissal.”
[33] As to
the exercise of the above discretion, the court said that:
“
It
is trite law that the power to grant a remedy in s 193 is by its
nature discretionary and that the discretion must be exercised
judicially by a court that enjoys that unfettered discretion.”
[2]
[34] Taking
into account the lengthy period of time since the retrenchments, the
personal circumstances of the individual applicants
and their
employment history since their dismissal, I am of the view that the
primary remedy of reinstatement should be ordered
with a limitation
as to retrospectivity. I therefore make the following order:
Order
1. The
dismissals of the second and third applicants were procedurally and
substantively unfair.
2. The
second applicant Ms Veronica Mokgosi is hereby reinstated into the
employ of the respondent into the same or a similar position
as she
held at the time of her dismissal with effect from 1 September 2015.
3. The
respondent is to pay backpay in an amount equivalent to 4 years’
salary to the second applicant, being an amount of
R2,308.84 X 48 =
R110, 824.32 within 10 calendar days of this order, being the 28
August 2015
4. The
third applicant Ms Coleen-Ann Joubert is hereby reinstated into the
employ of the respondent into the same or a similar position
as she
held at the time of her dismissal with effect from 1 September 2015.
5. The
respondent is to pay back pay in an amount equivalent to 18 months of
her salary to the third, being an amount of 2,540.34
x18 = R45,726.12
within 10 calendar days of this order, being the 28 August 2015.
6.
Respondent is to pay the costs.
________________________
H. Rabkin-Naicker
Judge of the Labour Court
Appearances
:
For the
Applicants: Ponoane Attorneys
For the
Respondent: Spamer-Triebel Attorneys
[1]
(2008) 29 ILJ 2507 (CC) at para 36
[2]
At para 48