About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Durban Labour Court, Durban
SAFLII
>>
Databases
>>
South Africa: Durban Labour Court, Durban
>>
2015
>>
[2015] ZALCD 68
|
|
Stander v Services Seta-Education and Training Authority (D214/13) [2015] ZALCD 68 (5 November 2015)
IN
THE LABOUR COURT OF SOUTH AFRICA
(HELD AT DURBAN)
Reportable
Case Number:
D214/13
In
the matter between:
AN-SORIETA
STANDER
Applicant
and
SERVICES SETA-EDUCATION
AND TRAINING
AUTHORITY
Respondent
Heard: 25 March 2015
Delivered: 05 November 2015.
Summary: Claim
of unfair dismissal – retrenchment - w
hen
an employer embarks on a retrenchment exercise it is implicit in
terms of section 189(2) that the employer
should
also take substantive steps to avoid a dismissal – job transfer
-
negative
effect of the transfer of the post has materially been mitigated by
the failure of the applicant to accept the reasonable
alternative job
offer.
JUDGMENT
CELE
J
Introduction
[1]
This is a claim in terms of section 189 of the Labour Relations
Act
[1]
of unfair dismissal of the Applicant by the Respondent occasioned by
the operational requirements of the Respondent.
The
issue for determination is whether the Applicant was dismissed for
substantively fair reasons and in a procedurally fair manner.
If the
result of this enquiry is that the dismissal was unfair, the issue of
appropriate remedy will arise. In this respect, the
Court must
consider the issue of reinstatement or compensation. The Respondent
opposed the claim with a contention that the dismissal
of the
Applicant was for substantively fair reason and was carried out
fairly. It was said that the Applicant was not entitled
to any
compensation in light of the fact that she unreasonably refused an
offer, made in Court, of financial compensation, equivalent
to six
months and that she was in fact paid in excess of the payment allowed
under the Basic Conditions of Employment Act.
[2]
Factual
Background
[2]
The Respondent is the Services Sector Education Training Authority.
It is one several sector education training authorities
established
in terms of the Skills Development Act
[3]
.
The scope of the Respondent is vast and incorporates every other
sector which is not covered by the other sector education training
authorities. The Respondent had various offices throughout the
country. One of its offices was in Durban, where the events leading
to this trial occurred as the Applicant was based there. She first
joined the Respondent, in 2007, as a Secretary, on a fixed term
contract. At the times material to this matter, she had been promoted
to the role of Divisional Coordinator. On 18 March 2012 her
fixed
term employment contract was extended until 31 March 2016.
[3]
The
Respondent was placed under administration by the Minister of Higher
Education, in April 2011. Consequent upon this Dr Sihle
Moon was
appointed as an Administrator. One of the decisions taken by Dr Moon
was the restructuring of the Respondent. This entailed
the adoption
of a new employment structure and the population of that structure.
The employees were then matched according to the
new structure. The
Applicant’s substantive position was in the projects office,
which was initially located in Durban. As
a result of the
restructuring, the decision was taken to move her position to
Johannesburg. Dr Moon appointed consultants to assist
him to prepare
a new organizational structure.
[4]
The Respondent consulted with trade unions operating in its
workplace, the United Association of South Africa (“UASA”)
and the National Education Health and Allied Workers Union
(“NEHAWU”). The outcome of this consultation was an
agreement
in certain principles pertaining to the new structure and
its population. The Respondent prepared a leaflet and circulated it
among
staff and the agreement reached with the Unions was recorded in
the follows terms:
“
Migration
Process
A
committee comprising of representatives from UASA, Nehawu, HR and
Management have been hard at work with regards to the migration
process. The members have been responsible for migrating staff from
the old structure into the new structure. The process was as
follows
Process
1
·
In
migrating staff the committee looked at existing appointments that
are on the company records as per individual contracts of
employment
and existing old structure.
·
As
a starting point, the committee
identified
positions that existed within the old structure and were also
reflected in the new structure
.
In these instances staff members were moved across as is into the new
structure. These were straight forward logical matches.
For instance,
a secretary in the old structure would move to a secretary position
in the new structures.
So
for all intents and purposes nothing has changed for this group of
employees. The HR department will then be sending them letters
confirming that they still hold the same positions.
”
[5]
The leaflet also stated that:
“
The
writing of the job descriptions and job grading is in progress as
these are the two key HR activities outstanding OD project.
The
consultants assisting with this project are progressing well and a
number of draft job descriptions have been completed.
…
The
job grading committee made up of representatives of UASA. Nehawu and
Management have undergone job grading training and will
be grading
all non-management jobs commencing in June…
On
completion of the job evaluation process, we will be issuing
individual letters confirming job title, job grade and salary.”
[6]
The Projects Office was relocated to Johannesburg, under the office
of the Chief Executive Officer. The reasons for this were
stated to
be two fold. The first was to improve efficiency in that most
functions, such as human resources and finance were located
at the
Head office, in Johannesburg and it was not making operational sense
that the project office was run from Durban, which
was a regional
office. Secondly, the projects function was a national, rather than a
regional function. As most functions were
located in the national
office, it was important that the projects office was also moved to
Johannesburg. According to the Respondent
the proposal to move the
Projects Office was also discussed at the committee comprising
management and trade unions. They agreed
to the relocation of the
office. Once the agreement was reached, the parties then went about
the execution of the decision.
[7]
The creation of the organizational structure was completed in April
2012 and the Respondent disseminated it across the staff.
There is an
issue whether all staff received the new organizational structure.
The Applicant said that she received a copy of two
pages, reflecting
the structure at the Johannesburg office and the structure at the
Durban office, in about April or May 2012.There
is also an issue
whether the Applicant was offered her position in the new structure
after it was moved to Johannesburg. But it
is common cause that she
was offered a position in Durban, by means of a letter from the
Respondent dated 18 May 2012 which read:
“
Confirmation
of migration to the new organizational structure
Dear
Anso Stander
We
have pleasure in confirming your migration into the new SSETA
organizational structure as an Officer: Region in the KwaZulu Natal
Provincial Office with effect from 1 June 2012. All your current
benefits and conditions of employment will remain unchanged. Please
note that your job title is subject to change based on the outcome of
the job evaluation process.
We
thank you for your patience during OD process and we look forward to
a continued fruitful and mutually rewarding experience.
”
[8]
The Human Resources Manager for the Respondent at the relevant time
was Mr Sibongiseni Gumede since January 2012. At the time
of the
trial he was no longer employed by the Respondent. He co-signed the
letter of 18 May 2012 together with Dr Moon. The Applicant
responded
to this letter on 29 May 2012 by stating that:
“
Acknowledgement
of receipt of migration letter
This
letter serves as an acknowledgement of receipt of the migration
letter dated 18 May 2012, and addressed to myself A Stander.
However,
kindly note I
do not accept
the lower position I was migrated to, as an “Officer” in
the regional office.”
[9]
Mr Gumede responded by an electronic mail to the letter of 29 May
2012 and the Applicant reciprocated by a letter of 31 May
2012,
saying that:
“
1.
Based on the new organizational organogram that was (that was only
emailed to head
office staff and managers, regional staff was
excluded) which is now in circulation amongst all staff, it is
apparent that management
proposed that I be transferred out of my
current position as a ‘National Project Management
Co-coordinator’ (positioned
in a National division) to a more
junior position as a ‘regional officer’. With respect to
the proposed transfer, effectively,
a significant demotion that
seriously affects my present status in the organization and also
presents serious prejudice to my future
prospects and my future in
the organization, which for obvious reasons I cannot accept.
2.
Based on the new organizational organogram in circulation it would
appear that
I have been replaced by either ‘Danier Harmsen’
or ‘Siphiwo Ndawo’ of which at least one of the
abovementioned
colleagues, are effectively junior to me. Once
again I am sure that you would understand, under the circumstances
that I consider
my proposed demotion unacceptable and therefore
reject such proposal outright.”
[10]
The evaluation process which was mentioned in the letter of 18 May
2012, conducted by a committee made up of trade unions and
management, was undertaken. The applicant was thereafter informed
that her position title would be called “Administrator”
and that it would be graded “B Upper”. At the relevant
time the Applicant was a member of the Trade Union.
A
meeting was arranged with the Administrator to address concerns of
the Applicant. It was scheduled to take place by way of a telephonic
conference on 16 July 2012. The conference did not proceed as the
Administrator cut the call when he realized that the Applicant
had
brought along to the telephonic conference meeting a labour
arbitrator, Mr Dave Manthey as her representative. On 27 July 2012
the Respondent sent a letter to the Applicant in which it set out the
negotiation process and confirm that the process was still
at level
two, and it proposed that a further meeting be set up with Dr Moon.
[11]
On 27 July 2012 the Applicant sent an electronic mail to Mr Gumede
asking him to furnish her with a copy of the agreement entered
into
between SSETS and the Unions. The response of 30 July 2012 informed
the Applicant that the agreement was verbal as it was
not reduced to
writing. She was advised to confirm that information with the union
she was a member of. On 13 August 2012 the Applicant
sent yet another
electronic mail to Mr Gumede asking if she would receive her salary
in that month. She also asked to be advised
in writing of what her
position within the services of the Respondent would be. Mr Gumede
couched his response in the following
terms:
“
Yes
you will be receiving your salary this month. As indicated you have
exhausted your annual and sick leave and we will to talk
about this
on your return.
Following
the job evaluation process the position that is offered to you is
Administrator: Region. Your current total cost to company
salary will
remain as is.
Please
confirm your response on this matter.
”
[12]
After some 40 minutes Mr Gumede sent another electronic mail to the
Applicant saying that:
“
We
are waiting your response on our email dated 27
th
July 2012 which is attached to this correspondence. See attached
extract from that mail.
As
a way forward we would like to reschedule another meeting with you.
It could be a teleconference, you could come to Johannesburg
or Dr
Moon can see you when he does his regional visits in two weeks’
time.
Kindly
advise what you intend doing.
”
[13]
Still on 14 August 2012 the Applicant responded to Mr Gumede by
electronic mail in which she said that:
“
As
per my previous correspondence to you in writing I have declined the
position in the regional office. And as per your email I
am still
awaiting your response to my letter in writing.
”
[14]
A further meeting took
place on 30 August 2012 at the Respondent’s Durban office
attended by Mr Gumede and the Applicant.
Dr Moon was not in
attendance as promised in the Respondent’s letter dated 27 July
2012. At this meeting the office files
which had been attended to by
the Applicant and had been removed from the Applicant were identified
to Mr Gumede. There is a dispute
on whether the Applicant’s
placement issues were discussed in that meeting and in the absence
the Administrator.
[15]
What further complicated the i
ssues
between the parties was that the Applicant reported that she was
unwell with the result that she was away from the work place
during
the period 16 June 2012 to 18 August 2012. She received communication
from the Respondent on this issue thus:
1.
On 11 May 2012, the Applicant was informed by Ms Francina Kanyane
that she had exhausted
her annual and sick leave. And that she would
not be allowed to take further paid leave. Any leave taken would be
unpaid leave.
2.
On
23 July 2012 the Applicant was also informed that she did not have
additional sick or annual leave available and that her absence
would
be regarded as unpaid leave in terms of policy.
3.
On
14 August 2012 the Applicant was also informed that her sick and
annual leave was exhausted.
[16]
Another complicating factor was that the Applicant stopped coming to
the office, saying that her files had been taken away
from her and
there was no work for her to do. The Applicant’s substantive
position had moved to Johannesburg where projects
were being carried
out. The Applicant had refused to accept the position offered to her
in Durban of Officer Region as such she
could not be given a “job
description”.
[17]
On 5 October 2012 the
Applicant received a retrenchment letter. On 17 October 2012 the
Applicant responded to the retrenchment letter
by confirming that she
remained committed to a consultation process, indicating an interest
in the transfer to the Johannesburg
office. The Respondent declined
her request for a further consultation on 30 October 2012, recording
that her last day of service
was 31 October 2012. Her
colleagues were informed that her services had been terminated
following failure between parties
to reach agreement on migration.
Evidence
[18]
That the Applicant was dismissed by the Respondent for its
operational requirements remained common cause between the parties.
The Respondent had then to prove that a fair reason for dismissal
underpinned its conduct which was carried out fairly. Mr Gumede
was
the only witness called by the Respondent and the Applicant was the
only witness in her case.
[19]
Mr Gumede testified that he had a meeting with the Applicant either
in April or May 2012 but that he could not remember the
exact date.
It was in that meeting that a position in the national office in
Johannesburg was offered to her.
The
position would have been a lateral transfer from Durban to
Johannesburg.
He said
that she indicated that she would not be interested in the
Johannesburg position at that time as her husband, a military
pilot,
would not have been able to relocate. No records or any written
communications confirming this meeting were however kept.
The
Applicant denied that this meeting ever took place and contended that
the first time she was aware of the position in Johannesburg
was when
she received a retrenchment letter in October 2012. She said that if
asked to move she would have agreed as her husband
would relocate to
Waterkloof base in Pretoria. Mr Gumede testified that he had another
meeting with the Applicant in the Durban
office in August 2012 when
he made use of the opportunity to address her apparent
misunderstanding of the process. He denied that
the issue of
discussion was limited to the files, saying that he had come down to
discuss the concerns of the Applicant.
[20]
Mr Gumede maintained that the organizational structure was circulated
to all offices. The Applicant denied receiving a complete
copy of the
structure. She said that she received from colleagues a two page
document and that in terms of it her position was
in Durban and not
in Johannesburg.
[21]
In her evidence the Applicant said that she had declined the position
in the Durban Regional office because accepting it would
have
amounted to accepting a demotion in that she would be required to
report to Ms Nerisa Beecum, who had previously reported
to her. She
also said that the position would carry a lower grade compared to her
previous position of Divisional Coordinator.
Although the Applicant’s
previous position as Coordinator was graded C, the new position was
graded “B Upper”.
[22]
Mr Gumede could not
confirm in what manner the Applicant was informed that there was a
retrenchment process underway which could
have resulted in a
dismissal in the event relocation was not accepted. The Applicant
insisted that she only became aware that she
might be dismissed if
she failed to accept a re-deployment when the retrenchment letter
dated 5 October 2012 reached her.
[23]
Both parties presented written submissions with the Applicant praying
for a finding that her dismissal was substantively and
procedurally
unfair and the Respondent contending that the probabilities favoured
its case and therefore that the claim ought to
be dismissed.
Evaluation
[24]
Sections 185
and 188 of the Act protect employees against unfair dismissal.
Section 185 of the Act
accords every employee a right not to be unfairly dismissed while
section 188 defines
a dismissal which is unfair, as including a dismissal where the
employer fails to comply with a fair procedure.
T
he
Respondent averred that it was due to its operational requirements
that it dismissed the Applicant. The term “operational
requirements” is defined in section 213 of the LRA to mean
“requirements based on the economic, technological, structural
or similar needs of an employer
.”
This definition is also contained in the Code of Good Practice on
Operational Requirements passed under the Act, which provides
this
definition of operational requirements:
“
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 which 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.
”
[25]
The change of structure which took place at the Respondent qualified
as an operational reason. The reason behind the introduction
of the
structure was to attain optimum use of resources and to streamline
activities by consolidating head office activities, including
the
Projects office. This much remained unchallenged throughout the
trial. It is perfectly rational for an employer to restructure
its
operations in order to achieve operational efficiency. The mitigating
factor is that this process was carried through with
the involvement
of the trade unions operating in the workplace. The real challenge in
this matter lies in how the Respondent went
about populating the new
organizational structure.
[26]
When an employer embarks on a retrenchment exercise it is implicit in
terms of section 189(2) that the employer, apart from
taking part in
formal consultations on the aspects set out in this section, should
also take substantive steps on its own initiative
to take appropriate
measures so as to avoid a dismissal,
[4]
hence the meaningful joint consensus seeking process. Therefore where
there are reasonable prospects of avoiding dismissal steps
should be
taken to salvage the loss of employment. It is now trite that
retrenchment must be a measure of last resort. Finding
a solution
should require no special expertise as it should be a matter of
common sense. The court must objectively look at the
procedure that
was followed and determine if dismissal could not be avoided.
[5]
[27]
The Respondent complied with the agreement it reached with the trade
unions in the creation of its new organizational structure.
The
migration process had stages depending on whether the positions dealt
with were prior existing or new. These stages for new
positions or
just changes, such as relocation, left room for relief in terms of
the Act for any disgruntled employee. The migration
process was
therefore a distinct exercise from any relief in terms of the Act.
The migration process was never intended to replace
or override the
peremptory provisions of the Act, such as a compliance with the
provisions of section 189 (3) of the Act. It could
not do so.
[28]
It remained common cause in this matter that the Respondent never
issued the peremptory written notice in terms of section
189 (3) of
the Act so as to kick-start the retrenchment process. This failure
was responsible for confusion which prevailed throughout
the process
that unfolded, ultimately leading to the dismissal of the Applicant.
Section 189 (1) (d) envisages a consultation process
between the
employer and an employee likely to be affected by the proposed
dismissal or his or her representative nominated for
that purpose.
Except to say the process was still internal, no evidence was ever
produced in the trial to show why the Applicant’s
nominated
representative, Mr Dave Manthey, could not participate in the
consultation process.
[6]
The refusal to accept Mr Manthey was the second step by the
Respondent in compromising the integrity of the consultation process,
assuming for a moment that this was the first consultation step.
[29]
The process was complicated by the fact that once t
he
evaluation process mentioned in the letter of 18 May 2012 was
conducted the Applicant was informed that her position title would
be
called “Administrator” and that it would be graded “B
Upper”. But no written notification was made to
her that she
was migrated to Johannesburg as the information on the leaflet
promised. This would have dispelled any doubt about
the initial
position offered to her. Further, while the Respondent maintained
that it circulated the new organogram to its entire
staff, no such
proof was produced during the trial. There is thus no reason to
reject the evidence of the Applicant that she received
from some
colleagues a two paged document which was an incomplete organogram.
[30]
When the Respondent scheduled a consultation meeting with the
Applicant to be held in Durban, the plan was to have Dr Moon
in
attendance. He was the decision maker. For unknown reasons he never
made it and further doubts exist of what took place as no
records
were kept of the meeting. In scheduling this meeting the Respondent
had o
n 27 July 2012 sent
a letter to the Applicant confirming that the process was still at
level two. It is not clear if the Respondent
understood this to be
level two of the migration process or that it had progressed to a
retrenchment stage.
[31]
As far late as August 2012 parties were not clear about progress in
the position of the Applicant. On 13 August 2012 the Applicant
sent
an electronic mail to Mr Gumede asking if she would receive her
salary in that month. She also asked to be advised in writing
of what
her position within the services of the Respondent was. The response
told her she would be paid and further said that following
the job
evaluation process, the position that was offered to her was
Administrator: Region. Her total cost to company salary would
remain
unchanged. It said nothing about the stage how far the consultation
progress was, any time frames within which the job-offer
could be
accepted and the consequences of not accepting it. The respondent’s
wrong doings in the retrenchment process are
mainly procedural in
nature.
[32]
One thing clear though about this letter from Mr Gumede was that her
total cost to the company salary would remain unchanged.
This should
have dispelled any anguish on the Applicant that the migration
process demoted her work status. That she would be required
to report
to Ms Nerisa Beecum, who had previously reported to her turned out to
be unfounded. In the old position she collated
information from the
region as a representative of the national office and forwarded it to
the national office in Johannesburg.
This did not make her senior to
all staff in the regional office. She also said that the position
would carry a lower grade compared
to her previous position of
Divisional Coordinator. Although the Applicant’s previous
position as Coordinator was graded
C, the new position was graded “B
Upper”. The position offered to her in Durban was therefore in
par with or at worse,
almost in par with that of the Divisional
Coordinator. It was the closest fit to her previous position. She
would be based in the
same establishment thus obviating the negative
consequences attendant to a transfer.
[33]
From 13 August 2012 to 5 October 2012 when the Applicant received a
letter of retrenchment she had been given sufficient time
to ponder
on her position. By this time she was back from her sick leave. She
really had no work to do and so cannot be heard to
have had no time
to reflect. On substantive fairness the Respondent did not want to
dismiss the Applicant as a result of the migration
process. It
offered her a reasonable alternative job offer. No evidence led by
the Applicant justified her rejection of the alternative
employment,
which offer would have taken care of the remaining fixed term
employment contract. The negative effect of the transfer
of the post
of the Applicant to Johannesburg has thus been materially mitigated
by the failure of the Applicant to accept the reasonable
alternative
job offer. Her dismissal due to the operational requirements of the
Respondent has consequently not been shown to have
been unfair.
[34]
At the commencement of the trial, Mr Ngcukaitobi for the Respondent
places it on record that an offer of financial compensation
equivalent to six months of her salary was made to the Applicant. Mr
van Lingen appearing for the Applicant confirmed the rejection
of
that offer. Mr Ngcukaitobi said that the Applicant had been paid by
the Respondent in excess of the payment allowed under the
Basic
Conditions of Employment Act.
[7]
[35]
In respect of the severance pay claim, the law is trite. W
here
an employer arranged alternative employment for an employee and the
employee rejected the alternative employment for no sound
reason,
severance pay should not be paid to such employee.
[8]
In
Astrapak
Manufacturing Holdings (Pty) Ltd t/a East Rand Plastics v Chemical
Energy, Paper, Printing, and Allied Workers Union,
[9]
Court held per
Davis JA that
:
“
Assuming
in favour of the respondent’s members, and that their failure
to raise objections to the alternative offer was not
definitive of
the resolution of the dispute, the reasoning adopted in Irvin and
Johnson Ltd, supra regarding s 41(4), as applied
to the present
dispute, is dispositive: An employee, who rejects an employer’s
offer of reasonable employment for no sound
reason cannot then claim
severance pay. If an employer such as the appellant offers an
increased amount or, at the very least,
the same amount, viewed
within the context of the specific conditions of employment that
cannot on any reasonable basis be taken
as more onerous than that
which existed prior to the retrenchment exercise, and if an employee
refuses to accept such an offer,
that refusal is then unreasonable
.
[36]
In consequence, I find that the dismissal of the Applicant by the
Respondent on its operational requirements was substantively
fair but
procedurally unfair. I also find that the Applicant is not entitled
to any severance pay and I proceed to issue the following
order:
1.
The
Respondent is ordered to compensate the Applicant in an amount
equivalent to three months of the salary she earned on the date
of
her dismissal, due to her dismissal being procedurally unfair;
2.
Such
payment is to be made within 14 days of the date of this order;
3.
No
costs order is made.
_____
Cele J
Judge of the Labour Court of
SouthAfrica.
APPEARANCES:
For
the Applicant: Mr A van Lingen
Instructed
by Randles Inc.
For
the respondent: T Ngcukaitobi
Instructed
by Maserumule Inc.
[1]
Act Number 66 of 1995 hereafter
referred to as the Act.
[2]
Act
Number 73 of 1997 (“the BCEA”)
[3]
Act Number 97 of
1998
[4]
See
SACCAWU
v Afrox Ltd
(1999) 20 ILJ
1718 (LAC).
[5]
See
CWIU
v Algorax
(2003) 24 ILJ
1917 (LAC).
[6]
See
Workers
Labour Consultants obo Petros Khoza v Zero Appliances
CC [1999] 11 BLLR 1225 (LC).
[7]
Act Number 75 of 1997.
[8]
Irvin and
Johnson Ltd v CCMA
(2006)
27 ILJ 935 (LAC).
[9]
(2014) 35 ILJ 140
(LAC).