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[2016] ZALCJHB 48
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Senne and Others v Fleet Africa (Pty) Ltd (J2888/14) [2016] ZALCJHB 48; (2016) 37 ILJ 1216 (LC) (12 February 2016)
THE
LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG
JUDGMENT
Reportable
Case
No: J2888/14
In
the matter between:
JUNIA SENNE
First Applicant
LERATO MPOFU
Second Applicant
LUCAS JOHANNES
BURGER
Third Applicant
ALEX VAN ZYL
Fourth Applicant
and
FLEET AFRICA
(PTY) LTD
Respondent
Heard:
6 - 9 October
2015
Delivered:
12 February 2016
Summary:
Voluntary retrenchment settlement agreements preceded by expiry of
“second generation outsourcing
agreement” –
respondent attempting to resile from agreements on the basis that,
when same were concluded, applicants
were not employees of respondent
– Section 197 of LRA providing that, pursuant to transfer of a
business as a going concern,
certain legal consequences flow from the
transfer – Section 197 stipulating that one legal consequence
is the substitution
of the new employer in the place of the old
employer but not stipulating when that occurs – that legal
consequence is a question
of fact to be determined on a case-by-case
basis – applicants entitled to declaratory orders that
agreements are valid and
binding.
JUDGMENT
BOYCE
AJ
Introduction
[1]
The genesis of this matter, an action in which the applicants seek,
inter alia
, orders that voluntary retrenchment settlement
agreements (“the retrenchment agreements”), concluded
between the applicants
and the respondent, are valid and binding, is
the expiry of a so-called “second generation outsourcing
agreement” (sometimes
also referred to as a “second
outsourcing agreement”). The matter, however,
had very little to do
with the aforementioned “second
generation outsourcing agreement”/”second outsourcing
agreement”, and the
primary issue concerned the timing of the
substitution of the new employer (“the City of Johannesburg”)
in the place
of the old employer (“the respondent”), as
contemplated by
Section 197
(2) (a) of the
Labour Relations Act 66 of
1995
, as amended (“the LRA”).
[2]
The essence of the respondent’s defense to the applicants’
claims was that, at the time of the conclusion of the
retrenchment
agreements:
2.1
There had been a transfer of a business as a going concern, the
subject matter of the “second
generation outsourcing
agreement”, in terms of
Section 197
of the LRA;
2.2
Upon the transfer of the business as a going concern, the City of
Johannesburg was automatically
substituted in the place of the
respondent (the old employer) in terms of
Section 197
(2) (a) of the
LRA;
2.3
The respondent was, therefore, not the employer of the applicants
when the retrenchment
agreements were concluded and the retrenchment
agreements were, consequently, invalid and unenforceable.
Background
[3]
The first applicant, Junior Senne (Senne), was employed by the
respondent from 1 July 2008, while the second applicant, Lerato
Mpofu
(Mpofu), was employed by the respondent from 5 May 2003.
The third applicant, Lucas Johannes Burger (Burger),
and the fourth
applicant, Alex van Zyl (van Zyl), were employed by the City of
Johannesburg from, respectively, May 1969 and 1
January 1986.
On 1 April 2001, pursuant to the transfer of a business as a going
concern in terms of
Section 197
if the LRA, the employment contracts
of Burger and van Zyl were transferred from the City of Johannesburg
to an entity called Super
Fleet Power Plus Performance, and then to
the respondent.
[4]
The City of Johannesburg concluded an outsourcing agreement with the
respondent, and then with an entity called Phakisaworld
Fleet
Services (“PFS”), in terms of which vehicles of the City
of Johannesburg were serviced and maintained.
When the
outsourcing agreement expired, the business of servicing and
maintaining the vehicles of the City of Johannesburg was
transferred,
in terms of
Section 197
of the LRA, to the City of Johannesburg, and
this transfer constituted the “second generation outsourcing
agreement”/”second
outsourcing agreement” referred
to in paragraph [1] supra.
[5]
It was common cause that the outsourcing agreement which had been
concluded between the City of Johannesburg and the respondent
expired
on 28 February 2012. Subsequent to the expiry of the
aforementioned outsourcing agreement, an arbitration (before
Advocate
Alistair Franklin SC) and an appeal arbitration (before Advocates
John Myburgh SC, Andrew Redding SC and Anton Myburgh
SC) took place
by agreement between the parties.
[6]
Pursuant to the abovementioned arbitration, Advocate Franklin SC
granted an order in the following terms:
6.1
Declaring that the transfer of assets, rights and obligations from
the respondent (Fleet
Africa (Pty) Ltd) to the City of Johannesburg
on 1 March 2012, on the expiry of the “second generation
outsourcing agreement”/”second
outsourcing agreement”
(which had been concluded between the respondent and the City of
Johannesburg), was a transfer of
a business as a going concern in
terms of
Section 197
of the LRA;
6.2
Declaring that the date of transfer of the business as a going
concern was 1 March 2012;
6.3
Ordering the City of Johannesburg to comply with its obligations to
the employees of the
transferred business in terms of
Section 197
of
the LRA.
[7]
On 29 May 2012 the abovementioned appeal tribunal dismissed the
appeal which had been launched by the City of Johannesburg and,
in
dismissing the appeal, held,
inter alia
, that:
7.1
Upon the expiry of the “second generation outsourcing
agreement”/”second
outsourcing agreement”, the
business in question (fleet management services) was transferred as a
business, or part of
business, as contemplated by
Section 197
of the LRA;
7.2
The servicing and maintenance of vehicles of the City of Johannesburg
(which had been the
business operated by the respondent and, at the
time of the arbitration, by PFS) continued as an “identifiable
economic entity”,
and the business was, therefore, transferred
as a going concern as contemplated by
section 197
of the LRA;
7.3
The employment contracts of employees who were involved with the
servicing and maintenance
of vehicles of the City of Johannesburg
were automatically transferred as a result of the transfer of the
business in question;
7.4
Applying the principles set out in
Aviation Union of SA and
Another v SA Airways (Pty) Ltd and Others (2011) 32 ILJ 2861 (CC)
,
the appeal tribunal held that:
a)
The initial transaction to the respondent was clearly a transfer of a
business
as a going concern;
b)
The economic entity that was transferred comprised the rights and
obligations
to service and maintain the vehicles of the City of
Johannesburg;
c)
On termination of the “Second outsourcing agreement” with
the respondent,
the City of Johannesburg did not divest itself of the
requirement for vehicles and the concomitant requirement for
servicing and
maintaining those vehicles;
d)
The maintaining and servicing of vehicles of the City of Johannesburg
constituted
an “identifiable economic entity”;
e)
The termination of the “second outsourcing agreement”,
consequently,
constituted a transfer of a business as a going
concern, as contemplated by
Section 197
of the LRA.
The
Pleadings
[8]
The statement of case
: It was common cause that
the four applicants concluded retrenchment agreements with the
respondent on, respectively,
7 May 2012 (Senne), 15 May 2012 (Mpofu),
14 May 2012 (Burger) and 18 May 2012 (van Zyl), and the essential
averments made in the
statement of case are
:
1)
“To date hereof the respondent has failed to honour the terms
of the settlement
agreement and its failure aforesaid can be seen to
be a repudiation of the settlement agreement, which repudiation the
applicants
do not accept”;
2)
“In the abovestated premises the applicants maintain that
factually it
has been established that a valid and binding
retrenchment agreement, the settlement agreement, has been concluded
between the
respondent and the applicants and as such the applicants
are entitled to payment of their voluntary retrenchment packages”;
[9]
The statement of defense
: The respondent resisted the claim
for the declaratory relief sought by the applicants, viz. that the
retrenchment agreements are
valid and binding, and, in that regard,
raised the following 5 points
in limine:
1)
“POINT
IN LIMINE
ONE – EXCLUSION OF
THE THIRD AND FOURTH RESPONDENT
(sic)
FROM THIS APPLICATION BY
VIRTUE OF ANY VOLUNTARY RETRENCHMENT AGREEMENT BEING RENDERED VOID
FOR NO-COMPLIANCE WITH SECTION 197 (6)
OF THE ACT”;
2)
“JURISDICTIONAL POINT
IN LIMINE
TWO – AGREEMENTS
VOID BECAUSE THEY WERE CONCLUDED WITHOUT AUTHORITY”;
3)
“POINT
IN LIMINE
THREE – VOLUNTARY RETRENCHMENT
SETTTLEMENT AGREEMENTS VOID BECAUSE NO EMPLOYMENT RELATIONSHIP IN
EXISTENCE BETWEEN THE PARTIES
AT THE MATERIAL TIME OF THE CONCLUSION
OF VOLUNTARY RETRENCHMENT AGREEMENTS AND THE AGREEMENTS ARE VITIATED
BECAUSE OF COMMON MISTAKE”;
4)
“POINT
IN LIMINE
FOUR – AGREEMENTS
NOT ENFORCEABLE BECAUSE THE APPLICANST
(sic)
HAVE BREACHED THE
AGREEMENTS OR HAVE ABANDONED THE AGREEMENTS BY NOT ENFORCING THEM AND
BY ACQUIESING IN THE TRANSFER”;
5)
“POINT
IN LIMINE
FIVE – JURISDICTION OF THE ABOVE
HONOURABLE COURT”.
The
Evidence Adduced during the Trial
[10]
The respondent did not persist with the abovementioned “point
in limine
one” and the evidence summarized herein (which
was, in the main, common cause, alternatively, not disputed by the
respondent)
has, consequently, been limited to the two main issues
which fell to be determined, viz.:
10.1
Whether the retrenchment agreements are void because, at the time of
the conclusion thereof, the respondent
was not the employer of the
applicants;
10.2
Whether the applicants waived and/or abandoned their right to enforce
the retrenchment agreements.
[11]
The evidence of van Zyl (the fourth applicant),
apropos
the
abovementioned two issues, disclosed the following:
11.1
He signed a retrenchment agreement with the respondent on 18 May
2012;
11.2
In terms of the retrenchment agreement aforementioned:
a)
It was in full and final settlement of,
inter alia
, any
entitlement to a transfer to the City of Johannesburg in terms of
Section 197 of the LRA;
b)
The respondent agreed to pay him an amount of R435 325.75;
c)
Subsequent to the conclusion of the retrenchment agreement:
i)
He continued working for the respondent, as a diesel mechanic, until
30
September 2012;
ii)
He was paid his salary by the respondent until 30 September 2012;
iii)
His employment with the City of Johannesburg commenced on 1 October
2012 and his
salary was paid by the City of Johannesburg from 1
October 2012;
iv)
During a meeting on 16 May 2012 the respondent’s attorney,
William Berry, explained
to the respondent’s employees,
including van Zyl, that, in order for the respondent to have
certainty, those employees who
had been involved with the contract
with the City of Johannesburg (to service and maintain its vehicles)
could receive a “double
benefit”, which would be the
conclusion of a retrenchment agreement with the respondent and the
transfer of their employment
contracts to the City of Johannesburg;
v)
The applicants instituted action against the respondent, to enforce
their retrenchment
agreements, after the Labour Court (per Rawat AJ),
in the matter of
Erica Nijs v Fleet Africa (Pty) Ltd and City of
Johannesburg (case no. J2115/12)
, granted an order declaring that
a valid and binding settlement agreement was concluded between Erica
Nijs and Fleet Africa (Pty)
Ltd during May 2012.
[12]
The evidence of Burger (the third applicant),
apropos
the two
main issues to be determined (vide paragraph [10] supra) disclosed
the following:
12.1
He signed a retrenchment agreement with the respondent on 14 May
2012;
12.2
In terms of the retrenchment agreement aforementioned:
a)
It was in full and final settlement of,
inter alia
, any
entitlement to a transfer to the City of Johannesburg in terms of
Section 197 of the LRA;
b)
The respondent agreed to pay him an amount of R944 772.08;
c)
Subsequent to the conclusion of the retrenchment agreement:
i)
He continued working for the respondent until September 2012;
ii)
He was paid his salary by the respondent until 30 September 2012;
iii)
His employment with the City of Johannesburg commenced on 1 October
2012 and his
salary was paid by the City of Johannesburg from 1
October 2012;
iv)
During a meeting on 14 May 2012, the respondent’s attorney,
William Berry, explained
that, in order for the respondent to have
certainty, those employees who had been involved with the contract
with the City of Johannesburg
(to service and maintain its vehicles)
could accept voluntary retrenchments (from the respondent) and still
pursue their rights
against the City of Johannesburg;
v)
The applicants instituted action against the respondent, to enforce
their retrenchment
agreements, after the Labour Court (per Rawat AJ),
in the matter of
Erica Nijs v Fleet Africa (Pty) Ltd and City of
Johannesburg (case no. J2115/12)
, granted an order declaring that
a valid and binding settlement agreement was concluded between Erica
Nijs and Fleet Africa (Pty)
Ltd during May 2012.
[13]
The evidence of Mpofu (the second applicant),
apropos
the two
main issues to be determined (vide paragraph [10] supra) disclosed
the following:
13.1
She signed a retrenchment agreement with the respondent on 15 May
2012;
13.2
In terms of the retrenchment agreement aforementioned:
a)
It was in full and final settlement of,
inter alia
, any
entitlement to a transfer to the City of Johannesburg in terms of
Section 197 of the LRA;
b)
The respondent agreed to pay her an amount of R187 496.13;
c)
Subsequent to the conclusion of the retrenchment agreement:
i)
She continued rendering services to the respondent, as a fleet
administrator,
until 17 May 2012;
ii)
She was paid her salary by the respondent until September 2012;
iii)
She was transferred to the City of Johannesburg, as a fleet
administrator, during
August 2012;
iv)
During a meeting on 20 April 2012 the respondent’s attorney,
William Berry,
explained that, in order for the respondent to have
certainty, those employees who had been involved with the contract
with the
City of Johannesburg (to service and maintain its vehicles)
could, as a “sweetener” or “bonus”, accept
voluntary retrenchments (from the respondent) and still pursue their
rights against the City of Johannesburg;
v)
She initiated action against the respondent, to claim the amount
referred to
in the retrenchment agreement (i.e. R187 496.13)
approximately two years after the conclusion of the retrenchment
agreement because
she knew that she had a period of three years in
which to pursue her rights.
[14]
The evidence of Senne (the first applicant)
apropos
the two
main issues to be determined (vide paragraph [10] supra) disclosed
the following:
14.1
She signed a retrenchment agreement with the respondent on 7 May
2012;
14.2
In terms of the retrenchment agreement aforementioned:
a)
It was in full and final settlement of,
inter alia
, any
entitlement to a transfer to the City of Johannesburg in terms of
Section 197 of the LRA;
b)
The respondent agreed to pay her an amount of R175 280.95;
c)
Subsequent to the conclusion of the retrenchment agreement:
i)
She continued working for the respondent, as a contract manager, at
the
premises of the respondent’s client (Pikitup) until 30 June
2012;
ii)
She was paid her salary by the respondent until 30 September 2012;
iii)
Her employment with the City of Johannesburg, still as a contract
manager at Pikitup,
commenced during January 2013, although her
salary was paid by the City of Johannesburg from October 2012;
iv)
The second applicant (Mpofu) told Senne that the respondent’s
attorney, William
Berry, had said that, by concluding a retrenchment
agreement with the respondent, she would be receiving a “double
bonus”
since she could also be transferred to the City of
Johannesburg;
v)
She initiated action against the respondent, to claim the amount
referred to
in the retrenchment agreement (i.e. R175 280.95)
approximately two years after the conclusion of the retrenchment
agreement because:
*
She knew that she had a period of three years in which to claim the
amount in the retrenchment agreement;
*
She was waiting for the outcome of the application of a colleague
(Erica Nijs) in the Labour Court.
[15]
The evidence of the respondent’s former Human Resources
Director, Nontuthuko Masuku (Masuku),
apropos
the two main
issues to be determined (vide paragraph [10] supra), disclosed the
following:
15.1
At the end of February 2012 the respondent’s fleet management
contract with the City of Johannesburg
expired and it was not
renewed;
15.2
As at the end of February 2012 some 180 to 200 of the respondent’s
employees were working on the aforementioned
fleet management
contract;
15.3
Following the expiry of the respondent’s fleet management
contract with the City of Johannesburg, at
the end of February 2012:
a)
A retrenchment process in terms of Section 189 of the LRA commenced;
b)
The respondent decided to offer all of its employees affected by the
Section
189 process voluntary retrenchment agreements.
15.4
According to Masuku, in her evidence in chief:
a)
The purpose of the voluntary retrenchment agreements was to
accommodate those
employees who would not be transferred back to the
City of Johannesburg;
b)
Employees would not be eligible for voluntary retrenchment agreements
and transfers
back to the City of Johannesburg.
15.5
The applicants were offered voluntary retrenchment agreements at a
time when the respondent was “not
sure” if they would be
transferred back to the City of Johannesburg.
15.6
During cross examination, Masuku:
a)
Admitted that, when the applicants concluded the retrenchment
agreements with
the respondent, they (i.e. the applicants) were
employees of the respondent;
b)
Agreed that the retrenchment agreements were concluded because the
respondent
wanted certainty;
c)
Conceded that the retrenchment agreements are still valid;
d)
Admitted that the respondent offered the applicants the retrenchment
agreements
in exchange for them waiving any entitlement to be
transferred to the City of Johannesburg in terms of Section 197 of
the LRA.
Who
was the applicants’ employer when the retrenchment agreements
were concluded?
[16]
The respondent’s contention that the retrenchment agreements
are void was predicated on the argument that, since the
expiry of the
“second generation outsourcing agreement”/”second
outsourcing agreement” (on 28 February
2012) constituted a
transfer of a business as a going concern, as contemplated by Section
197 of the LRA, the respondent was not
the employer of the applicants
when the retrenchment agreements were concluded.
[17]
This argument by the respondent is devoid of substance quite simply
because the existence or otherwise of an employment relationship
is a
factual question which must be determined on the available evidence
regardless of whether there has been a transfer of a business
as a
going concern in terms of Section 197 of the LRA. Stated
differently, the automatic substitution, in respect of
contracts of
employment, of the new employer in the place of the old employer, is
a consequence which flows, by operation of law,
from the transfer of
a business as a going concern in terms of Section 197 of the LRA, and
the said substitution is a consequence
which is separate and distinct
from the transfer of the business.
[18]
In the matter of
Aviation Union of SA and Another v SA Airways
(Pty) Ltd and Others (2011) 32 ILJ 2861 (CC)
, the Constitutional
Court (per Jafta J) noted that Section 197 (2) of the LRA lists legal
consequences which flow from a transfer
of a business, or part of a
business, as a going concern. One of these consequences
is embodied in Section 197 (2)
(a) of the LRA, viz.: “The
new employer is automatically substituted in the place of the old
employer in respect
of all contracts of employment in existence
immediately before the date of transfer”.
[19]
The fact that the automatic substitution of the new employer in the
place of the old employer, in respect of contracts of employment,
is
but one of the legal consequences which flow from a transfer of a
business in terms of Section 197 of the LRA, was clearly spelt
out by
Jafta J as follows in
Aviation Union of SA v SA Airways, supra, at
2873A – D:
“
The
text of s197 (2) makes it plain that its application is dependent on
the existence of a transfer. It says if a transfer
contemplated in the Section takes place, the legal consequences it
specifies will be activated. For the consequences
to be
triggered, a business must be transferred as a going concern.
Once a transfer of this kind occurs, it automatically
carries with it
all contracts of employment that existed immediately before the
transfer took place. The basket of
what is transferred
consists of the business and employment contracts. This
simultaneous transfer of business and contracts
of employment does
not require any declaration by a court. The employment
contracts are automatically transferred together
with the business.
The person to whom the business is transferred replaces the employer
in terms of those contracts
and assumes all obligations of the
previous employer. He or she also acquires the
contractual rights of the previous
employer.”
[20]
Although Jafta JA did state in the abovementioned extract from the
judgment in
Aviation Union of SA v SA Airways
, that the
“simultaneous transfer of business and contracts of employment
does not require any declaration by a court”,
I did not
understand the learned Judge to be saying that there is always a
simultaneous substitution of the new employer in the
place of the old
employer when a business is transferred in terms of Section 197 of
the LRA. While it is true that,
pursuant to a transfer of
a business in terms of Section 197 of the LRA, “the new
employer is automatically substituted in
the place of the old
employer”, it would seem to me, as a matter of logic, that the
timing of the aforementioned substitution
is something which is
required to be ascertained on the facts of each case. The
word “automatically” in
Section 197 (2) (a) of the LRA
signifies nothing more than that, following a transfer of a business
in terms of Section 197 of
the LRA, the affected employees are not
required to conclude new employment contracts with the new employer,
and it does not follow
that the legal consequence in question, viz.
the substitution of the new employer in the place of the old
employer, always occurs
simultaneously ( viz. at the same time ) with
the transfer of the business from the old employer to the new
employer.
[21]
Section 197 (2) (a) of the LRA, moreover, does not stipulate that the
substitution of the new employer in the place of the
old employer
occurs simultaneously with the transfer of the business as a going
concern and, although that is often the case, there
are obviously
situations where the substitution of the new employer in the place of
the old employer does not factually occur simultaneously
with the
transfer of the business. These situations would include
a case where the old employer, the new employer and
the affected
employees agree that, post the transfer of the business as a going
concern, the affected employees will continue rendering
services to
the old employer for a specified period of time. Another
such situation could occur when, as happened in
the present matter,
the old employer, the new employer and the affected employees were
not aware, and/or disagreed, that a termination
of a “second
generation outsourcing agreement”/”second outsourcing
agreement” constituted a transfer of
a business as a going
concern as contemplated by Section 197 of the LRA.
[22]
Having regard to the aforegoing, and given that the date when the new
employer substitutes the old employer is a factual question,
it is
plain from the evidence adduced during the present trial that the
respondent
in casu
was, indeed, the employer of the applicants
when the retrenchment agreements were concluded. This
finding, which effectively
disposes of points
in limine
two,
three and five in the respondent’s statement of defense (vide
paragraph [9] supra), was reinforced by the following facts
which
were clearly established during the course of the trial:
22.1
After signing a retrenchment agreement with the respondent on 18 May
2012, van Zyl:
a)
Continued working for the respondent as a diesel mechanic until 30
September
2012;
b)
Was paid his salary by the respondent until 30 September 2012;
c)
Commenced his employment with the City of Johannesburg only on 1
October 2012;
d)
Was paid his salary by the City of Johannesburg from 1 October 2012.
22.2
After signing a retrenchment agreement with the respondent on 14 May
2012, Burger:
a)
Continued working for the respondent until September 2012;
b)
Was paid his salary by the respondent until 30 September 2012;
c)
Commenced his employment with the City of Johannesburg only on 1
October 2012;
d)
Was paid his salary by the City of Johannesburg from 1 October 2012.
22.3
After signing a retrenchment agreement with the respondent on 15 May
2012, Mpofu:
a)
Continued working for the respondent, as a fleet administrator, until
17 May
2012;
b)
Was paid her salary by the respondent until September 2012;
c)
Was only transferred to the City of Johannesburg, as a fleet
administrator, during
August 2012.
22.4
After signing a retrenchment agreement with the respondent on 7 May
2012, Senne:
a)
Continued working for the
respondent, as a contract manager at the premises of the
respondent’s
client (Pikitup), until 30 June 2012;
b)
Was paid her salary by the respondent until 30 September 2012;
c)
Commenced her employment with the City of Johannesburg (as a contract
manager
at Pikitup) only during January 2013;
d)
Was paid her salary by the City of Johannesburg from October 2012.
22.5
The unchallenged statements by William Berry, the respondent’s
attorney, during meetings on 20 April
2012, 14 May 2012 and 16 May
2012, that employees who had been involved with the respondent’s
contract with the City of Johannesburg
(to service and maintain its
vehicles) could conclude retrenchment agreements with the respondent
and, in addition, could pursue
their rights to have their employment
contracts transferred to the City of Johannesburg;
22.6
The concessions, during cross examination, by the respondent’s
former Human Resources Director (Masuku)
that:
a)
When the applicants concluded the retrenchment agreements with the
respondent,
they were employees of the respondent;
b)
The aforementioned retrenchment agreements are still valid.
Did
the applicants waive and/or abandon their rights to enforce the
retrenchment agreements?
[23]
The respondent contended that the retrenchment agreements are not
enforceable because the applicants “breached”
or
“abandoned” the retrenchment agreements, “acquiesced”
in their transfer to the City of Johannesburg,
and “repudiated”
the retrenchment agreements (i.e. point
in limine
four).
This contention by the respondent, as I understood the argument, is
based on the doctrine of election in that,
following the outcome of
the appeal arbitration, the applicants elected to accept the benefit
of continued employment with the
City of Johannesburg, thereby
repudiating the retrenchment agreements, and they are, or so the
argument went, barred from enforcing
the said retrenchment
agreements.
[24]
At the outset, it must be noted that there was not a scintilla of
evidence that the applicants “breached”, “abandoned”,
or “repudiated” the retrenchment agreements, or waived
their rights in terms of same. There was also no
evidence
adduced during the trial that the applicants “acquiesced”
in their transfer to the City of Johannesburg.
On the
contrary, the evidence before me shows that:
24.1
The retrenchment agreements were not, in any way, “breached”,
abandoned” or “repudiated”
by the applicants;
24.2
The applicants did not, at any stage, waive their rights in terms of
the retrenchment agreements;
24.3
The outcome of the arbitration and the appeal arbitration was simply
that the termination of the “second
generation outsourcing
agreement”/”second outsourcing agreement”
constituted a transfer of a business as a going
concern, as
contemplated by Section 197 of the LRA, and the applicants did not
exercise an “election” to accept the
benefit of continued
employment with the City of Johannesburg.
[25]
When the respondent failed to honour the retrenchment agreements, and
pay the applicants the amounts reflected therein, the
applicants were
perfectly entitled to approach this court for relief, and there is no
merit whatsoever in the respondent’s
argument that the
applicants are barred and/or precluded from enforcing the
retrenchment agreements. The finding of
the arbitrator,
and the appeal tribunal, that the termination of the “second
generation outsourcing agreement”/”second
outsourcing
agreement” constituted a transfer of a business as a going
concern in terms of Section 197 of the LRA, did not,
by any stretch
of the imagination, amount to the exercising of an “election”
by the applicants. The applicants
are, consequently, not
barred or precluded from enforcing the retrenchment agreements.
The
relief sought by the applicants
[26]
Having regard to the aforegoing, and given that the respondent was
undoubtedly the employer of the applicants when the retrenchment
agreements were concluded, the applicants are entitled to enforce the
retrenchment agreements and to the relief sought by them.
The defenses raised by the respondent were ill-considered and without
substance and I was singularly unimpressed with the respondent’s
stubborn refusal to honour the retrenchment agreements which it had
concluded with the applicants. The respondent,
after all,
was fully aware, when it concluded the retrenchment agreements with
the applicants, that there was a chance that the
expiry of the
“second generation outsourcing agreement”/”second
outsourcing agreement” would be found to
constitute a transfer
of a business as a going concern, as contemplated by Section 197 of
the LRA. The applicants are,
consequently, entitled to
the declaratory relief sought by them and payment of the amounts
reflected in the retrenchment
agreements.
Costs
[27]
The applicants seek an order for costs in their statement of claim
and, since the applicants have been successful in this action,
there
is no reason why the respondent should not be ordered to pay the
applicants’ costs. I have also borne in
mind that
there is no longer a relationship between the parties and the
requirements of law and fairness require costs to follow
the
result.
Order
[28]
In the result, I make the following order:
1.
The voluntary retrenchment settlement agreements, concluded between
the applicants
and the respondent, are declared to be valid and
binding.
2.
The respondent is ordered to pay to the applicants the following
amounts reflected
in the voluntary retrenchment settlement
agreements:
2.1
Junia Senne: R175 280.95;
2.2
Lerato Mpofu: R187 496.13;
2.3
Lucas Johannes Burger: R944 772.08;
2.4
Alex van Zyl: R435 325.75.
3.
Interest is to be paid by the respondent on the above amounts at the
prescribed
mora
rate of interest:
3.1
In respect of Junia Senne, from 7 May 2012 until date of payment;
3.2
In respect of Lerato Mpofu, from 15 May 2012 until date of payment;
3.3
In respect of Lucas Johannes Burger, from 14 May 2012 until date of
payment;
3.4
In respect of Alex van Zyl, from 18 May 2012 until date of payment.
4.
The respondent is ordered to pay the applicants’ costs of suit.
__________________________
Boyce
AJ
Acting
Judge of the Labour Court of South Africa
Appearances
For
the Applicants:
Mr M Hennig of Martin Hennig Attorneys
For
the Respondent:
Mr S. Maritz
Instructed
by:
William Berry Attorneys.