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[2016] ZALCJHB 164
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South African Transport and Allied Workers Union and Others v Fedex Express Supaswift (Pty) Ltd (JS491/10) [2016] ZALCJHB 164 (12 February 2016)
REPUBLIC
OF SOUTH AFRICA
IN
THE LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG)
JUDGMENT
Reportable
CASE
NO:
JS 491/10.
In the
matter between:
SOUTH
AFRICAN TRANSPORT AND
First
Applicant
ALLIED
WORKERS UNION
SKOSANA,
J AND OTHERS
Second and Further Applicants
and
FEDEX
EXPRESS SUPASWIFT (PTY)
LTD
Respondent
Heard:
18 February 2015
Delivered:
12 February 2016
Summary:
Test for procedural and substantive fairness in dismissals for
operational reasons revisited; Employer
required to proactively
supply relevant financial data justifying claims of cost saving, huge
losses, “for profit”,
where that is a ground for alleged
operational requirements; Procedural lapses have substantive
implications; Fair procedure
serves a substantive purpose.
JUDGEMENT
MOSIME
AJ
Introduction
[1]
The issue raised by the
Applicants in the Statement of Claim, led by the South African
Transport and Allied Workers’ Union
(“SATAWU” or
“the union”) concerns the dispute over retrenchment,
which is alleged unfair on both substantive
and procedural grounds.
The Applicants aver that the Respondent failed to follow the fair
procedure in accordance with the provisions
of section 189 of the
Labour Relations Act, 66 of 1995 (as amended) (“the LRA”)
in carrying out the termination of
their employment on the alleged
grounds based on operational requirements, which took place on or
about 28 December 2009.
The Applicants allege further that the
Respondent failed to engage in a meaningful consensus seeking
consultation with the affected
employees, as well as to comply fully
with the provisions of section 189 (3)
(a)
– (j)
of the
LRA. The Applicants referred the dispute to the
Commission for Conciliation, Mediation and Arbitration
(CCMA) for
conciliation on the … In the certificate of outcome issued by
the CCMA after conciliation, the dispute is characterised
as
Unfair
Dismissal
that
relates to
Operational
Requirements
. The
matter is now before this court for determination in terms of section
191(5)
(b) (ii)
of
the LRA. The second and further applicants (“the union
members”, or “employees‟) are all members of the
First Applicant, who were all employed by the Respondent until their
alleged dismissals on the date mentioned above. They were
stationed
at various departments at the Respondent’s
Meadowdale,
Paulshof/Sandton & Midrand
premises. Three of the employees worked at the company’s
International Hub
,
a sub-division of its export department, while the rest worked as
supervisors in its various Operations departments. The retrenchment
process was apparently aimed at
all
of the supervisors, and the three employees in the
International
Hub
.
[2]
The
ten (10) employees
[1]
affected
in this dispute
[2]
,
the departments that they worked in
[3]
,
and the premises at which they were employed are as follows:
·
International
Hub/Export: Meadowdale
:
Johannes Skosana, Daniel Mokoatedi and Freddy Mokwana;
·
Operations:
Meadowdale
: Thapelo
Masilo and Michael Moshope; and Arzon Shoyisa.
·
Operations:
Paulshof/Sandton
:
James Tshabalala and Jamie Semenya;
·
Operations: Midrand
:
James Mashaya and Gedion Kadiaka.
[3]
According
to Ms Greta Cook
[4]
(“Ms
Cook”), The People Services Director of the Respondent,
testifying for the respondent in this matter, what the
latter had in
mind when undertaking the retrenchment exercise in question, was ‘to
look at ways to streamlining efficiencies
by putting into place a
structure that could flow and be fulfilling at the time’. The
process required that
the
company
should
put people in the right boxes, and the Respondent was ‘not
contemplating retrenchment’, but looking at ‘restructuring’
instead. She stated that, in order to achieve that, certain positions
had to be collapsed. The object was to minimise job losses.
This, as
it will appear below, seem to have been the main trigger for the
contemplation of the dismissal of the Applicants.
Notices
and Reasons for Retrenchment
The
First Notice
[4]
The
first notice to trigger the process, issued in terms of the
requirements of s189 (1) of the LRA, is dated 12 August 2009
[5]
.
This notice was issued to specific employees who, according to Ms
Cook, were performing operational functions as Supervisors,
and were
stationed at Meadowdale, near OR Tambo International Airport in the
Operations department, and whose names appear at the
top of the
letter, care of their union, SATAWU. These are referred to as “ALL
POSSIBLY AFFECTED EMPLOYEES”
[6]
.
[5]
The reasons for the
possible retrenchment of the Supervisors at Operations: Meadowdale,
were stated as follows in the first notice:
“
The
fact that the company has opened a Johannesburg North branch, as well
as the fact that a significant number of our bigger clients
are now
serviced by our Pretoria branch, has led to the identification of the
possibility that certain of the more senior operations
positions
within this business unit are superfluous”
.
[7]
[6]
According to Ms Cook,
the purpose of the exercise was to address what concerns may arise as
a result of splitting the operation
into two branches. However, by
the end of October 2009, the reasons stated in the First Notice as
the need for retrenchment no
longer held. She emphasised that there
were new developments that necessitated a new process, which was
triggered by the Second
Notice, dated 21 October 2009. The reasons
for retrenchment then were different to those that were present at
the time of the First
Notice.
[7]
Some
of the persons identified in the First Notice resigned from
employment or took voluntary severance packages. Ms
Cook
testified in chief that Conrad Cannel, Sammy Malete
[8]
and
Clayton Billings accepted voluntary packages; Tommy Maritz remained
at the Domestic Hub as night shift manager; Cedrick Manamela
remained; Terrance Williams was “deployed” somewhere and
the employees retrenched were Debbie Steward, Mike Moshope
and
George Kekana. Under cross examination, however, she testified that,
of the supervisors mentioned in the first notice, only
Mike
Moshope
[9]
was
retrenched. Another supervisor, Thapelo Masilo was also dismissed
following the Second Notice of retrenchment dated 21
October
2009.
The
Second Notice
[8]
The
Respondent issued the second section 189(3) notice
[10]
on
the 21 October 2009 to “
All
Affected Employees”
- a category comprising a broader section of employees, including
supervisors
[11]
,
members and non-members of the First Applicant - and copied it to
both the union and the then National Bargaining Council for
the Road
Freight Industry (NBCRFI). This notice was issued by Ms Cook, and
handed individually to all affected employees. It identified
a
markedly different reason as the company’s operational
requirement for the retrenchment of supervisors. Ms Cook testified
that this notice was “
not
a second notice, it was a new notice”
and conceded that it contained a fundamentally different reason to
the First Notice. She testified that some changes had already
been
resolved in August 2009, and the process triggered in the Second
Notice was a separate process. In essence, the Second Notice
identified “
huge
losses”
and “
other
factors”
as the reason or need for retrenchment. As a result of these losses,
the Respondent had, prior to extending the invitation to affected
employees to a consultation meeting
[12]
,
already taken “
principled”
and “
interim”
decisions to:
(a)
Restructure “
the
management structure at operational level”; and
(b)
Consider declaring certain positions
redundant and to revisit the number of supervisor and functions
performed by same.
[9]
The Second Notice
states:
“
As
all of us are acutely aware at this stage, the economic situation in
the whole of the country is in a very negative slump. With
specific
reference to our industry, being the courier business, there has been
huge losses sustained by all
major players and unfortunately we have not been spared from this
.”
“
As
a direct result of the above
, as
well as other factors, we are now in the position where we have to do
all in our capabilities to ensure that the business remains
a viable
entity during these trying times. The company has therefore taken a
principle
decision to consider
restructuring the management structure at operational level
.”
(My emphasis)
And,
in the fourth paragraph:
“
In
the circumstances
, the company
has taken an interim decision in principle to consider declaring
certain positions redundant and to revisit the number
of supervisor
and functions performed by same.”
[10]
The Respondent indeed emphasised
that “
no final decision has of yet
been taken in this regard, nor will any final decision be taken in
the absence of full and proper consultation”
with the employees or their representatives. It states that the
decision by the company has not been taken lightly and has been
the
subject of serious consideration by it management.
[11]
It
appears from the papers
[13]
that
soon after the Second Notice was issued, the union raised an
objection to it and raised some concerns, in a letter dated 23
October 2009 addressed to the Respondent. These included the
lack
of relevant information
such as that required to be disclosed in writing to invited employees
in terms s189 (3) (a) – (j); and also that only a
selection
of employees
(union members) had received notices and others not, which suggested
to the union that “
the
company had already concluded on the number of issues including the
criteria to be used to select the employees to be retrenched”
.
The union requested to be active participant in any joint consensus
seeking processes that would follow. The Respondent denies
ever
receiving this letter
[14]
.
In any event, the Court takes note that the union’s objections
may have been actuated by the fact that, objectively viewed,
it would
appear that the respondent had already taken decisions
(“principled”
and “interim”)
and that retrenchments of its members were already a
fait
accompli
.
The
third Notice
[12]
The third notice, dated
30 October 2009, issued to the same employees as the second, and
handed individually to them, states the
reasons for the contemplated
retrenchments as follows:
“
As
you may be aware, the Company has to consider all possible measures
at this point in time
to
survive in a very tough economic situation
.
This would include investigating
measures
to not only save costs
but also to
improve
efficiencies
within our business
in
order to gain an advantage
in a highly competitive industry.”
“
The
company has therefore been looking at all areas of the business to
try and identify the areas where we may have to
consider
making some structural changes to achieve our objectives
.
Many of our other divisions have already been looked at and some
changes have been effected in certain areas of the business.
One
of the areas that have been identified as a division in which we may
have to consider making some structural changes is the
International
Hub
.
The structural changes referred to may include possibly declaring
certain positions redundant and/or absorbing certain positions
into
each other combining them, or possibly relocating the functions.”
“
Management
would therefore like to invite the whole International Hub division
to participate in the process to assist management
in identifying
means to save costs as well as improve efficiencies.”
[15]
(My
emphasis)
[13]
It is quite plain that
the measures taken by the Respondent were aimed primarily at ‘gaining
advantage in a highly competitive
environment’. This objective
clearly disavows a claim of “
huge
losses
” that
formed the reasons for the second notice. De Beer confirmed in his
testimony that he understood the reasons for restructuring,
alternatively retrenchment, as “
for
profit”
. No
due to losses. Furthermore, the Respondent repeated the “
tough
economic situation”
leading to “
investigating
measures
not
only to save costs
but also to improve efficiencies within our business in order to gain
an advantage in a highly competitive industry”
.
[14]
Ms Cook testified under
cross examination that, in relation to supervisors, the Respondent
relied on the notices issued on the 21
and 30 October 2009 only, and
not the First Notice. The employees affected in the International
Hub, however, were only referred
to in the Third Notice. In that
regard, the Respondent invited ‘the whole division in the
International Hub to participate
in the process to assist management
in identifying means to save costs as well as improve efficiencies’.
Respondent
also was ‘not certain how many positions in the
International Hub may be affected at this time’ and would rely
heavily
on the consultation process.
[15]
As
it appears above, there are various, in my view, compound reasons
advanced by the Respondent as the founding rationale for the
retrenchments in the Notices as seen above. The discord did not end
with the notices. In the first consultation meeting of the
6
November 2009
,
returning to “
losses”,
the following reasons are recorded
[16]
,
with regard to the International Hub:
·
“
Currently making losses
due a couple of reasons
:
1)
Economic downturn;
2)
Big Competition: lots of companies
out there
3)
Weights have dropped even though
clients are still shipping, their bulks have dropped significantly as
they are also affected by
the economic downturn
·
Sales have decreased dramatically as
well. There has been a lot of pressure on the sales team.
And
with regard to the Supervisors:
“
This
is an area of our business that has been identified as a place where
restructuring / retrenchments could lead to savings”
[17]
[16]
The Minutes record also
rather curiously that:
“…
the
company has made significant changes to the sales team effective 1
November 2009 in an attempt to cut costs and increase revenue
as our
year to year date revenue / figures is way below target. We are
seeking ways to work smarter.”
[18]
And
also (when the union asked what has been put in place to avoid
retrenchments):
“
The
company has made some changes in several areas of the business to not
only save costs but also try and stimulate business growth
[Cook]”
[19]
[17]
It
appears to this Court and noted from these statements, that the
company would have already, five days before the first consultation
meeting, implemented measures to improve efficiencies, with the
resultant redundancy in positions, potentially leading to dismissals,
without first having given the Applicants the opportunity to make
representations as required in the LRA and by the Labour Appeal
Court
[20]
.
[18]
The
Amended Statement of Defence, moving away from the “
losses”
,
contains a further statement
[21]
to
the effect that the Respondent was looking to embark on a process
that would ‘
ensure
longevity’
,
given the ‘
adverse
trading conditions’
,
and proceeded with a restructuring process,
alternatively
a retrenchment exercise based on operational requirements.
There was plainly no statement about huge losses. De Beer testified
that the object was to “
restructure
the International Hub”
,
relook at whether or not the supervisor positions should stay, “
for
profitability”
.
The evidence of Ms Cook, under cross examination, was that during the
protected strike in September 2009, the manager of the International
Hub undertook an investigation to determine which employees on strike
were performing all of the tasks that were associated with
their job
descriptions. His opinion became the reason identified by the
management of the Respondent as one that triggered the
retrenchment
of the three specific employees involved, namely:
·
Johannes Skosana who
was employed as an exports clerk and whose job was re-classified as a
freight processor, with a two thirds
reduction in the salary;
·
Daniel Mokoatedi who
was employed as a supervisor and whose job was re-classified as a
driver with a more than 50% reduction in
salary; and
·
Freddy Mokoana, who was
employed as an export clerk and whose job was re-classified as a
freight processor with an almost 50% reduction
in salary.
[19]
With regard to the
retrenchment of the supervisors, the following seems to be reasons
provided by the Respondent for their dismissal:
·
The
splitting of branches and the opening of a new Johannesburg North
office
[22]
;
·
The
‘in principle’ decision to restructure the management
structure, and the ‘interim’ decision to declare
certain
positions redundant and revisit supervisor positions
[23]
;
and
·
‘
An
area of our business that has been identified as a place where
restructuring / retrenchments could lead to savings’
[24]
.
[20]
I
consider that, once the reasons for retrenchments are advanced,
however “
foolish”
[25]
they
might be, it then becomes imperative for employer to support its
rationale with written details of relevant and adequate information,
and supply that information to invitees to the consultation meeting,
so that there will be meaning to the joint problem-solving
and
consensus-seeking process. The provisions of
s189
(3)
invariably place this burden on the employer.
[21]
The
Court also notes that, despite the testimony of Ms Cook that the
supervisors were dealt with in terms of the Third Notice, there
is
neither specific nor general reference to supervisors in that notice.
Therefore, the Court cannot ignore the fact that all these
developments and statements import the understanding that decisions
on retrenchments, which the Respondent also referred to as
“
restructuring”
,
had already been taken even before what appeared to be some endless
formalistic, backward-bending, officious and laborious efforts
by
management to get the union to the consultation table. The
discussions in the consultation meetings were seemingly “
basically
to try and find ways on how to achieve this”
[26]
.
[22]
It appears to the court
that there is merit in the proposition that the motive and real
reason for the retrenchment of the retrenched
employees had nothing
to do with “efficiencies” or “streamlining”,
but was based on an unidentified manager’s
view that the these
employees may not have been performing profitably in the tasks in
their job descriptions, in circumstances
where neither the employees
nor the union had an opportunity to be heard in respect thereof.
Retrenchments are invariably infringing
adversely on the right of
employees to fair labour practices. This however, can be justified
only through an honest, transparent
and open-minded engagement in a
problem-solving exercise envisaged in the scheme created by the
legislature in
s189
.
There is a balance of both the interests of the employer and
employees in this scheme. Where the union viewed the proposed plan
in
the organograms for the International Hub as a unilateral change to
conditions of employment, it was the duty of the employer
to allay
those fears through an honest engagement in the problem-solving
exercise. If the employer, because it can, flexes its
economic muscle
against the employees despite their protestations, like a bulldozer,
the employees will be well within their rights
to
approach
the court for assistance, and the courts must use section 23 of the
Constitution to help them.
The
Consultation Process
[23]
It
is common cause that parties subsequently exchanged numerous
correspondence in which attempts
[27]
were
made to schedule, arrange, re-schedule and ultimately agree to dates
for consultations meetings to take place. An initial retrenchment
consultation finally took place on the 6 November 2009
[28]
.
It was recorded in this meeting that the issues on the table were the
retrenchment or restructuring that would affect employees
in both
International Hub as well as Supervisors in Operations
[29]
.
This meeting was followed by further consultations on 26 November, 4
December and 11 December 2012. The final-mentioned meeting
ended
abruptly as a result of a dispute between the parties regarding who
should chair and take minutes of the meeting.
[24]
In
chief, Cook states that management considered that the management
structure then - of supervisors reporting to Ops Managers,
and the
latter reporting to the Branch Manager - was no longer efficient.
Factors such as traffic, among others, were taken into
account and it
was the “
then
decided to split the Meadowdale office by creating a satellite at
Paulshof”
.
This affected the spans of control in the management structures, with
the effect that the supervisors were no longer adding any
value to
the business and that the hierarchy was unnecessarily tall.
Management “
then
took a decision to collapse the structure of supervisors”
.
In the Statements of Defence, the Respondent states repeatedly that
the process was leaned “
more
towards restructuring, and thus accommodating all affected employees,
rather than retrenching the Applicants”
[30]
.
The exercise was therefore undertaken with the purposes of
“
streamlining
operations”
.
[25]
Following the
consultation meeting of the 6 November 2009, on the 24 November 2009,
the Respondent completed and submitted a proposed
rough draft
organogram that management anticipated as the look of the future
structure of the
International
Hub
. This was
submitted with a copy of the organogram reflecting the International
as it looked then. Management invited comments and
proposals from the
union regarding their views on the proposed structure. The Minutes do
not reflect any proposals on how the supervisors
would be dealt with.
[26]
The
objective of the exercise that affected the International Hub, and
its essence, according to Cook, is depicted in the diagrams
of the
old
and
new
organograms attached to the papers
[31]
.
At the apex of the Old Organogram is located the position of the
Gateway
Manager
,
Craig
Farah
;
this position, the first level, is retained in the New Organogram.
Reporting in a solid line to the Gateway Manager, in both
organograms, are two offices of
Export
Customs Specialists
(2
positions) in one, and
PM
Hub Manager
(one position) in another. The two ECS’s are
Michael
Brytenbach
and
Oupa
Malema
.
The Hub Manager is
Alcon
Davids
.
There is no evidence that there was any change at this second level
as well.
[27]
The
third level is composed of three offices of
AM
Hub Supervisors
.
These are
David
Mokotedi
(04h00 – 14h00),
Shaun
Nel
(05h00 – 14h00) and
Eric
Baloyi
(13h00
– 22h00). Of the three supervisors in the Old Organogram, only
Daniel Mokoatedi has no subordinate. Both Nel and Baloyi
had people
reporting to them. In the New Organogram, the position occupied by
Mokotedi is changed to that of “Driver”
and the other two
are left unchanged. There are also five Route Clerks
[32]
(19h00
– 04h00) reporting to Alcon Davids.
[28]
Cook testified that
Daniel Mokoatedi was no performing actual supervisor functions, in
that he had no one reporting to him. His
job entailed mainly driving
to and from OR Tambo International Airport. It was then decided that
the position would be ‘changed’,
or
re-classified
to that of Driver.
[29]
In the fourth level of
the Old Organogram, are located subordinate reports to the offices of
Supervisors. Among these, there are
two
Manifesting
Clerks
reporting to
Shaun Nel, namely
Solomon
Mmope
(04h30 –
13h30) and
Magda
Venter
(12h00 –
21h00). There is also one
Export
Clerk
,
Freddy
Moakoana
(05h00 –
14h00) reporting to Nel. Reporting to Eric Baloyi were
the following positions on the Organogram:
·
Two Operational
Assistants (19h00 – 04h00),
Eric
Radebe
and
Dlozi
Skosana
;
·
One Bagger and Tagger
(12h00 – 21h00),
Elphas
Mudau
;
·
Export Clerk
(12h00 – 21h00)
Johannes
Skosana
;
·
Driver (12h00 –
21h00),
Themba
Skosana
; and
·
Driver (15h00 –
24h00),
Albert
Cannon
.
[30]
According to Cook, the
Route Clerks were actually performing the job functions of Export
Clerks. Therefore, in the New Organogram,
the job function of the
five Route Clerks was renamed
Export
Clerks
. The job
functions of the two old style Export Clerks, Skosana and Mokoana,
were reduced to one position, renamed
Freight
Processor
, now
reporting to Eric Baloyi’s office. This meant that one position
of the erstwhile Export Clerk would be redundant on
the structure.
The functions of the Route Clerks, now re-classified Export Clerks,
remained the same as they were when the Respondent
inherited them
from the previous company. The positions of the two drivers remained,
except that one driver was placed next to
the Export Clerks’
office, reporting to the Hub Manager. An additional single
Manifesting Clerk
position (08h00 – 17h00) was created.
[31]
On the 27 November
2009, the Respondent provided the Applicants with proposals
regarding, inter alia, the suggested job descriptions
and monthly
salary ranges for certain job positions proposed to be created during
the process of a restructuring exercise (namely
Manifesting Clerk;
Export Clerk; Freight Processor-International Hub; and
Driver-International Hub). The Respondent reiterated
that they
intended to eradicate the entire supervisory band throughout its
departments and branches.
[32]
There were some
expressions of dissatisfaction by the union, at the job profiles so
proposed as it considered them a “demotion”
of employees
at the International Hub. It appears indeed that the change proposed
by the company was a mere reclassification of
jobs where the tasks,
or the work content remained the same. Daniel Mokoatedi, for
example, was earning R8 850.00 per month
as an Export Clerk. Cook
testified that this job function was the same as the Route Clerk, and
yet when the Route Clerks were re-classified
Export Clerks their
proposed salary range reduced to between R5 000.00 and R7 000.00 per
month. Mokotedi was not performing
actual supervisor functions
in that he had no one reporting to him, and this was supposedly the
reason for his retrenchment. It
is plain to the court that the
Respondent was looking to the reduction of the salary bill, and would
then contrive a scheme through
which it can achieve the objective of
reducing the salaries and benefits of employees in the International
Hub. It seems that,
in order to avoid having to change terms and
conditions of employees unilaterally, and the consequences thereof,
the Respondent
chose the retrenchment route.
[33]
Cook testified as
follows, under cross examination:
“…
it
would have been foolish for Fedex to impose a change in the structure
by forcing employees to accept new job titles; new salaries;
and new
job designations if there were no consensus … Such imposition
would have amounted to a unilateral change to conditions
of
employment which most likely would have caused a pertinent
intervention either by way of a strike in terms of Section 64(4)(a)
and (b), alternatively the unilateral imposition of the aforesaid may
have invoked an urgent application to this Honourable Court
resulting
in an interdict.”
[34]
They also opposed the
intended collapse of the supervisory positions at Operations. They
asked for more information as they were
in the dark as far as reasons
for the changes were concerned. With regard to supervisors likely to
be affected, the union made
proposals that the management explore the
possibility of examining the number of senior managers employed, and
consider reducing
that figure as an alternative to removing the
supervisor positions completely.
[35]
It
also raised a concern that the company was unnecessarily employing
external agencies and consultants, for placements and dealing
with
disciplinary processes;
[33]
·
It
opined that the selection criteria used for supervisors was wrong,
and that the Respondent must look at other ways of saving
money, as
for example, relooking at funds spent on polygraphs and Christmas
parties
[34]
.
·
The union was also of
the view that there was a shortage of staff at the international Hub,
and proposed that the status quo be
left as it were.
[36]
At
the third consultation meeting of the 4 December 2009, management
respondent to the union’s proposals
[35]
and
denied the claim that there was any individual earning “
very
low salaries”,
as well as rejected the proposal to reduce the number of managers
identified by the union, claiming that such would lead to serious
problems in the business and would cause operations to collapse;
management also claimed that they do make ‘every effort
not to
make use of services of temporary employment services so as to avoid
unnecessary expenses and fees coupled thereto and to
rather make use
of internal staff’. However, during peak times, it becomes
inevitable to resort to external services for
this purpose
[36]
.
It is plain to this court that these responses begged for more
particulars to be supplied to the employees, so as to bring them
to
speed with the rationale that was relied on by the employer.
[37]
The
Court notes that during the currency of the consultation process, a
number of vacancies became available in various offices
of the
respondent in Johannesburg, Meadowdale, Midrand, OR Tambo, Durban and
Cape Town
[37]
.
All these positions were advertised internally. It is common cause
that the union had made a proposal that consideration be made
to
offer these positions to employees likely to be affected. The union
pleaded that the Second and Further Applicants were capable
of
performing a number of these advertised positions, but these were not
placed on offer during the consultation process as alternative
measures that could be taken to avoid the retrenchment of the
Applicants. The Respondent’s answer to this pleading is not
cogent enough to form a constructive response to the proposal by the
union. The gist of it is simply that these positions were
advertised
(during the consultation process), and that the Applicants were free
or entitled to apply for these positions but they
did not.
[38]
The “
final
consultation”
took
place on Friday 11 December 2009. In that meeting, which indeed
convened on the date proposed but did not proceed, the union
was
represented by a fifth union official, Mr Molefe. The reasons for the
collapse of the meeting of the 11 December was a dispute
over who
would chair, and take minutes of, the proceedings. No other meeting
took place after that abortive meeting. The
court does not
accept that the scuppering of this meeting by a dispute over the
chair and minute taker could be taken as the collapse
of the
consultation process.
[39]
On 28 December 2009 the
company issued final notices of retrenchment to all affected
employees individually, including the second
and further applicants.
The notices stated that management had reached a decision to
restructure the International Hub and to declare
certain of the
supervisory positions redundant. On the 29 December 2009, the
day immediately after the retrenchment of the
applicants, the
Respondent employed Thulani Zwane, Victor Mudau and Daniel Mokoatedi
on fixed term contracts as export clerks/processors.
They are
essentially performing the same function as those that were
performed
by Johannes Skosana, Daniel Mokoatedi and Freddy Mokwana.
Disclosure
of information
[40]
Following
the deadlock that was apparent during the meeting of the 4 December
2009, the union, through a letter dated 5 December
2009
[38]
,
requested disclosure of the following information:
1)
Audited financial
records,
2)
The Business Plan,
3)
The reasons for the
contemplated retrenchment, and
4)
The measures that the
company put in place in order to minimise the impact of the
retrenchment.
[41]
The
Respondent answered to the Applicant’s request for disclosure
of specified information by letter
[39]
dated
9 December 2009. The latter stated that it could not provide a
business plan
[40]
as
there was none formal formulated. With regard to reasons and
appropriate measures, the Respondent referred the Applicant to
Minutes of previous meetings (6 and 26 November, and 4 December 2009)
and the Second Notice (21 October 2009).
[42]
The
respondent attached a one-page document to the answering letter,
purporting to be an ‘Income Statement’. There is
nothing
in this document that identifies it as a formal, official document
that makes representations with regard to the Respondent’s
financial matters. It is far from being a semblance of an audited
financial statement requested by the union. Nowhere does the
give any
explanation as to the reasons the audited financial statement
requested by the union was not given. In their written argument
[41]
,
they make an issue of the fact that the Applicants requested a
“
statement”
and nothing else. It is argued that the unpretentious document
provided to the applicants by the respondent, to the extent that
it
purports to be a statement (profit and loss account), as it calls
itself, is sufficient to meet the request, as it is “
an
accurate and true reflection of the financial position of Fedex at
the time”
[42]
.
[43]
The
Respondent did not complain that any of the information requested by
the union could not be supplied because it was either irrelevant
[43]
or
was outside the bounds of adequacy for the purposes of the
consultation process.
[44]
The
union in this case did not set any conditions for their participation
in the consultation process. Instead, even after the last
botched
consultation meeting, the union still wrote
[45]
to
the employer and made impassionate pleas for the process to continue,
which request was rejected by the Respondent. It is this
court’s
view, therefore, that the information requested by the union was
‘germane’ to the proposed retrenchment
of its members.
This information was requested during the time when the vacillation
of the Respondent regarding the true rationale
for dismissal was
becoming confusing, even to the reader of the documents. The
respondent persistently raised a mosaic of reasons,
including aspects
of “
restructuring”
,
“
streamlining”
,
“
huge
losses”
,
“
new
offices”
,
“
for
profit”
and “
economic
conditions”
interchangeably, without actually providing the union with concrete
information that formed the rationale for its contemplated
action.
Rather, the minutes show that De Beer was in fact constantly
requiring
the
union
to request for clarity in writing. (In fact, in the Minute of the 26
November 2009, out of the five recorded comments he made,
three of
them are solely made of solicitations of written questions/concerns
from the union, instead of the employer, on its own
accord, providing
the union with relevant information that forms the rational basis of
their intentions.) The Applicants submitted
that they sought this
information in order to establish whether the restructuring was in
fact necessary in the International Hub
and the company more
generally.
[46]
[44]
From the outset I think
it ought to have been mentioned that the peremptory speak of
s189(3)
must be purposefully aimed compelling the employer to proactively
supply all information that is relevant to the other parties
to
consultation. This procedural step serves a substantive purpose. It
allows the union to be fully
au
fair
with the
issues, so that it can be placed in the speed that will enable it run
along with the employer, along the tramlines set
in the items
(a)
to
(j)
in identifying all matters and details that needs to be identified
and dealt with. The union is left in the dark when the
employer
invites it to a meeting and then say: ‘please provide us with a
written request for particulars so that we can supply
you with the
relevant information’. That not only reverses the burden
imposed on the employer, but it also defeats the whole
purpose of the
LRA, and s189 in particular.
[45]
The
importance of the disclosure of relevant information by the employer
to the affected employees was highlighted by Murphy AJ
in
Moodley
v Fidelity Cleaning Services (Pty) Ltd t/a Fidelity Supercare
[47]
as
follows:
“
A
critical, if not the most central ingredient of the consultation
process, is the requirement of written notice and the disclosure
of
information. Effective consultation requires employees to have an
opportunity to prepare for consultation by being given sufficient
advance notice, an agenda and adequate information. Without this, the
joint consensus-seeking process mandated by the legislature
is hardly
likely to be “meaningful” . . .
The
failure of employers to fulfil this obligation meaningfully,
invariably leads to disputes, misconceptions, a breakdown in trust
and the delegitimizing of the joint consensus-seeking process
mandated by the statute.”
[46]
The
cross examination of Skosana went at some length into the theory that
the managing executives of employer knew better about
what is good
for the company than the employees would. It is also plain from the
discussions in the consultations, as well as in
the correspondence,
that the union was in the dark regarding the real reasons for the
proposed dismissals. The statement that despite
all the diverse
aspects raised by the Respondent as reasons, “
the
process was leaning more towards restructuring than retrenchment”
,
just rang hollow in the absence of all relevant information that
should have been proactively supplied by the employer as required
by
s189(3)
[48]
.
[47]
The
Labour Appeal Court, in
SACWU
& Others v Afrox Limited
[49]
has
laid a position that:
“
It
is implicit in terms of section 189(2) that an employer, apart from
taking part in the formal consultations on the aspects set
out in the
section, should also take substantive steps on his or her own
initiative:
·
to take appropriate measures to avoid
dismissals;
·
to mitigate the adverse effects of the
dismissals;
·
to change the timing of the dismissals;
·
to select a fair and objective method
for the dismissals, and
·
to provide appropriate severance pay for
dismissed employees.
What
is appropriate will depend on the facts each case, and on the
evidence presented about the steps taken, if the matter proceeds
to
court
[50]
.”
[48]
The ubiquitous
requirement in the Minutes that the union should raise its concerns
in writing, or ‘request for further particulars
in writing’,
leads to a conclusion that because it was unable to do so, management
was left in the dark as to what information
would have been required
by the union for the purposes of consultation, or that because the
union did not request information in
writing, then, as I understand,
it may not entitled to any. It also says, because the union did not
request for further particulars
of what was mentioned in the notices,
then the employer is exonerated from supplying that information on
its own. As already mentioned
above, this reversed the burden placed
on the employer by the LRA to proactively supply the union with that
information before
the consultation takes place. The union is not
precluded from seeking further relevant and adequate information, but
it has to
be brought to speed before it can be able to do so.
This was the space that was supposed to be filled by the supply of
all
information to the union, including the factors that were taken
into account in concluding that dismissal was indeed in the business
interest. This is not rocket science.
[49]
I find that Respondent
was not correct in complaining that the employees, or their union,
are incapable, as this court understood
the cross examination of
Skosana, of comprehending the machinations of business operations, a
province that supposedly only company
management can master. The
union was left in the dark, and therefore, in the circumstances,
adequate consultation was impossible.
Substantive
Fairness
[50]
Indeed
the employer may take provisional decisions to consider retrenchments
on their own
[51]
.
But, as the LRA instructs, no final decision may be taken without
consulting meaningfully in a joint consensus seeking meeting
with the
employees likely to be affected by that decision. The reason for this
is that the provisional decision may be obviated
partially or
completely by genuine, good faith effort by the parties in the
consultation sessions. Instances abound, where such
decisions were
completely changed, overturned or modified in attempts to minimise or
eliminate the adverse consequences of job
losses.
[51]
The
requirements for a fair consultation were dealt with in
NEHAWU
v University of Pretoria
[52]
,
in which the court concluded that there was nothing wrong with the
employer coming to the consultation table with predispositions
towards a particular method of solving the problem which has given
rise to the contemplation of dismissals for reasons based on
operational requirements.
[52]
However, the court
pronounced an important rider that gives a profound expression to the
spirit of s189, as follows:
“
What
is critical is that the employer should nevertheless be open to
change its mind if persuasive argument is presented to it that
the
method is wrong or is not the best or that there is or may be another
one that can address the problem either equally or even
in a better
way. He should engage in a joint problem-solving exercise with the
other consulting party or parties”
.
[53]
Our
courts have also pronounced widely on the meaning and scope of
“
operational
requirements”
in the context of dismissals, drawing largely from the Code of Good
Practice on Dismissal Based on Operational Requirements (“the
Code”)
[53]
.
In general, s 213 of the LRA defines “
operational
requirements”
as:
[R]equirements
based on the economic, technological, structural or similar needs of
an employer.”
[54]
Article 2 of the Code
elaborates as follows:
“
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.”
[55]
In
general however, the courts have aimed to strike an appropriate
balance between the right of employers to regulate and determine
the
manner in which their business operate, and the rights of employees
not to be subjected to arbitrary dismissals
[54]
.
An additional primary consideration in this regard is not just the
reason cited by the employer for the dismissal, but also the
proof
thereof. Froneman DJP noted in
SA
Chemical Workers Union & others v Afrox Ltd
[55]
,
“
It
follows that it can no longer be said that the court's function in
scrutinizing the consultation process in dismissals for operational
requirements is merely to determine the good faith of the employer
(compare SACTWU & others v Discreto (A Division of Trump
&
Springbok Holdings) [198]
12 BLLR 228
(LAC); (1998) 19 ILJ 1451 (LAC)
para [8]). The matter is now one of proof by the employer, on a
balance of probabilities of –
·
The
cause or reason for the dismissal;
·
The
defined 'operational requirements' that the dismissal was based on .
. .;
·
A
fair procedure in accordance with s 189 . . .;
·
The
facts upon which a finding of a substantively fair reason for the
dismissals can be made...”
Furthermore,
the court added
[56]
:
“
The
presiding officer's assessment of the fairness or otherwise of the
dismissal will also be dependent on the evidence presented
before him
or her. An assessment on 'moral' considerations not based on the
evidence led at the trial will be impermissible. (All
this is not
new. It happens every day in all courts, in relation to all sorts of
different kind of issues. It is the very stuff
of litigation and
adjudication.)”
[56]
The
reasons for the dismissals in this case, or the rationale for
retrenchment, is one based at best, on
cost-saving
,
or better still, on
huge
losses
,
or at the very least, as a result of the need to
streamline
or
restructure
the business. The judgement in
Ndlhela
v Sita Information Networking Computing BV (Incorporated in the
Netherlands)
[57]
by
this court, is on point. Counsel for the employer in that matter
argued to the effect that it was sufficient for the employer
that it
had its basis for dismissals on an economic rationale (cost saving)
to reduce its staff as a result. It was also argued
that a court is
not entitled to enquire into the reasons which informed the
employer’s decision to reduce costs
[58]
.
The court expressed its disapproval to being wooed to this
deferential approach, particularly in the light of the judicial
mandate
conferred in the Constitution and the LRA
[59]
.
In the judgement of
BMD
case, Davis AJA had earlier posited that: “
viewed
accordingly, the test becomes less deferential and the court is
entitled to examine the content of the reasons given by the
employer,
albeit the enquiry is not directed to whether the reasons offered is
the one which would have been chosen by the court,
farness, not
correctness is the mandated test”
[60]
.
[57]
I therefore align this
court with findings made in the
Ndlhela
decision, as follows:
“
This
does not entitle the court to decide if the reasons given by an
employer are the best reasons available. The Labour Court
is
constitutionally and statutorily required to supervise the fairness
of reasons given by employers where they dismiss employees
on
operational grounds. This cannot happen
in
vacuo
. Where an employer
contends that the operational justification for its decision to
dismiss is reduction of operating costs, it
must at least put forward
evidence showing the actual operating costs which it sought to
reduce. This can be done by producing
financial information which
demonstrates the relevant operating costs. This should not been an
onerous task. Any sensible employer
wishing to reduce costs must
first know what costs are to be reduced.”
“
In
addition, where an employer wishes to cut operating costs by reducing
its headcount, it must at least produce evidence of the
costs
associated with the headcount and how this will meet the overall
target of cost reduction. In the absence of this information,
it is not possible for a court to decide if the decision is not
arbitrary or capricious. Nor is it possible to decide if the decision
is a rational or reasonable one, based on the information which was
available to an employer at the time it decided to embark on
a
restructuring exercise.”
[61]
[58]
The company
acknowledged, with regard to substantive merits on which supervisors
were dismissed, that the hierarchies throughout
its various
departments generally took the same form, with differences dependant
on the particular functions of each department.
This structure
comprises a clerical band of employees, overseen by management. The
decision to collapse the supervisor band –
which appears to
have been located between the other mentioned bands – is
alleged to have been applicable throughout the
company, but with a
particular focus on the International and Domestic Hub departments,
located within the broader Operations department.
[59]
Despite this collapse
and the resultant retrenchments, it was not disputed that the
Respondent employed “team leaders”
as the intermediary
band between the clerical and management positions, which employees
are thus effectively fulfilling the functions
of the retrenched
supervisors. In fact, in cross-examination Cook conceded that the
retrenched supervisors were sufficiently skilled
to occupy the team
leader posts. In fact, not all supervisors were retrenched in the
course of the restructuring exercise described
above. I find that
such conduct, in fact, calls into question the efficacy of and
justification for the exercise as a whole.
[60]
Notwithstanding
that this was the purported basis for the retrenchments, at the
hearing the employer’s evidence was to the
effect that the
primary basis for the restructuring of the International Hub was that
a “disconnect” existed between
the job descriptions of
the various positions therein, and the actual functions performed by
the employees.
[62]
As
a result, it was contended that a streamlining exercise was necessary
to ensure that employees were performing adequately the
duties
required of their particular positions, thereby ensuring efficiency
in the division’s operations. This was put forward
despite the
fact that it was acknowledged that no consultation was had on the
nature of the affected employees‟ job descriptions
and
requirements, whether current or proposed.
[61]
It is thus apparent
that the reason for the retrenchment of the affected applicants is
not that stated in their s 189(3) notice,
and is thus not that on
which the company purportedly sought to consult with them throughout
November and December 2009. I accept
the argument by the applicant’s
counsel that the resultant inability of applicants to prepare
adequately for the consultations
or address any concerns of the
company that might have led to their being retained, and thus any
consultations were rendered meaningless.
[62]
In
my view, the Respondent has not discharged its burden to prove that
t
he
cause or reason for the dismissal was one based on fair grounds; the
defined 'operational requirements' that the dismissal was
based on
were not established. The decision in the judgement of
Ndlhela
had also, following a line of others, held that “
there
is no bright light separating procedural fairness and substantive
fairness in retrenchment matters because s189 has a substantive
purpose – to save jobs”
[63]
.
[63]
This finding flows also
from the concession by the Respondent that in any event not all
supervisors were retrenched in the course
of the restructuring
exercise. This places a higher burden on the company to justify not
just its decision to collapse the supervisor
band throughout its
operations, but the specific retrenchments of each of the second and
further applicants. This is done by way
of the identification and
application of selection criteria as provided for in s 189(7) of the
LRA. I find that the Respondent
patently failed to do.
[64]
It is also a common
fact that, in casu, the employer had decided to engage the services
of additional employees after the retrenchment
of the Applicants had
taken place. This demonstrate to the court that this is not a case
where it can be said that there were operationally
justifiable or
rational grounds for the dismissals.
[65]
The substantive
fairness of retrenchments, which commences when contemplation of
dismissals materialises, finds its profundity in
the material
compliance with the provisions of sub-sections
189(2)
and
(3)
.
These provisions clearly
oblige
the employer to consult on issues specified in
ss189(2)
and to disclose the specified information as required in
ss289(3)
,
and thus enjoins it to supply the all relevant information on its own
initiative, by providing it in writing to the other parties,
‘before
proposing the dismissals’, including:
·
The reasons for the
proposed dismissals;
·
The alternatives that
the employer
considered before
proposing the dismissals, and the reasons for rejecting each of those
alternatives;
·
The number of employees
likely to be affected and the job categories in which they are
employed;
·
The proposed method for
selecting which employees to dismiss;
·
The timing of the
retrenchment;
·
The assistance that the
employer proposes.
[66]
The
rights of the employees not to be unfairly dismissed would be
contravened if the employer failed to engage in a meaningful joint
consensus-seeking process with the union whose members were likely to
be affected by the proposed retrenchments and agree substantially
on
the matters specified in
items
(a)
to
(j)
of
ss189(3)
,
including agreement on alternatives to dismissals and on selection
criteria
[64]
that
is fair and objective
[65]
.
The language of these provisions make it mandatory for the parties to
the consultation to explore certain issues from this menu,
to the
extent that they are capable to mitigate or avoid the adversity of
job losses. The reasons for dismissals in this case,
the method of
selecting candidates for retrenchment, and the lack of consideration
for alternatives, some of which presented themselves
during the
consultation, show lack of commitment and good faith on the part of
the employer. This has led this court to making
the findings that:
1)
There was no fair
reason for the second and further applicants to be retrenched ahead
of those employees who had fewer years of
service and less experience
than them;
2)
The company’s
decision to engage the services of additional employees, namely
Thulani Zwane, Victor Mudau and Daniel Mokoatedi
on fixed term
contracts as export clerks/processors after the retrenchment of the
second and further applicants indicates
that the retrenchments
were not operationally justifiable on rational grounds;
3)
The company did not
offer the vacant internal positions that arose during the process to
the second and further applicants who were
capable of performing
those functions. The company accordingly did not consider and take
all viable alternative steps to prevent
the retrenchments or to limit
the numbers to a minimum.
[67]
Counsel
for the Respondent argued
unconvincingly
that the alternatives considered “
ranged
between the introduction of the organogram as well as the proposed
organogram”
[66]
.
But the organogram, as this court has observed, amounted to nothing
more that moving chairs to different decks in the same vessel.
It
proposed reclassification of jobs without changing the job
specifications. It was an attempt to derive a consent from employees
for a change in their conditions of employment, which amounted to
accepting demotions. It did not constitute a fair reason for
the
dismissal of the second and further applicants.
[68]
I
find that, as a result of the murkiness in the saga, alternatives
were never considered adequately, and no relevant information
as to
the reasons for the proposed retrenchments was supplied to either the
affected applicants or the union. Viewed alone, and
as indicated
above, the organograms do not provide reasons for the restructuring
exercise, but simply outline the proposed new
structure in which jobs
would be reclassified downwards. By itself this is clearly
insufficient. Moreover, none of the affected
applicants or their
union were informed through collective bargaining platforms that the
actual performance of their functions
was inconsistent with their job
description (as alleged), nor were they given an opportunity to
rectify this “disconnect”.
A dismissal that occurs in
such circumstances, without employees being given opportunity answer
on their alleged inadequacies or
deficiencies on their performance,
is recognised by our courts as unfair
[67]
.
Procedural
Fairness
[69]
The Respondent sought
to make a stupendous issue out of the fact that the union had engaged
no less than four representatives in
the consultation process, and
that this caused delays and ultimately led to the collapse thereof.
But both Cook and De beer conceded
in the hearing that this did not
on its own, account for any delay or collapse of the process. They
also conceded that management
has also delayed the process and issued
varying notices to different categories of employees, with different
reasons for the proposed
dismissals. The fact is that when the union
raised an objection to the respondent’s lawyer, Mr de Beer,
chairing the meeting
on the 11 December 2009, and proposed that the
chair and the scribe be chosen openly in the meeting, a dispute
arose, and though
there are differing version on what transpired
later, security was ultimately called in to remove the union
delegation, who were
still in the boardroom and calling for
management to continue with the consultation.
[70]
This
court cannot find that the collapse of the meeting of the 11 December
2009 signalled the end of the consultation process owing
to the
belligerence of the union. The admissions made during the examination
of the employer’s witnesses are indications
that the employer
had already made up its mind to reduce the status of supervisors to
that of team leaders, and to reclassify the
jobs of employees in the
International Hub to lower categories, in order to save costs. Whilst
there is nothing wrong with the
employer taking any measures to save
costs, the legislature had gone to lengths in finding, through the
LRA, a balance that would
safeguard both the interests of the
employer and employee in such circumstances. Employers must take this
into account when taking
valid business decisions that would
potentially affect the rights of employees not to be unfairly
dismissed. In other words, you
can retrench for operational reasons,
but what matters is
what
those reasons are and
how
you do it. The LRA expressly requires
[68]
that
the dismissal must be both substantively and procedurally fair. In
this case, no regard was had to that requirement.
[71]
The question in the
determination of procedural fairness in retrenchments loses clarity
in that, as in this case for instance, failure
to consult on and
consider alternatives, and explore a fair selection criterion,
invariably has substantive implications. There
is greater probability
that, had the employer seriously considered alternatives, vacancies
that arose during the consultation process
could have been offered
and accepted by the applicants, and thus consequently, there could
potentially have been no need for dismissals.
It is for this reason,
among others, that this court in the
Ndlhela
case above has concluded that “
there
is no bright light separating substance from procedure in
retrenchments”
.
[72]
I therefore find that
the respondent has not discharged the onus of showing that the
dismissals of the second and further applicants
was for a fair reason
based on operational requirements. The dismissal of the second and
further applicants are therefore declared
substantively and
procedurally unfair.
REMEDY
[73]
Both
counsel have made submissions in this regard. The respondent’s
counsel has referred me to the decision in
Robbertze
v March (SA) (Pty) Ltd
[69]
,
where
the
Court, in interpreting the provisions of s194, as it stood
prior to the amendments in 2002
[70]
,
held as follows:
“
[70]
This court is required to exercise a discretion as to whether to
grant the compensation sought,
or
to grant no compensation at all
.”
(Counsel added the emphasis).
[74]
Counsel
also referred me to the decision in
De
Bruyn v Sunnyside Locksmith Suppliers (Pty) Ltd
[71]
,
in
which Van Niekerk AJ – as he then was – in
De
Bruyn supra
the
proceeded as follows:
“
[35]
I am of the view that the degree of unfairness in relation to the
company’s conduct is not such
that an award of the equivalent
of twelve months remuneration is warranted. The company
has paid an amount equivalent
to five weeks remuneration in
compensation, and that in my view is a fair and adequate sum to
compensate De Bruyn in the circumstances
of the case. In
the words of the formula of Johnson and Johnson, sufficient redress
has already been made. Furthermore,
the process of consultation
was to come [sic] extent frustrated by the applicant. Although
this was insufficient to warrant
a finding that De Bruyn’s
dismissal was procedurally fair, I am entitled to take into account
for the purpose of exercising
a discretion concerning compensation
the fact that Mr De Bruyn, who was authorised to act and who acted on
De Bruyn’s behalf,
conducted himself in a manner that was not
conducive to constructive consultation. A degree of blame
can therefore
be attributed to the applicant for the failure of the
consultation process, and for the failure of the purpose underlying s
189.
In all the circumstances, I exercise the discretion
conferred on me by s 194(1) not to award compensation to De Bruyn. ”
[75]
The
court notes that these two decisions were handed down at the time
when the judges or arbitrators had no discretion but to award
compensation either to the full extent or not at all, thus giving
rise to the ‘
all
or nothing’
principle
[72]
.
Since the amendments introduced in the year 2002
[73]
the
requirement that judges and arbitrators now have the discretion to
award compensation that is “
just
and equitable”
subject to the 12-month ceiling, has been restored. I find that the
court has the discretion to find that the ‘all or nothing’
principle’ may not be appropriate in this matter.
[76]
Mr Venter, for the
Respondent, has also urged this court to find that the union’s
conduct had also contributed materially
to the lapse, if any. The
facts indicate nothing to suggest that SATAWU acted in any other
manner than as would be expected from
any union in the Republic. The
change of representatives, admittedly, did not cause any delay or
disarray. The fiasco that scuppered
the meeting of the 11 December
2009 can also not have been the contributed to the failure by the
Respondent to supply relevant
information and advance consistent and
credible reasons for the proposed retrenchments. The inability
of the parties to explore
appropriate alternatives and agree on a
fair selection criteria, was due to the fact the consultation process
was not a genuine
consensus seeking effort.
[77]
Ms Gaibie, for the
Applicants, submitted that the reinstatement of the Applicants was
the only just and equitable remedy available
to the Applicants. She
submitted, however, should the court not be inclined to order
reinstatement, that the remedy of re-employment,
as per s193(1) (b)
of the LRA is an appropriate alternative remedy in the circumstances.
This, I am inclined to do. In this event,
the LRA stipulates that
such re-employment be
“
[
E]ither
in the work in which the employee was employed before the dismissal
or in other reasonably suitable work on any terms and
from any date
not earlier than the date of dismissal . . . .‟
[78]
In
this regard, she referred the court to the two decisions of the
Constitutional Court in
Billiton
Aluminium SA t/a Hillside Aluminium v Khanyile
[74]
and
Equity
Aviation Services (PTY) Ltd v Commission for Conciliation Mediation
and Arbitration & Others
[75]
.
[79]
The Respondent in this matter, like
the employer in
Billiton Aluminium
sought to raise a constitutional
argument about the onerous and cumulative effect of a reinstatement
order in matters that may sometimes
take up to eight years before the
matter is finally determined by the Constitutional Court. The
employer in that matter raised
the issue of “systemic delays”
in the determination of labour disputes that commence with the
arbitration process,
is thereafter dealt with in review proceedings
by the Labour Court, and thereafter in appeal proceedings in the LAC,
the SCA (which
was applicable at the time) and finally in the
Constitutional Court. By the time the matter was heard by the
Constitutional Court,
eight years had passed, and it was contended by
the employer before that court that the LAC is obliged to make orders
that are
just and equitable, and that confirmation of an award that
had the effect of backdating an employee’s reinstatement for
eight
years was neither just nor equitable and it breached the
employer’s constitutional rights. Apart from the fact that the
employer
in that matter had raised this issue for the first time in
the Constitutional Court, and that Court was disinclined to give it
leave to appeal to that court on that basis, Froneman J made
pertinent findings about an order of reinstatement, its effect and
the risk of an appeal process on such an order.
[80]
In articulating the nature of a
reinstatement order, Froneman J cited the decision of the
Constitutional Court in
Equity Aviation
Services (Pty) Ltd v Commission for Conciliation, Mediation and
Arbitration & Others
, and confirmed
that the judgment in that matter achieved clarity about the nature
and inter-relationship between the remedies of
re-instatement,
re-employment and compensation provided for in section 193 of the
LRA. He indicated that after the
Equity
Aviation
judgment, there can be no
doubt not only that reinstatement is the primary remedy in unfair
dismissal disputes but quoted the following
dicta from that judgment
in support of the proposition that the remedy of reinstatement is
granted by virtue of an arbitration
award or an order of court:
“
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
section 193(1)(a) indicates, the extent
of retrospectivity is
dependent upon the exercise of a discretion by the Court or
arbitrator . . . The fact that the dismissed
employee has been
without income during the period since his or her dismissal must,
among other things, be taken into account in
the exercise of the
discretion, given that the employee’s having been without
income for that period was a direct result
of the employer’s
conduct in dismissing him or her unfairly”.
[81]
It is apparent, in citing the dicta in the
Equity Aviation
matter,
that the Constitutional Court in the
Billiton
matter reinforced the notion that the
reinstatement order arises from the confines of the
Labour Relations
Act and
must be ordered where the dismissal is found to be
substantively and procedurally unfair. To the extent that the
employer or the
company contests the dismissals, it does so with the
risk that the order of reinstatement may be a distinct possibility
when its
actions have been determined to be unfair. This court finds
the Respondent’s conduct to be unfair. I find the Respondent’s
conduct to be unfair.
[82]
In the premises, I find that the
Respondent:
1)
Failed to follow the
fair procedure in accordance with the provisions of section 189 of
the Labour Relations Act, 66 of 1995 (as
amended) (“the LRA”)
in carrying out the termination of their employment on the alleged
grounds based on operational
requirements, which took place on or
about 28 December 2009; and also that,
2)
The Respondent failed
to engage in a meaningful consensus seeking consultation with the
affected employees, as well as to comply
fully with the provisions of
section 189 (3)
(a)
– (j)
of the
LRA.
ORDER
I make
the following order:
[1]
The dismissals of the Second and Further Applicants for reasons based
on the Respondent’s operational requirements was both
procedurally and substantively unfair;
[2]
The Respondent is ordered to re-employ the Second and Further
Applicants, in the work in which they were employed before the
dismissal
or on reasonably suitable work, from the date of this
judgement.
[3]
The reinstatement of the Applicants shall be on the same terms and
conditions that applied to them as they would have been to date
had
they not been dismissed.
[4]
The Respondent is ordered to pay the costs of the applicant, on a
party and party scale, such costs to include the costs of the
trial.
________________
MOSIME AJ
Acting
Judge of the Labour Court of South Africa
Appearances:
For the
Applicants:
Ms S Gabie, Attorney
Cheadle Thompson
& Haysom Inc
For the
Respondents:
Adv. F Venter
Johannesburg Bar
Instructed by:
Johanness
de Beer Inc.
[1]
Pages 2
(para 4) and 17 (para3), Pleadings Bundle.
[2]
See
paragraph 2.4, Pre-Trial Minute, page 116, Pleadings Bundle.
[3]
Page 4,
Consolidated Bundle.
[4]
Mrs Cook
was “Ms Coetzer” at the time of the incidents, before
she got married.
[5]
Pages 6, 7
Consolidated Bundle.
[6]
The names
of these ‘possibly affected employees’ in the notice
were:
Conrad
Cannel; Sammy Malete; Clayton Billings; Tommy Maritz; Cedrick
Manamela; Terence Williams; Debbie Steward; Thapelo Masilo;
Mike
Moshope and George Kekana
.
[7]
Page 7,
Consolidated Bundle.
[8]
[8]
Sammy
Malete actually resigned in 2009.
[9]
His letter
of retrenchment is attached in page 73 of the consolidated bundle.
[10]
Pages 8, 9
of Consolidated Bundle.
[11]
Mike
Moshope and Thapelo Masilo (who were supervisors) also received the
section 189(3) notice dated 21 October 2009.
[12]
As required
by
section 189(1)
of the
Labour Relations Act, No 66 of 1995
, as
amended.
[13]
Page 10,
Consolidated Bundle.
[14]
Paragraph
8, page 18; paragraph 8, page 35 of the Pleadings Bundle.
[15]
Page 15,
Consolidated Bundle.
[16]
See
Minutes, page 22 Consolidated Bundle.
[17]
It is
recorded in the Minute of the meeting held on 26 November 2009 that
the company could make a saving of R12k – see
page 32
Consolidated Bundle.
[18]
Page 22,
Consolidated Bundle,
International
Hub
.
[19]
Page 23,
Consolidated Bundle.
[20]
In
Enterprise
Food (PTY) Ltd v Allen & Others
[2004] 7 BLLR 659
(LAC)
it transpired that the employer only consulted with the employees
after it had taken a final decision to close one of its plants.
The
court held that even if there was a business rationale, the employer
had to consult before the final decision was taken.
[21]
See
paragraph 6 of the Amended Statement, page 75 of the Pleadings
Bundle.
[22]
First
Notice, page 2, Consolidated Bundle.
[23]
Second
Notice, page 8, Consolidated Bundle.
[24]
It is
recorded in the Minute of the meeting held on 26 November 2009 that
the company could make a saving of R120k per annum –
see page
32 Consolidated Bundle.
[25]
See
NUMSA
v Atlantis Diesel Engineers (Pty) Ltd,
(1992)
13 ILJ 405 (IC)
where it
was stated:
“
We
are somewhat doubtful… after all in business frequently not
always the best, nor is the correct decision taken.
Perhaps management has a right to be foolish as long as it is
strictly bona fide in its deliberations.”
[26]
See the
last but one bullet point in the Minutes, page 22 Consolidated
Bundle.
[27]
See pages
18 – 21, consolidated Bundle.
[28]
Page 22,
Consolidated Bundle.
[29]
See section
on Opening, ibid.
[30]
[30]
Paragraph
83, page 98 Pleadings Bundle.
[31]
Pages 4 and
5 of the Consolidated Bundle.
[32]
These are
only named Philemon, Michael, George, Ludwick and Neordine.
[33]
See pages 7
– 9; 101 – 102, Pleadings Bundle.
[34]
See page
33, pages 40 - 41, and pages 43 -45, Consolidated Bundle.
[35]
Pages 43 –
44, Consolidated Bundle.
[36]
Page 47 -
48, Consolidated Bundle.
[37]
Pages 62 –
72 of the Consolidated Bundle.
[38]
Page 46,
Consolidated Bundle.
[39]
Page 49,
Consolidated Bundle.
[40]
Ibid
,
para 9 of letter, page 50.
[41]
Page 51,
Consolidated Bundle.
[42]
See
paragraph 51, page 28 of the Respondent’s Heads.
[43]
Section
189(4)
(b)
imposes
an onus on the employer to prove that any information not disclosed
in a
s189(3)
notice is not relevant to the dismissal or any dispute
as to its fairness or lawfulness.
[44]
In
this regard, the Respondent cannot rely, as it sought do, on the
decision of
Simelane
and Others v Letamo Estates
[44]
,
where this court held as follows: “
[31]
It is apparent that despite being repeatedly told that the financial
statements were not germane to the proposed retrenchment,
the union
stuck to that before it would consult. The question of course
is, were they justified in that stance? In
the court’s
view not.
Section 189(3)
refers to disclosure in writing of
all relevant information. Therefore the determinative
phrase therein is the relevant
information. (See UPUSA and
Others v Grinaker Duraset (1998) 19 ILJ 107 (LC);
[1998] 2 BLLR 190
(LC), NUMSA v Comark Holdings (Pty) Ltd (1997) 18 ILJ 516 (LC);
[1997] 5 BLLR 589
(LC) and NUMSA v Atlantis Diesel Engines (Pty) Ltd
(1994) 15 ILJ 1257 (A).”
[45]
Page 56
Consolidated Bundle, letter from Local Chairperson of SATAWU, Khathu
Mvhungu, addressed to Human Resources Manager, Ms
Cook, dated 11
[December] 2009; and page 60 Consolidated Bundle, email dated 11
December 2009, from J Skosana, addressed to Senior
Management.
[46]
Page 44,
Consolidated Bundle, discussions in the Minute of the meeting of the
4 December 2009, Point 2.
[47]
(2005)
26 ILJ 889 (LC) paras 5, 34.
[48]
SACWU
& Others v Afrox
Limited
(1999) 20
ILJ 1718 (LAC)
[49]
(1999) 20
ILJ 1718 (LAC)
[50]
At para 36.
[51]
This
approach was endorsed by the Labour Appeal Court in
General
Food Industries Ltd v FAWU
[2004] BLLR 667
(LAC)
where the Court held as follows: “
An
employer is entitled to take the provisional decision to consider
the possible retrenchment of employees on his own, without
any input
from the employees or the union. But he is not allowed to make
a final decision before consulting with the trade
unions or
employees involved. In practice an employer will first sense
the need to retrench at managerial level and the
decision in
principle will be taken. However, the employer must consult
once it contemplates the dismissal of employees
for operational
requirements.”
[52]
(2006) 27
ILJ 117 (LAC).
[53]
Code of
Good Practice on Dismissal Based on Operational Requirements GN
1517,
GG
20254
of 16 July 1999.
[54]
Thompson
and Benjamin
South
African Labour Law
(Service
No 48, 2006) at AA1-473.
[55]
(1999) 20
ILJ 1718 (LAC)
[56]
Afrox
Limited
,
supra
,
at para 38.
[57]
[2014] 35
ILJ 2236 (LC)
[58]
At para 32.
[59]
In this
regard, the court made reference
to
BMD Knitting Mills v SA Clothing & Textile Workers Union
(2001)
ILJ 2264 (LAC)
, where the
‘
various terms had
been employed to articulate the test for assessing the substantive
fairness of an employer’s decision
to dismissed based on
operational grounds’
.
[60]
BMD Knitting Mills
at
para 19.
[61]
Ndlhela
,
at paragraphs 43 and 44.
[62]
It is
notable that the company, through Cook, testified that this
“disconnect” was identified during a strike by employees
in September 2009. The strike apparently enabled the management band
to identify the particular duties and functions of each
striking
employee in their absence, and thereby understand which functions –
and thus employees – were in fact unnecessary
to the smooth
performance of operations.
[63]
At para 45.
[64]
S189
(7)
(a)
of
the LRA.
[65]
S189
(7)
(b)
of
the LRA. See also Johnson & Johnson (Pty) Ltd v CWIU (1999) 20
ILJ 89 (LC), where the ultimate purpose of
section 189
is explained.
[66]
P
age
39 para 66 of Respondent’s Heads.
[67]
Sidumo
& another v Rustenburg Platinum Mines Ltd & others
2008
(2) SA 24
(CC), at para 78. See also SA mutual Life Assurance
Society v Insurance & Banking Staff Association & Others
92001]
9 BLLR 1045
(LAC) for an example where the courts frown at
the use of retrenchments for ulterior purposes.
[68]
At
s188.
[69]
(2002) 23
ILJ 1448 (LC).
[70]
See
s48
of
[the LRA Amendment] Act 12 of 2002.
[71]
(1999) 20
ILJ 1754 (LC), where the court held that it may, in deciding to
award compensation where it was found that dismissal
was
procedurally unfair, consider the manner in which the union
representatives conducted themselves during the consultation
process, and the extent of their culpability in influencing the
employer’s failure to comply with the provisions of s189.
[72]
Johnson
& Johnson (Pty) Ltd v CWIU
(1999) 20
ILJ 89 (LC) and
Chothia
v Hall Longmore & Co (Pty) Ltd (1997) 18 ILJ 1090 (LC)
.
[73]
Labour
Relations Amendment Act 12 of 2002
.
[74]
[2010]
5 BLLR
465
(CC).
[75]
[2008] ZACC
16
;
(2009) 1 SA 390
(CC).