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[2017] ZALCJHB 96
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Southern African Clothing and Textile Workers Union and Others v Stephead Military Headwear CC (JS791/14) [2017] ZALCJHB 96 (20 March 2017)
IN
THE LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG
Not Reportable
Case no: JS79114
In the matter between:
SOUTHERN
AFRICAN CLOTHING
AND
TEXTILE WORKERS UNION
First Applicant
MAGGIE
MALALA
Second Applicant
LESEGO
RACHEL NKHUMANE
Third Applicant
and
STEPHEAD
MILITARY HEADWEAR CC
Respondent
Heard:
25 – 26
August 2016
Delivered:
20 March 2017
JUDGMENT
TLHOTLHALEMAJE
J
Introduction
and background
[1]
SACTWU
approached this Court by way of a statement of claim to challenge the
substantive and procedural fairness of the dismissal
of its members,
viz, Ms Maggie Malala, and Ms Lesego Rachel (the Employees) on 23
April 2014. Their dismissal was pursuant to a
purported retrenchment
exercise in terms of the provisions of section 189 of the Labour
Relations Act.
[1]
[2]
The respondent conducts its business as a
designer and manufacturer of military headwear, badges and other
accessories for the military,
the SAPS, other security agencies and
non-military institutions. The Employees were employed with effect
from 1 September 2009
and 8 October 2010 respectively as
Machinist/sample and pattern makers in the respondent’s
Development Department
until 23 April 2014.
[3]
As recorded in the parties’ pre-trial
minutes, the Employees’ key performance areas included
inter
alia
, translating the drawings,
products, specifications and samples into pattern paper; maintaining
and opening communication with
the respondent’s operational
manager and production factory manager; producing ‘product
patterns; ensuring that sample
patterns matched original designs;
altering, adjusting and redesigning sample products.
[4]
It was common cause that with effect from
13 September 2013, the Employees were placed on short time and were
informed not to report
for duty from 16 September 2013. They were
only paid two weeks’ salary for that month. Whilst they were
placed on short time
between October and November 2013, the
respondent employed two new employees within the same department that
they were employed
in. The one individual was employed as Design and
Development Manager, and had performed the functions which were
performed by
the Employees before they were placed on short time. The
other individual was employed as a Sample Maker.
[5]
On
3 December 2013, the respondent issued a notice in terms of the
provisions of section 189(3) of the LRA
[2]
in which it was stated that:
“
Due
to the following circumstances based on economic needs and reductions
of the company’s production. The company/employer
is
considering retrenchments.
Step Head
Military Headwear
is experiencing
financial difficulty, due to the down turn in procuring new contracts
and has led to a loss of finances and a substantial
decline in the
workload. To ensure the economical well-being of the company the
employer is considering retrenchments and needs
your written reaction
to this as soon as possible but no late than close of business
11/12/2013 (one week).”
[6]
A meeting was held on 11 December 2013
between the representatives of the respondents and those of the
Employees’ Union. The
purpose of that meeting was purportedly
to attempt consensus on the contemplated dismissal. In the course of
the meeting, the Union
raised concerns surrounding the fact that the
respondent had not disclosed its financial status in support of the
contention that
it was not doing well; the employment of new people
whilst the Employees were placed on short time; the selection
criteria; and
the reason only one department was affected.
[7]
A further meeting was held on 12 March 2014
and again the Union raised its concerns surrounding the employment of
the other two
people in the Employees’ positions. The Union had
suggested that all departments must be considered and where
necessary,
LIFO ought to be the preferred method of selection.
Amongst the respondent’s responses to these concerns was that
to confirm
that indeed new people were employed, but that they were
more skilled and able to perform other functions which the Employees
could
not perform. A severance package of a pay equivalent to 1.5
weeks’ wages for each year of service was proposed by the
respondent.
No agreement could be reached on the retrenchments and as
a result, the Employees were handed their notices of dismissal on 23
April 2016.
The
evidence
[8]
The
respondent called two witnesses in support of its case, viz, its
Managing Member, Ms Maureen Simoes, and Emily Taukobong, its
Human
Resources Manager. The applicants had closed their case without
calling witnesses. The respondent’s initial stance
on the
matter as can be gleaned from the pleadings was that the dismissals
were effected on the basis of its operational requirements
and/or
their inability to do their designated jobs properly.
[3]
[9]
In these proceedings and based on the
evidence led on its behalf, it transpired that the Employees were
effectively dismissed
for poor work
performance. To the extent that this was the case, it was argued on
its behalf that the dispute must be remitted back
to the relevant
Bargaining Council to be conciliated and adjudicated as a dismissal
for poor work performance. The Employees on
the other hand maintained
that they were retrenched in accordance with the process contemplated
by section 189 of the Act and therefore
the procedural and
substantive fairness of their dismissal ought to be tested in
accordance with the provision of section 189 of
the LRA in the light
of the evidence presented.
[10]
Maureen Simoes’ testimony can be
summarised as follows:
10.1
The Employees started their employment as
sewing machinists and sample markers. At some point during their
employ, they were promoted
to positions of pattern maker in 2011
after they had received their certificates including a diploma in
dressmaking;
10.2
The respondent’s business is
dependent on tender work, and had over time expanded, with orders
being also received from
inter alia
,
Israel Military (Ministry of Defence) in 2008 to produce berets,
badges etc;
10.3
It was at some point noticed that the
Employees were not performing according to standards, especially in
respect of the SAA and
SANDF contracts. The respondent had been
appointed by SAA with effect from 12 November 2012 to supply and
deliver
inter alia
shirts and blouses for the Airline. The proposed contract was to be
for a period of three (3) years, but the respondent failed
to meet
its delivery deadline;
10.4
The respondent was anticipating another
tender, and had assigned the Employees to the SAA order. They however
did not make the correct
samples, which turned out to be of poor
quality. Of concern were the samples produced for SAA, and the number
of times the samples
had been submitted to SAA and only to be
rejected. The respondent was given time to resolve these issues and
to submit proper samples;
10.5
The above turn of events proved to be an
embarrassment for the respondent, and final warnings were then issued
to employees in the
factory. On 3 June 2013, the respondent was
scheduled to make a final presentation to SAA. Still, the
presentation revealed that
the samples were defective, and a further
meeting was then held with the employees;
10.6
In view of these problems, the respondent
on 3 June 2013 decided to cancel the contract with SAA on the basis
that it could not
meet delivery deadline. The respondent however
received another tender from the South African Navy to deliver 3 000
ties by
March 2013. This being a new venture, the pattern makers had
to produce samples but could however not do so. The work had to be
outsourced to another company, resulting in deliveries being made
about 6-7 months out of deadlines;
10.7
The respondent received another tender from
the South African Army to deliver shorts. It had not produced shorts
before, and the
pattern markers could not produce the necessary
samples or do so correctly. Inspectors from the SABS having inspected
the samples
had rejected them, resulting in the respondent being
penalised for late delivery or the products ordered. Again, the work
had to
be outsourced to another company based in Cape Town, and this
implied additional costs as fabric material already ordered for the
products had to be shipped off to Cape Town;
10.8
There was another tender received on 18
February 2013 from the South African Military Health Services for the
supply of ruby ties.
The respondent could not produce the right
samples after receiving the order in May 2013. The samples were again
rejected by the
SABS. The problem was with the quality, deviations
from specifications, constructions, workmanship quality and
dimensions. The
ties were due to be delivered in July 2013. Again,
the respondent had to acquire the services of another company located
in Durban
to make the samples;
10.9
The respondent made a profit of R1 million
at the financial year end of February 2013. However, in the financial
year end of February
2014, it made a loss of approximately the same
amount. Over time, it was realised that the Employees had performance
issues despite
these being discussed with them informally, especially
with Malala who was also a shop steward. The Operations Manager, HR,
and
the Factory Manager had discussions with them and when spoken to,
they had failed to react in any positive manner. Amongst concerns
raised with them was the poor quality of samples, the use of cell
phones in the workplace and general poor performance;
10.10
The Employees were placed on short time in
September 2013, and before then, they had been rotated. This was due
to the fact that
there was not much work at the time. Simoes was
uncertain whether any other employees were placed on short time;
10.11
Another person was employed as Design
Development Manager during November 2013 while the Employees were on
short time. Simoes denied
that this person’s duties included
making patterns and contended that productivity had improved when
this new person came
in, as she could also use a machine for
patterns;
10.12
Simoes blamed the Employees for three years
in loss of production and contended that the respondent could not
retain them. Had they
performed according to expected standards and
been productive, they would have been retained;
10.13
According to Simoes, the Employees were
dismissed on 23 April 2014, and the retrenchments followed as they
were on short time. Part
of the reasoning for the retrenchments
according to her was that the respondent intended to outsource
patterns;
10.14
The Employees could have in fact been
subjected to discipline due to poor work performance rather than
being retrenched. She confirmed
that they were the only employees in
the respondent’s employ to be retrenched, and contended that
they have since not been
replaced;
10.15
Under cross-examination, Simoes confirmed
that there were different departments within the respondent,
including administration,
the cutting room, the production floor, the
hand workers, the preparation department and the Design and
Development;
10.16
The Design and Development Department was
started in 2013, and the Employees were multi-skilled, and were
initially promoted because
they had skills which added value after
being given performance agreements. Prior to their promotion, they
had not done patterns
before;
10.17
Malala in particular was a good machinist
and regarded as the most proficient all-rounder in 2007, and there
were no concerns in
regard to her performance;
10.18
She confirmed that the Employees were
retrenched due to poor work performance because that is what the
respondent thought was correct
at the time. This was despite the fact
that performance appraisals conducted in March 2013 in respect of
both of them revealed
that they had met expectations;
10.19
She further confirmed that prior to the
retrenchment process no comparison were made between the performance
of new sample marker
(Mapane) and the Employees. A decision was made
in accordance of what the respondent deemed as a choice between two
inefficient
people or to close down the factory;
10.20
The Employees nevertheless had to be
retrenched as a choice had to be made amongst multi-skilled
employees, those that had performed,
were committed and showed
willingness to work. According to Simoes, LIFO was not an option as
the Employees lacked commitment or
willingness. She contended that
long service did not necessarily get the work done;
10.21
There were no alternatives considered as
the Employees’ performance was assessed against the performance
of other employees.
The respondent, in hindsight, and in view of
performance concerns, ought to have followed the disciplinary route
rather than retrenching
them. There was according to Simoes, a basis
for charging them with misconduct, and poor work performance. This
was due to the
fact that they were given an opportunity to improve,
were put on short time, and thereafter retrenched. A further problem
encountered
in not instituting disciplinary measures against them was
that one of them was a shop steward.
[11]
The evidence of Ms Emily Taukobong was that
the Employees were promoted in 2011 to positions of pattern markers
as they had the
necessary qualifications. At no point did they raise
any problems and concerns about training, and it was only when they
got a
performance contract that they raised the issue of grading. In
2012 when performance assessments were done, they had then raised
the
need to be trained on grading and computers.
[12]
When the SAA order was secured, the
Employees had struggled with the patterns. Meetings were held with
them in June and August 2013
in the presence of the Production
Manager surrounding the delay in samples, patterns and lack of
production. The Employees nevertheless
showed no commitment or
intention to improve, resulting in them being placed on short time,
particularly after work on patterns
had to be outsourced and after
the SABS rejected certain samples.
[13]
In her capacity as HR Manager, she had
advised management to start with the process of retrenchments. This
had resulted in a meeting
of 13 December 2013 with the
Union representative. At that meeting, the Union representative had
made suggestions, including
that the Employees should be moved to
other departments. The Union also suggested LIFO as a selection
criteria. The respondent’s
attitude however was not to support
LIFO. Taukobong’s view was that had the Employees performed
well, they would still be
employed.
[14]
Cross-examination of Taukobong revealed
that there was one other machinist with lesser service than the
Employees. Other employees
such as Anna Baloyi and Sarah Mthobeni
were employed at the same time as them. During the two consultations,
the Union was informed
that only one department was to be affected by
retrenchments, and that it could be closed down because the samples
and patterns
were a problem and further since those services were to
be outsourced. She conceded however that the department was not
closed
down especially after the appointment of Design and
Development Manager and a sample maker. She denied that the new
sample maker
performed the same tasks as the Employees, and that she
mainly did new samples. Her performance contract was also different,
and
her responsibilities were extended to include training others on
the pattern machine which the respondent acquired in 2014 after
it
had received funds from the Department of Trade and Industry.
[15]
Taukobong reiterated that there were
concerns with the performance of the Employees, especially Malala
after her appointment as
shop steward and promotion as pattern
marker. She nevertheless contended that concerns surrounding
willingness to work and attitude
were not the selection criteria, and
that the two positions had become redundant after the respondent
employed a person who could
do the work.
The
legal framework and evaluation
[16]
In accordance with the parties’
pre-trial minutes, this Court is required to determine:
i.
Whether the dismissal of the Employees was
procedurally and substantively unfair;
ii.
Whether there was an agreement that the
Employees ought to be placed on short time;
iii.
Whether the NBCCMI has jurisdiction to hear
and determine the dismissal dispute.
[17]
I intend to dispose of the last two issues
first. The issue of whether or not there was an agreement to place
the Employees on short
time does not take this matter any further in
the light of the common cause fact that they were indeed placed on
short time.
[18]
The
issue of whether the NBCCMI has jurisdiction to determine the
dismissal dispute is in my view moot at this point of the
proceedings.
As shall be further illustrated below, in regards to the
issue of onus and jurisdiction, once the applicants were informed at
the
time of the dismissal that those dismissals were as a result of
operational requirements, they were entitled to follow the dispute
resolution procedures laid down in sections 135;
[4]
191 (5) (b) (ii);
[5]
and 191 (11) (a)
[6]
of
the LRA. The mere fact that the respondent at this belated stage
sought to have the reason for the dismissal changed to alleged
poor
work performance cannot deprive the court of jurisdiction to
determine the issue whether the dismissals were procedurally
and
substantively fair or not.
[19]
An initial preliminary point in regards to
whether the real reason why the Employees were dismissed related to
operational reasons
or whether they were dismissed for poor work
performance as raised by the respondent was abandoned at the
commencement of the proceedings,
and correctly so in the light of the
concessions to be made and the evidence led.
[20]
The
starting point in this case in the light of the pleadings and the
evidence led is that in instances where
an
employer dismisses employees on account of its operational
requirements, the provisions of section 188(1) read together with
those of section 192(2) of the LRA obliges the employer to prove that
the reason for the dismissal was fair. In emphasising the
question of
onus, Tlaletsi JA (as he then was) in
Super
Group Supply Chain Partners v Dlamini and Another
[7]
restated
that it is expected of the employer to discharge the onus of proving
that the dismissals of the employees were fair. In
doing so, evidence
was to be presented to demonstrate that there was indeed a need to
retrench in the sense that there was a fair
reason to retrench; the
selection criteria was fair and objective; and the dismissals were
effected in accordance with the requirements
of a fair procedure.
[21]
The immediate difficulty that arises in
this case pertains to what the respondent’s case was as stated
in the pleadings, and
what that case turned out to be during these
proceedings. As already indicated with the summation of the evidence
as above, the
respondent’s initial stance was to concede that
it—
“
went
through an ostensible process applicable to dismissals for
operational reasons involving an official from First Respondent
and
that it purported to dismiss Second and Third Applicants for
operational reasons.”
It
was further stated in its reply that this was—
“
done
for the benefit of Second and Third Applicants by causing them to be
paid severance pay in excess of the statutory minimum,
the alternate
being that they would have received no severance pay;
and
‘
preventing
the publication of the true reason for their dismissal, being an
inability to do the job, which would have prejudiced
their efforts to
seek alternative employment elsewhere.”
[8]
[22]
The above being the case, it is trite that
litigants stand and fall by their pleadings.
Counsel
for the respondent had at the end, correctly conceded that the
evidence led in these proceedings demonstrated that the real
reason
for the dismissal was poor performance. It was further conceded that
even if the Employees were dismissed for poor work
performance, there
might indeed be a case of procedural unfairness to answer to.
[23]
There
are however inherent difficulties that are faced by the respondent in
this case. The ultimate determination of this dispute
cannot solely
be on the grounds that concessions have been made. In its misguided
effort to show ‘benevolence’ towards
the Employees, the
respondent had in the same vein, sugar coated the real reason for the
dismissal, which does not assist it when
it comes to discharging its
onus of proving that
the
reason
for
the
dismissal
was fair as required in terms of the provisions of section 188 of the
LRA.
[9]
[24]
Ultimately, the Court is required to
determine what the real reason for the dismissal was and whether it
was fair or not. It goes
without saying that an employer is not
permitted to dismiss employees for X reason, and then come to court
and contend that those
employees were instead dismissed for Y
reasons. This is so in that there is a distinction between a
dismissal for a reason based
on an employer’s operational
requirements and a dismissal based on conduct or capacity.
Furthermore, the dispute resolution
mechanisms contained in the LRA,
read together with applicable Codes of Good Practice dictate or
provide guidelines in respect
of distinct forms of dismissals,
inclusive of appropriate remedies in that regard. Other than these
factors, aligned to the dispute
resolution procedures is the
important factor of jurisdiction in regards to how and which forum
these various disputes can be determined.
[25]
It
has long been held in
FAWU
obo Kapesi & others v Premier Foods Ltd t/a Blue Ribbon Salt
River
[10]
that
an employer cannot dismiss employees for operational requirements
simply because of the difficulties involved in proving misconduct,
or
as in this case, proving poor work performance. It can further not be
correct for employers to disguise the real reason for
a dismissal as
there are consequences that flow from that dismissal.
Any
contention that such a disguise was to benefit the employees should
be rejected out-rightly.
[26]
To the extent that evidence was led in this
case in respect of the purported retrenchments, I am prepared to
accept that the ultimate
decision to retrench or real reason for the
dismissal was therefore not properly and genuinely justifiable by
operational requirements
or, based on any commercial or business
rationale.
[27]
In
Havemann
v Secequip (Pty) Ltd
,
[11]
Savage AJA held that—
“
a
fair reason is one that is bona fide and rationally justified, and
informed by a proper and valid commercial or business rationale.
The
enquiry is not whether the reason put up is one which would have been
chosen by the court but whether the reason advanced considered
objectively is fair.”
In
this case, the reason for retrenchments, to the extent that it was a
means of getting rid of what the respondent deemed to be
poor
performers was a sham
[12]
, as
it was unrelated to any operational requirements as defined in
section 213 of the LRA
[13]
.
[28]
In the light of the above conclusions, it
would not be necessary to examine whether other requirements
applicable in dismissals
based on operational requirements were met.
This is so in that once it is concluded that the real reason for a
dismissal was disguised
as a retrenchment, any purported procedures
followed in that regard are equally deemed to have been a charade, as
they could not
have been intended to follow the spirit of the
provisions of section 189 of the LRA.
[29]
Even
if these other considerations were to be examined, first, regarding
the need to retrench, it was common cause that not long
after the
Employees were placed on short time, the respondent employed other
people to essentially perform the same tasks that
the Employees had
performed
[14]
. If indeed
operational requirements compelled the respondent to place the
Employees on short time, it is inexplicable that they
would have been
replaced immediately by someone else in their positions. There was
therefore in any event, no genuine or rational
basis for declaring
the Employees redundant, let alone placing them on short time.
[30]
A second factor is that it was common cause
that two purported consultation meetings were held between the
respondent and the Union
representing the Employees. The meetings
cannot in my view be construed to have been meant for any meaningful
engagement with the
Union in that none of its proposals pertaining to
bumping or selection criteria were even considered. The Union’s
concerns
surrounding the need to retrench in the light of the
employment of new people did not appear to elicit any positive
response from
the respondent. The respondent’s attitude was
merely to present a severance package equivalent to 1.5 weeks’
wages
for each year of service and to get rid of what it perceived to
be non-performers.
[31]
Equally, the criteria adopted in selecting
the Employees, i.e. willingness to work, attitude or performance can
hardly be considered
as fair or objective. Taukobong’s evidence
was that
the concerns surrounding
willingness to work and attitude were not the selection criteria, and
that the two positions had become
redundant after the respondent
employed a person who could do the work. This evidence however does
not take the respondent’s
case any further in that its
contention throughout these proceedings was that the Employees were
poor performers who lacked commitment.
In any event, it was common
cause that that new people were employed in the Employees’
department after they were placed
on short time. Their placement on
short time and the employment of new people in their stead goes to
the very essence of fairness
of their dismissal. The employment of
new people in positions previously occupied by the Employees was the
sine qua non
of them being declared redundant in the first place.
[32]
Section
189(2)(b) of the LRA requires an employer and the other consulting
parties to engage in a meaningful, joint consensus-seeking
process
and attempt to reach consensus on the method for selecting the
employees to be dismissed. From these consultations, the
employer is
obliged to consider and respond to any suggestions made by the Union
or employees, and not to simply ignore those suggestions.
[15]
Thus, even if there is no agreement between the parties, ultimately
the respondent must still prove that the method of selection
was fair
and objective.
[33]
It
was held in
CWIU
and Others v Latex Surgical Products
that the use of selection criteria that are not fairly and
objectively applied renders a dismissal procedurally and
substantively
unfair.
[16]
Simoes and Taukobong had conceded that the Employees had longer
service than other employees not selected for retrenchment. To
this
end, the suggestion by the Union that LIFO should have been
considered could not simply have been dismissed on the basis that
‘long service did not make a difference’ or that ‘long
service does not get the job done’ as Simoes had
contended.
This dismissive response can hardly be objective.
[34]
To
the extent that it was confirmed that the dismissal of the Employees
was due to alleged poor work performance, it was argued
on behalf of
the respondents that the Court should then determine whether the
dismissal was in any event unfair in the light of
the evidence led.
To deal with the fairness or otherwise of the dismissal based on poor
performance on its own would not be within
the jurisdiction of this
Court, as ordinarily such a matter would have been the subject of
arbitration. I however intend to deal
with the issue of poor
performance not as a stand-alone reason for the dismissal, but within
the context of a determination of
whether the selection criteria
adopted was fair or objective. This is so in that in accordance with
the principles enunciated in
Food
and Allied Workers Union obo Kapesi and Others v Premier Foods Ltd
t/a Blue Ribbon Salt River; Premier Foods Ltd t/a Blue Ribbon
Salt
River v Food and Allied Workers Union obo Kapesi and Others.
[17]
It is permissible in certain circumstances for employers to use
grounds such as misconduct, and by implication, capacity and/or
performance as acceptable and reasonable criterion for selecting
employees for retrenchment.
[35]
In this case, even if the respondent could
use poor performance as a reasonable criterion, the evidence led in
regard to the Employees’
poor performance cannot on a balance
of probabilities lead to a conclusion that dismissals were fair. It
was correctly pointed
out on behalf of the applicants that Item 9 of
Schedule 8 of the LRA provided guidelines in regard to dismissals for
poor work
performance. It was in any event conceded on behalf of the
respondent that procedural fairness might be an issue in this regard.
[36]
It is my view that it was not sufficient
for the employer to simply allege that employees were poor
performers. It needed to demonstrate
in what material respects, even
if they were poor performers, it had confronted that problem in the
sense of training, counselling
etc. Even on the evidence of Simoes,
the individual applicants were good performers, were trained,
qualified, and were also promoted
at some point of their employment.
I have no reason to doubt Simoes’ evidence that there were
indeed performance concerns
surrounding the Employees, and that
concerns were raised with them. However, even if this was the case,
and in the light of what
has already been stated, there was no reason
for them to be dismissed after being placed on short time especially.
There were various
contradictions presented in this case as to
whether the Employees were poor performers or not. At some point,
they are praised
as qualified, all-rounders, capable, and competent
to deserve promotion. When matters went pear-shaped however, the
respondent
was quick to vilify them for having caused loss of
production or tenders.
[37]
Ultimately however, even if there were
concerns surrounding the Employee’s performance, there was no
justification to first
place them on short time, and as if that was
not enough, then retrench to make way for other employees it deemed
suitable. This
approach cannot by any stretch of imagination be fair.
Overall, I am therefore satisfied that the respondent failed to
discharge
the onus of proving that the dismissal of the Employees was
procedurally and substantively fair.
Relief
[38]
The Employees as per their statement of
claim sought retrospective reinstatement. It was submitted on behalf
of the respondent that
if any relief was to be granted, it could only
be in respect of procedural unfairness, and even then, it must be
taken into account
that the Employees were already paid six weeks’
salary as part of the severance package.
[39]
There
is merit in the submissions made on behalf of the Employees that
there is no reason in section 193(2) of the LRA that militates
against an order of retrospective reinstatement. On the evidence of
the respondent’s Taukobong, the department where the
individual
applicants used to be employed is still fully operational, and there
was nothing placed before the Court to justify
why a reinstatement
was not appropriate. In any event, reinstatement is the primary
remedy in unfair dismissal disputes, and section
193(1)(a) of the LRA
confers a discretion on this Court to determine the extent of
retrospectivity of the reinstatement.
[18]
In this case, the Employees were dismissed on 23 April 2014,
having been placed on short time since September 2013.
The six
weeks’ salary paid to them as severance package is small
comfort in the circumstances where, immediately after their
placement
on short time, the respondent had employed someone else in their
stead. That amount is also of small comfort when it
is taken into
account that they were dismissed after going for almost seven months
without a salary. Furthermore, the fact that
their dismissal was
disguised as a retrenchment when the respondent knew that this was
not the case makes it even more grossly
unfair.
[40]
In the light of these considerations, I am
satisfied that retrospective reinstatement in this case would be
appropriate. It is my
view however that given the circumstances of
this case, any amount of back-pay due to the Employees as a result of
retrospective
reinstatement ought to exclude any severance payments
made at the time of their purported retrenchment on 23 April 2014.
I
have also had regard to the requirements of law and fairness in
regards to the issue of costs, and I am satisfied that a cost
order
is not warranted given the circumstances of this case.
Order
[41]
Accordingly, the following order is made:
1)
The dismissal of the second and third
applicants was procedurally and substantively unfair.
2)
The respondent is ordered to reinstate the
second and third Applicants in its employ, with retrospective effect
from 23 April 2014,
and on the same terms and conditions as
applicable to their employ.
3)
Payments of back-pay in the form of
remuneration and benefits due to the second and third applicants as a
result of their retrospective
reinstatement shall exclude any
severance payments made to them as a result of their purported
retrenchment.
4)
There is no order as to costs.
__________________
E Tlhotlhalemaje
Judge of the Labour Court
of South Africa
APPEARANCES
For
the applicant:
R Daniels of Cheadle Thompson & Haysom Inc.
For the Respondent:
R. G Beaton SC
Instructed
by:
De Villiers &
Du Plessis Attorneys
[1]
66
of 1995 (LRA).
[2]
Section
189(3) provides:
“
(3)
The employer must issue a written notice inviting the other
consulting party to consult
with it and disclose in writing all
relevant information, including, but not limited to—
(a)
the reasons for the proposed dismissals;
(b)
the alternatives that the employer considered before proposing the
dismissals, and
the reasons for rejecting each of those
alternatives;
(c)
the number of employees likely to be affected and the job categories
in which they
are employed;
(d)
the proposed method for selecting which employees to dismiss;
(e)
the time when, or the period during which, the dismissals are likely
to take effect;
(f)
the severance pay proposed;
(g)
any assistance that the employer proposes to offer to the employees
likely to be
dismissed;
(h)
the possibility of the future re-employment of the employees who are
dismissed;
(i)
the number of employees employed by the employer; and
(j)
the number of employees that the employer has dismissed for reasons
based
on its operational requirements in the preceding 12 months.”
[3]
Statement
of Response at paragraph 3.1.
[4]
Section 135 is headed: “
Resolution
of disputes through conciliation
”
and provides—
“
(1)
When a dispute has been referred to the Commission, the Commission
must appoint a commissioner
to attempt to resolve it through
conciliation.
(2)
The appointed commissioner must attempt to resolve the dispute
through conciliation
within 30 days of the date the Commission
received the referral: However the parties may agree to extend the
30-day period.
(3)
The commissioner must determine a process to attempt to resolve the
dispute which
may include—
(a)
mediating the dispute;
(b)
conducting a fact-finding exercise; and
(c)
making a recommendation to the parties, which may be in the form of
an advisory
arbitration award.
(3A)
If a single commissioner has been appointed, in terms of subsection
(1), in respect of more
than one dispute involving the same parties,
that commissioner may consolidate the conciliation proceedings so
that all the disputes
concerned may be dealt with in the same
proceedings.
(5)
When conciliation has failed, or at the end of the 30-day period or
any further
period agreed between the parties—
(a)
the commissioner must issue a certificate stating whether or not the
dispute has
been resolved;
(b)
the Commission must serve a copy of that certificate on each party
to the dispute
or the person who represented a party in the
conciliation proceedings; and
(c)
the commissioner must file the original of that certificate with the
Commission.
(6) (a)
If a dispute about a matter of mutual interest has been
referred to
the Commission and the parties to the dispute are engaged in an
essential service then, despite subsection (1), the
parties may
consent within seven days of the date the Commission received the
referral—
(i)
to the appointment of a specific commissioner by the Commission to
attempt
to resolve the dispute through conciliation; and
(ii)
to that commissioner’s terms of reference.
(b)
If the parties do not consent to either of those matters within the
seven day period,
the Commission must as soon as possible—
(i)
appoint a commissioner to attempt to resolve the dispute; and
(ii)
determine the commissioner’s terms of reference.”
[5]
Section 191(5)(b)(ii) states that—
“
(5)
If a council or a commissioner has certified that the dispute
remains
unresolved, or if 30 days or any further period as agreed
between the parties have expired since the council or the Commission
received the referral and the dispute remains unresolved—
. . .
(b)
the employee may refer the dispute to the Labour Court for
adjudication if the employee
has alleged that the reason for
dismissal is—
. . .
(ii)
based on the employer’s operational requirements”
[6]
Section
191(11)(a) provides:
“
The
referral, in terms of subsection (5)(b), of a dispute to the Labour
Court for adjudication, must be made within 90 days after
the
council or (as the case may be) the commissioner has certified that
the dispute remains unresolved.”
[7]
(2013)
34 ILJ 108 (LAC);
[2013]
3 BLLR 255
(LAC) at para 27.
[8]
See under heading 2.2 paras (i) – (ii).
[9]
Section
188 of the LRA is entitled “
Other
unfair dismissals”
and
provides:
“
(1)
A
dismissal
that is not automatically unfair, is unfair if the employer fails to
prove—
(a)
that the reason for
dismissal
is a fair reason—
(i)
related to the
employee’s
conduct or capacity; or
(ii)
based on the employer’s
operational requirements
; and
(b)
that the
dismissal
was effected in accordance with a fair procedure.
(1)
Any person considering whether or not the
reason for
dismissal
is a fair reason or whether or not the
dismissal
was effected in accordance with a fair procedure must take into
account any relevant
code of good
practice
issued in terms of
this
Act
.”
[10]
(2010)
31 ILJ 1654 (LC); [2010] 9 BLLR 903 (LC).
[11]
[2016]
ZALAC 53
at para 28.
[12]
See
Decision
Surveys International (Pty) Ltd v Dlamini and Others
[2002] ZACC 27
;
[1999] 5 BLLR 413
(LAC) at para 27 where it was held that:
“
The
ultimate decision to retrench must be fair. In this context,
fairness means that the ultimate decision to retrench must “properly
and genuinely” be justified by operational requirements. The
ultimate decision must be “genuine and not merely a
sham”
(
SACTWU & others v Discreto
(supra) at paragraph 8). The court’s function, therefore, is
not merely to determine whether the requirements for a proper
consultation process have been followed and whether the decision to
retrench was commercially justifiable. There may be other
options
open to the employer other than retrenchment such as short time,
casual employment, or demotion. If the employer resorts
to
retrenchment when alternatives to retrenchment are available, it
cannot be said that the ultimate decision to retrench is
necessarily
fair. The court will, therefore, examine the reasons advanced for
retrenchment in order to determine whether the
ultimate decision to
retrench is genuine and not a sham. However, this is not to say
courts are to second guess the commercial
or business efficacy of
the employer's decision. Nor is the enquiry whether the best
decision was taken . . . The enquiry is
whether the retrenchment is
properly and genuinely justified by operational requirements in the
sense that it was a reasonable
option in the circumstances.”
[13]
Section
213 defines “operational requirements” to mean—
“
requirements
based on the economic, technological, structural or similar needs of
an employer.”
[14]
See
also paragraph 2.8 of the Pre-trial minutes.
[15]
Chemical
Workers Industrial Union and Others v Latex Surgical Products (Pty)
Ltd
(2006) 27 ILJ 292; [2006] 2 BLLR 142 (LAC).
[16]
Id
at
paras
94-6.
[17]
(2012)
33 ILJ 1729 (LAC).
[18]
See
Equity
Aviation Services (Pty) Ltd v Commission for Conciliation, Mediation
and Arbitration and Others
2009 (2) BCLR 111
(CC) at para 36, where it was held that:
“
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 only limitation in this
regard
is that the reinstatement cannot be fixed at a date earlier
than the actual date of the dismissal. The court or arbitrator may
thus decide the date from which the reinstatement will run, but may
not order reinstatement from a date earlier than the date
of
dismissal. The ordinary meaning of the word “reinstate”
means that the reinstatement will not run a date from
after the
arbitration award. Ordinarily then, if a Commissioner of the CCMA
order the reinstatement of an employee that reinstatement
will
operate from the date of the award of the CCMA, unless the
Commissioner decides to render the reinstatement retrospective.
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.”