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[2017] ZALCJHB 103
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Panniers (Pty) Ltd v Commission for Conciliation, Mediation and Arbitration and Others (JR2533/14) [2017] ZALCJHB 103 (29 March 2017)
Not
reportable
THE LABOUR COURT OF
SOUTH AFRICA
HELD
AT JOHANNESBURG
C
ase
no: jr 2533/14
In
the matter between:
PANNIERS (PTY) LTD
Applicant
and
COMMISSION FOR
CONCILIATION
MEDIATION AND
ARBITRATION
First
Respondent
JOHANN E PRETORIUS
N.O.
Second Respondent
GUIDLLE THOMAS
HLONGWANE
Third Respondent
Heard
:
28 February 2017
Delivered
:
29 March 2017
Summary:
(Review-unopposed-condonation- compensation
disproportionate relative to gravity of unfairness)
JUDGMENT
LAGRANGE
J
[1]
This is an unopposed review application in
which the review application was filed one day late. The applicant
has applied for condonation
for the late filing of the review. In
view of the minimal delay and my assessment of the merits which are
dealt with below there
is no reason why condonation should not be
granted.
[2]
The arbitrator found that the third
respondent had been substantively and procedurally unfairly dismissed
and ordered the applicant
to pay him eight months compensation.
[3]
The arbitrator was sceptical of the
employer’s reasoning that it was compelled to retrench the
third respondent based on operational
requirements for financial
reasons when he was the only person out of a workforce of 65 who was
retrenched, particularly in the
absence of the employer providing any
financial information about the specific impact the retrenchment
would have in addressing
its financial difficulties. During the
consultation process, the third respondent had said that he was
willing to be placed in
any position in the warehouse. He had
previously been employed as a forklift driver in the warehouse before
he was transferred
to the position of a logistics assistant. The
employer had claimed that it had looked at other positions but could
not spare anyone
else.
[4]
The employer had conceded that the third
respondent had said he was willing to be placed in any position in
the warehouse as an
alternative to dismissal that it did not have any
position available for. Because he was the last person employed in
the logistics
department, he was selected for retrenchment on that
basis. The third respondent agreed that his salary had increased by R
1500
per month as a logistics assistant but that his payslip did not
reflect that, this was a permanent move because it still described
him as a forklift driver. The evidence of the respondent was that,
another person replaced him as a forklift driver when he was
moved
out of the warehouse. When the third respondent asked why he could
not simply have been returned to his previous position
as a forklift
driver, the response was simply that there was already a person
filling that position and an additional forklift
driver was not
needed. It is fairly obvious that the respondent took a very narrow
view of selection criteria and did not consider
whether the new
forklift driver should be the one to be retrenched instead of the
longer serving employee being the third respondent.
[5]
The
evidence
[1]
also tended to show
that the consultation process was an extremely narrow one focusing on
the third respondent himself and it is
difficult to escape the sense
that although the applicant’s financial problem was stated in
broad terms, it had effectively
closed its mind to considering anyone
else for retrenchment except the third respondent because he was the
only person they consulted
with. Further, the consultation with the
third respondent itself appeared to have a narrow focus because the
applicant appeared
to have assumed that a general discussion at a
staff meeting about the company’s possession at which
retrenchments had not
been mentioned, formed part of the consultation
process it then instituted with the third respondent. There was no
evidence to
suggest that the applicant had responded to the third
respondent’s suggestions of alternative employment in the
warehouse,
which is at odds with a meaningful engagement process in
which an employer is expected to explain its inability to consider
alternatives.
[6]
The
only grounds of review the court can consider are those set out in
the founding affidavit. In essence, these are not very different
from
grounds of appeal and it is questionable whether they satisfy the
requirement that, not only must they show that the arbitrator’s
evaluation of the evidence failed to take into account material
factors but that the failure to consider such factors necessarily
meant that arbitrator could not have arrived at the conclusions he
did if those factors had been considered.
[2]
[7]
In summary, the grounds of review set out
in the founding affidavit are that:
7.1
The arbitrator failed to realise that there
was substantial compliance with the provisions of section 189.
7.2
The arbitrator failed to appreciate that
the third respondent had been paid to severance, notice pay and leave
pay owing to him.
7.3
The arbitrator failed to appreciate that
the evidence that there was no alternative position for the third
respondent and that proposed
alternatives would not have been
compatible with the applicant’s financial position.
7.4
The arbitrator failed to appreciate that
there was a valid reason for the dismissal in view of the uncontested
financial position
of the applicant and that the third respondent’s
post was the only post “in danger of retrenchment” and
there
were no other suitable alternatives.
7.5
The arbitrator’s award of eight
months compensation was excessive given that the applicant had
complied with its obligations
to pay severance notice pay and leave
pay and failed to have regard to the financial difficulties suffered
by the applicant.
[8]
On considering the grounds of review, I am
satisfied that:
8.1
It appears that the arbitrator felt that
the respondent did not seriously engage in the question of
alternatives to retrench the
third respondent in the sense that it
did not seriously consider his request to be placed in any position
in the warehouse. In
this context, even if the applicant had not
specifically mentioned his previous position as a forklift driver,
that obviously was
a post he was fit to fill and no explanation was
provided other than the fact that there was someone in the post. If
the applicant
had indeed been committed to the LIFO principle, it is
inexplicable why it did not consider the more recently appointed
forklift
driver as an alternative candidate for retrenchment.
8.2
It cannot be said that merely because an
employer cites financial difficulties that it follows that it needed
to retrench one employee.
When the applicant’s witness was
asked to what extent the third respondent’s retrenchment had
assisted in alleviating
its financial position, the question was
avoided. The arbitrator sensed a disconnection between the broad
financial problem stated
by the applicant and the retrenchment of the
third respondent as a solution. I do not think that was an
unreasonable inference
to draw.
8.3
The fact that the applicant had complied
with its other statutory obligations regarding payments due on
termination where the reason
for termination is operational
requirements has no bearing on the fairness of the retrenchment,
since the applicant is merely complying
with its other legal
obligations. The issue before the arbitrator was simply whether or
not the retrenchment was fair.
8.4
However, on the question of the
compensation of eight months remuneration given that the applicant
had been employed for three years
prior to his retrenchment, the
level of compensation does seem somewhat disproportionate in relation
to the gravity of the applicant’s
failure to act fairly. This
was not a case in which the retrenchment process was entirely
perfunctory or where there was no rationale
at all for embarking on a
retrenchment exercise. The principal sense in which the process was
wanting was in the employer’s
failure to properly explore
alternatives and in adopting a very narrow approach to the ambit of
consultations with the third respondent.
In the circumstances and
given the applicant’s length of service, the award of eight
months compensation is hard to justify
as a reasonable exercise of
the arbitrator’s discretion.
[9]
In the circumstances, the award stands to
be reviewed only in respect of the quantum of compensation, which is
reduced to four and
a half months’ remuneration
Order
[10]
The award of compensation of eight months’
salary in the arbitration award of the second respondent dated 5
November 2015
issued under case number GATW 9989-15, is reviewed and
set aside and paragraph 39 a) of the award is replaced with the
following:
“
a)
The respondent Panniers (Pty) Ltd, must pay the applicant, Mr Guiddle
Thomas Hlongwane, compensation of four and a half months’
salary, calculated as follows: R 6,500-00 x 4.5 = R
29,250-00.
[11]
The substituted amount of compensation in
paragraph [10] above must be paid within 14 days of receipt of this
judgement.
[12]
No order is made as to costs.
_______________________
Lagrange J
Judge
of the Labour Court of South Africa
APPEARANCES
APPLICANT:
N
Mahommed of Nadeem Mahomed Attorneys
THIRD
RESPONDENT:
No
appearance
[1]
Note:
only
the transcript of the arbitration was filed as a record in the
proceedings.
[2]
See
e.g.
Gold
Fields Mining SA (Pty) Ltd (Kloof Gold Mine) v Commission for
Conciliation, Mediation & Arbitration & others
(2014) 35
ILJ
943 (LAC) at 950, para [21].