Brief Summary

Labour Law — Unfair Dismissal — Automatic unfair dismissal under section 187(1)(g) of the Labour Relations Act — Applicant claimed he was unfairly dismissed after refusing to relocate following a business transfer — Respondent argued dismissal was due to operational requirements — Court found that the applicant failed to establish a credible connection between the dismissal and the transfer, and the dismissal was not automatically unfair.

Comprehensive Summary

Summary of Judgment

1. Introduction

The proceedings were an action in the Labour Court in which the applicant sought relief arising from his dismissal, primarily a declaration that his dismissal was automatically unfair under section 187(1)(g) of the Labour Relations Act 66 of 1995 on the basis that the reason for dismissal was a transfer, or a reason related to a transfer, contemplated in section 197. In addition to the declaratory relief, the applicant claimed compensation, severance pay, interest on severance pay, and costs.

The parties were Willem Hendrik Du Plessis (applicant) and AMIC Trading (Pty) Ltd t/a Toys’R’Us (respondent). The applicant appeared in person, and led evidence from himself and a second witness, Ms Jennifer Valerie Irving, who had been employed by the respondent and dismissed at the same time as the applicant.

At the close of the applicant’s case, the respondent applied for absolution from the instance. The judgment dealt with whether, on the evidence led by the applicant, there was a basis upon which the Court could find in the applicant’s favour on the pleaded case of automatic unfair dismissal, as well as the appropriate costs order if absolution were to be granted.

The general subject-matter of the dispute concerned a dismissal that followed the respondent’s relocation plans and a subsequent retrenchment process, with the applicant contending that the dismissal was linked to a business transfer under section 197 (and thus automatically unfair), and also raising complaints relating to alleged unilateral changes to employment terms and the calculation of severance pay.

2. Material Facts

The applicant was employed by Redgwoods (Pty) Ltd as its National Risk Manager from 1 February 2010. On 1 December 2012, the respondent purchased the business of Redgwoods (Pty) Ltd and the applicant’s employment was transferred to the respondent. The existence of a dismissal was common cause, and the dispute concerned the basis or reason for that dismissal.

The applicant contended that during December 2012 the respondent decided to relocate its head office from Modderfontein (Johannesburg) to Durban, but that this was not communicated to employees at the time. During 3 to 5 September 2013 the respondent held a managers’ meeting in Durban. Upon arriving in Durban, the applicant was required to return his company motor vehicle.

On 4 September 2013, Ms Irving accessed the respondent’s server and conducted an unauthorised search of emails relating to her name. She discovered an internal communication involving the Human Resources Department and the respondent’s directors that discussed a strategy relating to dismissing her and the applicant. In relation to the applicant, the email recorded a plan that the respondent would relocate offices to Durban, request the applicant to move, and if he refused, commence retrenchment procedures. The email also reflected a proposed severance amount.

The email had been the subject of High Court proceedings resulting in an interdict preventing the applicant from using it as evidence without the respondent’s permission. Despite this, the applicant made use of the email in the Labour Court trial, and the judgment recorded that there was no objection from the respondent at the time.

On 5 September 2013, the applicant was informed that the head office would be relocated to Durban and he was requested to move to Durban to work at the new head office. The applicant initially agreed to relocate, stating that he wished to foil what he understood from the email to be a strategy directed against him. After the meeting, he changed his mind and refused to relocate, stating that he did not trust the respondent after reading the email.

The respondent then commenced a retrenchment process and engaged an independent company to facilitate consultations. During this process, the respondent made two written offers to the applicant. The first offer provided, in substance, an option to relocate to Durban at the same salary, and an alternative option to take a position as an area manager in Gauteng at a reduced salary. The applicant rejected this offer. The second offer was similar, but included a contribution of R7 500.00 to transportation costs if he relocated to Durban. The applicant also rejected this offer. The applicant was dismissed on 7 November 2013.

The applicant further complained that the respondent had unilaterally altered his terms and conditions of employment by requiring the return of the company motor vehicle and replacing it with a motor vehicle allowance and fuel reimbursement. During cross-examination, the applicant conceded that he had accepted the contents of a letter in August 2013 dealing with the return of the vehicle, that he knew before attending the Durban meeting that he would have to return it and fly back to Johannesburg, and that he received an allowance and fuel reimbursement such that he earned more than before. He also conceded he did not complain at the time and raised this issue only after dismissal.

A further set of concessions addressed the timing and plausibility of the claimed December 2012 relocation decision. The applicant and Ms Irving conceded that during 2013 Ms Irving was tasked with finding alternative premises in Johannesburg and that the respondent extended its Modderfontein lease for a further three years. The Court treated these concessions as undermining the applicant’s assertion that there had been a decision in December 2012 to relocate to Durban.

Regarding severance pay, the applicant’s claim was framed as the difference between the amount suggested in the internal email and the severance pay actually paid to him. The Court treated the email amount as a projected settlement figure for internal discussion, rather than a representation binding on the respondent.

3. Legal Issues

The central legal question was whether the applicant had produced sufficient evidence to raise a credible possibility that his dismissal was automatically unfair under section 187(1)(g), in that the reason for dismissal was a transfer under section 197 or a reason related to such transfer.

Because the respondent sought absolution from the instance at the close of the applicant’s case, the Court was required to determine whether there was evidence upon which a court, applying its mind reasonably to such evidence, could or might (not should) find for the applicant. This involved an assessment of whether the applicant had made out a prima facie case on the pleaded cause of action.

The dispute therefore concerned the application of legal standards to the facts (including causation and the characterisation of the true reason for dismissal), together with an evaluative assessment of whether the applicant’s evidence was capable of sustaining the pleaded claim at the absolution stage.

A related issue concerned costs, namely whether, in light of section 162 of the LRA and the requirements of law and fairness, a costs order should follow the result once absolution was granted.

4. Court’s Reasoning

The Court approached the matter from the premise that the applicant relied on section 187(1)(g), and that because dismissal was common cause, the applicant carried an evidentiary burden to adduce credible evidence on an objective basis showing that the dismissal was causally connected to a transfer contemplated by section 197, or was related to such a transfer. The Court referred to authority on the legal structure of such claims, including the causation-focused approach articulated in Van der Velde v Business & Design Software (Pty) Ltd & Another.

In evaluating the absolution application, the Court applied the principle that absolution is appropriate where the plaintiff (here, the applicant) has not led evidence on which the Court could or might find in his favour. The Court relied on the articulation of the absolution test in Gordon Lloyd Page and Associates v Rivera and Another, and referred to the Labour Appeal Court’s approach in Commercial Stevedoring Agricultural and Allied Workers Union (CSAAWU) obo Dube and others v Robertson Abattoir, read with Kroukamp v SA Airlink (Pty) Ltd, emphasising that section 187 claims impose an evidential burden to raise a credible possibility of automatic unfairness before any burden shifts to the employer.

Applying these standards, the Court identified the applicant’s principal complaints as being that the respondent had decided to relocate in December 2012, that the respondent had unilaterally changed employment terms (the motor vehicle issue), and that severance pay had been incorrectly calculated (by reference to the internal email figure). The Court found that these complaints did not provide evidence establishing a credible possibility that the dismissal was related to the section 197 transfer.

On the relocation timing, the Court found the applicant’s version improbable in light of the conceded facts that, during 2013, Ms Irving had been tasked with locating other premises in Johannesburg and that the respondent extended its Modderfontein lease for three years. The Court reasoned that these actions were inconsistent with a firm relocation decision allegedly made in December 2012. The Court accepted that the decision to move to Durban was made only later, when remaining in Modderfontein became uneconomical.

On the motor vehicle issue, the Court relied on the applicant’s concessions that he had accepted the August 2013 communication about the return of the vehicle, that he obtained a vehicle allowance and fuel reimbursement, and that he earned more as a result. The Court further noted that the applicant did not complain at the time and raised the issue only after dismissal. This evidence was treated as undermining the contention that an impermissible unilateral change materially supported the pleaded claim.

On severance pay, the Court rejected the proposition that the amount in the internal email constituted a representation of what the applicant was entitled to receive. The Court characterised the email figure as a projected settlement amount meant for internal discussion between HR and directors, and therefore not a basis for concluding that severance pay was incorrectly calculated in the manner alleged.

The Court also evaluated the applicant’s reliance on the internal email as demonstrating a predetermined strategy to dismiss him. The Court reasoned that the strategy described in the email was rendered ineffective when the applicant initially agreed to relocate. The Court further reasoned that the respondent’s subsequent conduct did not accord with the alleged strategy: it engaged an independent facilitator for consultations and made two written offers which the Court regarded as reasonable, both of which the applicant rejected. The Court therefore treated the evidence as indicating that the email did not, in fact, determine the applicant’s dismissal in the manner asserted.

In addition, the Court recorded that the applicant advanced, in opposing absolution, the contention that there had been a breakdown of the trust relationship. The Court treated this submission as supporting justification for the dismissal, rather than supporting the applicant’s pleaded case of automatic unfairness.

On the totality of the evidence led by the applicant, the Court concluded that he had not produced evidence sufficient to raise a credible possibility that an automatically unfair dismissal had taken place under section 187(1)(g). As a result, the Court held that the evidentiary threshold required to resist absolution had not been met, and that it was in the interests of justice to grant absolution from the instance.

On costs, the Court exercised its discretion under section 162 of the LRA, taking into account the approach to costs based on law and fairness, including the principle that costs do not automatically follow the result where fairness considerations justify departure. The Court accepted the applicant’s evidence of impoverishment and reliance on financial assistance, and considered that fairness warranted no costs order against him despite the respondent’s success.

5. Outcome and Relief

The Labour Court granted the respondent’s application for absolution from the instance at the close of the applicant’s case. The applicant’s claim for declaratory relief in respect of automatic unfair dismissal and the related monetary relief did not proceed further on the evidence presented.

No order as to costs was made, the Court holding that fairness considerations justified a departure from the ordinary rule that costs follow the result.

Cases Cited

Van der Velde v Business & Design Software (Pty) Ltd & Another (2006) 27 ILJ 1738 (LC); [2006] 10 BLLR 1004 (LC).

Commercial Stevedoring Agricultural and Allied Workers Union (CSAAWU) obo Dube and others v Robertson Abattoir [2016] 12 BLLR 1163 (LAC).

Kroukamp v SA Airlink (Pty) Ltd [2005] 12 BLLR 1172 (LAC).

Gordon Lloyd Page and Associates v Rivera and Another 2001 (1) SA 88 (SCA).

Claude Neon Lights (SA) Ltd v Daniel 1976 (4) SA 403 (A).

Gascoyne v Paul and Hunter 1917 TPD 170.

Ruto Flour Mills (Pty) Ltd v Adelson (2) 1958 (4) SA 307 (T).

Marine & Trade Insurance Co Ltd v Van de Schyff 1972 (1) SA 26 (A).

National Union of Mine Workers v East Rand Gold and Uranium Company Ltd [1991] ZASCA 168; 1992 (1) SA 700 (A).

Callguard Security Services (Pty) Limited v TGWU & Others [1997] 4 BLLR 392 (LC).

South African Airways Technical (SOC) Ltd v South African Transport and Allied Workers Union and Another [2014] 5 BLLR 491 (LC).

Wallis v Thorpe and Another (2010) 31 ILJ 1254 (LC).

Legislation Cited

Labour Relations Act 66 of 1995 (as amended), section 5; section 162; section 187(1)(g); section 188; section 189; section 197; section 197A.

Rules of Court Cited

No rules of court were cited in the judgment.

Held

The Court held that the applicant failed, on the evidence led in his case, to raise a credible possibility that his dismissal was automatically unfair under section 187(1)(g) as being caused by, or related to, a section 197 transfer. In consequence, the Court granted absolution from the instance. The Court further held that, despite the outcome, considerations of fairness under section 162 warranted no order as to costs, given the applicant’s financial circumstances.

LEGAL PRINCIPLES

The judgment applied the principle that where an employee alleges automatic unfair dismissal under section 187 on the basis of a section 197 transfer (or a reason related to it), the employee bears an evidentiary burden to adduce credible evidence establishing, objectively, a causal connection between the dismissal and the transfer or a reason related to the transfer, before any burden shifts to the employer to show a permissible true reason.

The judgment applied the two-stage causation framework referenced in the authorities relied upon, including factual causation (a “but for” enquiry) and legal causation (whether the transfer is the main, dominant, proximate, or most likely cause), as part of assessing whether a dismissal is for an automatically unfair reason or for operational requirements.

In relation to absolution from the instance, the judgment applied the principle that at the close of a plaintiff’s (applicant’s) case, absolution is appropriate where there is no evidence upon which a court, applying its mind reasonably to that evidence, could or might find for the plaintiff. This requires at least a prima facie case on all elements of the claim.

On costs, the judgment applied the principle that section 162 of the LRA confers a discretion to award costs in accordance with law and fairness, so that although the ordinary rule that costs follow the result is relevant, it is not determinative and may yield where fairness considerations—such as a party’s financial circumstances and access to justice—justify no costs order.

Du Plessis v AMIC Trading (Pty) Ltd t/a Toy's R Us (JS230/15) [2017] ZALCJHB 196 (23 May 2017)