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[2017] ZALCJHB 425
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Van Zyl v Mutual and Federal (JS435/16) [2017] ZALCJHB 425 (15 November 2017)
IN
THE LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG
JUDGMENT
Not
Reportable
Not
of interest to other judges
Case
No. JS 435/16
In
the matter between:
IGNATIUS
PETRUS VAN ZYL
Applicant
And
MUTUAL &
FEDERAL
Respondent
Heard:
13 & 14 November 2017
Delivered:
15 November 2017
JUDGMENT
BARNES
AJ
Introduction
[1]
On 1 June 2013 the applicant commenced
employed with iWyse, a division of the respondent, Mutual and
Federal, now Old Mutual Insure
(“the business”). The
applicant was employed as the Claims Manager in the “Motor”
division of the business.
On 1 April 2016, the applicant was
dismissed for operational reasons.
[2]
The applicant accepts that his dismissal
was procedurally fair. He contends however that it was substantively
unfair. The applicant’s
dismissal occurred pursuant to the
restructuring of the business as a result of which he and other
affected employees were required
to apply for positions on a modified
organogram. The applicant’s applications were unsuccessful.
[3]
The applicant does not take issue with the
need to restructure the business or with the need to retrench in
general. The applicant’s
case, as recorded in his statement of
case and in the pre-trial minute, is that his dismissal was
substantively unfair because
his position as Claims Manager: Motor
was not affected by the restructuring.
[4]
The respondent’s case is that the
position of Claims Manager: Motor changed significantly as a
consequence of the restructuring.
[5]
The key issue for determination before me
is therefore a narrow one. It is whether the position of Claims
Manager: Motor held by
the applicant prior to restructuring remained
unchanged after restructuring.
[6]
The applicant did not plead, in the
alternative, that if the position of Claims Manager: Motor did change
after restructuring, he
ought to have been appointed in the position.
Notwithstanding this, the parties canvassed this issue in the
evidence and I will
accordingly consider it in my judgment.
The
Evidence
The
Evidence for the Respondent: Mr Wilken
[7]
The respondent led the evidence of Mr
Johannes Wilken. His partnership, 360troy Partnership (“360troy”),
was engaged
by Old Mutual Direct Holdings in 2016 to develop a
turnaround strategy for the business. This was necessary because the
business
had suffered a R150 million underwriting loss in the
previous financial year and had suffered losses prior to that as
well. The
financial situation of the business was disastrous and the
situation was considered to be unsustainable.
[8]
The brief to 360troy was to develop a
strategy to deliver the financial turnaround of the business while
saving as many jobs as
possible. To this end, 360troy presented
a restructuring strategy to the boards of the respondent and Old
Mutual Direct Holdings.
The restructuring strategy was approved.
[9]
Mr Wilken testified that it was found that
there were operational inefficiencies in the business, a lack of
appropriate skill at
many levels and that the business was being
poorly managed. The restructuring strategy sought to address this
appropriately at
all levels of the business.
[10]
As far as the business’s Claims
Department was concerned, Mr Wilken testified that the 2016
statistics revealed that only
15% of claims received were being
repudiated. This was significantly below the industry benchmark of
25%. There was therefore a
concern that the Claims Department was
paying out significantly more claims than ought to have been the
case.
[11]
The Claims Department was comprised of two
divisions: “Motor” and “Non-Motor.” In the
“Motor”
division, there was a separation between the
“call centre” function which handled the registration and
processing of
claims and the investigation function which handled the
investigation of claims. As Claims Manager: Motor, the applicant was
responsible
for the call centre function only. There was an
Investigations Manager who was responsible for the investigation
function. The
Investigations Manager reported not to the applicant
but to the applicant’s superior.
[12]
The “Non-Motor” division
operated differently in that the call centre function and
investigation function were managed
in parallel by the Claims
Manager: Non Motor.
[13]
Mr Wilken testified that having regard to
the low claim repudiation rate, it was considered necessary to bring
the investigation
skill set closer to the call centre in the Motor
division. This would assist in ensuring that claims were scrutinised
from a merit
perspective at an earlier stage and minimise the risk of
bogus or unmeritorious claims being paid out.
[14]
A decision was therefore taken to do away
with the post of Investigations Manager in the Motor division and
combine the call centre
and investigation functions under the
management of Claims Manager: Motor (as was the case in the Non-Motor
division).
[15]
The organogram was altered accordingly and
affected employees, including the applicant were invited to apply for
positions on the
new organogram.
[16]
The applicant applied for three positions:
Claims Manager: Motor; Claims Manager: Non Motor and Claims Manager
Admin Support. The
applicant indicated that his preferred position
was Claims Manager: Motor.
[17]
Mr Wilken was a member of the interview
panel. He testified that the applicant was found not to be suitable
for any of the positions
applied for. In relation to the positions of
Claims Manager: Motor and Claims Manager: Non-Motor the reason was
that the applicant
lacked sufficient investigative experience. Mr
Wilken testified that while the applicant had, during his three years
of employment
with the business, referred claims for investigation,
he had no experience of personally conducting or managing
investigations.
By contrast, Mr Reinhardt Smit (“Mr Smit”)
who was appointed as Claims Manager: Motor had 22 years of
investigative
experience. Ms Ursula Barnard (“Ms Barnard”)
who was appointed as Claims Manager: Non Motor had 20 years of
investigative
experience.
[18]
In relation to the post of Claims Manager:
Admin Support, Mr Wilken testified that the incumbent at the time of
restructuring, Mr
Charl Fick (“Mr Fick”), had
significantly more experience in the short term insurance industry
than the applicant and
had been performing very well in the post. For
these reasons, it was considered preferable to retain Mr Fick in the
post.
[19]
Mr Wilken’s above evidence was not
challenged during cross examination.
[20]
It was put to Mr Wilken during cross
examination that nothing in the job description for the position of
Claims Manager: Motor (post
restructuring) referred to the need to
conduct or manage investigations. Mr Wilken replied that this was
incorrect and read the
description of the purpose of this post which
provided as follows:
“
To
effectively manage the designated Motor/Non Motor Claims area
(
consisting of claims consultants and
investigations
) and ensure containment
of claims spend and provide excellent service in setting a culture of
best practice within mandated responsibility.”
(emphasis added)
[21]
It was also put to Mr Wilken during cross
examination that after the applicant’s dismissal a new
Investigation Team Leader
was employed in the Motor division. Mr
Wilken confirmed this but stated that this did not alter the new
managerial role ascribed
to the position of Claims Manager: Motor
post restructuring.
The
Evidence for the Applicant: Mr Van Zyl
[22]
The applicant testified that he had a long
history in the insurance industry commencing in 1994. He had been
employed by Sanlam
Life Assurance, Discovery Insure, Fedsure Health,
Liberty Health and Destiny Health. He had occupied a management
position in all
the above businesses and therefore had over 20 years
of managerial experience.
[23]
The applicant confirmed that the above
businesses dealt with health and long term insurance and that his
only experience in the
short term insurance industry was his three
years in the iWyse business.
[24]
The applicant testified that as the Claims
Manager: Motor, he had, prior to the restructuring, 45
staff members and
5 team leaders who reported to him.
[25]
The applicant further testified that he has
been unemployed since his retrenchment.
[26]
Under cross examination, the applicant
confirmed that prior to the restructuring the Investigation Manager
in the Motor division
did not report to him but to his superior. He
confirmed further that pursuant to the restructuring, the post of
Investigation Manager
was done away with and the investigation
function combined with the call centre function under the management
of the Claims Manager:
Motor.
[27]
The applicant sought to emphasise the fact
that the Claims Manager: Motor (post restructuring) was not required
to personally conduct
investigations. He accepted however that the
incumbent was required to oversee investigations and would be
expected to be able
to step in and assist in high profile or complex
investigations. He accepted, under cross examination, that
investigative experience
was therefore required.
[28]
Under cross examination, the applicant
conceded that Mr Smit and Ms Barnard were properly and appropriately
appointed to the positions
of Claims Manager: Motor and Claims
Manager: Non Motor, respectively, regard being had to their
investigative experience.
[29]
Other than to state that he considered Mr
Fick to be immature, the applicant
did not
give any reason why he should have been appointed to the position of
Claims Manager: Admin over Mr Fick.
Analysis
[30]
It is clear from the evidence that the
applicant’s contention that his position of Claims Manager:
Motor did not change as
a result of the restructuring cannot be
sustained. The position changed significantly in that it incorporated
management of the
investigative function which had previously been
managed separately. The applicant conceded this under cross
examination.
[31]
As stated above, the applicant’s
pleaded case was confined to the contention that his retrenchment was
substantively unfair
because his position was not affected by the
restructuring. He did not plead in the alternative, that even if the
position did
change, he was the most suitable candidate. The evidence
having established that the position did change, significantly at
that,
the applicant’s case must be found to be without merit.
[32]
Even however if the Court were to go on and
consider the appointments made, I am satisfied that the respondent
established that
it had fair and rational reasons for making the
appointments it did. Moreover, the applicant did not lead evidence to
the effect
that he was the most suitable candidate for any of the
positions applied for and in fact conceded, under cross examination,
that
the appointments were properly and appropriately made.
[33]
The respondent sought the costs of the
action, if successful. The appplicant has however been unemployed
since his retrenchment
and I do not consider it fair in the
circumstances to award costs against him.
[34]
I therefore make the following order:
Order
1.
The action is dismissed.
2.
There is no order as to costs.
________________________
H
BARNES
Acting
Judge of the Labour Court
Appearances:
For
the Applicant:
Adv Koetle
Instructed
by:
Charmain Gibbens Attorneys
For
the Respondent:
Mr R Orton (Snyman Attorneys)