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[2017] ZALCJHB 422
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Aveng Water (Pty) Limited v Nelson and Others (JR2711/14) [2017] ZALCJHB 422 (17 November 2017)
IN
THE LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG
Not
Reportable
Case no: JR 2711/14
In
the matter between:
AVENG
WATER (PTY) LIMITED
Applicant
and
KEITH
JOHN NELSON
First Respondent
COMMISSION
FOR CONCILIATION
MEDIATION
AND ARBITRATION
Second Respondent
COMMISSIONER
M MOTSOENG N.O.
Third Respondent
Heard:
11
May 2017
Delivered:
17
November 2017
JUDGMENT
WHITCHER,
J:
Introduction
[1]
The
Applicant employed the First Respondent as a construction manager at
its eMalahleni Water Reclamation Plant (“the project”)
in
terms of a two year limited duration contract (“LDC”),
concluded to run until 31 March 2014. On 1 April 2014,
his contract was extended to 30 June 2014.
[2]
On
23 July 2014, he referred an unfair dismissal dispute to
the Commission for Conciliation Mediation and Arbitration
(CCMA) in
terms of s 186(1)(b) of the Labour Relations Act (LRA). He sought the
“renewal of [his] contract on substantially
the same or similar
terms to completion of the project” and stated that the dispute
arose on 30 June 2014.
[3]
The Second
Respondent (“the Commissioner”) found that the
Applicant’s non-renewal of the First Respondent’s
LDC
constituted a dismissal that was substantively and procedurally
unfair. The Commissioner ordered the Applicant to compensate
the
First Respondent with an amount equivalent to 10 months’
remuneration,
i.e
.
for the period from 30 June 2014 to April 2015.
[4]
The
Applicant seeks to have this award reviewed and set aside. The main
issue is whether the First Respondent proved the existence
of facts
that, in the ordinary course, would lead a reasonable person to
anticipate renewal of his fixed term contract of employment.
[5]
The Labour
Appeal Court in the matter of
IMATU
and Others v City of Johannesburg Metropolitan Municipality and
Others,
[1]
quoted with approval the test established in the matter of
SA
Rugby Players Association and Others v SA Rugby (Pty) Limited and
Others
[2]
and confirmed:
“
The
employee bears the
onus
to establish that he was dismissed. He must therefore prove on a
balance of probabilities that he reasonably expected his employer
to
renew the fixed term contract of employment on the same terms and
that the employer refused to do so. The employee had to adduce
evidence which, objectively considered, established a reasonable
expectation. The test to establish the reasonableness of the
expectation is an objective one. In
SA
Rugby Players Association & Others v SA Rugby (Pty) Ltd &
Others; SA Rugby (Pty) Ltd v SA Rugby Players Union and Another
the test was formulated thus: would a reasonable employee in the
circumstances prevailing at the time have expected the employer
to
renew his or her fixed term contract on the same or similar terms.
When
assessing whether an expectation is reasonable all the surrounding
facts and circumstances should be considered including the
terms of
the contract of employment, promises made by the employer –
regardless of contractual terms which gainsay what the
employer
promised and the general conduct of the parties.”
The evidence and
submissions before the Commissioner
[6]
The
Applicant employed the First Respondent as a construction manager in
terms of a two year limited duration contract (“LDC”),
concluded to run until 31 March 2014.
[7]
The First
Respondent reported to the Project Manager.
[8]
On
19 February 2014, the new Project Manager, Hendriks,
emailed the outgoing Project Manager, Dorrington, stating that
they
needed to review the manhour forecast for the project.
[9]
On
27 February 2014, Dorrington emailed a response to
Hendricks, which set out proposals on various LDCs on the project.
In
respect of the First Respondent, he proposed that his contract be
extended until the end of June 2014 only and that he
be replaced
with a new site manager to be “appointed until (say) the end of
February 2015, with expectation that a two
month further
extension may be required…end date April 2015”.
[10]
Dorrington
noted that his recommendations were based on an updated manpower and
cashflow
forecast
that he and Hendricks had prepared.
[11]
Dorrington’s
email was forwarded to the First Respondent on 11 March 2014
at 04:38 PM, together with a further email
of even date from
Dorrington to Hendricks asking if “Ester” (HR: Executive)
could “action” the proposals
sent on 27 February 2014.
[12]
On
12 March 2014 at 07:48 AM, the First Respondent emailed a
response to Hendricks:
“
Noting the
proposed contract extension (they mostly make sense) I have to raise,
maybe motivate my situation. Last year, November,
I enquired as to
whether my contract would be extended. [Dorrington] came back to me
in January with an extension to end of June
that was related to some
sort of practical completion….I am available for the duration
of the contract…I believe
that my current relationship and
experience with the client, contractors and my peers will be
conducive to successful (although
late) completion of EWRP. It also
does not make sense to bring in a new site manager in the last
threads of construction/commissioning”.
[13]
Hendriks,
on the 12 March 2014 at 08:24 AM responded:
“
We do not
intend terminating earlier than at least construction completion. A
skeleton site staff then stay to assist with commissioning
until
completion or full handover…We will communicate as such with
Ester [HR Executive] today and keep you copied”.
[14]
On
1 April 2014, Hendriks gave First Respondent a new LDC
contract to sign. In terms thereof, the First Respondent’s
contract was extended until 30 June 2014, that is, for a
period of only 3 months.
[15]
On
20 June 2014, the Applicant advised the First Respondent in
a letter that in terms of the contract he signed on 1 April 2014
his employment will terminate on 30 June 2014.
[16]
The First Respondent testified that he formed the impression, based
on Hendrik’s email of 12 March 2014, that
his
employment as the construction manager would continue to the end of
the construction phase of the project in April 2015.
That
expectation was bolstered by a manpower forecast prepared by Hendriks
and which reflected his inclusion up to April 2015.
Furthermore,
after he received the letter of 20 June 2014, Hendriks told
him that “there was still a chance”
his contract would be
extended because he was “still trying to convince EXCO to
extend his contract” and the client
[on whose behalf the
project was being undertaken by the Applicant] was not happy with the
termination of his contract. Moreover,
the Applicant had assigned his
duties to two employees, Roux and Deysel who, in his view, were not
sufficiently qualified for the
job. The client appeared to share this
view, hence their dissatisfaction with the termination of his
contract.
[17] When he was given
only a three month contract to sign on 1 April 2014 a mere
two weeks after Hendriks’ email
he did not question this
because all LDC’s were to be extended until 30 June 2014
and thereafter until the end
of the project period.
[18] Under
cross-examination, he agreed that the manpower forecast was open to
change and that it did not mean that every individual
cited therein
would be employed until 30 April 2015, but said he had not
observed any amended forecast in the time he
was on site. He said
Hendriks had given him the document as “back-up assurance”
as to “what was budgeted for
to complete the project”.
[19] He agreed, however,
that he had known that the project was running at a huge financial
loss and, on this basis, the Applicant
was entitled to review the
extension of contracts. He further agreed that EXCO, or as he put it
– “the financial management”,
had the final say on
the extension of LDC’s.
[20] He also agreed that
that his own email to Hendricks dated 12 March 2014 and Dorrington’s
email did not support his version
that all LDCs would be aligned to
30 June 2014 and thereafter to the end of the construction phase.
[21] Hendriks testified
that, although he used the term “we” in his email of 12
March, the email had merely reflected
his view as the new project
manager and a proposal he intended to take to EXCO. He had no
authority to conclude and extend LDC’s.
[22] He claimed that he
had verbal discussions with the First Respondent where he undertook
to motivate with EXCO for an extension
of his contract until the
completion of the construction phase, which he did, but EXCO made the
decision to extend the contract
only until the end of June 2014
on the basis of financial constraints.
[23] Hendriks confirmed
that the forecast document presented the First Respondent reflected
that the First Respondent would be present
until April 2015. He
stated, however, that this was merely a forecast which changed on a
monthly basis. The forecast document presented
by the First
Respondent was one of the earlier forecasts done in early 2014. The
forecast would have been different later after
the Applicant’s
contract was only extended for three months until the end of June
2014.
[24] At the time of
giving evidence [in November 2014], Hendriks predicted that the
construction phase of the project would likely
end in February 2015.
However, at the time the First Respondent’s contract was
extended until the end of June 2014, the forecast
was that the
construction phase of the project would end in November 2014.
[25] He testified that
the client had eventually accepted that Roux and Deysel were fit to
take over the functions of the First
Respondent.
[26]
It was contended in argument that Hendriks’ email constituted
an unequivocal intent on the part of the Applicant not
to terminate
the First Respondent’s employment before project completion and
Hendriks had never intimidated to the First
Respondent that the
authority to conclude and extend contracts lay elsewhere –
namely with EXCO.
Analysis and findings
[27] In my view the First
Respondent could not reasonably have interpreted Hendriks’
email as an unequivocal intent on the
part of the Applicant not to
terminate his employment before project completion.
[28] Dorrington’s
email which was in response to Hendriks’ request that
they
needed to review the manpower forecast and sent to the First
Respondent at 4:38 PM on 11 March reflected a recommendation that
the
contract be extended to 30 June and no further. This was consistent
with the offer Dorrington had communicated to the First
Respondent in
November 2013.
[29] Dorrington’s
email moreover indicated that the proposal was based on a
cashflow
forecast that he
and Hendriks
had prepared.
[30] There were clearly
material contradictions between Dorrington and Hendriks’
emails, which were communicated to the First
Respondent in very close
proximity.
[31] The point is that
Hendriks’ email of 12 March 2014, read in conjunction with
Dorrington’s email, is confusing.
It required clarification.
[32] Both Dorrington and
Hendrik’s emails further revealed that the recommendations
still had to be sent to the HR Executive
for signing off.
[33] In any event, any
subjective expectation the First Respondent may have held as a result
of Hendriks’ email of 12 March
2014 was dispelled only two
weeks later on 1 April 2014 when he was given a three month contract
to sign.
[34] One would have
thought that if Hendriks’ email had conveyed an unequivocal
intent in the mind of the First Respondent,
he would have queried and
protested the three-month contract, particularly when it was
delivered by Hendriks who had purportedly
made a promise to the
contrary.
[35] His explanation
regarding why he did not protest against a three month contract was
shown to have no reasonable basis.
[36] Hendriks’
conduct after the First Respondent received the letter of
20 June 2014 does not assist the First
Respondent’s
case. On the First Respondent’s own version, Hendriks undertook
to
continue
to
motivate
for the extension of his
contract.
[37] The above events
renders more likely than not Hendriks’ version that round about
the time of his email he had discussions
with the First Respondent to
the effect that he intended to motivate with EXCO for an extension of
his contract until the completion
of the construction phase, which he
did, but they returned with only a three month extension.
[38] Finally, the
undisputed evidence before the Commissioner was that the manpower
forecast was a budget management document and
that it changed from
time to time – it had no rigidity or binding effect as an
indicator of the expected duration of the
employment relationships
between the company and the various employees depicted thereon.
Order
[39]
In the premises, I make the following order:
1.
The arbitration award
issued by the Second Respondent on 3 December 2014
under
case number GAJB17611-14 is reviewed and set aside and substituted
with an order that Mr Keith John Nelson is found not to
have been
dismissed by the Applicant, as a consequence of which the Second and
Third Respondent did not have jurisdiction to arbitrate
the dispute.
2.
There is no order as to
costs.
________________________________
Benita Whitcher
Judge
of the Labour Court of South Africa
APPEARANCES:
For
the Applicant:
Mervyn Taback Inc
For
the First Respondent:
Wright, Rose-Innes Inc
[1]
[
2014]
6 BLLR 545 (LAC)
[2]
(2008) 29 ILJ 2218
(LAC)