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[2018] ZALCJHB 266
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National Union of Metalworkers of South Africa and Others v Lectropower (Pty) Ltd (JS1151/2014) [2018] ZALCJHB 266 (6 July 2018)
IN THE LABOUR COURT OF SOUTH
AFRICA, JOHANNESBURG
Not
Reportable
Case No: JS1151/2014
In the matter between:
NATIONAL UNION OF METALWORKERS OF
SOUTH
AFRICA
First
Applicant
SEGABUTLE PR & 4
OTHERS
Second
- Further Applicants
and
LECTROPOWER (PTY)
LTD
Respondent
Heard: 27 February 2017
Delivered: 6 July 2018
JUDGMENT
TLHOTLHALEMAJE,
J
Introduction
and background:
[1]
The second to further applicants are members of
NUMSA whose services were terminated by the respondent on 3 September
2014 due to
its operational requirements. NUMSA approached the Court
with a statement of claim to contest the fairness of the dismissals.
[2]
The respondent opposed the applicants’
claim. At the commencement of the trial proceedings, it transpired
that out of the
five original individual applicants on whose behalf
the claim was brought, Mr Hezekiel Segane is since deceased, and Mr
Sam Mathebula
was subsequently reinstated. This matter therefore only
pertains to Messrs Pieter Segabutle, Mamotedi Sekgathume and Ms ST
Nkosi.
[3]
In accordance with
the parties’ signed pre-trial minutes, it was common cause that
a proper consultation process in terms
of section 189 of the Labour
Relations Act
[1]
(LRA) was followed
by the respondent, and further that there was indeed a need to
retrench. The only issue in dispute was whether
the selection
criteria used by the respondent to select the individual applicants
was fair or not. The applicants contend that
there was an agreement
that LIFO would be used, whilst the respondent maintains that LIFO
was to be used in certain instances,
whilst in others,
strategic/operational needs determined the selection.
The
dispute:
[4]
Of the remaining individual applicants in this
case, the dispute was that Messers Segabutle and Sekgathume were
selected for retrenchment
in the boilermaker department because they
were less qualified than Messrs Martin Kirton and Michael Orme, who
were retained for
their specific skills. Segabutle was employed on 24
May 2010 and Sekgathume on 23 January 2012. Orme was employed on 22
June 2012
whilst Kirton was employed on 18 June 2013.
[5]
The respondent further contended that LIFO was in
any event not applicable in the boilermaker department owing to the
standard of
work required to uphold contracts, and further that it
was of strategic importance that Kirton and Orme be retained as they
were
more qualified. The applicants on the other hand contend that
Segabutle and Sekgathume should have been retained as they had more
service than both Kirton and Orme.
[6]
In respect of the administration department, Ms
Kubayi was employed on 14 November 2012, and Nkosi on 11 March 2010
as cleaners
in the administration department. The respondent
contended that LIFO was not applied in respect of cleaners in the
administration
department. Nkosi also acted as a ‘tea lady’,
whilst Kubayi was deemed to have other administration skills as she
also
underwent training in administration. The respondent contended
that Kubayi was retained for strategic reasons and due to her
administration
skills, whilst Nkosi had limited use or no other
skills. The applicants nonetheless maintain that Kubayi had lesser
service than
Nkosi and should therefore have been retrenched instead.
The
evidence
[7]
The respondent is in the business of supplying and
repairing pumps, fabrications, and pump stations for mining clients.
It was common
cause as further testified by the respondent’s
Managing Director, Mr Irvin Lines, that the individual applicants
were previously
dismissed as a result of industrial action. Following
litigation under case number JS119/13, they were then reinstated on
20 February
2014, and effectively reported for duty on 5 March 2014.
Subsequent to their dismissal, the respondent had proceeded to
replace
them. This had caused an oversupply of labour, leading to the
retrenchment exercise that led to this dispute. There is a further
dispute as to whether the effect of the order of the court of 20
February 2014 was such that the reinstatement was with retrospective
effect. This issue however as the facts of this case would reveal, is
not material for the purposes of a final determination of
this
dispute.
[8]
Significant with Lines’ testimony was that
it was emphasised during consultations with NUMSA that the selection
criteria would
be based on the employer’s strategic
requirements, and skills of employees, and that LIFO was not the only
criteria to be
applied. Lines testified that NUMSA never objected to
the employer’s approach in that regard during consultations,
and that
the referral of the dispute came as a surprise.
[9]
According to Lines, subsequent to the
retrenchment, vacancies arose in the boiler-making section, and when
Segabutle and Sekgathume
were contacted with an offer of
re-employment in October 2014, their response was that the two had
obtained alternative employment.
An attempt by the respondent to
produce an affidavit by its employee (William Vally) midstream the
trial proceedings that ostensibly
confirmed that this offer of
re-employment made was unsuccessful, following an objection raised on
behalf of the applicants. The
reasons for that ruling are on record.
[10]
The evidence led on behalf of the applicants by Mr
Abram Mashula, a NUMSA local organiser was that the parties during
consultations
never agreed on the selection criteria, and that it was
always the applicants’ approach that LIFO should be applied.
The
Boiler-making section:
[11]
Lines and Hendrick Classens, the respondent’s
Branch Manager, testified that the boiler-making section at the time
of the
retrenchment exercise had four employees, viz, Kirton, Orme,
Segabutle and Sekgathume.
[12]
Kirton as a boilermaker was more qualified and
skilled, and was able to lay out, and interpret drawings necessary
for operations.
Orme was the only employee who had qualifications in
argon and stick welding, which is a specialised type of welding
involving
the joining of high pressure pumps. He was also qualified
to perform other tasks such as the manufacturing of pipes, based
plates,
fabrication, stick and CO2 welding.
[13]
According to Claasens, it takes four years to
qualify as a boilermaker. Segabutle was only an aid/helper with
certification in Welding
I (stick welding) and Welding II, who could
only perform basic tagging and welding duties. He could not perform
argon welding duties,
and his main function was to assist Kirton as
the boilermaker.
[14]
Under cross-examination, Claasens conceded that
Orme had lesser service than Segabutle and Sekgathume, but that the
latter had less
skills in that when mining clients required high
pressured pumps, it was only Orme who could perform those tasks. The
other difference
was that Orme did not do a trade test, and that a
comparison could not be made between an ordinary welder with stick
and CO2 training
(Sekgathume) and an argon welder (Orme). Thus,
Segabutle needed training in argon welding.
[15]
Michael Orme’s testimony on behalf of the
respondent was that he is a qualified boilermaker with eight years of
experience
as a welder, having received training in apprenticeship in
South Africa and the United Kingdom. He has qualifications in CO2
welding,
stick and argon welding. He confirmed having been assisted
by Segabutle and Sekgathume, who were involved in the basic welding
of pipes and trollies. Orme also confirmed that Segabutle was a
boilermaker assistant with whom he had only worked with for three
months.
[16]
Martin Kirton’s testimony on behalf of the
respondent was that he was a boilermaker by trade, having trained for
three years.
He also confirmed that Segabutle and Sekgathume were
only assistant boiler-makers and could not perform argon welding.
Under cross-examination,
he conceded that Sekgathume might have been
a welder, but did not have the necessary training of three years to
perform argon welding
duties
[17]
Mashule, who was party to the consultation process
throughout testified that both Segabutle and Sekgathume had longer
service and
skills and should have been retained based on their
experience, rather than Orme and Kirton who had lesser service,
irrespective
of his qualifications.
[18]
Segabutle was also part of the consultations, and
his testimony was that, of the original 12 employees identified by
the respondent,
only 8 were ultimately retrenched after the
consultation process. He testified that he performed boiler-making
and welding functions,
and that it was unfair to select him and
Sekgathume for retrenchment as Orme and Kirton performed exactly the
same tasks as they
used to, and the two always asked them how to
perform welding tasks. He nonetheless could not respond when it was
put to him that
the others had better qualifications.
[19]
Under cross-examination, Segabutle confirmed that
he had qualifications/certification as welder I, II which pertained
to CO2 and
stick welding, and also boiler-making. Notwithstanding the
fact that he could not confirm that he was skilled to perform argon
welding duties, he testified that he had qualifications and skills,
and was not merely an assistant to Orme and Kirton.
[20]
Sekgathume’s testimony was a repeat of
Segabutle’s in many respects. He also claimed that the four of
them performed
the same tasks even though he only did apprenticeship
in welding, and that argon welding was part of that training. He
further
contended that he had in fact trained Orme in argon welding,
as he had a certificate in argon/CO2 and stick welding, and that he
had to show him all the time as to how to perform his welding duties.
[21]
Under cross-examination, and upon being asked to
produce any documentary evidence to prove that indeed he had done
argon welding,
his response was that he had disclosed in his
interview for the post that he had done such welding and had further
demonstrated
to those in the interview that he could do argon
welding. He denied that he only performed stick or CO2 welding, and
insisted that
he was also trained on argon welding.
Administration
section:
[22]
In respect of Nkosi, Lines’ and Claasen's
testimony was that she was employed as a cleaner/’tea-lady’,
and Kubayi
was retained as she had administration skills which Nkosi
did not have, such as filing, back-ups etc. Reference was made to
Kubayi’s
certificates in respect of the administration training
she undertook in July 2013. A further consideration in the selection
between
the two was that Nkosi had a break of service flowing
from her dismissal for participation in a strike, and her use was
limited
to cleaning and tea-making.
[23]
Nkosi’s testimony was essentially that she
was hired as a cleaner/’tea-lady’, but was also required
to pack files
and perform other tasks as and when required by the
respondent. Upon her reinstatement subsequent to the initial
dismissal, she
had found that Kubayi had taken over her position, and
the respondent had disliked her and shown distrust towards her.
Nkosi’s
contention was that her retrenchment was unfair as
according to her, had LIFO been applied, Kubayi would have been
selected, specifically
since they had performed the same functions.
[24]
Under cross-examination, she conceded that she was
not trained to deal with invoices, even though a promise to take her
for administration
training never materialised. She further conceded
that after her reinstatement, her tasks were limited to cleaning and
making tea.
The
legal principles and evaluation
[25]
In
terms of section 189(2)(b) of the Labour
Relations Act (LRA), the employer and other consulting parties must
engage in a meaningful
joint consensus seeking process and attempt to
reach consensus on the method for selecting the employees to be
dismissed. Under
section 189 (7) of the LRA, the employer must select
the employees to be dismissed according to selection criteria
(a) that
have been agreed to by the consulting parties, and
(b) if no criteria have been agreed, criteria that are fair and
objective.
The onus is upon the employer to demonstrate that the
criteria it chose in the face of a disagreement is indeed fair and
objective.
[26]
In unpacking the provisions of section
189 (7) of the LRA, Van Niekerk J in
National
Union of Metalworkers of South Africa and Others v Columbus Stainless
(Pty) Ltd
[2]
,
held that
;
“
This
formulation gives primacy to criteria that have been agreed to by the
consulting parties. Where no criteria are agreed, it
requires the
employer party to meet the dual or combined requirements of fairness
and objectivity. To the extent that Numsa’s
position throughout
the consultation process and indeed this litigation has been that the
respondent ought to have applied LIFO
to the exclusion of all other
criteria, this court has recognised the objectivity of length of
service but never endorsed LIFO
as the only fair and objective
criterion. On the contrary, there are numerous decisions in which the
court has held that an employer
is entitled to adopt selection
criteria such as experience, competency efficiency and special
skills. In
NUM
and others v Anglo American Research Laboratories (Pty) Ltd
[2005)
2
BLLR 148
(LC), Murphy AJ considered an employer's deviation from
LIFO and its selection criteria based on key skills retention and
continued service delivery to its clients. In that instance, a skills
matrix was developed but regard is also had to performance
appraisals. The court held that in the circumstances in which the
company found itself, the criteria applied within objective as
required by s 189 (7)(b). Similarly, in
Van
Rooyen and others v Blue Financial Services (SA) (Pty) Ltd
(2010)
31 ILJ 2735 (LC), the court held that an employer was entitled to
have regard to competency , qualifications and experience
as
selection criteria.”
And,
“
Following
the influential article by Prof Alan Rycroft 'Corporate restructuring
and 'applying for your own Job' (2002) 23
ILJ
678,
the courts have held that criteria need to be clear and transparent
and selection criteria and the application should ensure
that the
dismissal does not cross the line between a no-fault dismissal and
one based on performance. John Grogan (see
Dismissal
at
245) has summarised the position as follows;
‘
In
summary, criteria for selection can be divided into those that are
potentially fair, and those that are unacceptable in principle.
Potentially fair criteria include length of service, balanced by the
need to maintain history skills. In addition, criteria such
as
performance (whether individual or group performance) , conduct,
experience, skill, adaptability, attitude, potential and the
like -
or a matrix or 'mix' of such criteria - are acceptable. When these
criteria are adopted, however, the employer is required
to ensure
that a 'rating' system is used which can be applied fairly,
consistently and objectively.’”
[27]
The approach of the applicants in this case is no
different from that adopted by the applicants in
National
Union of Metalworkers of South Africa and Others v Columbus Stainless
(Pty) Ltd,
which is that in the absence of adoption of LIFO in
the strict sense, the selection of the individual applicants cannot
be fair.
Clearly based on the authorities referred to above, that
approach is misguided and unsustainable.
[28]
In his closing arguments, Mr Masutha had
nonetheless conceded that LIFO was agreed upon, inclusive of other
considerations such
as strategic skills and experience. Mashula on
behalf of the applicants equally conceded under cross-examination
that other criteria
other than LIFO were also discussed during
consultations. It therefore follows that the applicants’
contention that there
was an agreement that only LIFO would be
applied is misleading and unsupported by the evidence. What therefore
remains to be determined
is whether the criteria as applied by the
respondent was fair, objective and transparent.
[29]
The respondent’s contention was that LIFO
was one of the criteria used, together with strategic/operational
requirements.
In respect of the boiler-making section, it cannot be
doubted that due to the nature of the respondent’s clients’
requirements
and the products produced or to be serviced, it made
sense to retain employees with the necessary skills, technical
know-how, qualifications
and experience.
[30]
On the evidence presented before the Court, Kirton
had vast experience as a boilermaker, and there was nothing suggested
by the
applicants’ evidence that indicated that as compared to
Segabutle and Sekgathume, he was less qualified or skilled, or could
not perform basic functions such as lay outs or interpret drawings
necessary for operations and requirements of clients, which
the
latter could not perform.
[31]
Orme on the other hand was a qualified argon
welder amongst his other qualifications. Any dispute raised on behalf
of the applicants
as to whether Orme was the only employee with
qualifications in argon and stick welding, which is a specialised
type of welding,
is clearly without merit. Other than those
specialised skills, it was further not seriously placed in dispute
that Orme could perform
other tasks such as manufacturing of pipes,
based plates, fabrication, stick and CO2 welding.
[32]
In a sense both Orme and Kirton had more skills,
experience and qualifications than Segabutle and Sekgathume. As
to how the
latter two could therefore claim to have either trained or
shown Kirton and Orme how to perform argon welding duties, when on
the
facts they were clearly not qualified in that field is beyond
comprehension. The fact that Segabutle and Sekgathume could have
acquired some of the welding skills on the job, or could have
obtained certificates in welding at some stage, does not place them
on par with Orme and Kirton, in terms of skills, experience and
qualifications.
[33]
I am therefore satisfied that based on the facts,
and comparisons between Kirton and Orme on the one hand, and
Segabutle and Sekgathume
on the other, there is no reason to believe
that the respondent’s decision to dismiss the latter two upon a
consideration
of skills, experience and its strategic/operational
requirements rather than purely on the basis of LIFO, cannot be said
to be
lacking in transparency, fairness or objectivity.
[34]
The same conclusions are equally applicable in the
administration department when it came to the selection of Kubayi
or Nkosi.
In respect of Nkosi, I struggled throughout her evidence to
appreciate the basis of her complaint. Other than being employed as
a
cleaner and ‘tea-lady’ there is nothing in her evidence
that suggested that she had any other particular skills that
would
have made her to be retained. The high watermark of Nkosi’s
case was that Kubayi had less years of service. Other than
that,
there was no basis upon which any other comparison could be made with
Kubayi.
[35]
I am satisfied that based on the evidence of Lines
and Claasen, Kubayi had to be retained based on her other skills in
administration,
having gone through some form of training in that
regard. Nkosi on the other hand could not offer more, and whatever
extra tasks
she alleged to have had performed did not make her any
more skilled than Kubayi. In the end, the fact that she had more
years of
service counted for nothing in the light of her limited
skills in the affected department.
[36]
In the light of the above conclusions, I am
satisfied that the respondent had discharged the onus placed on it to
demonstrate that
the selection criteria adopted in dismissing the
individual applicants was fair and objective. In considering an award
of costs,
the court takes into account the requirements of law and
fairness. The respondent sought a punitive cost order against NUMSA
as
it was of the firm view that this claim was frivolous and
vexatious.
[37]
Having had regard to the basis of the applicants’
claim, I am satisfied that it had no merit from the beginning and
should
never have been before the Court. I accept that there is an
on-going relationship between NUMSA and the respondent. I have
however
always held the view that such a relationship is not a bar to
a cost order, especially in circumstances where a party should have
had serious introspection prior to pursuing a claim such as in this
case. In the circumstances, the requirements of law and fairness
dictate that NUMSA should be burdened with the costs of this claim.
Order:
1.
The applicants’ claim is dismissed.
2.
The first respondent (NUMSA), is ordered to pay
the respondent’s costs.
___________________
E.
Tlhotlhalemaje
Judge
of the Labour Court of South Africa
APPEARANCES:
For
the Applicants: Mr. MJ Masutha - NUMSA Official
For
the Respondent: Advocate. E Myhill
Instructed
by: Trevor Bailey Attorneys
[1]
Act 66 o 1995 as
amended.
[2]
(JS529/14) [2016] ZALCJHB 344 (30
March 2016) at paragraphs 10 – 11