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[2018] ZALCJHB 340
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National Union of Metalworkers of South Africa and Others v Clear Creek Trading 167 (Pty) Ltd t/a Wireforce (JS656/16) [2018] ZALCJHB 340 (12 October 2018)
THE
LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG
Not
Reportable
Case
no: JS 656/16
In
the matter between:
NATIONAL
UNION OF METALWORKERS
OF
SOUTH
AFRICA
First
Applicant
MOYENG
KIBA AND 16
OTHERS
Second
Applicant
and
CLEAR
CREEK TRADING 167 (PTY) LTD t/a
WIREFORCE
Respondent
Heard:
30 May to 6 June 2018
Delivered:
12 October 2018
Summary:
Practice – parties are bound by the pleadings and pre-trial
minutes – version of defence not pleaded is forbidden.
Settlement
agreements signed under duress stand to be annulled – the
dismissal
for operational requirements is
procedurally and substantively unfair.
JUDGMENT
NKUTHA-NKONTWANA.
J
Introduction
[1]
In most trial proceedings in this Court, some litigants and counsel
do not give pleadings the attention which they should, a
typical case
in these proceedings. The respondent Clear Creek Trading 167 (Pty)
Ltd t/a Wireforce (Wireforce) adduced evidence
and is seeking to rely
upon it in a manner which departed from its pleaded case as
summarised in the pre-trial agreement. I deal
with this issue fully
below.
[2]
The second
to further applicants, who are members of the first applicant,
National Union of Metalworkers of South Africa (NUMSA),
are
challenging their dismissal. They assert that their dismissal was not
effected in accordance with the provisions of section
188 read
together with section 189 of the Labour Relations Act
[1]
(LRA).
[3]
Wireforce
vehemently opposes the applicants claim and it asserts, in its
statement of opposition, that the applicant employees’
employment contracts were terminated by consent due to operational
requirements and that they were paid severance pay equated to
their
length of service.
[2]
It raised
a point
in
limine
to the effect that the applicant employees are estopped from
challenging their termination because they are bound by the
settlement
agreements and the payments made to them in full and final
settlement of all or any claims that they have against Wireforce.
[3]
Factual
Background
[4]
Wireforce is in a persisting collective bargaining relationship with
NUMSA. On 1 March 2016, the business of Independent Wire
(Pty) Ltd in
Vereeniging was transferred to Wireforce in Germiston and the
employees were also transferred in terms of section
197 of the LRA.
There were issues concerning transport allowance and the three shift
system in relation to employees that had been
transferred from
Vereeniging. Wireforce and the employee representatives agreed to a
R100.00 allowance per week and the introduction
of the three shift
system with effect from 21 March 2016.
[5]
However, the employees were not happy with the deal. On 11 April
2016, the employees embarked on an unprotected strike. The
striking
employees were issued with final written warnings consequent to
consultation with NUMSA on behalf of its members. On 18
April 2016,
Wireforce implemented the three shift system as follows:
5.1 06:00 to 15:00 with
lunch time at 11:00
5.2 14:00 to 22:00 with
lunch time at 19:00
5.3 22:00 to 06:00 with
lunch time at 03:00
[6]
On 26 April 2016, some of the applicant employees were approached by
Mr Tebogo Mokoena (Mr Mokoena), Internal Labour Relations
Officer,
accompanied by security personnel. While, on 3 May 2016 and 4 May
2016, the rest of the applicant employees were called
by different
people to appear before Ms Julia McIntyre (Ms McIntyre), the
facilitator who was employed as Group Human Resources
Manager for
Duppro, a labour broker. In all instances, the applicant employees
were presented with voluntary retrenchment settlement
agreements to
sign and were told that Wireforce did not want them anymore.
[7]
The applicant employees testified that they were surprised by the
turn of events and that their attempt to resist to sign the
settlement agreements was not welcome. Ms McIntyre told them that
failure to sign the retrenchment settlement agreements would
result
in their dismissal without any cash benefit. The applicant employees
were not allowed to take the settlement agreements
to NUMSA for
advice.
[8]
The applicant employees testified that they were threatened to sign
the settlement agreements by the presence of the security
guards who
were unfamiliar to them and their uniform was different from that of
the security guards who were manning the entrance
to the Wireforce
premises. Mr Mokoena pointed at the security guards to scare the
applicant employees who refused to sign the settlement
agreements.
This evidence was never challenged.
[9]
NUMSA sent a communication to Wireforce wherein it questioned the
procedure that had been undertaken and the fact that it was
not
consulted yet its members were being retrenched. Wireforce was
adamant that the process was voluntary and there was no need
to
involve NUMSA.
[10]
Wireforce’s version of defence, raised for the first time
during trial, is that the Vereeniging employees were not satisfied
with the transport allowance and the relocation to Germiston. While
the Germiston employees were not satisfied with the shift system.
As
a result, Mr Yassen Parker (Mr Parker), Wireforce’s Chief
Operating Officer, requested Ms McIntyre to facilitate the departure
of all unsatisfied employees as per their wishes.
[11]
Ms McIntyre conducted the separation consultations that sat on 3 and
4 May 2016. She was adamant that the individual applicant
employees
were allowed to negotiate independent and separate packages on
voluntarily basis. Hence, there was no need to consult
with NUMSA.
[12]
As mentioned above, Ms McIntyre’s evidence is incongruous with
Wireforce’s pleaded version of defence.
Pleadings
[13]
It is
important that we remind ourselves of the purpose of Pleadings in a
lawsuit. Mainly, Pleadings are statements of what each
party’s
contentions will be at the trial and give all such details as
opponents need to know in order to prepare their case
in answer. It
is a cardinal rule that parties are bound by their Pleadings and are
not allowed to adduce facts which they have
not pleaded. Obviously,
the reason is that cases must be decided on the issues that are on
record and if it is desired to raise
other issues, they may be placed
on the record by way of an amendment.
[4]
[14]
By the same
token, the pre-trial minute, a consensual document, is a binding
contract between the parties and it obliges the Court
to decide only
the issues set out therein.
[5]
Hence, it impermissible for Wireforce to rock up in court with a new
version of defence without, at least, seeking an amendment
to its
pleaded case. Wireforce must accordingly stand and fall by its
pleaded version of defence. It is not for this Court to construe
or
infer from the asserted facts in the statement of opposition that
they sustain another claim even though it is not pleaded.
[6]
[15]
It follows that Ms McIntyre’s evidence, to the extent that she
testified that the applicant employees had approached
Wireforce and
sought to terminate their contracts of employment on mutual basis,
stands to be rejected.
Voluntary
retrenchment or dismissal?
[16]
Wireforce
asserts that the applicant employees have accepted the voluntary
retrenchment packages in full and final settlement of
all claims
against it. Therefore, they are bound by the retrenchment agreements.
In this regard, I was referred to the Constitutional
Court judgment
in
Gbenga-Oluwatoye
v Reckitt Benckiser South Africa (Pty) Limited and Another
,
[7]
where it was stated:
‘
[22] As against
this,
we must consider the importance of giving effect to
agreements, solemnly concluded, by parties operating from the
necessary position
of approximate equality of bargaining power.
Here, the power of the Labour Appeal Court’s approach is
obvious. What is at issue here is a powerful consideration
of
public policy – the need for parties to settle their disputes
on terms agreeable to them. That need arises in their own
interests,
and the interests of the public.
[23]
Here, the
applicant had engaged in outright material deceit and
misrepresentation. He himself, confronted with the misrepresentation
in his curriculum vitae, confessed he had no defence. It was
then that he entered into a final agreement to put a present
dispute
to bed. He did so full knowingly, with his eyes open to his own
future interests
. It may have been different if he had agreed to
abjure recourse to the courts in future disputes. But here the
dispute was
hot and fresh, and present. He agreed to part ways
with Reckitt on terms that were final, and that protected him from
further
action by his employer – including the possibility of a
disciplinary process that could wound his career irremediably.
That
finality included an agreement that the courts would not be involved.
The parties would go their ways without more
.
[24] The public, and
indeed our courts, have a powerful interest in enforcing agreements
of this sort. The applicant must be held
bound.
When parties
settle an existing dispute in full and final settlement, none should
be lightly released from an undertaking seriously
and willingly
embraced. This is particularly so if the agreement was, as here, for
the benefit of the party seeking to escape the
consequences of his
own conduct.
Even if the clause excluding access to courts were
on its own invalid and unenforceable, the applicant must still fail.
This is
because he concluded an enforceable agreement that finally
settled his dispute with his employer.’ (Emphasis added)
[17]
Gbenga-Oluwatoye
[8]
is
distinguishable as the Constitutional Court had regard,
inter
alia
,
to the parties’ position of approximate equality of bargaining
power and the fact that the agreement was for the benefit
of the
party seeking to escape the consequences of his own conduct. The
converse is true in the present case; retrenchment is a
no fault
termination and must be effected in accordance with section 189.
[18]
In
Elliot
International (Pty) Ltd v Veloo and Another,
[9]
the Labour Appeal Court (LAC), confronted with similar circumstances,
rejected the suggestion that when the respondent employees
accepted
payments
in
‘
full
and final settlement’
of their claims
,
they
accepted settlement of the dispute in terms of the voluntary
retrenchment agreement. It was stated:
‘
[34]
At any rate, it seems to me that,
whereas in a business transaction scenario between business people or
corporate entities certain
patterns of conduct are expected, the same
set of expectations cannot ordinarily be applied to circumstances
where employees, who
are generally ignorant of business conventions,
make decisions.
Therefore, if the
indications from the facts suggest that banking the money was not
intended to be a waiver, on the part of the
party banking the money,
then the inference cannot be drawn from the facts, against such
party, that the transaction was a full
and final settlement of the
claim or dispute between the parties. Each case would have to be
determined on the basis of its own
specific facts. It is significant
that even in
Andy's Electrical,
relied upon by Mr
Snyman
, the Court further stated as follows:
“
A
payment’s description as one ‘in full settlement’
is not necessarily decisive. The circumstances may show that,
despite
the description, the payment is intended to satisfy nothing more than
an admitted debt. If that is its true rating, the
words ‘in
full settlement’ are of no further consequence and may safely
be ignored.” (346B-C)
[35]
Therefore, in the
present instance it would be important to examine whether any facts
exist on the record which suggested that the
respondents grasped and
appreciated the significance and potential negative implication that
by not returning or offering to return
the payments they would
thereby be deemed to have made an election to subscribe to the
retrenchment agreement as voluntary participants
. In my view,
such facts did not exist, for the reasons that appear in this
judgment. Therefore, in my view, an inference in favour
of the
appellant cannot properly be drawn.’ (emphasis added).
[19]
Even in the present case, the payment of
severance packages ‘in full and final settlement’ have no
additional consequences
as the applicant employees were evidently
ignorant of the legal implications of keeping the said payments.
[20]
In
any event, the applicants disavow that the applicant employees
voluntarily participated in the retrenchment discussions as the
settlement agreements were signed under
duress.
Since Wireforce seeks to enforce the
voluntary
retrenchment agreements, it
bears
the onus to prove the parties’ common intention to enter into
the agreements.
[10]
[21]
Duress
is not necessarily a consequence of ‘physical threat, such as
locking the employees into a room and physically forcing
them to sing
an agreement’, as correctly opined by Steenkamp J in
Kanku
and Others v Grindrod Fuelogic
[11]
where he eloquently summarised the legal principles and relevant the
authorities applicable in similar circumstances as represented
in the
present and stated:
‘
[38]
Did the employees in this case sign the agreements “voluntarily,
i.e. without duress or coercion, unequivocal and with
full knowledge
of its terms and implications as a full and final settlement of all
the issues”?
[39]
On the facts and on the evidence before me, and on the probabilities,
I am not persuaded that Grindrod has discharged that
onus. All three
drivers were called in out of the blue, with no prior warning and
without the benefit of a notice that is required
by law in s 189(3)
of the LRA. They were presented with a
fait accompli
: This is
Eskom’s requirement; there is nothing we (Grindrod) can do
about it; if you refuse, we lose the contract (and put
all the South
African drivers at risk); you have no choice but to sign. Mateus was
on his own, confronted by his two superiors
in their boardroom.
Neither he, nor the other two, were given the opportunity to obtain
union or legal representation. On the probabilities,
I do accept that
Kanku was not given the opportunity to ascertain for himself what
Eskom’s position was, even though I find
it improbable that the
door was locked. And the consistent evidence of all three drivers
that Church insisted on leaving for Johannesburg
with the signed
agreements is also more probable than not. Under those circumstances,
I do not think it can be said that Grindrod
has shown that the
employees accepted the agreement voluntarily, unequivocally and with
full knowledge of its terms and implications.
[40]
The employees in this case had even less opportunity to consult
anyone about the “retrenchment agreement” that
was
presented to them out of the blue than was the case of the employee
at
Adelkloof Drankwinkel.
In that case, the employee was also
called into a meeting and presented with a “voluntary
retrenchment agreement”.
She telephoned her mother and then
signed it. The Court commented:
“
I
am unconvinced that there was any attempt to comply with the
obligations placed upon an employer by section 189 of the Act.
The applicant was told that her services had to be terminated on 15
December 2000. She heard about this for the first time
on that
day. Yet the document setting out her package is dated 11
December 2000, four days previously, and is titled "Kennisgewing
van aflegging". She received no such notice, and she was
taken to Mr Viljoen unprepared and unrepresented.”
…
“
The
respondent argued in a special plea that the termination of the
applicant's services was consensual, as she had signed the agreement
in question. Any shortcomings in the process, which was
conceded by the respondent's advocate or counsel for the respondent,
that preceded the agreement was cured by the voluntary retrenchment
package agreement.
In
my view, and for the reasons set out above, the respondent did not
discharge its onus of proving that the dismissal was for a
valid
reason. The procedure was entirely unfair, high-handed and
flawed.
In
Bekker v
Nationwide Airlines (Pty) Ltd
1998
2 BLLR 139
(LC) Landman J held that where an agreement of this nature is re
ached
as a form of settling a retrenchment, the agreement must be preceded
by consultation. In this matter, the consultation
process was
so flawed that it amounted to no consultation at all. The
applicant was taken to a building where she was confronted
by a
perfect stranger with the news that she had to be retrenched.
Mr Viljoen had a standardised agreement ready at hand.
Even if
she declined the postponement of the meeting, Mr Viljoen says he
offered, it was clear that she would eventually be retrenched
whether, at this meeting or the next meeting. The circumstances
in which her signature was procured were oppressive.
She was in
shock, needed advice, followed her mother's advice over the telephone
in circumstances where no one had her interests
at heart.
The
main objective of that meeting was to procure the applicant's
signature on the agreement, and to circumvent the requirements
of
section 189 of the Act. The decision to dismiss was taken four
days ago.
From
the respondent's point of view there was really nothing to discuss,
and Mr Viljoen did nothing to discuss, other than the amounts
set out
in the retrenchment package. In the end he conceded, when asked about
the minutes, the only notes he made were in relation
to the amounts
to be paid. All that was discussed was the package.
In
my view, an agreement obtained in such unfair circumstances amounts
to a nullity. I therefore find that the dismissal was
both
procedurally and substantively unfair. The applicant should be
reinstated.”
[22]
Turning to the present case, like in the authorities referred to
above, the applicant employees were individually called ‘out
of
the blue’ and without notice to NUMSA to sign the settlement
agreements. They were never allowed time to ponder on the
terms of
the settlement agreement nor given an opportunity to be represented.
They were confronted with Ms McIntyre, a stranger,
and Mr Mokoena, a
junior manager, whose concern was figures and signatures, as
instructed by Wireforce. Wireforce deliberately
made sure that none
of the applicant employees return to their workstations after signing
the agreement in order not to alert other
employees. They were all
escorted by the security guards to collect their belongings and
vacate Wireforce premises.
[23]
What is more atrocious is that those employees who were on the 10:00
pm to 06:00 am shift were escorted out of Wireforce premises
after
midnight and had to wait for their transport outside. It is
regrettable that the clandestine styled so-called consultation
processes are still happening after two decades into our democracy.
[24]
Clearly,
like in
Nationwide
Airlines,
[12]
Wireforce had no intention to bargain or consult with the applicant
employees but wanted to procure their signature on the settlement
agreements and, consequently, circumvent the requirements of section
189. It is not surprising that NUMSA was never notified.
[25]
In the circumstances, I am persuaded that the applicant employees
were coerced into signing the settlement agreements. Accordingly,
the
settlement agreements are annulled.
[26]
This matter must then be decided on the basis that
the reason for the applicant employees’ dismissal is indeed due
to Wireforce’s
operational requirements.
In this regard,
the only inference that one can draw from the approach adopted by
Wireforce in these proceedings is that there
was no business
rationale for the retrenchments. If Wireforce had one, it would not
have abandoned its pleaded case. Also, the
retrenchments were not
preceded by a fair procedure as contemplated in section 189.
[27]
In all the circumstances, I an convinced that the dismissal of the
applicant employees is substantively and procedurally unfair.
Relief
[28]
The
applicant employees seek compensation as opposed to reinstatement.
In
determining what is just and equitable compensation that can be
awarded under s194(3) of the LRA
,
I have followed the guidelines set out in
Minister
of Justice and Constitutional Development v Tshishonga,
[13]
quoted with approval in
ARB
Electrical Wholesalers (Pty) Ltd v Hibbert,
[14]
where the LAC stated:
‘
[24]
…In
Minister of Justice &
Constitutional Development v Tshishonga
(Tshishonga), this Court in an award of
solatium
referred to the delictual claim made under the
actio
iniuriarum
for guidance in what would
constitute just and equitable compensation for non-patrimonial loss
in the context of an unfair labour
practice. It stated that since
compensation serves to rectify an attack on one’s dignity, the
relevant factors in determining
the quantum of compensation in these
cases included but were not limited to:
‘…
the
nature and seriousness of the
iniuria
,
the circumstances in which the infringement took place, the behaviour
of the defendant (especially whether the motive was honourable
or
malicious), the extent of the plaintiff's humiliation or distress,
the abuse of the relationship between the parties, and the
attitude
of the defendant after the
iniuria
had taken place…’’
[29]
As such, I have considered the insincere manner in which the
applicant employees were treated, the fact that there was no business
rationale for the retrenchments and the fact that Wireforce
deliberately sought to circumvent the provisions of section 189. To
my mind, it is, therefore, just and equitable to award compensation
equivalent to eight months’ salary to the applicant employees,
respectively.
[30]
However, I must mention that there are three applicant employees
(Enseto Maibombo, Aziel Tisetsi Tau and Ngceba Kalo) who did
not
attend the court proceedings. NUMSA is of the view that they are no
longer interested in the matter. Therefore, they stand
to be excluded
from the relief.
Costs
[31]
The only issue remaining is that of costs. It is trite that costs in
this Court do not follow the result, especially if the
parties are in
a persisting relationship as typified in the present case.
Nonetheless, given the approach Wireforce adopted which
protracted
the trial unnecessarily, I am convinced that the present case
presents an exception to the rule.
[32]
In the circumstances, I make the following order:
Order
1. The dismissal of the
applicant employees is substantively and procedurally unfair.
2. Wireforce to pay the
applicant employees, excluding Enseto Maibombo, Aziel Tisetsi Tau and
Ngceba Kalo, compensation equivalent
to eight months’ salary,
respectively.
3. Wireforce to pay the
applicants’ costs.
___________________
P
Nkutha-Nkontwana
Judge
of the Labour Court of South Africa
Appearances:
For
the applicant: Advocate F Venter
Instructed
by: Norton Rose Fulbright South Africa Inc.
For
the respondent: Mr X Ngako of Ruth Edmond Attorneys
[1]
Act 66 of 1995 as amended.
[2]
See para 17.1 of the Statement of Opposition at page 19 of the
pleadings bundle.
[3]
See para 22.5.5 of the Pre-trial Minute at page 35 of the pleadings
bundle.
[4]
Gcaba
v Minister of Safety and Security
and
Others
[2009]
ZACC 26
;
2010 (1) SA 238
(CC);
2010 (1) BCLR 35
(CC) at para 75;
Khumalo
and Another v Member of the Executive Council for Education: KwaZulu
Natal
[2013]
ZACC 49
;
2014 (3) BCLR 333
(CC); (2014) 35 ILJ 613 (CC);
2014 (5) SA
579
(CC) at para 90.
[5]
See:
MEC for Economic Affairs, Environment and Tourism, Eastern Cape v
Kruizenga and Another
2010 (4) SA 122
(SCA) [also reported at
[2010] 4 All SA 23
(SCA) – Ed];
Filta-Matix
(
Pty
)
Limited
v Freudenberg and Others
1998 (1) SA 606
(SCA) [also reported at
[1997] ZASCA 110
;
[1998] 1 All SA 239
(A) – Ed];
NUMSA
v Driveline Technologies (Pty) Ltd and Another
[2007] ZALC 66
;
[2000] 1 BLLR 20
(LAC);
Shoredits
Construction (Pty) Ltd v Pienaar NO and Others
[1995] 4 BLLR 32
(LAC) at 34C–F);
Chemical,
Energy, Paper, Printing, Wood and Allied Workers' Union and Others v
CTP Ltd and Another
[2013] 4 BLLR 378
(LC);
Mosiane
and Others v Murray and Roberts Cementation (Pty) Ltd
[2014] ZALCJHB 518 (12 December 2014) at paras 25 and 25;
Sethole
and others v Dr Kenneth Kaunda District Municipality
[2018] 1 BLLR 74 (LC).
[6]
Gcaba
supra
n 4.
[7]
[2016] ZACC 33
; (2016) 37 ILJ 2723 (CC);
2016 (12) BCLR 1515
(CC);
[2017] 1 BLLR 1
(CC) at para 24.
[8]
Supra.
[9]
[2014] ZALAC 36
;
[2014] 10 BLLR 955
(LAC); (2015) 36 ILJ 422 (LAC)
at paras 34 and 35.
[10]
See:
Wireforce
Springbok
Trading (Pty) Ltd v Zondani
(2004)
25
ILJ
1681 (LAC) at para 46, referred with approval in
Kanku
and Others v Grindrod Fuelogic
(C602/2014) [2017] ZALCCT
at
para 43.
[11]
Kanku
supra
at
paras 38 to 40.
[12]
Kanku
supra
n
10.
[13]
[2009] 9 BLLR 862
(LAC); (2009) 30 ILJ 1799 (LAC).
[14]
[2015] ZALAC 34
;
[2015] 11 BLLR 1081
(LAC); (2015) 36 ILJ 2989 (LAC)
at paras 23 to 25.