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[2018] ZALCPE 40
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Van Vuuren and Others v Modelez South Africa (Pty) Ltd (PS22/17) [2018] ZALCPE 40; [2019] 3 BLLR 302 (LC); (2019) 40 ILJ 1106 (LC) (7 November 2018)
THE
LABOUR COURT OF SOUTH AFRICA, PORT ELIZABETH
Not
Reportable
Case
no: PS 22 / 17
In
the matter between:
BELINDA
VAN VUUREN & 5
OTHERS
Applicants
and
MODELEZ
SOUTH
AFRICA (PTY)
LTD
Respondent
Heard:
10 and 11 September 2018
Delivered:
7 November 2018
Summary:
Operational requirements - alternative positions - alternative
positions came about as a result of employees' own conduct
- not
appropriate to offer employees such alternatives
Operational
requirements - compliance with section 189(2)(iii) and (iv) -
employer complied with these provisions
Operational
requirements - agreed termination dates - employer anticipating
termination dates because employees refused to do handover
-
employer's conduct justified
Operational
requirements - case of substantive fairness must be properly defined
in pleadings - employees then bound by such
case
Dismissal
operational requirements dismissal substantively fair application
dismissed
JUDGMENT
SNYMAN,
AJ
Introduction
[1]
This
case epitomises the unfortunate reality of being part of the global
market place, where it comes to local security of employment.
This
reality simply is that global decision making in
the interest of enhancing profits and efficiencies
of a
global conglomerate leaves in its wake local unemployment, and there
is not much than can be done about it. This was
recognized
by the Labour Appeal Court as early as 1999 in the
judgment of
Johnson
&
Johnson
(Pty) Ltd v Chemical Workers Industrial Union
[1]
where the Court recorded the following where it came to the
consequences of this kind of global decision making:
'...
Word was sent from USA headquarters to subsidiaries around the world:
restore profitability of the product range by the end
of 1997 or face
closure of those business divisions connected to manufacture of the
range. The appellant was one of those who had
to pay heed to this
call. Something had to be done. Costs needed to be reduced. A
time-honoured way of cutting costs is to dismiss
staff. So it came
about that a number of females working for the appellant at the East
London factory (the employees) were retrenched
at the end of 1996.
All of this, it is said by some, is for the ultimate benefit of
mankind. Consumers will benefit. It is even
possible that Proctor &
Gamble might, as a result of its success, employ more workers. But
not in East London. It does not
have a factory there. Wondrous and
mysterious though the ways of global capitalism may be for some, for
others they bring only
cold comfort.'
[2]
And so it also is in the matter now
before me. A decision was taken by the respondent's overseas parent
to outsource all
its accounts receivable
functions, on a global basis, to a
service provider
in India called Accenture.
This
decision meant that these functions were simply no longer
needed where it came to the respondent's accounting
operations in Port Elizabeth. All this culminated in the ultimate
retrenchment of the applicants in this matter.
[3]
The
applicants, as a result of their retrenchment, brought a case of
unfair dismissal based on operational requirements to this
Court in
terms of section 191(5)(b) of the Labour Relations Act ('LRA').
[2]
The applicants brought this case by way of
statement of claim filed on 3 May 2017.
[4]
Because section 189A applied the
retrenchment process in this case, section 189A(18) applies, which
reads:
'The
Labour Court may not adjudicate a dispute about the procedural
fairness of a dismissal based on the employer's operational
requirements in any dispute referred to it in terms of section 191
(5) (b) (ii).'
Therefore,
it was not competent to challenge procedural unfairness in these
proceedings.
[3]
Procedural
fairness is accordingly not an issue to be decided in this
case, and all I must consider and decide in this case
is whether the
retrenchment of the applicants by the respondent was
substantively fair.
[5]
The matter came before me on trial on 10
and 11 September 2018, and I reserved judgment which I now
provide. I will
commence with this judgment by
first setting out the relevant facts.
The
relevant background
[6]
The pertinent facts in this matter were
mostly common cause. The matter was also well documented, with most
of the interaction between
the parties being confirmed in
correspondence and in the pre-trial minute. The consultation
proceedings were also facilitated under
the auspices of the CCMA, and
these consultations were minuted, the contents of which minutes were
not in dispute.
[7]
The respondent, at its Port Elizabeth
operations, conducts the business of the manufacturing of chocolate
confectionary and
sweets for the
wholesale market, with its local customer base being the large
retail chains such
as Pick 'n Pay, Shoprite, Spar
and the like. The respondent had a dedicated
accounting department
at its Port Elizabeth operation,
consisting of a total of 36 (thirty six) employees, with
some 15 (fifteen) of
these employees, including the applicants,
being in the accounts receivable section.
[8]
The applicants were all employed as
financial controllers in the accounts receivable section. In such
capacity, they were each
allocated specific customers to
attend to. The duties relating to these customers were the overseeing
and processing of payment
collections from allocated
customers, the preparation of reports on payments from customers and
amounts owing by customers,
and the managing of credit and credit
limits. The amount of customers allocated to each applicant
depended on the size and
complexity of a particular
customer, with some applicants having more customers
than others to attend
to.
[9]
In 2016, the respondent's overseas
parent company, and on a worldwide basis,
took a global decision
to outsource account
management functions of all subsidiaries to a service
provider in India, called Accenture.
This included the
respondent locally. The impact of this decision would be that all the
respondent's local customers would
also be serviced by
Accenture in India. This was known as the Mondelez
Business Systems project.
[1O]
This decision meant that the entire accounting
department in Port Elizabeth would be affected.
In
particular, and of relevance to this matter, accounts receivable
would be done by Accenture in India, and thus all these positions,
numbering the whole total of 15, would be affected. It was common
cause between the parties that this came about pursuant to the
valid
and legitimate operational requirements of the respondent.
[11]
On 5 July 2016, the respondent initiated
restructuring proceedings in terms of the LRA, by way of a
section 189(3) notice
issued on that date. It was common cause that,
as set out above, section 189A applied in
this instance,
considering the number of employees affected. As
a result, the respondent requested CCMA facilitation
in respect
of the consultation process
to follow, and commissioner Feizel Fataar was designated to the
process
as facilitator, by the CCMA.
[12]
A number of facilitated consultations
took place between the respondent and employees. These consultations
were held on 14 and 29
July 2016, 29 August 2016, and finally 6 and
16 September 2016. Pursuant to these consultations, consensus was in
fact achieved
between the parties on all of the issues as
contemplated by section 189(2) of the LRA. In
particular, and
in the consultation on 16 September
2016, it was agreed that the issues of the
reason for retrenchment,
ways to avoid job losses, selection criteria
and applicable severance pay had been fully consulted upon, and
consensus had been
achieved on these issues.
[13]
In the course of the above
consultations, it was finally determined that the respondent would
only retain 5 (five) permanent positions
in the accounting department
in Port Elizabeth. As part of the agreed process of selection, all
the employees in the accounts department
were given the opportunity
to apply for these available positions. The applicants participated
in the process, and indeed applied
for the positions remaining in the
accounts department, along with all the other affected incumbents.
They were all interviewed.
Unfortunately, none of the applicants were
successful in their applications, were not appointed, and were thus
earmarked for retrenchment.
It must be reiterated that this selection
process was not in dispute between the parties, and none of the
applicants sought to
make out a case that someone else should have
been retrenched in their stead and that they should rather have been
appointed.
[14]
There was only one remaining
issue for discussion in the last consultation
of 16 September
2016. This was the so-called 'ramp down
plan' in terms of which time frames and
activities would
be discussed relating to the
winding down and then handing over of the duties and functions
relating to the now
outsourced accounts receive positions, to the
external service provider. Commissioner Fataar indicated in this
consultation that
as far as he was concerned, the actual retrenchment
process had been concluded, the issue of 'ramp-down' was an internal
matter,
and he took his leave from the further consultation on
this issue on the day.
[15]
After discussion on 16 September 2016, a
ramp-down plan was agreed to. Part of this included
extended and
staggered actual termination of
employment dates of employees. In the end, a total of 15 (fifteen)
employees
were to be retrenched, and the following termination dates
were agreed to, where it came to the 6 (six) applicants:
15.1
Tania
Rankin:
30
November 2016
15.2
Lynn
Allies:
30
November 2016
15.3
Verne
Campbell:
30
November 2016
15.4
Adele
Britz:
31
December 2016
15.5
Belinda
Van Vuuren:
31
January 2017
15.6
Shameela
Abrahams:
31
January 2017.
[16]
Up to this point, there was nothing
contentious between the parties. It is what happened after the final
consultation on 16 September
2016 and where it came to the actual
implementation of the ramp down plan, that led to the issues at stake
in this case.
[17]
According to Karol Jowzicki
('Jowzicki'), the manager responsible for finance who testified
for the respondent, the very reason
for the staggered termination
dates of the applicants was because of the specific customers
they serviced and
what would individually be required from each
of them in conducting a handover of their duties to Accenture.
Jowzicki explained
that what was envisaged was firstly a 'knowledge
capture' (KC) process, in which the applicants would not be
required to
specifically participate in. But what was required in
terms of the KC process is that each of the applicants would
continue to fulfil their normal day to day duties and activities, and
would be 'shadowed', for the want of a better description,
by
the Accenture personnel that would ultimately take over
these functions.
[18]
Although the applicants did not have to
participate in the KC process, they were required
to participate in the
handover part of the ramp down plan. This
entailed that in exchange for the extended notice periods as set out
above, the applicants
had to fulfil certain handover functions such
as summarizing in writing the day to day aspects of their
jobs on particulars
clients and what these
clients practically required from them.
Jozwicki explained
that this was critically important,
because some of the large clients would even refuse
to pay a
whole invoice for millions of Rand if there is a lack
of process followed or even a small discrepancy, which is
highly prejudicial
to the respondent.
[19]
According
to Jozwicki, the applicants did not comply with their side of
the bargain where it came to the handover part of
the agreed ramp
down plan. A dispute then arose as what exactly the applicants
were required to do as part of this handover
requirement in the ramp
down plan. As touched on above, and as
described by Jozwicki, what the applicants
needed to do was
to properly document all their day to day dealings with
customers, so that there was a
usable record of all unique
internal customer requirements. Jozwicki testified that the
applicants refused to do this, and as a
result, and in a letter
dated 22 October 2016, it was
conveyed to the applicants
(through their
representatives)
[4]
what was required of them, and
should they continue to refuse
to do this, there
may well not be justification for their continued employment beyond
the end of November 2016.
[20]
Pursuant to the letter of 22 October
2016, there was then a discussion with the applicants'
representatives on 26 October 2016.
The contents of this
discussion were then confirmed in a letter on the same date, to the
applicants' representatives.
It was explained to the applicants why
there was a need for a proper handover. It was reiterated that the
need for a handover was
not an unreasonable request or expectation.
It was further explained that the extended termination
dates agreed to
was in order to give effect to this. The respondent
even went so far as to provide the applicants with a basic template
of
what
needed
to be done. The letter concluded with the following statements:
'Should
it be that the impacted team (referring to the applicants) feels they
cannot interact with the retained team or assist with
the latter
phases of MBS i.e. Go-live, Hypercare and Stabilization, the purpose
and value of the ramp
down
plan will be defeated.
Given
the conversation on the 25th of October 2016, we ask that the team to
reflect on the above and let us know by Monday, the
31st October
2016, whether or not they wish to continue with
the ramp down plan and the requirement
and expectations
thereof or exit the business at an earlier
date.'
(sic)
[21]
The answer emanating from the
applicants' representatives came on 28 October 2016, and was a
relatively simple one. In this
response, it stated that the
applicants have done what was expected of them, and there was no
need for a meeting on Monday
as proposed by the respondent. It
suggested that an independent mediator be called in to listen to both
points of view and resolve
the impasse.
[22]
This being the position adopted by the
applicants, the respondent brought matters to a head by way of a
letter on 1 November 2016
given to the applicants. In this
letter, it was pointed that for all intents and purposes, the
consultations had concluded
on 16 September 2016, and at that point
in time the respondent was entitled to terminate the employment
of the applicants
forthwith. This being the case, it is then
important to highlight some aspects of this letter, which records the
following:
'I
would like to stress that the business was not obliged to compromise
on exit dates and would have effected terminations at that
juncture.
Our willingness to agree to a ramp down plan was a gesture of
goodwill and on the provision that impacted employees work
collaboratively with both Accenture and the retained Mondelez team at
the point of Go-live and beyond.
From
our dialogue and your resultant e-mail it is apparent that impacted
colleagues do not agree to our expectations. For this reason,
we
believe that the ramp down plan is nullified on the basis of it no
longer being mutually beneficial.
I
therefore confirm that we will be effecting exists on the 30
th
November 2016
as
we believe the employer-employee relationship and associated trust is
irretrievably broken.'
[23]
No response from the applicants was
forthcoming to this letter. There was no attempt on their part to
convince the respondent otherwise,
where it came to these clear views
expressed.
[24]
As also indicated in the letter of 1
November 2016, and then on 2 November 2016, the respondent provided
what it called a
severance agreement to each of the
applicants. The applicants all refused to sign the agreement.
[25]
On 24 November 2016 the respondent then
gave each one of the applicants written notice that their employment
would be terminated
effective 30 November 2016. The
notice further provided that they would be paid
in
lieu
of notice, receive their
severance pay, and all outstanding statutory payments.
[26]
The difficulty faced by the respondent
as a result of all the above events is that it still
needed individuals to do
the required handover as part of the ramp
down plan. Jozwicki testified that if the applicants simply did what
was expected of
them, there would have been no need to engage anyone
else, and the applicants would have worked to the agreed
termination
dates which would have concluded the
handover. It was common cause that the respondent only after 1
November 2016 employed
temporary employees on
fixed term contracts to assist the respondent with completing
the handover. It was
also common cause that this decision was taken
after the completion of the consultation process and for the reasons
set out above.
[27]
It was common cause that the respondent
employed the following temporary employees:
27.1
Jennifer Hull: She was engaged from 14
November 2016 to 31 March 2017, and then again from 1 April 2017 to
30 June 2017. Jozwicki
explained that she was a former employee of
the respondent that had retired, and was brought in mainly for the
handover of Shoprite,
which was a customer she had some familiarity
with.
27.2
Natasha Luiters: She was engaged from 2
May 2017 to 31 July 2017 and from 1 August 2017 to 30
November 2017. Jozwicki
explained that she was one of the employees
that was actually retrenched, and was brought back to finalize
handover issues, unrelated
to the duties the applicants would be
doing in this regard.
10
27.3
Gillian Maggot and Charmelle Robie:
These employees were engaged between 1 November 2016 / 1 December
2016 and 31
March 2017. With regard to these
employees, Jozwicki explained that they were employees that had been
retrenched earlier
and were brought in to specifically attend to the
handover because they knew the business and operations.
27.4
Charmaine Koen: She was appointed from
19 September 2016 to 30 November 2016, and 1 December 2016 to 31
March 2017. It turned out
she was fulfilling temporary duties not
associated with the positions of the applicants, and her
appointment
was in reality of no relevance to
this matter.
[28]
There was also a TES employee used from
7 November 2016 to 31 March 2017, being one Bonita Maasdorp, to
finalize the handover.
But she was also only involved in back office
work, which was only part of the duties which the applicants
normally did.
[29]
Jozwicki testified that the engagement
of the temporary employees was a measure of last resort and because
of the approach
adopted by the
applicants, this left the respondent with no choice in this regard.
He explained, which was never challenged,
that it would be far more
operationally advantageous and efficient to have used the applicants
for the handover,
hence their extended termination dates
and participation in the ramp down plan. It
was also more expensive
to engage these external
resources instead of the applicants. It would not have been
necessary to have
procured the additional temporary resources
if the applicants simply did what was expected of them.
[30]
It was not possible to say which of the
duties of each individual applicant was being fulfilled by each of
these temporary employees.
They did not specifically replace a
particular applicant. They were engaged to do handover duties in
general, as needed and when
needed. Jozwicki specifically explained
this in evidence, and the two applicants that testified, being Linda
Van Vuuren ('Van Vuuren')
and Adele Britz ('Britz'), conceded this
as well.
[31]
In the end, the employment of all the applicants then ended on 30
November 2016. This was in any event in line with the
agreed
termination dates of Rankin, Allies and Campbell.
It did however result in the termination date
of Britz
being pushed up by 1 (one) month, and that of Van Vuuren
and Abrahams by 2 (two) months.
[32]
Dissatisfied with their termination of employment
under the circumstances as set out above, the
applicants
then pursued an unfair dismissal dispute based on
operational requirements to this Court. As
stated above,
procedural fairness was not in dispute, leaving me only to
decide the issue of substantive fairness.
As to consequential relief,
the applicants seek compensation.
Was
the dismissal substantively unfair?
[33]
As
a point of departure, the issue of whether a dismissal for
operational requirements is substantively fair is decided by way of
answering what is called a general question and a
specific question. As said in
Chemical
Workers Industrial Union and Others v Latex Surgical Products (Pty)
Ltd
[5]
:
'Whether
or not there was a fair reason for the dismissal of the individual
appellants relates to a general question and a specific
question. The
general question is whether or not there was a fair reason for the
dismissal of any employees. The specific one is
whether there was a
fair reason for the dismissal of the specific employees who were
dismissed, which in this case, happened to
be the individual
appellants. The question of a fair reason to dismiss the specific
employees who were dismissed goes to the question
of the basis upon
which they were selected for dismissal whereas the other question
relates to whether or not there was a reason
to dismiss any employees
in the first place.'
[34]
In this instance, I need not concern
myself with answering the general question
articulated in
Latex.
The
parties have agreed in the pre-trial minute the respondent's
need to retrench and the fairness of its rationale
in
this regard is not in dispute.
[35]
This
then only leaves the specific question to answer, namely whether
it was fair to have retrenched the applicants themselves.
In this
regard, the basis on which the applicants have sought to bring their
case must first be established. The applicants must
set out the basis
of their case in the statement of claim, and then
the pre-trial minute, and
are then bound to
the case so articulated.
[6]
In
SA
Breweries (Pty) Ltd v Louw
[7]
the
Court said the following:
'...
the premises upon which the issues were to be advanced had been
refined and limited by the terms of the minute, which is the
very
purpose of the minute and, more particularly, the very purpose of the
directives in the Practice Manual. It was therefore
inappropriate to
fall back on the generalities of averments about procedural and
substantive unfairness. Were that approach to
be permissible, there
would be no point at all to efforts to narrow issues and trim down
the scope of contestations. It was suggested
in argument on behalf of
Lauw that the contention on behalf of SAB was that Lauw had narrowed
his cause of action; that understandJng
is incorrect. The argument,
properly understood, was that the terms of the minute narrowed the
permissible grounds upon which the
cause of action was to be
presented.
Accordingly,
the judgment cannot be sustained because its findings are based on
issues not put to the court for a decision. If the
court a quo took
the view that the case as pleaded and refined was not proven, the
order ought to have been a dismissal of the
application. If a
litigant pleads a bad case, it must lose, and it cannot be rescued
from failure because it is possible to conceive
and construct a
better case.'
[36]
What
is then the case as pleaded by the applicants, where it comes
to the
Latex
specific
question relating to substantive fairness? Crystalized down to is
simplest form, the factual basis of this case is the
following:
36.1
After the completion of the retrenchment
process, it was expected of the applicants to do an in depth
knowledge transfer to remaining
employees and the new service
provider, which is contrary to the conditions in the retrenchment
procedure.
36.2
The applicants completed what was
expected of them, and the respondent unilaterally changed
these conditions.
37.3
The termination dates of the applicants
were then moved to an earlier date contrary to the agreed
termination dates.
37.4
The respondent then employed temporary
employees to fill the positions of the
applicants.
37.5
There was no discussion in the
consultations with the applicants of the possibility of alternative
employment as temporary
employees.
37.6
The applicants were not contacted and
offered these temporary positions before or after the
retrenchment process.
[37]
As to the legal basis of the applicants'
case, they accept that there existed no alternatives to their
retrenchment. They also
do not contend that
someone else should have been retrenched in their stead. There is
further no
dispute where it comes to the placement of employees
in the 5 (five) remaining available positions, and the
applicants
do not contend that the fact that they were
not placed in these positions was in any way unfair. In
summary,
the legal basis of the applicants' case is as
follows:
37.1
The
respondent contravened the provisions of
sections 189(2)(iii) and (iv) of the LRA.
[8]
37.2
The
applicants should have been appointed to assist with the handover
instead of the temporary employees and the TES employee, and
should
have remained employed until after their exit dates for this purpose.
[38]
The above being the case to be decided,
one of the issues the applicants placed considerable emphasis on in
the trial, can be immediately
disposed of. Both Van Vuuren and Britz
referred in their testimony to the e-mail from their representative
of 28 October 2016 in
which it was proposed that the parties appoint
a mediator to resolve the issue about compliance with the ramp down
plan. According
to both Britz and Van Vuuren, the
current matter would not have been pursued if the
respondent had
agreed to the mediation proposal
and consulted further on the issue, and the
respondent's
failure to agree to this mediation
rendered the retrenchment unfair. However, this issue
was
never raised in the statement of case, or pre-trial minute.
It was never part of the applicants' articulated case
that
their retrenchment was unfair because the respondent did not
agree to the proposed mediation and consult further on the issue of
the ramp down plan. As such, it is simply not permissible for the
applicants to rely on this issue as an alleged ground of unfairness
at trial.
[39]
But even if this issue of mediation is
considered, it simply cannot establish a case of substantive
unfairness. The proposed mediation
was only about whether
the applicants were complying with the ramp down plan obligations.
These obligations had nothing
to do with the retrenchment process and
the fairness of the ultimate retrenchment of the applicants. The
retrenchment process ended
on 16 September 2016, with commissioner
Fataar himself saying that the issue of ramp down and
extended termination
dates was an 'internal matter'. As at 16
September 2016, the respondent was entitled to terminate the
employment of the applicants,
and if it had simply done so, there
could have been no question of the fairness of the retrenchment of
the applicants.
[40]
Further, and as both Van Vuuren and
Britz conceded, what they wanted was further consultation after the
consultation process
had been concluded. Not only
was the respondent not obliged to do so, but this would be a matter
of procedural fairness
which was not open to challenge in the
current proceedings. On the facts, there was clearly a
disagreement between
the parties as to whether the
applicants complied with their ramp down plan obligations, and there
is no legal requirement
that the parties had to agree on this.
All that was required was consultation, and that indeed
happened.
And finally, even if the respondent as wrong in its
assessment
of
the
applicants' compliance, what would follow is still the agreed
retrenchment of the applicants, albeit one and two months later
for
three of the applicants. The failure to agree to mediation, even if
considered, thus cannot render the retrenchment
of
the applicants substantively unfair.
[41]
Finally, I am in any event satisfied
that the applicants did not comply with what was expected
of
them where it came to the handover
Jozwicki's testimony in this regard emerged unscathed from cross
examination. He maintained that
it became difficult to discuss day to
day business matters with the applicants, and that in the end, there
was a communication
breakdown with them. He added that the backlog
was increasing. He was also adamant that the applicants, in some
instances, did
not even complete the customer handover template
provided and in other instances only completed minimum detail. The
applicants
did not want to in any way work with Accenture.
[42]
As opposed to the testimony by Jozwicki,
Van Vuuren and Britz did not fare that well. Van Vuuren acknowledged
that she did not complete
the template provided. Instead, she simply
extracted a document relating to vendor processes from the Shoprite
website, which according
to her was sufficient. But she was compelled
to concede under cross examination that this document did not provide
all the information
the customer template required. She conceded that
the applicants refused to co-operate with the Accenture personnel and
that she
personally was distressed by the retrenchments. Britz, in
giving evidence, clearly displayed her aggravation towards the
respondent
for being retrenched. It emerged that she was upset about
being selected for retrenchment in the first place, despite never
challenging
it. Britz even sought to contend that the respondent
never explained to them what to do in the handover and why they had
to leave
earlier, which was clearly not the case.
[43]
In my view, and in the end, it was clear
that the applicants were not happy with being retrenched, and were
not going to assist
the respondent in any way in transitioning its
account functions to a third party like Accenture. I believe Jozwicki
to have been
correct when he said in testimony that the applicants
wanted to sit around and do nothing, whilst getting paid, as a mark
of their
displeasure.
[44]
The conduct of the respondent is in any
event inconsistent with an employer that knew the applicants
had complied their handover
duties, and simply
sought to let them go for some or other ulterior motive. The
various approaches
to get the applicants to commit to doing
their handover duties makes it evident that the
respondent was fostering a
genuine view that the applicants were not
doing their handover duties and it then attempting to get them to
commit. Under cross
examination, Britz was specifically asked what
possible motive the respondent could have had to simply terminate
their employment
earlier if they were doing their handover duties,
and she was unable to provide any reason why the
respondent would
do so. It was also uncontested that it would make no
financial and operational sense for the respondent to behave in such
a fashion
as the applicants allege it did.
[45]
I thus conclude that the first part of
the appl1cants' case of substantive fairness has no merit. It is
simply unfounded to suggest
that the respondent did not comply with
sections 189(2)(iii) and (iv) of the LRA. It was beyond contestation
that the respondent
did consult on these issues and
in the end, consensus was achieved with agreed extended
termination
dates. But this agreement was
reciprocal, in that the applicants had to do a proper handover, which
they refused
or simply failed to do. With the applicants not doing
their part, there was no need for the respondent to still apply
the extended termination dates. What the respondent in the end did in
this regard was justified, and fair.
[46]
This then leaves the issue of the
applicants being replaced with temporary employees. It was common
cause that temporary
employees were engaged,
but what is of critical importance to consider is the context in
which it
happened. What was abundantly clear from all the
evidence, and even the testimony of Britz and Van Vuuren, is that
there
was never an intention or even
contemplation on the part of the respondent to replace
the applicants
with temporary employees once they were
retrenched. After all, this would defeat the very object of
outsourcing these
functions to Accenture in
India. That is why this was not even a topic for consultation in the
retrenchment consultations
themselves.
[47]
This being the case, then why use
temporary employees? The only plausible and logical answer has to be
because of what the
applicants themselves did.
To
illustrate as simply as possible - had the applicants done the
handover as required, they would have all worked until the agreed
termination dates, the functions would have gone over to Accenture,
and there would never have been any temporary employee
engaged.
However, because the applicants refused to do the handover, someone
had to do it. Hence the temporary employees. Therefore,
the temporary
employees had a specific function and purpose. This was to do the
handover, which the applicants did not want to
do.
[48]
It
is untenable to suggest that the applicants were unfairly retrenched
because they were not offered these temporary positions,
considering that they were the cause of this very
necessity. The applicants cannot be seen to benefit from
their own obstructive conduct.
[9]
In any event, it would have been rather naive for
the respondent to have offered these positions
to the
applicants hoping that they would then do what they had been
refusing or failing to do until that point. It
is simply not a
realistic proposition that the applicants would have executed these
handover tasks, as required. In my view
, the following
dictum
in
Forecourt
Express (Pty) Ltd v SA Transport and Allied Workers Union and
Another
[10]
can
equally be applied to illustrate the proper consequences of the
applicants' own conduct:
'In
any event both in its letter of 27 August 1999 and in the subsequent
consultations with the union the appellant invited those
employees of
the Fauna operation who were interested in getting employment with
the labour broker and the subcontractor (who were
going to be
involved in doing the work previously done by the Fauna employees) to
submit their names so that it could facilitate
their employment by
the labour broker and the subcontractor, but the second and further
respondents spurned that offer. As a result
the labour broker and the
subcontractor did not employ them. This is common cause.
There
was an attempt to say that an offer of employment with a labour
broker was not such an attractive idea because the employment
would
have entailed that the employees work only on the days when the
labour broker had work for them. It was suggested by Monyela
that
employment by a labour broker would have meant that employees would
on some days have spent money to travel from the townships
to work
and found that they were turned away on the basis that there was no
work on those days. This may well have been so but
the fact of
the matter is that, if the appellant was in law entitled to use a
labour broker - and it was not the respondents'
case that the use of
a labour broker in this case was unfair - there is
nothing that could be done about such
an eventuality.... In my view
the second and further respondents' loss of income arose out of their
refusal of the offer of employment
by the subcontractor and labour
broker and not from their dismissal. It seem$ to me that the second
and further respondents
are, in this regard, the authors of
their own misfortune.
In
the light of the above there can, in my judgment, be no doubt
that the reason for the dismissal of the second
and further
respondents was a fair reason. .. . '
[49]
Jozwicki explained in his testimony,
which I have touched on above, that replacing the applicants with
temporary employees to do
the handover was quite an onerous task.
Even though these employees were sourced from former permanent
employees with some institutional
knowledge and experience, they
still had to be brought 'up to date', so to speak, with operations
and customer relationship.sConsiderable
management resources were
committed into this. There was also the issue of the growing backlog.
This resulted in a longer than
contemplated handover at much greater
expense to the respondent, all because of the approach the applicants
decided to adopt.
[50]
It
must also be considered that the temporary employees in fact did not
replace the applicants in the positions they occupied, which
shows
that the decision simply cannot be seen to be unfair vis-a-vis the
applicants.
[11]
The temporary
employees were working more in the context
of a team with management
to conclude the handover
doing what was required as and when needed. The following dictum from
the judgment in
Smith
and Others v Courier Freight
[12]
is
comparable to the matter
in
casu:
'There
was no evidence to corroborate the evidence of the
employees that after their dismissals their positions
were
filled by temporary casual employees who carried out the same
functions as they did prior to their
dismissals. Both
Baloyi
and Jacobs testified that people with specialized skills were
brought in on temporary contracts to reverse the
slide in
the company's profits and to bring in the requisite
skills in line with the new vision of the
restructured finance department.
I
am satisfied that the employer has proved on a balance of
probabilities that there was a genuine need to restructure the
finance
department ...
[51]
I am therefore satisfied that these
temporary positions filled by the temporary employees referred to
above, were never a viable
alternative to the retrenchment of the
applicants. Considering the preceding events and what actually gave
rise to these positions,
the applicants were never competent
to fill same. Also because these positions only arose because
of what the
applicants did after the consultation process concluded,
these positions were never contemplated to exist during the course of
the consultations and to be the subject matter of
consultations. I thus conclude that there is nothing unfair in
not
having offered the applicants these positions.
[52]
I may add that the real gripe of Britz
came out in her testimony, being that one of the successful
incumbents for the remaining
positions in the accounts department,
one Lindiwe, later the following year resigned, and she (Britz) was
not contacted and offered
the position. But this case was never
raised, nor pleaded, and can in any event not have rendered the
earlier retrenchment unfair.
She was simply barking up the wrong
tree.
[53]
In sum, what exists in this case was
overall a fair retrenchment. Consensus was achieved on all the
consultation topics under
section 189 of the LRA. Consensus was
specifically achieved on termination dates for the applicants, which
was only departed from
because of the applicants' own obstructive
conduct. As said, the respondent was justified in doing what it
did in
this regard. But even if the respondent was
wrong in its conclusions in this regard, it simply could not
contaminate
the underlying fairness of the retrenchment of the
applicants, as it would not have changed the reality that the actual
retrenchment
of the applicants was justified and fair. Further, the
alleged alternative of the temporary positions was not a
feasible
alternative available to the applicants,
considering that the very necessity for these positions were
caused
by the obstructive conduct of the applicants in the first
place, and that these positions only came into existence to fulfil
what
the applicants had refused or failed to do.
Conclusion
[54]
Therefore, the applicants' dismissal by
the respondent for operational requirements is in my view
substantively fair. The applicants'
unfair dismissal claim thus
falls to be dismissed.
[55]
As to costs, I accept that in terms of
section 162 of the LRA I have a wide discretion in this regard. I
must say that I have a
measure of understanding of the
applicants' unhappiness for having lost their jobs because of what a
global conglomerate
considers to be more efficient, especially where
there was no question that the applicants were doing their jobs
properly. Their
frustration spilled over into a misguided form of
indirect protest, and when the respondent reacted, ill-advised
litigation. I
however must also consider that they properly
participated in the consultation process until the point
of conclusion
and agreed termination dates. I do
not believe the applicants were malicious or
ma/a
fide
in pursuing this matter. The
reality is that they lost their jobs due to circumstances beyond
their control in an environment where
jobs are already scarce. It is
my view that a costs order against the applicants, all considered,
would not be appropriate. I consider
it fair and justified that
no order as to costs be made.
Order
[56]
For all of the reasons as set out above,
I make the following order:
1.
The
applicants' dismissal by the respondent is substantively fair;
2.
The
applicants' application is consequently dismissed;
3.
There is no order as to costs.
S
Snyman
Acting
Judge of the Labour Court of South Africa
Appearances
:
For
the Applicant: Advocate K Pask
Instructed
by:
Labuschagne Van Der Walt Inc
For
the Respondent: Advocate J Grogan SC
Instructed
by: Joubert Galpin Searle Attorneys
[1]
(1999) 20 ILJ 89 (LAC) at para 2.
[2]
Act 66 of 1995 (as amended).
[3]
See
Edcon
v Steenkamp and Others
(2015)
36 ILJ 1469 (LAC) at para 19 (an appeal to the
Constitutional Court was dismissed in
Steenkamp
and Others v Edcon Ltd (National Union of Metalworkers
of SA intervening)
(2016)
37 ILJ 564 (CC));
National
Union of Metalworkers of SA and Others v SA Five Engineering
and Others
(2004)
25 ILJ 2358 (LC) at 23611-23628;
Perumal
and Another v Tiger Brands
(2007)
28 ILJ 2302 (LC) at para 19;
National
Union of Mineworkers v Anglo American Platinum Ltd and Others
(2014)
35 ILJ 1024 (LC) at paras 20 - 22.
[4]
The applicants were inter alia throughout the retrenchment process
by one Alistair Pringle, to whom the correspondence was addressed.
[5]
(2006) 27 ILJ 292 (LAC) at para 55.
[6]
See
Filta-Matix
(Pfy) Ltd v Freudenberg and Others
[1997] ZASCA 110
;
1998
(1) SA 606
(SCA) at 6148-D;
National
Union of Metalworkers of SA and Others v Driveline Technologies
(Ply) Ltd and Another
(2000)
21
ILJ
142
(LAC) at paras 16 and 83;
GE
Security (Africa) v Airey and Others
(2011)
32
ILJ
2078
(LAC) at rara 20- 21
[7]
(2018) 39 ILJ 189 (LAC) at paras 14 -15
[8]
Section 189(2) reads: 'The employer and the other consulting parties
must in the consultation envisaged by subsections (1) and
(3) engage
in a meaningful joint consensus-seeking process and attempt to reach
consensus on (a) appropriate measures to ...
(iii) change the timing
of the dismissals; and (iv) to mitigate the adverse effects of
the dismissals ...'
[9]
Compare
Viljoen
v Johannesburg Stock Exchange Ltd
(2017)
38 ILJ 671 (LC) at paras 93 - 95
[10]
(2006) 27 ILJ 2537 (LAC) at paras 40 - 42.
[11]
See
CRWUSA
and Others v Girlock SA (Pty) Ltd
(2001)
22 ILJ 2008 (LC) at para 28
[12]
(2008) 29 ILJ 420 (LC) at paras 57 - 58.