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[2019] ZALCJHB 45
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NUMSA obo Cebekhule and Others v Monte Vista Investments (Pty) Ltd t/a Caltex Monte Visa (JS1034/16) [2019] ZALCJHB 45 (14 February 2019)
the
labour court of South Africa, JOHANNESBURG
Not Reportable
case
no:
JS1034/16
In
the matter between:
NUMSA
obo CEBEKHULU & 18 OTHERS
Applicants
and
MONTE VISTA
INVESTMENTS (PTY) LTD
T/A
CALTEX MONTE
VISA
Respondent
Heard
:
07 February 2019
Delivered
:
14 February 2019
Summary:
A referral in terms of which the applicants allege that the
dismissal was both substantively and procedurally unfair. A company
facing financial difficulties has a fair reason to dismiss. Prior to
a dismissal, an employer must engage in a meaningful joint-consensus
seeking consultation. Whether a fair procedure was followed, the
court is concerned with what happened at the employer’s
premises as opposed to the evidence tendered in court. The duty to
consult arises once dismissal for operational reasons is
contemplated.
The obligation to consult is a dual one. Where, the
other consulting party frustrates the process, an employer is
entitled to take
a final decision to retrench. Held: (1) The
dismissal is both substantively and procedurally fair. (2) The
applicants’ claim
is thus dismissed. (3) No order as to costs.
judgment
MOSHOANA,
J
Introduction
[1]
This is a
referral in terms of section 191 of the Labour Relations Act
[1]
(the Act). The individual applicants (Cebekhulu and 18 others)
alleged that the respondent unfairly dismissed them for operational
reasons. The respondent disputed that the dismissal was unfair on any
leg.
Background
facts
[2]
Given the issues to be addressed in this judgment it is not necessary
to give detailed background
facts of this matter. Suffice to mention
that around June 2016, the respondent advised the trade union and its
employees of its
dire financial difficulties and suggested measures
to avoid the possible retrenchments. These suggested measures of
working less
hours and changing the roster, irked the employees and
almost caused an industrial action. On 5 July 2016, the respondent
issued
a section 189(3) notice to the employees. A consultation
meeting only happened on 5 August 2016. Parties have different
versions
as to what transpired in this meeting. I shall deal with
those later. It is common cause that following a commotion in the
meeting
of 5 August, parties engaged each other through written
correspondence to a point. On 10 August 2016, the trade union made
certain
written proposals. Those were rejected on 15 August 2016. The
respondent invited further proposals before it took a decision to
terminate. Such proposals did not come forth.
[3]
On 30 August 2016, the respondent issued termination letters.
Aggrieved by the termination,
the applicants referred a dispute to
the Bargaining Council alleging unfair dismissal. The dispute could
not be resolved and was
referred to this court for adjudication.
Evidence
Led
[4]
Since dismissal was not placed in issue, the respondent bore the
onus
and the duty to begin. The respondent tendered the evidence of two
witnesses. The two witnesses corroborated each other on the
relevant
issues. They testified that on 5 August 2016, the first consultation
meeting occurred and the trade union official made
proposals around
short time and related issues. This, the respondent rejected as it
was suggested in June 2016 and it almost caused
an industrial strife.
The respondent suggested a temporary closure of the entity. It was at
this point that tempers flared and
the meeting could not proceed as
the trade union representatives walked out of the process. The trade
union official handling the
matter informed management that by close
of business, they would forward their written proposals. On 10 August
2016, which is five
days later, the written proposals were received.
After considering them, the respondent responded in writing and
rejected the proposals
with reasons. Further they invited further
proposals by 19 August 2016. After 19 August, they formed a view that
the process has
come to an end and issued letters of termination on
30 August 2016.
[5]
The applicants tendered the evidence of Mr Cebekhulu. Suffice to
mention
upfront that he was a weak witness. He appeared not to have
been prepared to present the applicants’ case. Regarding the
meeting of 5 August, he had accompanied a trade union official, who
was handling the matter. According to him there was no meeting.
It
was more a gathering of less than 10 minutes, where the “tall”
Mr Naidoo, informed them that they are forging ahead
with a
retrenchment no matter what the trade union says. Thereafter, both he
and the trade union official walked out of the “gathering”.
He was not party to the correspondence addressed by the trade union.
[6]
On 15 August 2016, whilst he was at the employer’s premises for
some other gathering, after such gathering, he was summoned back to
the premises to receive his termination letter. At first he
testified
that he received his termination letter on 15 September 2016 and he
later changed the date to 15 August 2016. He testified
that all the
individual applicants wished to be reinstated.
Evaluation
[7]
In terms of section 192 of the Act, the
onus
is on the
respondent to prove that the dismissal was fair. In terms of section
188, a dismissal is fair if it is for a fair reason
and effected in
accordance with a fair procedure.
[8]
Dismissing
an employee for operational reasons is fair. I am satisfied that on
the uncontested evidence, the respondent was facing
financial
difficulties. It is uncontested that in order to address the
financial difficulties, the respondent had to cut costs.
There is no
other evidence to gainsay the testimony of the respondent’s
witnesses. The financial records demonstrated that
the assets of the
respondent were exceeded by the liabilities
[2]
.
I have no doubt in my mind that the respondent faced a financial
quagmire. I cannot agree with any contention that there were
no
economic reasons for the dismissal. It seems to be the applicants’
contention that because in August 2016, the company
did not produce
audited financial statements, the respondent cannot rely on the
economic reasons. I cannot agree. The respondent’s
witnesses
testified that they offered management accounts since the financials
were not available at the time. Other than a bare
denial, there is no
reasonable version put by the applicants. Audited financial
statements are for a financial year. In the interim,
financial
records that may reflect the financial position of the company are
management accounts. It is uncontested that dismissing
the applicants
was the only viable option available to the respondent. Accordingly,
the dismissal of the individual applicants
was substantively fair.
[9]
With regard to procedure, it is common cause that the dismissal
happened
before the consultation process could reach finality. The
law is such that an employer is entitled to take a decision to
dismiss.
Section 189 enjoins that a decision to terminate for
operational reasons can only be taken once a consultation process has
taken
place. Section 189 (2) further enjoins a consultation to be
meaningful and to attempt to reach consensus on appropriate measures
to avoid the dismissal, minimise the number, change the timing of the
dismissal and mitigate the adverse effects of the dismissal.
The
consulting parties must consult and attempt to reach consensus on the
method for selecting employees to be dismissed and the
severance pay
for dismissed employees.
[10]
The duty to
consult rests on both the employer and the other consulting party. It
is a dual obligation. Where the other consulting
party frustrates the
process, an employer is entitled to take the decision to terminate.
As such, the party who frustrated the
process cannot complain about
procedural unfairness. Where a party complains about procedural
unfairness such a party must state
the basis of the unfairness to
enable the employer party to address it in evidence.
[3]
[11]
In the pre-trial minutes, the applicants submitted thus: “
Respondent
effected the retrenchment prior to consultations being finalised
”.
As pointed out above, it is indeed common cause that the consultation
process was not completed. The factual question to
be resolved by
this Court, is who frustrated the process? Differently put, who is at
fault? The applicants contend that since the
respondent did not
consult in a
bona fide
manner, it frustrated the process. On
the other hand, the respondent contends that since the trade union
bailed out, given the
urgency of the financial situation, it had no
option but to take the decision. They reasonably assumed that the
process is completed.
[12]
The basis of the applicants’ contention is that its letter of
10 August was not fully
responded to, accordingly, the respondent was
not consulting in good faith. I cannot agree with this contention.
Firstly, it is
undisputed that the Local Organiser, Mr Lazarus
Moetsela, from whom the Court had no pleasure of hearing, suggested
in the meeting
of 5 August 2016 that he shall be communicating in
writing and shall do so by close of business on that day. It is
common cause
that he only did that 5 days later. Secondly, the
director of the respondent invited further proposals by close of
business on
Friday, 19 August 2016. It is common cause that this
invitation was made in writing on 15 August 2016.
[13]
It is further common cause that the trade union did not respond to
this invitation. It
was only in argument that Mr Sebotsa, a trade
union official, appearing for the applicants, argued that the reason
there was no
response is that the trade union took a view that since
the response is not as detailed as they would have wanted it, the
respondent
was not
bona fide
. Having taken that view, they
gave up on the process. The applicants were not entitled to a
detailed response. Section 189 (6)
(a) provides that the employer
must consider and respond to the representations made by the other
consulting party and, if the
employer does not agree with them, the
employer must state the reasons for disagreeing. The letter of 15
August 2016, in part reads
thus:
“
These are not
solutions for us as the problem is long term. These garages simply do
not generate sufficient revenue to sustain its
costs. The situation
is dire and actions needs to be taken immediately.”
[14]
The legal obligation is to consider and respond with reasons of
disagreeing. This the respondent
did. It took the respondent 5 days
to respond. It can only follow that the respondent considered the
representations. It is not
awaited that the other consulting party
must agree with the reasons. Parties must agree to disagree. The
respondent gave its reasons
for disagreeing, thus complied with the
requirements of the subsection. Available to the applicants was the
procedure in section
16 of the LRA. They chose not to invoke same.
The decision to bail out was not wise and was self-defeating. It can
only mean a
frustration of the consultation process. Accordingly, I
conclude that the trade union frustrated the process and the
respondent
was entitled to conclude the retrenchment process at the
time it did on 30 August 2016. There was no procedural unfairness.
[15]
In the results, I make the following order:
Order
1.
The dismissal of the individual applicants
is both substantively and procedurally fair;
2.
The applicants’ claim is hereby dismissed;
3.
There is no order as to costs.
_______________________
GN Moshoana
Judge
of the Labour Court of South Africa
Appearances:
For
the Applicants
: Mr Spuy Sebotsa, Trade
Union Official.
For
the Respondent
: Advocate C Prinsloo.
Instructed
by
: De Villiers & Du Plessis Attorneys, Pretoria.
[1]
66 of 1995, as amended.
[2]
As testified and not disputed, the respondent was technically
insolvent.
[3]
See:
Tshivhase-Phendla
v University of Venda
(JS
1145/12) dated 12 October 2017 at paragraph 75.