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[2019] ZALCJHB 119
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Mweli and Another v MTN Group Management Services (Pty) Ltd (JS610/16) [2019] ZALCJHB 119 (22 May 2019)
THE
LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG
Not
Reportable
case no:
JS
610/16
In
the matter between:
SPHIWE
MWELI
1
st
Applicant
OLGA
NAKEDI 2
nd
Applicant
And
MTN
GROUP MANAGEMENT SERVICES (PTY) LTD
Respondent
Heard
:
06 – 10 May 2019
Delivered
:
22 May 2019
Summary:
A referral in terms of
section 191
of the
Labour Relations Act,
1995
. It remains the duty of an employer to avoid a no-fault
dismissal. Dismissal for operational requirements is a no-fault
dismissal
and should be applied as a measure of last resort. Where an
employer has vacant positions at the time of dismissal, it cannot be
said that the dismissal is the measure of last resort. Held (1): The
dismissal of the applicants is procedurally fair but substantively
unfair. Held (2): The respondent is ordered to re-employ the first
applicant to a post equivalent to the one he held prior to his
dismissal. Further to pay as compensation to the second applicant an
equivalent of 12 months’ salary. Held (3): There is
no order as
to costs.
JUDGMENT
MOSHOANA,
J
Introduction
[1]
This is a
referral in terms of
section 191
[1]
of the Labour Relations Act
[2]
(LRA). The respondent dismissed the two applicants following a
restructuring process of its Group Business Risk Management (GBRM)
division. Following an assessment by Ernest and Young, the respondent
embarked on a process aimed at improving the efficiency of
the GBRM.
A new structure was proposed and consulted upon. Ultimately, a new
structure with more positions was adopted by the respondent.
Through
a scientific tool known as mapping
[3]
,
the two applicants could not be absorbed into the new structure.
After failing to secure alternative positions for them, the two
were
dismissed for operational requirements reasons. Aggrieved by their
dismissal, they approached this Court for a relief. Their
referral is
opposed by the respondent.
Background
facts
[2]
The respondent is a mobile technology
network company. One of the strategic imperatives of the respondent
was to focus on strengthening
its building blocks. Resultantly, the
respondent’s GBRM was identified as one of the divisions that
should be reviewed and
assessed in order to ensure that the business
model and strategy supported its needs and inefficiencies.
[3]
The respondent then procured the services
of Ernst and Young on 29 May 2015 for the purposes of performing a
quality assurance review
of the division’s functions; benchmark
and evaluate the then operating model and agreeing on a future date
to address gaps
and develop a roadmap for transforming the division’s
function. Ultimately, Ernst and Young identified certain weaknesses
and made suggestions. One of the suggestions made was to change the
structure and operations of GBRM. Upon reflection on the suggestions,
the respondent resolved that, because of its evolving business model
and strategy and as the then ways of working did not support
the
business, it was not efficient and effective to retain the structure
of the division. It sought to propose a new structure
with a view to
realign the division’s function to the needs of its business
and to execute a risk management function that
meets the expectations
of its Audit Risk Committee and its shareholders.
[4]
Following the acceptance of the
recommendations of Ernst and Young by the Audit Committee on 27
November 2016, a section 189(3)
of the LRA notice was issued to the
staff on 5 February 2016. Three consultation meetings were held
thereafter. After producing
a final structure, a meeting was held
where mapping was discussed. The discussed mapping was to compare the
positions in the old
structure with the positions in the new
structure. If the mapping of the position in the old and new
structure was less than 60%
then the position in the new structure
would effectively be considered to be a new role.
[5]
A mapping exercise was then engaged in. It
turned out that few of the roles could successfully be mapped into
the new structure
of the division. The affected employees were
advised to apply for the positions in the new structure. The
applicants before me
applied for some positions and were found to be
unappointable. No other positions could be identified for the two
applicants and
they were given notices of dismissal, with 30 May 2016
being their last day of employment. The pair, referred a dispute to
the
Commission for Conciliation, Mediation and Arbitration (CCMA) for
conciliation. After failure of conciliation, the pair referred
the
dispute to this Court for adjudication.
Evidence Led
[6]
Dismissal is common cause. In order to
justify the dismissal of the pair, the respondents led the evidence
of two witnesses; namely
Mr Varun Singh and Mr Ebrahim Kahn. What was
placed in dispute by the applicants was the fairness of their
dismissal and lack of
meaningful consultation. With regard to
substantive fairness, the applicants alleged that there was no need
to retrench them and
their selection for dismissal was unfair. With
regard to procedural fairness, the applicants alleged that there were
no consultations
held, since there are no minutes for the meetings
that were held. Parties called upon this Court to decide whether
there was a
fair reason for the dismissal of the applicants and
whether the dismissal was substantively and procedurally fair or not?
Further,
the Court was called upon to decide on the relief that is
appropriate. In this judgment, the Court shall not recount the
evidence
of all the witnesses that testified before it in any detail.
The two applicants testified in their own case.
Varun Singh
[7]
At the relevant time, he was the Human
Resources Business Partner for the division. He testified about the
Ernst and Young report
and its recommendations. He was present in the
consultation meetings which took place on 11 February, 25 February
and 10 March
2016. Presentations were made at these meetings and
shared with the affected employees. All the concerns raised by the
employees
were responded to in writing. The required documents and
information were disclosed during the currency of the consultation
meetings.
Mapping as a process was discussed in the first
consultation meeting. The first applicant did not make any
suggestions. Nobody
questioned the need to have a new structure.
Employees who had been mapped were still allowed to apply for the
available positions
if they did not like the mapped position. All
employees, including Mr Basson were appointed after an interview
process. The interviews
were for the set standard period of sixty
minutes. The applicants made no proposal that could have saved their
jobs.
[8]
In cross-examination, he was referred to
the respondent’s retrenchment policy and he testified that it
was followed. He disputed
an assertion that whilst the restructuring
process was unfolding, members of PWC were employed. In the new
structure there were
more positions and others were newly created.
The respondent, despite having more positions, did not use LIFO
because the situation
to enable its usage did not present itself. The
available positions were ring-fenced for the affected employees at
the division.
The only method used to select employees for dismissal
was retention of skills and the tie breaker LIFO did not arise.
Ebrahim Kahn
[9]
He is a General Manager Human Resources:
Organizational Development and Performance. He testified about the
rationale
to restructure the division. He also explained the mapping process
and its application. He received feedback and also acted on
issues
that arose at the consultation process. The purpose of the
restructured positions was to be more specialists driven than
being
generalists. The position of the two applicants were not mapped
because they were not specialists but more generalists. GBMR
being a
critical part of the business, it was necessary to change it as and
when the business changed. At the time, it was necessary
to diversify
into the financial space. The relief of reinstatement is not
available to the two applicants because their positions
were made
redundant and do not exist. It was not possible to map them into the
new structure. He confirmed that the old structure
had lesser
positions as opposed to the new structure. In order to avoid possible
dismissal, employees had to apply for the available
positions. Should
an employee not apply, he or she would face dismissal. Employees
could challenge their non-mapping on a one on
one basis with the
Human Resources Division.
Olga Nakedi
[10]
She is the second applicant. She testified
about her skills and work experience. At the relevant time, she had
seven years’
experience in governance and risk. As far as she
is concerned there was no consultation in that the respondent ignored
other subsections
of section 189. At the first meeting, the General
Manager was present but was not afforded an opportunity to say
anything. At the
second meeting she was booked off sick. In a one on
one discussion, she asked to be placed in any of the available
positions, inclusive
of lower positions. This was not acceded to. She
had the capabilities to function in the positions of a senior auditor
and an auditor.
She was not given the results of her mapping
exercise. According to her, mapping is a simple process. She met the
sixty percent
match in her position. She could literally perform any
position in the structure. She applied for two positions.
[11]
One at the General Manager level and the
other at Senior Manager level. Owing to the fact that the structure
grew from 14 positions
to 34 positions, the respondent could have
offered her and the other applicant positions. Other employees were
offered demoted
positions. On 22 April 2016, she received a letter
notifying her of her retrenchment. She did not have a good
relationship with
the General Manager. In cross-examination, she
testified that it was the duty of the respondent to have avoided her
dismissal.
[12]
It was not easy for her to make any written
suggestions as she felt threatened. She is currently employed at
Telkom and no longer
seeks reinstatement as a relief. She did not
apply for junior positions as she expected the respondent to offer
those positions
to her in order to avoid her dismissal.
Sphiwe Mweli
[13]
He amassed 17 years’ experience in
risk, governance and compliance. He commenced employment with the
respondent as a Senior
Risk Manager and Support. However, for the
better part of his work, he developed policies and trained Operating
Companies (OPCOs)
of the respondent. Ernst and Young was
uncomfortable with his presence because he designed policies and
asked a lot of questions.
The 5 billion fine was an operational issue
for the Nigerian OPCO.
[14]
When he received a section 189(3) notice,
he requested documents and such were not provided. To his knowledge,
the restructuring
ought to have been approved by the Risk Committee.
He was not provided with documents in support thereof. He was part of
the employees
who addressed a letter of complaint to the President,
Mr Phutuma Nhleko. He had issues with an Executive role at the
General Manager
level as depicted in the final structure. Given the
fact that for a period of 2 years, he was doing something unrelated,
his position
did not match the 60 % requirement for mapping purposes.
He was not mapped and when he wanted reasons for that, he was told
not
to worry and was encouraged to apply for the vacant positions.
[15]
He applied for three positions as he was of
the view that he qualified for any of those positions. People were
employed during the
restructuring process and others were young and
inexperienced. He was interviewed for the positions he applied for
and was told
that he was not successful. He was not offered any
position. The two positions that he applied for were still vacant as
at the
time of his testimony in court.
[16]
The respondent had the responsibility to
find alternative employment for him. He did not have qualms with
mapping as a principle.
However, he is unhappy with the process and
the outcome. He is not averse to the principle of interviewing
persons for positions.
The new structure had more headcounts and he
was optimistic that he would be placed.
The applicable legal
principles and evaluation.
[17]
It
remains the duty of an employer to demonstrate that its decision to
retrench is commercially rational. It is not the duty of
this Court
to second-guess a business decision of an employer. For as long as
the decision is clothed with commercial rationality,
the Court must
accept it as being fair. The mandated test is not that of correctness
of the business decision but its fairness.
In this matter, I am
satisfied that the respondent needed to restructure its business in
order to achieve effectiveness of the
division. The evidence of the
respondent’s witnesses remains unchallenged on this front. The
Labour Appeal Court (LAC) in
the matter of
BMD
Knitting Mills (Pty) Ltd v SA Clothing and Textile Workers Union
,
[4]
said:
‘…
Viewed
accordingly, the test becomes less deferential and the court is
entitled to examine the content of the reasons given by the
employer,
albeit that the enquiry is not directed to whether the reason offered
is the one which would have been chosen by the
court. Fairness, not
correctness is the mandated test.’
The
issue of selection for dismissal
.
[18]
The starting point is the provisions of
sections 189 (2) (b) read with section 189 (7) (b) of the LRA. The
method of selecting employees
to be dismissed is placed high on
issues to be consulted upon. The legislature obliges the consulting
parties to first engage in
a meaningful joint consensus-seeking
process and secondly attempt to reach consensus on the method. The
reason is pretty obvious,
a proper selection method if properly
applied would ensure job security. In a no-fault dismissal situation
job security is key.
Therefore, the method of selection is as
important as measures to avoid dismissal or minimize the number. This
Court must be more
vigilant on issues of selection criteria given the
potential of abuse and unfairness.
[19]
The LRA places primacy on an agreed
selection method. To my mind, an employer must double its efforts
during a consultation process
to reach an agreement on the method.
Failure to do so, simply means that an employer actually invites the
Court’s scrutiny
on any method it employs. Might I add, the LRA
is designed in such a way that it would not countenance a situation
where an employer
seeks to avoid agreeing on and/or applying a
selection criterion. In a dismissal for operational requirements
where more employees
are affected there must be a selection
criterion.
[20]
Section 189 (7) (b) is clear. First, it
enjoins an employer to select employees to be dismissed according to
a selection criterion.
In this regard, an employer has no discretion
but must select for dismissal using a selection criterion. If there
are no criteria
agreed upon the criterion must be a fair and
objective one. Such entails that once the criterion is employed to
select employees,
the Court must be satisfied that such criterion is
fair and objective. This will involve, firstly, the scrutiny of the
criterion
itself-form and shape and secondly its application. The
requirement for objectivity and fairness is not one to be
compromised.
Back to basics. The dictionary meaning of the word fair
is one that is free of blemishes or stains, clean and pure, unsullied
or
equitable. The word objective means uninfluenced by emotions or
personal prejudice, existing independently of perceptions or some
individual conceptions. Once the word fair is used together with
objective, it simply means that the standard is higher than normal.
If, for any reason, a criterion is stained, blemished or sullied to
even a lesser and negligible degree, then it is not one that
is
contemplated in the section.
[21]
As a matter of principle, any criterion
that does not pass the muster renders a dismissal that follows, using
it, substantively
unfair. I conclude that an employer has no option
but to employ a selection criterion when selecting employees to be
dismissed
for operational requirements. Once the Court is satisfied
that the criterion is fair and objective, the Court must be told how
it was applied on the employees dismissed using such a fair and
objective criteria.
[22]
Such entails evidence being led by the
employer as to how it applied the criterion. Yet again objectivity
and fairness at this stage
entails amongst others consistency and
transparency. If no satisfactory evidence is led that the criteria
was applied consistently
and transparently, then the court must
conclude that the criterion was not fair and objective on
application. Such equally renders
the dismissal that follows to be
substantively unfair.
What types of criteria
are fair?
[23]
Criteria simply means methods. So any
method can be used as it were. There is no prescribed method.
However, the Code of Good practice
states the following:
“
(7)
If one or more employees are to be selected
for dismissal from a number of employees, this Act requires
that the
criteria for their selection must be either agreed with the
consulting party or if no criteria have been agreed be
fair
and objective criteria
(8)
Criteria that infringe a fundamental right protected by this Act when
they are applied,
can never be fair. These include selection on the
basis of union membership or activity, pregnancy, or some other
unfair discriminatory
ground. Criteria that are on the face of it
neutral should be carefully examined to ensure that when they are
applied, they do
not have a discriminatory effect. For an example, to
select only part-time workers for retrenchment might discriminate
against
women, since women are predominantly employed in part-time
work.
(9)
Selection criteria that are generally accepted to be fair include
length of service
,
skills
and
qualifications.
Generally, the test for fair and objective criteria
will be
satisfied
by the use of the
“last in first out”
(LIFO) principle.
There may be instances where LIFO principle or
other criteria needs to be adapted. The LIFO principle for an example
should not
operate so as to undermine an agreed affirmative action
programme. Exceptions may also include
the retention of employees
based on criteria mentioned above which are fundamental to the
successful operation of the business.
These exceptions should however
be treated with caution.”
[24]
It seems to me that length of service
(experience) may be used as an independent criterion. Similarly,
skills and qualifications
may be used as such. But retention of
experienced, skilled and qualified employees is an exceptional
criterion, which must be treated
with caution. The reason for that is
that such criteria are not easily capable of objective justification.
Selecting inexperienced,
unskilled or unqualified employees may mean
that they are being dismissed for poor performance. In
casu
,
the respondent proposed retention of skills that are best suited to
the positions available in the new structure and, where potential
candidates are considered equal in terms of skills and suitability
for a limited number of positions, to apply LIFO. The respondent
chose a method of applying for the vacant positions in order to
determine the skills to be retained.
[25]
The
criterion chosen by the respondent falls within the exceptions and
thus require to be treated with caution. Unlike LIFO, this
criterion
is not capable of easy objective justification. It carries with it at
all times the element of subjectivity. Treating
it with caution
implies an in depth scrutiny of the criterion to firstly establish
whether it is fair or objective and secondly
whether it was fairly
and objectively applied. Had the respondent reached an agreement on
this exceptional criteria, the duty of
the Court would have been
limited to a fair and objective application of the criteria.
[5]
Does making employees
to apply for vacant positions a fair and objective method?
[26]
This
issue has bedeviled this Court on a number of occasions. As far back
as 2001, the writer, Professor Rycroft, sitting as an
arbitrator in
the matter of
Grieg
v Afrox Ltd
[6]
had the following to say:
“
The
declaration that all jobs were redundant
avoided
the need to decide selection criteria up front for those who would
ultimately be retrenched
…The
onus was on employees to apply for jobs. Ultimately the selection
criteria for retrenchment were that (a) an employee’s
old job
as previously defined was declared redundant and the employee either
(b) failed to apply for a job, or (c) failed to be
appointed to a
job.”
[27]
I fully agree with this view. I may add
that in such situations, employees are technically dismissed when
their positions are made
redundant. Making them apply for positions
is a manner of delaying the eventual effect. Once a position of an
employee is declared
redundant and if he or she is not placed in
another position shortly thereafter, such an employee would
eventually be dismissed.
When that eventuality arises, it would have
happened without a fair selection criteria being applied. Therefore,
making an employee
to apply for a position is not a selection
criterion
per se
.
[28]
Later
on, in the matter of
Wolfaardt
v IDC
[7]
Landman
J had the following to say on the criterion of not being appointed:
“
[25]
Two points need to be made. The first is that
advanced by Prof Rycroft namely that the employer must not
use the
restructuring as an exercise to dismiss employees on a no-fault basis
where the employer cannot dismiss them by reason
of misconduct or
incapacity. This does not apply only where the employer uses
restructuring as a sham or stratagem but also where
the employer
cannot show that the non-employment is fair, e.g.
where
the employees are not afforded an opportunity to deal with
perceptions of their incapacity.
[26]
The second point which should be made, which
Prof Rycroft
[8]
touches on is
that it should be easier to retrench an employee where restructuring
is involved. I would add that a retrenchment
involving a process of
restructuring whereby an employee applies for his or her own job
must
be closely scrutinized because it ignores, sometimes unconsciously,
that an existing employee enjoys job security which will
be protected
against no-fault terminations. But placing an employee in the
position of an applicant for a job, or worse merely
on a waiting
list, creates a supplicant of the employee.”
[29]
I
believe these observations are still true to this day
[9]
.
I must add, until dismissed an applicant for own job retains job
security that calls for protection under the Constitution and
the
LRA. To then subject such an employee to a stressful process that
threatens his or her job security is imminently unfair to
my mind.
This torturous process should not be received with open arms by this
Court. I am acutely aware that Professor Rycroft
suggested that the
acceptance of such “selection criterion” should be
dependent on whether it is clear and transparent.
[10]
[30]
It seems to me that the LAC in
Gijima
supra
accepted this selection criterion
on the basis that it was agreed upon. The court said:
“
[34]
It would not make sense to declare a selection
criteria agreed to by the parties
unfair
only because it was agreed to and that it does not comply with the
requirement of being fair and objective
…In
my view, the court
a quo
erred in so far as it may have found that s189A should be interpreted
to limit the method for selection to criteria that are fair
and
objective only.
[36]
Having found that nothing prevented the parties from
agreeing to
selection criteria as they did in this case
what needs to be
determined is whether the
agreed selection criteria
was
applied.”
[31]
I
am however, still of a firm view that this method of making employees
with job security to apply for their own positions should
not be
accepted as a selection criterion let alone a fair and objective one.
I am in favour of the approach in
SA
Breweries (Pty) Ltd v Louw
[11]
when
the Court said the following:
“
[21]
In this matter what has been
inappropriately
labelled as the ‘selection criteria’
is the inclusion of past performance ratings in the assessment
process for the competitive process to select an incumbent for the
new job of area manager, George.
This is
not a method to select who, from the ranks of the occupants of
potentially redundant posts is to be dismissed and is not
what
section 189 (2) (b) is concerned to regulate
.
The fact, as illustrated in this
matter
that a dislocated employee who applies for a new post fails, and by
reason thereof remains at risk of dismissal if other
opportunities do
not exist, does not convert the assessment criteria for competition
for that post into selection criteria
for
dismissal, notwithstanding that
broadly
speaking it is possible to perceive the assessment process for the
new post as part of a long, logical, causal chain ultimately
ending
in a dismissal.
Accordingly, in our
view, it is contrived to allege that the taking into account of
performance ratings in a process of recruitment
for a post is the
utilization of an unfair method for selecting for dismissal as
contemplated by ss 189(2) (b) and 189(7)
[22]
An employer,
who seeks to avoid dismissals
of a dislocated
employee, and
who invites the dislocated employee to compete for
one or more of the new posts therefore does not act unfairly, still
less transgresses
ss 189(2) (b) or 189(7)
. The
filling of
posts
after a restructuring process in this manner cannot be
faulted.
Being required to compete for such a post is not a method
of selecting for dismissal; rather it is a legitimate method of
seeking
to avoid the need to dismiss a dislocated employee.”
[32]
Having said that the LAC, had, earlier, in
the same judgment, said the following:
“
[19]
Axiomatically, an incumbent of a redundant post is
not automatically dismissed; that person
is
merely dislocated
and only after the
opportunities to relocate that person in another suitable post have
been explored and exhausted, may they be
fairly dismissed.
[20]
When, as typically is the position,
several
employees who occupy posts of similar function
find themselves in a predicament that only some of a number of
existing posts are to be retained,
a
selection method that is fair must be chosen to decide who is to stay
and who is to go.”
[12]
[33]
It is then my understanding of this
judgment that making the employees to apply for position is part of
an obligation to avoid a
dismissal as opposed to a method of
selecting employees for dismissal. Therefore, an employer who failed
to place a number of employees
is still required to choose a method
to select those employees for dismissal. The chosen method must
either be agreed upon or be
one that is fair and objective. In such a
situation an employer may still choose an exceptional method of
experience, skills and
qualifications. However, the process of
attempting to avoid the need to dismiss cannot be equated to the
selection method. The
applicants before me were dislocated and not to
be dismissed. The process which the respondent termed as part of a
selection method
was nothing but a means to avoid dismissal. The
evidence demonstrated that about 9 out of 15 employees were
dislocated. Only 2
were subsequently dismissed. That being so, it can
hardly be said that those who were placed were subjected to a
selection method.
The selection is for dismissal and not for
placement. Appropriately called, the process of placement was not a
selection method
but an attempt to avoid dismissal.
[34]
The respondent succeeded in doing that for
about 12 employees and failed in respect of the two applicants. The
two applicants then
became candidates for dismissal. The respondent
was therefore obliged by law to choose the two by applying some
selection criteria.
It cannot be correct to suggest that the process
that was aimed at retaining can also be used as a selection method.
To my mind
it cannot be open to an employer to say: Guess what! The
process I used to place employees with the intention to avoid their
dismissal
was actually the method I was using to select employees for
dismissal and therefore, I have complied with the requirements of
section
189 (7) of the LRA. Such would be unfair and inconsistent
with what the LAC said in
SA Breweries
.
[35]
I therefore conclude that making an
employee to apply for a position is not a selection method but a
means to avoid that employee’s
dismissal. Therefore, the issue
of fairness and objectivity does not arise in such a situation.
What then was the
method and is such a method fair and objective?
[36]
It is apparent to me that the method
applied is one of the applicants not being appointed to the available
positions in the new
structure. This criterion is the one that was
used in
Wolfaardt supra.
This
Court had the following to say about it:
“
[24]
…Mr Maserumule continued: “
Employees
were selected for retrenchment using one and only one criteria:
failure to be appointed to a position in the new structure
.
These (this) criteria was fair and applied to all employees who were
retrenched, and not just the applicant.”
[37]
The
Court was critical of this criterion
[13]
.
In seeking to distinguish the case before court and
Clive
Naicker v Q Data Consulting
[14]
,
the court had the following to say:
“
[29]
This case is distinguishable from the present one.
IDC did not invite its employees to
compete for positions in the new IDC.
Rather the new management handpicked the key staff and also made
block appointments
[30]
I am of the opinion that the process of filling the posts in the new
IDC was open to the charge of
arbitrariness. The process denied
existing employees the right to present facts in support of their
retention. It
was inherently flawed.
So much so that it could
lead to the unfair dismissal of existing employees.
[31]
When it comes
to selection the procedure was simply a choice by
management.
The procedure and selection criteria remind one of
schoolboys picking a team by calling out names until the less
desirable players
are left and discarded reluctantly.
This is not
objective. It is probably unfair
. Indeed, Mr Mathlape said that
he did not need to interview his staff for positions in the new IDC,
he knew what they could do.”
[38]
In my view the selection method applied in
this matter is not a fair and objective one and the Court was not
appropriately appraised
of its fair application. The persons who made
a decision that the two applicants were not appointable did not
testify before this
Court. All the court knows is that a panel
interviewed the applicants and found them to be unappointable. On
what basis they were
unappointable, the Court was not told. Whoever
made the decision, if he or she was guided by skills retention and
best suitability,
concluded that the applicants are unskilled and not
best suited. One wonders how persons such as the applicants before
me, with
vast experience in risk and governance, would be without
skills and not suited.
Was
the dismissal of the applicants the only viable option
?
[39]
The
uncontested evidence was that as at the time of the applicants’
dismissals, there were about 22 vacant positions
[15]
.
[40]
It
must be mentioned upfront that the duty to avoid dismissals rests
with the respondent. It is for that reason that I do not accept
the
notion that existing employees should apply for internal jobs in
order to survive dismissal. Before even proposing dismissal,
an
employer is obliged to consider alternatives
[16]
.
It has not been suggested that prior to proposing dismissal an
attempt was made to place them without having them apply. This
Court
cannot simply accept the
ipse
dixit
of an employer that the applicants are not skilled and/or suited. If
they are, why not upskill them? The court would be failing
in its
duties if it were to accept the
ipse
dixit
of the respondent in this regard.
[41]
It
is true that an employee whose position has been made redundant will
ultimately be dismissed if no vacancy is found for him or
her. In
SAA
v Bogopa and Others
,
[17]
Zondo JP (as he then was) had the following to say:
‘
[60]
The question, which arises, is what the obligation of an employer is
in relation to the dismissal of
employees for operational
requirements when it does away with an old structure and adopts a new
structure (for operational requirements
).
An employer has an obligation to try and avoid the dismissal of an
employee for operational requirements
.
This obligation entails that an employer
may
not dismiss
an employee for operational
requirements
when such employer has a
vacant position, the duties of which the employee concerned can
perform with or without at least minimal
training
…
Where the employer has a vacancy and the employee can perform the
duties attached to that vacancy, the employer would be
acting
unfairly in dismissing the employee
without
offering the employee such a position
and the ensuing dismissal would be without a fair reason. Where
however, the employer offers the employee such a vacant position
and
the employee, having accepted the offer, fails to perform the duties
attached to that position satisfactorily, the employer
can deal with
the case as a case of poor performance.” [My own underlining
and emphasis]
[42]
Similar
sentiments were echoed in the
Oosthuizen
v
Telkom SA
[18]
matter where Zondo JP (as he then was) again said:
“
[19]
The fact that the respondent did not place any
evidence before the Court to explain why it did not give
one of the
positions to the appellant and
gave
positions to other employees means that the respondent has failed to
justify the dismissal of the appellant.
In other words, the respondent selected employees from the
redeployment pool to remain in its employ by virtue of appointing
them
to certain positions and
selected
those to be retrenched by not appointing them to any vacant posts.
The respondent was obliged to explain
the basis of such selection criteria applied and should have complied
with the Act
. And that means that if
such criteria have not been agreed, they should be fair and
objective.
In the end one is left in the
dark as to why the appellant was in effect selected to be among those
who did not get any of its available
positions and had to be
retrenched.”
[43]
Similarly, in this matter the Court is left
in the dark as to why the applicants could not be placed in any of
the 22 available
posts. Like in
Oosthuizen
,
the respondent failed to explain, through evidence, the basis upon
which it chose to not retain the applicants. I cannot accept
a
submission that the case as pleaded by the applicants is not one that
behooved the respondent to show that their dismissal was
avoidable.
The policy adopted by the respondent stated as its purpose, to ensure
that retrenchment processes are fair and transparent.
One of the
guiding principles of the policy is the following:
“
3.3
All possible alternatives to retrenchments should be explored and
offered to employees prior to final
decision being taken to retrench
employees. Where vacancies exist in other business units, employees
facing the possibility of retrenchment will be
given
preference
.”
[44]
On any interpretation of this clause, it is
suggested that all possible alternatives ought to be offered to
employees facing retrenchment.
A vacant position is an alternative to
a dismissal. The applicant’s statement of case, although not a
model of clarity, makes
reference to this clause and allege
non-compliance with it. The vague evidence of Singh in
cross-examination was simply that clause
3.3 was done. In any event,
the applicants contended that their dismissal is substantively
unfair. Where dismissal is not shown
to be a measure of last resort,
dismissal is bound to be substantively unfair.
[45]
I therefore conclude that the dismissal of
the applicants before me was not the only viable option. Therefore,
on this basis too,
the dismissal of the applicants could have been
avoided and therefore substantively unfair.
Is the dismissal
procedurally unfair?
[46]
The obligation to consult arises when an
employer contemplates to dismiss an employee for reasons based on its
operational requirements.
The applicants’ view is that there
was no consultation because there are no minutes for the meetings of
11, 25 February and
10 March 2019, those are not consultation
meetings. I do not agree with this view. There is no dispute before
me that what transpired
in those meetings was recorded in a number of
documents. Although the applicants suggest that there was no joint
consensus seeking
process, the evidence of the respondent as to what
was discussed was not placed in dispute. The Act contemplates dual
responsibility.
It remains the duty of the applicants to seek
consensus as well. The attitude adopted by the applicants was that of
seeking to
challenge the process at its infancy.
[47]
Clearly, that attitude is not consonant
with a joint consensus seeking process. In my view, it was a
destructive attitude, one that
is not contemplated in the section.
With that attitude, the respondent was entitled to proceed in the
manner in which it did. Although
I am not satisfied that mapping as
part of the selection method, as submitted, was properly consulted
upon, I cannot on that account
find that there was procedural
unfairness. The applicants in a pre-trial agreement agreed to confine
its challenge for procedural
unfairness to certain issues. That was
the case to be met by the respondent on process. Accordingly, the
dismissal is procedurally
fair.
The issue of relief
[48]
The first applicant persisted with
reinstatement as a relief. The second applicant did not wish to be
reinstated. It is uncontested
that the position which the first
applicant occupied does not exist as the new structure introduced new
titles and roles. The applicant
testified that the position that he
applied for is effectively his position barring the change of title.
Further, he testified
that that position is still vacant to this day.
His evidence on this score was not sufficiently challenged. It is
indeed so that
such a version was not put to the witnesses of the
respondent. However, this Court was not told in any certain terms
that the position
of Senior Manager: Risk Management was filled. It
was one of the vacant and available positions.
[49]
Reinstatement and re-employment are primary
remedies for unfair dismissal. Section 193(2) (c) excludes the
primary relief if it
is not reasonably practicable for the employer
to effect it. The evidence of the respondent is simply that the old
positions do
not exist. It must be borne in mind that the positions
were made redundant by applying mapping. The results of the mapping
process
were not placed before the court. Regard being had to the
mapping process, all it implies is the combination of roles to
produce
a position. Therefore, this court was not told that the roles
and or functions of the applicants became obsolete for the
respondent.
This Court accepts that the old positions as they
appeared on the old structure ceased to exist due to the
restructuring
process. The first applicant’s position in the
old structure was labelled SM: Group Risk Support.
[50]
The court has not been provided with the
job profile of this position. Having had regard to the job profile of
the position Senior
Manager: Risk Management, it is apparent to me
that the duties involve risk management. Other than being told that
the positions
do not exist, the court was not told that the duties
involving risk management ceased to exist. In the circumstances, I
find nothing
that would prevent this Court to order the respondent to
re-employ the first applicant and place him in any of the vacant
positions
carrying some if not all his functions. A similar approach
was taken in
Oosthuizen
.
In there the LAC had the following to say:
“
[25]
The appellant can be reinstated – not in the
position which he occupied before he was put in the redeployment
pool
– but to the position he was in when he was in the redeployment
pool. I do not understand that to have been a specific
position. When
he and other employees were in the redeployment pool, they were given
tasks while the respondent was trying to redeploy
them.
Upon
reinstatement the appellant can be dealt with the same way that he
was or could have been dealt with when he was in the redeployment
pool
. That means that
,
if the appellant can be put in a certain position and he is happy
with such position that would be the end of the matter.
If, however, the respondent cannot find such a position or the two
parties cannot agree, the respondent must consider itself to
have a
surplus of employees. It could be having one employee more than it
needs. If that is the position, the respondent must then
deal with
that situation as the law requires it to when faced with such a
situation…”
[51]
Accordingly, I am not convinced that
re-employment as a relief is excluded within the contemplation of the
sub-section.
[52]
In
the absence of the exclusion, re-employment as a relief is not
ousted. There is no reason why the first applicant should be denied
the primary remedy in the circumstances where his dismissal could
have been avoided. I must of course deal with the date of the
re-employment, I intend ordering. Section 193(1) (b) provides that it
may be from any date not earlier than the date of dismissal.
In my
view, had the first applicant been offered any of the vacant
position, he could not have been dismissed. That being the case,
it
is appropriate to order his re-employment from the date of his
dismissal. That implies that the first applicant should be treated
as
an employee from the date of his dismissal to the date on which he is
re-employed as per the order of this court. This court
is not
reviving a contract of employment since the position was declared
redundant but orders re-employment for reasons that the
functions or
roles remained. Since it shall be from the date of dismissal, the
employer would be compelled to pay to the first
applicant a salary
that the first applicant would have earned in the re-employed post
from the date of his dismissal. It is common
cause that the first
applicant was paid severance pay. In terms of section 41 of the Basic
Conditions of Employment Act
[19]
,
an employee who unreasonably refuse an offer for alternative
employment forfeits severance pay. Regard being had to such statutory
imperatives, if the first applicant is re-employed as ordered, it
shall be inappropriate for him to retain the severance pay.
Accordingly, the first applicant is to return the severance pay made
to him, now that he shall be in an alternative position and
his job
security remains intact.
[53]
With regard to the second applicant, I must state
that since her dismissal was substantively unfair she qualified for a
primary
relief but she did not wish to be afforded same. Therefore,
there is no reason why she should not be awarded maximum compensation
for her substantively unfair dismissal.
[54]
In the results I make the following order:
Order
1.
The dismissal of the applicants is procedurally
fair but substantively unfair
2.
The respondent is ordered to re-employ the first
applicant in any of the suitable position including any of the vacant
positions
within the GBRM division effective from the date of his
dismissal.
3.
The first applicant is ordered to return the
severance pay made to him once the respondent pays to him the salary
he would have
earned from the date of his dismissal.
4.
The respondent is to pay to the second applicant
as compensation, an amount equivalent to twelve months’ salary
at the rate
applicable to her at the time of her dismissal.
5.
There
is no order as to costs.
_______________________
GN Moshoana
Judge
of the Labour Court of South Africa
.
Appearances:
For
the Applicants:
Mr F Makhanya of Floyd Makhanya
Inc, Sandton.
For
the Respondent:
Mr F Malan of ENSafrica Inc, Sandton.
[1]
Section 191 (5) (b) (ii)-the employee may refer the dispute to the
Labour Court for adjudication if the employee has alleged
that the
reason for dismissal is-based on the employer’s operational
requirements.
[2]
No 66 of 1995, as amended.
[3]
Mapping is also known as competence mapping. Competence indicates
the required abilities. Knowledge and skills that enable an
employee
to perform his work in any organisation. Therefore, mapping is the
combination of both observable as well as measurable
attributes of
an employee or an organization.
[4]
(2001) 22
ILJ
2264 (LAC) at para 19.
[5]
See: Gijima Ast (Pty) Ltd v Hopely [2014] 35 ILJ 2115 (LAC) at
paragraphs 35 and 36.
[6]
[2001] 22ILJ 2102 (ARB).
[7]
Case number J869/00 handed down on 01 August 2002 (LC)
[8]
Corporate Restructuring and “Applying for your own job”
[2002] 23 ILJ 678.
[9]
See Law@work 4
th
Edition, November 2017 by Van Niekerk et al page344
[10]
This suggestion was adopted by my brother Van Niekerk J in
Van
Rooyen and others v Blue Financial Services SA (Pty) Ltd
delivered on 11 May 2010. Later in
Numsa
v Columbus Stainless (Pty) Ltd
Case JS 529/14 delivered on 30 March 2016.
[11]
[2018] 39 ILJ 189 (LAC). Followed by this court in Moipone Gare v
T-Systems and another Case number JS 426-11 delivered on 21
November
2018.
[12]
My own emphasis and underlining.
[13]
Paragraphs 25-26.
[14]
[2002] 23 ILJ 730 (LC) per Pillay J
[15]
Pages 186-7 of Bundle A.
[16]
Section 189(3) (b) of the LRA.
[17]
(2007) 11 BLLR 1065
(LAC) at para 60.
[18]
[2007] 28 ILJ 2531 (LAC).
[19]
Act 75 of 1997