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[2019] ZALCJHB 147
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Mashile v Wings Travel Management (JS1016/17) [2019] ZALCJHB 147 (11 June 2019)
in
the labour court of South Africa, JOHANNESBURG
Not
Reportable
case
no: JS 1016/17
REGAOGETSWE MARIPE
HEZEKIEL MASHILE Applicant
and
WINGS
TRAVEL MANAGEMENT
Respondent
Heard:
29-30 April 2019
Delivered:
11 June 2019
JUDGMENT
MAHOSI.
J
Introduction
[1]
The applicant approached this Court by way of a statement of claim to
challenge the
substantive and procedural fairness of his dismissal
based on the respondent’s operational requirements. The relief
that
he seeks is retrospective reinstatement.
[2]
The key question is whether the applicant’s dismissal was
substantively and
procedurally fair.
[3]
Prior to outlining the applicant’s case in detail and
considering the issues
that gave rise to the claim, it is necessary
to outline the facts that form the relevant background to the dispute
between the
parties.
Relevant background
facts
[4]
The essential facts are not in dispute and are summarised by the
parties in the pre-trial
minute. The respondent employed the
applicant as a consultant in its Systems Support Department (SSD)
from 2 December 2014.
[5]
The retrenchment that forms the subject matter of this dispute
occurred in the SSD.
Prior to the retrenchment, the SSD consisted of
the following positions: Team Leader, two consultants (including the
applicant)
and a hardware technician.
[6]
During or about the last quarter of 2014, the respondent concluded a
service level
agreement (SLA) with a service provider named Alchimea
in terms of which it would provide a range of Information Technology
(IT)
services to the respondent which include, but not limited to IT
support services relating to the respondent’s mid-office
systems (TMA). In terms of the SLA, Alchimea would provide IT support
to the respondent’s staff in regard to the TMA queries
that
were escalated to it, as well as analysis and development relating to
the TMA application.
[7]
The applicant, along with another consultant, Nkhwazi, performed an
internal support
function in the SSD and their duties comprised
primarily of assisting staff with first line IT support in regards to
the respondent’s
TMA and to escalate any IT support issues in
regards to TMA to Alchimea to resolve such issues. The hardware
technician, Demetri
Christofides (Christofides), performed extremely
basic hardware maintenance functions, like troubleshooting and
swopping out malfunctioning
hardware, general cabling and fixing
PC’s. The team leader in the SSD was responsible for
supervising the SSD staff.
[8]
There was an overlap in the services rendered by the SSD consultants
and Alchimea
in that both Alchimea and the SSD consultants provided
IT support to staff in regards to the respondent’s TMA.
However, prior
to the retrenchment, Alchimea would provide such
support when the SSD consultants escalated the queries, which
happened often and
caused the business to incur additional out of SLA
costs. In other words, prior to the retrenchment, the staff members
would first
escalate TMA queries to the SSD consultants who in turn
would escalate such queries to Alchimea.
[9]
The applicant and the Team Leader were selected for retrenchment
based on the last
in first out (LIFO) criteria. Both Nkhwazi and
Christofides, respectively had longer years of service with the
respondent than
the applicant and the Team Leader. All the affected
employees were issued with a notice of compliance with section 189(3)
of the
Labour Relations Act
[1]
(LRA) on 10 October 2017. Retrenchment consultations were conducted
on 17 October, 25 October, 27 October and 02 November 2017.
[10]
Subsequent to the consultations, the applicant and the Team Leader
were dismissed. Dissatisfied
with the respondent’s decision,
the applicant referred an alleged unfair dismissal dispute to the
Commission for Conciliation,
Mediation and Arbitration (CCMA) and
conciliation was held on 11 December 2014. The parties were unable to
settle the dispute and
the commissioner issued a certificate of
outcome. As a result, the applicant brought this application.
Evidence
of parties
[11]
The applicant testified in support of his case and Mr Nomanja Kirstic
(Kirstic) testified for
the respondent.
The respondent’s
case
[12]
The respondent’s case was that there was a sound operational
rationale for retrenchment.
Mr Kirstic testified that in order to
increase its efficiencies and profitability, the respondent evaluated
its internal structures
with the aim of cutting costs. As a result, a
decision was taken to declare the applicant’s position
redundant. Mr Kirstic
further testified that the applicant’s
dismissal was not motivated by any arbitrary consideration, including
but not limited
to a purported personal vendetta.
[13]
The section 189(3) notice recorded that should the respondent proceed
with the retrenchment,
the selection criteria would be agreed upon by
the parties. However, should the parties not agree, then a fair and
objective criteria
would be used. In addition, the respondent further
proposed using specfic criteria, such as productivity measures and
recorded
that it might in addition look at LIFO as a qualifying
criterion. At the end, the respondent decided to use LIFO because the
performance
of the applicant and that of the other consultant,
Nkhwazi was on the same level.
[14]
On the issue of procedural fairness, the respondent’s case was
that it complied with all
the procedural obligations in terms of
section 189 of the LRA in that the notice of intention to retrench
was issued to all affected
employees on 10 October 2017, which notice
disclosed the respondent’s intention to embark on a
retrenchment process including
possible termination of the employee’s
services, the reasons why retrenchment was necessary, the number of
employees to be
affected, the selection criteria, timing of the
retrenchment, severance pay, assistance to be provided to the
affected employees
and possible re-employment.
[15]
The applicant was given an opportunity to make submissions regarding
possible alternatives and
the only suggestion he made was that of a
desktop engineer which position was not available. There were vacant
positions open at
the time and the applicant applied for a Business
Development position in which he had no relevant experience and
qualification.
This resulted in his application not being successful.
The applicant’s
case
[16]
The applicant’s case was that he was retrenched because the
respondent and his managers
had a personal vendetta against him.
Although the applicant did not dispute the fairness of the selection
criterion, he contended
that the selection criterion was changed from
performance to LIFO and that this was not disclosed in writing as
required in terms
of section 189(3)(d) of the LRA. The applicant
further contended that the consultations held were not meaningful, as
the alternatives
he proposed were not considered by the respondent.
He contended that consultation meetings were held just for the
respondent to
be seen to have complied with the provisions of the
LRA.
Legal principles and
analysis of evidence
[17]
The first issue is whether the respondent had a sound operational
rationale to retrench the applicant.
Section 192(2) of the LRA
requires an employer, in any proceedings concerning any dismissal, to
prove that the dismissal was fair.
Similarly,
section
188(1) of the LRA obliges the employer to prove that the reason for
the dismissal was fair
, where an employer
dismisses employees on account of its operational requirements.
The term “operational requirements” is defined in section
213 of the LRA as “requirements based on the economic,
technological, structural or similar needs of an employer”.
Item 1 of the Code of Good Practice on dismissal based on operational
requirements provides that:
‘
(1) The
Labour Relations Act (Act 66 of 1995) (“the Act”) defines
a
dismissal
based
on the
operational
requirements
of
an employer as one that is based on the economic, technological,
structural or similar needs of the employer. It is difficult
to
define all the circumstances that might legitimately form the basis
of a dismissal for this reason. As a general rule, economic
reasons
are those that relate to the financial management of the enterprise.
Technological reasons refer to the introduction of
new technology
which affects work relationships either by making existing jobs
redundant or by
requiring
employees
to adapt to the new technology or a consequential restructuring of
the workplace. Structural reasons relate to the redundancy
of posts
consequent to a restructuring of the employer’s enterprise.
[18]
In
Haveman
v Secequip (Pty) Ltd,
[2]
the
Labour Appeal Court (LAC) restated the test to evaluate the
substantive fairness of dismissal related to operational requirements
as follows:
‘
A
fair reason is one that is
bona fide
and
rationally justified, informed by a proper and valid commercial or
business rationale. The enquiry is not whether the reason
put up is
one which would have been chosen by the court but whether the reason
advanced considered objectively is fair.’
[19]
The respondent’s evidence is that its management took a
decision to evaluate its internal
structures with the aim of
increasing efficiencies and profitability and to further cut costs.
This decision was taken because
there was an overlap in services
rendered by the SSD consultants, one of whom was the applicant and
Alchimea. As a consequence,
the position of one SSD consultant was
declared redundant. This evidence was not challenged and in fact, it
was common cause between
the parties.
[20]
The applicant’s claim that the respondent had a personal
vendetta against him was not supported
by any evidence before this
Court. In fact, the applicant seemed to be making his case as he went
along. In his statement of claim,
he submitted that his retrenchment
was caused by the fact that he requested a salary increase during the
first quarter of 2017.
However, during the trial, he argued that he
was dismissed because he had previously referred a dismissal dispute
against the respondent
to the CCMA. This is notwithstanding the fact
that he conceded in the pre-trial minute that there was an overlap of
services.
[21]
Under cross-examination, the applicant could not explain the reason
he made two contradicting
versions except to state that he was not
legally represented. This cannot be an excuse as it is common cause
that the first pre-trial
meeting was postponed to afford the
applicant an opportunity to amend his statement of claim. It is
apparent from the different
versions presented by the applicant that
he was not a credible witness as he kept making his case as the trial
proceed. Therefore,
there is nothing before this Court to suggest
that the restructuring and the retrenchment process embarked upon by
the respondent
was not based on a
bona fide
commercial
rationale and need to cut costs in order to improve profits.
[22]
The next
question is whether the respondent
complied with its obligations in terms of section 189 of the LRA.
Section 189(1) requires the
employer to consult with affected
employees prior to embarking on a retrenchment process and it reads:
‘
(1)
When an employer contemplates dismissing one or more employees for
reasons based on the
employer‘s operational requirements, the
employer must consult -
(a)
any person whom the employer is required to consult in terms of a
collective agreement;
(b)
if there is no collective agreement that requires consultation –
(i)
a workplace forum, if the employees likely to be affected by the
proposed dismissals
are employed in a workplace in respect of which
there is a workplace forum; and
(ii)
any registered trade union whose members are likely to be affected by
the proposed
dismissals;
(c)
if there is no workplace forum in the workplace in which the
employees likely to be
affected by the proposed dismissals are
employed, any registered trade union whose members are likely to be
affected by the proposed
dismissals; or
(d)
if there is no such trade union, the employees likely to be affected
by the proposed dismissals
or their representatives nominated for
that purpose.’
[23]
Section 189(2)
[3]
of the LRA
requires the parties to engage in a meaningful joint
consensus-seeking process in an attempt to agree on appropriate
measures
inter
alia,
to
avoid and minimise dismissals; to identify the employees to be
retrenched; to change the timing of the dismissal; and to mitigate
the adverse effects of the dismissal.
[24]
In terms of section 189(3), the employer must issue a written notice
inviting the other consulting
party to consult with it and disclose
in writing all relevant information, including, but not limited to:
‘
(a)
the reasons for the proposed
dismissals;
(b)
the alternatives that the employer considered before proposing the
dismissals, and
the reasons for rejecting each of those alternatives;
(c)
the number of employees likely to be affected and the job categories
in which they are
employed;
(d)
the proposed method for selecting which employees to dismiss;
(e)
the time when, or the period during which, the dismissals are likely
to take effect;
(f)
the severance pay proposed;
(g)
any assistance that the employer proposes to offer to the employees
likely to be dismissed;
(h)
the possibility of the future re-employment of the employees who are
dismissed;
(i)
the number of employees employed by the employer; and
(j)
the number of employees that the employer has dismissed for reasons
based on
its operational requirements in the preceding 12 months.’
[25]
It is common cause that the applicant was issued with a retrenchment
notice. The applicant’s
claim that the said notice was not
compliant with section 189(3)(b) of the LRA has no merit. It is
evident from the reading of
the retrenchment notice that the
respondent disclosed the alternatives that it considered before
proposing the dismissals. The
respondent further undertook to
consider any proposed alternatives to be tabled by the affected
employees during the consultation
process and to discuss potential
positions that could arise in the near future. In addition, the
notice discloses that a fair and
objective selection criteria would
be applied and LIFO was also specified. The evidence is that the
respondent’s decision
to apply LIFO was based on the fact that
both SSD consultants performed equally.
[26]
The applicant’s contention that the consultation process was
not adequate is not supported by
the evidence before the Court. It is
not in dispute that consultation meetings were held on 17 October
2017, 25 October 2017, 27
October 2017 and 2 November 2017. However,
the applicant argued
that
the consultation was not adequate. What made the consultation
inadequate, argued the applicant, was that the respondent was
“not
sincere”.
The
minutes of the meetings placed by the respondent before the Court
disclose the fact that the parties engaged in a
joint
consensus-seeking process in an attempt to agree on appropriate
measures to avoid the dismissals, to change the timing of
the
dismissal and to mitigate the adverse effects of the dismissal.
[27]
The applicant’s further contention was that the alternatives he
suggested during consultations
were not considered. The undisputed
evidence is that the position of a Desktop Engineer that was
suggested by the applicant as
an alternative had not been created.
Further evidence was that the applicant unsuccessfully applied for a
vacant position of Business
Development because he lacked relevant
experience and qualification. It is apparent from the evidence that
the applicant was given
an opportunity to suggest alternatives, which
were considered by the respondent. There is, therefore, no merit in
the contention
that the respondent disregarded the alternatives
suggested by the applicant.
[28]
The applicant also took issue with the timing of the retrenchment as
he had proposed for its delay
so that one of the affected employees
could fill the position of a junior employee who indicated his
intention to resign mid-2018.
To counter the applicant’s
contention, the respondent submitted that it did not make business
sense to retain the services
of both the Team Leader and the
applicant, and pay them until the resignation of the junior employee,
just so that they can decide
whether they want to offer him a
position for a salary that is approximately half the applicant’s
salary when it became vacant.
This is a fair proposition.
[29]
In my view, the evidence is compelling that the respondent had a
bona
fide
operational rationale to embark on the retrenchment process.
Further that, subsequent to a notice of retrenchment, there were
consultation
meetings in which the parties engaged in a meaningful
joint consensus-seeking process in an attempt to reach consensus on
appropriate measures to avoid the dismissals, to minimise the
number of dismissals,
to change the
timing of the dismissals, to reach consensus on the method for
selecting the employees to be dismissed and to mitigate
the adverse
effects of the dismissals.
[30]
As such, it follows that the applicant’s claim falls to be
dismissed.
I had regard to the issue
of costs and I am not inclined to order costs against the applicant
taking into account the principles
of equity and fairness.
[31]
In the premises, I make the following order.
Order
1.
The applicant’s claim is dismissed.
2.
There is no order as to costs.
__________________
D. Mahosi
Judge
of the Labour Court of South Africa
Appearances:
For
the Applicant:
Mr Mashile (In person)
For
the Respondent:
Mr Orton of Snyman Attorneys
[1]
Act
66 of 1995 as amended.
[2]
JA
91/2014 at para 28, delivered 22 November 2016; See also
Johnson
& Johnson (Pty) Ltd v CWIU
[1998]
12 BLLR 1209
(LAC
)
.
Kotze v
Rebel Discount Liquor Group (Pty) Ltd
(2000)
21 ILJ 129 (LAC) at para 36;
BMD
Knitting Mills (Pty) Ltd v SACTWU
[2001]
7 BLLR 705
(LAC) at para 19 and
CWIU
and Others v Algorax (Pty) Ltd
[2003]
11 BLLR 1081 (LAC).
[3]
(2)
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 -
(i)
to avoid the dismissals;
(ii)
to minimise the number of dismissals;
(iii)
to change the timing of the dismissals; and
(iv)
to mitigate the adverse effects of the dismissals;
(b)
the method for selecting the employees to be dismissed; and
(c)
the severance pay for dismissed employees.’