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[2019] ZALCJHB 152
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MTN (Pty) Ltd v Commission for Conciliation, Mediation and Arbitration and Others (JR803/18) [2019] ZALCJHB 152 (14 June 2019)
in
the labour court of South Africa, JOHANNESBURG
Not
Reportable
case
no: JR803/18
In
the matter between
MTN
(PTY) LTD
Applicant
and
COMMISSION
FOR CONCILIATION,
MEDIATION
AND ARBITRATION
First Respondent
COMMISSIONER:
ERIC MYHILL
N.O
Second
Respondent
DHIRESHEN
DUSHEN NAIDOO
Third Respondent
Heard:
14 May 2019
Delivered:
14 June 2019
Summary:
Unopposed application for review in terms of
section 145
of the
Labour Relations Act, 66 of 1995
– test for review restated -
transfer of employee constitutes a demotion if status is diminished
even if remuneration is
not affected – failure to consult with
an employee prior to taking the decision to transfer is procedurally
unfair –
application dismissed.
JUDGMENT
NIEUWOUDT,
AJ
[1]
This is an unopposed application to review and set aside or
alternatively
substitute the arbitration award under case number
GAJB17783-17, handed down by the second respondent on 19 March 2018.
Background
Facts
[2]
It suffices for the purpose of the application to record a few facts.
[3]
The applicant employed the third respondent in various capacities at
various
places. Salient to this application is his employment as a
Store Supervisor at the Morningside branch. The third respondent was
employed at Morningside in order to reduce stock losses. He testified
that by the time he had left Morningside, the stock losses
had
dropped from R3,5 million to R1 200. (The period of measurement was
not disclosed.) This is a significant improvement. This
was not
challenged under cross examination.
[4]
Despite this, there was a Business Risk Management report that was
critical
of the applicant and others.
[5]
This report led to the applicant’s Mr Monadira, a regional
manager,
deciding that the third respondent and his fellow
supervisors at Morningside should be transferred. Mr Mans called the
third respondent
and his fellow supervisors to an informal meeting on
6 May 2017. The third respondent testified that they were called in
by Mr
Mans and told that they were being moved. The reason for the
move was due to the shrinkage at Morningside. The third respondent
chose Rosebank as the branch to which he would move. There was no
consultation at the meeting, a point that he stressed at a later
meeting with Mr Monadira.
[6]
The third respondent’s evidence was that the commission portion
of his remuneration was impacted severely by the move. He stated that
in the last month of employment, he was paid approximately
R3 000
when Rosebank made target whereas his commission would have been
approximately R30 000 if Morningside made target. This
fact was not
disputed under cross examination. However, the applicant stressed the
fact that the third respondent should have been
able to grow his
commission over a period of time and that Rosebank has the same
turnover potential as Morningside. It also contended
that he was on
sick leave for a period and could accordingly not exploit the
potential of the Rosebank store.
[7]
The third respondent resigned and his last day of employment was 30
October
2017.
The
award
[8]
The second respondent delivered a lengthy award of 30 pages. On the
face
of it, the award is well reasoned.
[9]
The second respondent found that the transfer of the third respondent
amounted to a demotion despite the fact that he retained his title
and his conditions of employment. The reason for this finding
is that
the transfer constituted a diminution in status, importance, prestige
and responsibility of the applicant as the store
in Rosebank was a
lot smaller than the store in Morningside. (Although the second
respondent did not refer to it, the reduction
in the third
respondent’s remuneration.) He also found that the transfer was
not preceded by consultation.
[10]
Accordingly, so the second respondent found, the third respondent was
entitled to relief
and that such relief had to be calculated on the
amount that the third respondent had been paid prior to the transfer.
[11]
He awarded 3 months’ compensation in the amount of R229 991.15
to the third
respondent.
The
grounds of review
[12]
In its founding affidavit, the applicant contended that the award was
not one that a reasonable
commissioner could reach. In its
supplementary affidavit, it contended that the second respondent also
committed a gross irregularity
in the conduct of the proceedings.
[13]
As far as
the test on review is concerned, the Court needs do no more than
refer to the decision in
Herholdt
v Nedbank Ltd (Congress of SA Trade Unions as Amicus Curiae)
[1]
.
The test on review is by now trite and it is not necessary for the
purposes of this decision to revisit it.
Consultation
[14]
It is convenient to first deal with the issue of consultation. The
applicant contended
that Mr Mans consulted with the third respondent
on 6 May 2017. This contention is, quite frankly, without substance.
The third
respondent pertinently stated in his testimony that the
meeting in May did not constitute consultation, a fact which he
recorded
at the later meeting in July. This aspect was not challenged
under cross examination. Mr Matyolo, for the applicant, submitted
that the fact that the third respondent had conceded that Mr Mans had
consulted with him and his fellow supervisors in May, meant
that
consultation did occur. The submission loses sight of the fact that
an erroneous concession in the witness box, does not bind
a party. It
also loses sight of the fact that Mr Mans testified in chief that Mr
Monadira had stated at the meeting in July that
he would stick to his
decision to move the Store Supervisors. This confirms that the
decision had been taken prior to the meeting
in July.
[15]
Mr Matyolo was then constrained to submit that where an employer was
contractually entitled
to transfer employees, consultation was not
required; it was only necessary for the employer to explain why the
transfer was implemented.
He was unable to refer the Court to any
authority in this regard.
[16]
In
Riverview
Manor (Pty) Ltd v Commission for Conciliation, Mediation and
Arbitration and Others
[2]
,
the Labour Court said the following at paragraph 24:
‘
The resignation of
an employee in the face of a transfer of employment from Cape Town to
Johannesburg amounted to constructive dismissal
in Howell v
International Bank of Johannesburg (1990) 11 ILJ 791 (IC) because -
(a)
the period allowed the employee to respond to the employer's proposal
was totally unreasonable,
in the light of the employee's personal
circumstances;
(b)
the employer had a positive duty at least to consult with the
applicant about his transfer before
taking a final decision.’
[17]
The
employer in
Howell
[3]
was contractually entitled to transfer Mr Howell.
[18]
The requirement to consult is even more applicable when the transfer
constitutes a demotion.
Although the fact that the third respondent
could elect the store to which he wished to go indicate that there
was limited consultation,
but this did not extend to the decision to
transfer. It was thus unfair for the applicant not to consult with
the third respondent
prior to taking the decision to transfer him.
Demotion
[19]
The second
respondent referred to a passage in
Solidarity
on behalf of Kerns v Mudau NO and Others
[4]
in his award (without
expressly referring to the decision itself). This passage reads:
‘
In
van der Riet
v Leisure Net t/a Health & Racquet Club
[1998] 5 BLLR 471
(LAC), it was held that, 'failure to consult with an employee in a
non-disciplinary demotion is an unfair labour practice'. In
Du Toit &
E others Labour Relations Law (4 ed at 465) the learned authors state
that: 'In law demotion could also mean a reduction
or diminution of
dignity, importance, responsibility, power or status even if salary,
attendant benefits and rank are retained’.
[20]
In
Nxele
v Chief Deputy Commissioner, Corporate Services, Department of
Correctional Services and Others
[5]
the LAC said the following:
‘
I
agree with counsel for the appellant that the mere fact that the
appellant's rank and remuneration were not going to change does
not
mean that the transfer to Pollsmoor could not or did not constitute a
demotion. I agree, too, that the status, prestige and
responsibilities of the position are relevant to the determination of
whether or not a transfer in a particular case constitutes
a
demotion. As can be seen above, the appellant in this case has set
out in great detail a number of matters which go to the status,
prestige and responsibilities of his then position and the position
he was to occupy in Pollsmoor. Largely, the respondents have
not
challenged the appellant's version on many aspects of his evidence in
this regard. All of these have been referred to above.
In the light
of the largely uncontradicted evidence that the appellant has adduced
in regard to the status, prestige and responsibilities
of his
position in Cape Town, I have no hesitation in concluding that such
position was of a higher status, prestige and responsibilities
than
the position he was to occupy in Pollsmoor. That being the case, I
also have no hesitation in concluding that the appellant's
transfer
to Pollsmoor constituted a demotion.’
[21]
Accordingly, there is clear authority for the finding by the second
respondent that a diminution
in status, importance, prestige and
responsibility constitutes a demotion and this finding is not one
that a reasonable commissioner
could not make.
[22]
Mr Matyolo contended that the post to which the third respondent had
been transferred in
Rosebank was not (to use a neutral phrase)
inferior to the post that the applicant had occupied at Morningside.
He relied on the
fact that Rosebank catered for the same Living
Standard Measure group as Morningside. This means, broadly speaking,
that the patrons
at both stores have the same purchasing power. He
also relied on the fact that the unchallenged evidence before the
second respondent
was that the third respondent would have been able
to build up his commission earnings over a period of time to match
that of Morningside.
[23]
It was not disputed that Morningside was a bigger store, with more
salespeople in its employ,
than Rosebank. The applicant tried to
avoid the obvious consequences of this fact by stressing the growth
potential of the Rosebank
store. Future potential can however not
impact on current status.
[24]
Accordingly, the second respondent’s decision that the third
respondent had been
demoted, was not a decision that no reasonable
commissioner could have reached.
The
test for unfair labour practice
[25]
Mr Matyolo
referred the Court to a number of decisions in support of the
contention that the second respondent ought only to have
found that
an unfair labour practice had been committed if the conduct of the
applicant was motivated by arbitrariness,
mala
fides
,
capricious conduct or a discriminating management policy. However,
none of these cases dealt with a demotion and they are thus
not in
point.
Solidarity
obo Oelofse v Armscor (SOC) Ltd and Others
[6]
dealt with the inconsistent
application of discipline,
Ncane
v Lyster NO and Others
[7]
dealt with the suitability
of an applicant for promotion,
City
of Cape Town v SA Local Government Bargaining Council and Others
[8]
dealt with the termination
of a motor-vehicle benefit and
Aucamp
v SA Revenue Service
[9]
dealt with participation in
a performance management and development system.
Substantive
fairness
[26]
The applicant relied on the fact that it was contractually entitled
to transfer the third
respondent and that its operational
requirements justified the transfer. The second respondent did not
decide the issue of the
justification for the transfer due to the
fact that there was no evidence, save for the reference to the BRM
report, to justify
the transfer. The mere say-so of an employer can
never be justification for its conduct.
Conclusion
[27]
The applicant did not make out a case for review and the application
falls to be dismissed.
[28]
In the premises, I make the following order:
Order
1. The
application is dismissed.
—————————————
Hermann
Nieuwoudt
Acting
Judge of the Labour Court of South Africa
Appearances
For
the Applicant: Adv
D X Matyolo
Instructed
by: Werkmans
Attorneys
[1]
(2013) 34 ILJ 2795 (SCA), and more particularly to paras 12 and 25
thereof
[2]
(2003) 24 ILJ 2196 (LC).
[3]
Ibid n 3.
[4]
(2007) 28 ILJ 1146 (LC) at para 39
[5]
(2008) 29 ILJ 2708 (LAC) at para 88
[6]
(JR2004/15) [2018] ZALCJHB 87 (21 February 2018) at para 51
[7]
(2017) 38 ILJ 907 (LAC) at para 25
[8]
(2014) 35 ILJ 163 (LC) at para 24
[9]
(2014) 35 ILJ 1217 (LC), no para reference