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[2019] ZALCJHB 177
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Hutchison v Merchants SA (Pty) Ltd (JS239/18) [2019] ZALCJHB 177 (16 July 2019)
IN THE LABOUR COURT OF
SOUTH AFRICA, JOHANNESBURG
Not Reportable
Case no: JS 239/18
In the matter between:
PATRICK GEORGE
HUTCHISON Applicant
and
MERCHANTS SA (PTY)
LTD
Respondent
Heard:
10-12 June 2019
Delivered:
16 July 2019
JUDGMENT
MAHOSI.
J
[1]
The applicant seeks an order to the effect that his dismissal due to
operational requirements
was both substantively and procedurally
unfair and that he be compensated an amount that the Court deems fair
and equitable in
the circumstances.
[2]
The applicant contends that there was no need for him to be
retrenched as his position
was not redundant, there was no meaningful
and joint consensus-seeking consultation and that the respondent
failed to consider
him for alternative positions to avoid
retrenchment.
Relevant
material facts
[3]
The applicant was employed as a Campaign Manager by Quest (Pty) Ltd,
a temporary employment
service provider and was placed at it’s
client, Vodacom. He was then transferred to the respondent in terms
of section 197
of the LRA. Subsequent to his transfer, on 20 March
2015, the applicant entered into a fixed term contract in terms of
which he
was employed in a position of EUB support.
[4]
In October 2015, the applicant moved from his position to Projects
and Communications
Department. On 01 March 2017, he was seconded to
the position of Business Improvement, Communications and Engagements
and he worked
in that position until 30 June 2017.
[5]
On 02 June 2018, the respondent invited the applicant to an informal
meeting in which
he was informed that his position had become
redundant and that he faced a possible retrenchment. The second
meeting was held on
09 June 2018. It was during this meeting that the
respondent served the applicant with a notice in terms of section 189
of the
Labour Relations Act
[1]
(LRA).
[6]
On 12 June 2017 the applicant and the respondent had another
consultative meeting
and the applicant was served with another notice
in terms of section 189 of the LRA. On the 26 June 2017 the applicant
addressed
a letter to the respondent which contained two alternatives
to retrenchment.
[7]
On 30 June 2017 the respondent served the applicant with a notice of
retrenchment
in terms of which the applicant’s employment was
to be terminated with effect from 28 July 2017. Dissatisfied with the
respondent’s
decision, the applicant referred the unfair
dismissal dispute to the Commission for Conciliation Mediation and
Arbitration (“CCMA”)
which dispute was conciliated
unsuccessfully. The applicant then referred the dispute to
arbitration, but the respondent objected
to the CCMA’s
jurisdiction to arbitrate the matter on the basis that more than one
employee were retrenched. It was for that
reason that the applicant
filed this matter for adjudication.
Applicant’s
case
[8]
In support of his contention that there was no need for the
respondent to retrench
him, the applicant submitted that his transfer
in terms of section 197 of the LRA to the respondent created his
position, that
is Campaign Manager, within the respondent’s
structure. The applicant further contends that all the surveys
conducted by
the respondent show that the respondent had a
communication challenge, which made his services relevant and needed.
[9]
It was the applicant’s further contention that he was not aware
that his position
had become redundant until the respondent embarked
on the retrenchment process.
[10]
Although the applicant confirmed that there were consultation
meetings held with him, he testified
that they were irregular and
that the respondent failed to consider alternative positions to avoid
retrenchment.
Respondent’s
case
[11]
The respondent’s led evidence through two witnesses who
testified that the position that
was held by the applicant prior to
his transfer, namely campaign manager, did not exist within the
respondent’s business
structure. Subsequent to being
transferred, the applicant was employed on a fixed term contract in a
position of EBU support. The
role of EBU support was later absorbed
into the Operations’ Manager role. It was at this stage that
the applicant was seconded
into various departments to undertake
specific projects that were of a short-term duration.
[12]
Ms Ureshni Morisson testified that it was not commercially and
operationally sustainable to continue
with the applicant’s
secondments indefinitely. Hence, the respondent had to make a
decision to merge the applicant’s
ad hoc
functions to
the Head Office Project Team and Marketing Department in which the
function fits within its business structure.
Legal principles and
analysis of evidence
[13]
The applicant’s case is that when he was transferred from Quest
(Pty) Ltd to the respondent
in terms of section 197 of the LRA, his
position as a Campaign Manager did not change. However, the evidence
is that he entered
into a fixed term contract with the respondent
which contract clearly states his position to be EUB support. What
makes things
worse for the applicant is that his own testimony
reveals that prior to his transfer, the Campaign Manager’s role
was undergoing
constant changes because Vodacom froze it and then
later outsourced it to the respondent. The respondent’s
witnesses corroborated
his evidence and further testified that the
Campaign Manager’s position did not exist within the
respondent’s business
structure. There is therefore, no
evidence that the applicant was employed as a Campaign Manager.
[14]
The question is whether the respondent had a commercial reason to
retrench the applicant and
whether a fair procedure was followed to
do so. Section 189(1) requires the employer to consult with affected
employees prior to
embarking on retrenchment and 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.’
[15]
Section 189(2)
[2]
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. The question is whether,
subsequent to its decision to restructure its business, the third
respondent complied with its obligations in terms of section 189 of
the LRA.
[16]
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.’
[17]
The applicant’s
contention that the respondent’s attitude was to conduct the
consultations just for the purpose of compliance
as his submissions
were not objectively viewed is not supported by evidence. It is
apparent from the pre-trial minute that subsequent
to a discussion
with the applicant in the informal meeting of 02 June 2017, the
respondent invited him to another meeting on 09
June 2107 in which he
was issued him with a notice as contemplated by section 189 of the
LRA. On 12 June 2017, the parties held
another meeting in which the
applicant was issued with another notice, which reads:
‘
Further
to our consultation meetings between yourself and the company on 2
June 2017, the company is hereby inviting you to a consultation
meeting on 14
th
June 2017, at Vodacom JHB, at 16h00 in order to further engage in a
meaningful joint consensus-seeking process and attempt to avoid
retrenchment.
As
discussed in the aforementioned consultation meetings the Company has
taken the principle decision to declare your position redundant
arising from your current secondment ending on 31 May 2017.
It has
been placed on record that you were appointed to Merchants on 1 April
2015 in the capacity of EBU Support as a result of
s197 from Vodacom
and fulfilled this role until September 2015. From October 2015 to
date you have fulfilled various project roles
under business
improvement department across the Merchants Vodacom business unit and
did not return to the original contract role.
The EUB support role
was not replace and absorbed as a function into the Operations
Manager role.’
[18]
The applicant testified that there was no meeting that took place on
14 June 2014. Instead, another
meeting was held on 19 June 2017. This
is supported by the applicant’s letter dated 20 June 2017 that
reads:
‘
After
consideration of the reasons provided for the contemplated/possible
retrenchment and unsupportive experience I endured yesterday,
I have
concluded that I am uncomfortable with the decision and reasons
provided.’
[19]
On 26 June 2017, the applicant addressed a letter to the respondent
in terms of which he challenged
the respondent’s reason to
retrench him. In the same letter, he made two proposals as an
alternative to retrenchment. The
proposals read:
‘
Option
1
I
would like to be re-instated in my role and assignment to manage
communications and change management within the operations team.
As
articulated in my meeting with Ureshni over the December and January
periods, I would need to follow KPIs and performance reviews
to
enable me to deliver greater value to the business and a clear
position and support structure in the operations team to be
successful.
Option
2
I
would like to perform an additional alternative; that the role which
I had originally fulfilled and the duties which had been
absorbed
into the operations manager role for EBU support has become available
due to the positions recently having been vacated.
The role
originally advertised has been placed on hold, however the business
still requires the support and therefore I would propose
that a take
up my old duties and the additional Operations Manager duties to
support the business, until such time the role is
the re-advertised
and people can re-apply for it.’
[20]
In response to the applicant’s proposals, the respondent
addressed a letter to him dated 30 June
2017 in which it recorded
that:
‘
4.
“Request made to be reinstated to manage communication and
change management.”
There is no formal communication or change
manager functions within the budgeted headcount structure, nor is
there any intention
or expectation that this role maybe considered by
the business in the future. Communication is channelled through the
centre Marketing
Team and coordinated within the business area
assistant function.
5.
“Request to be considered to return to EBU support.” The
EBU support
function has been absorbed as part of the operational
function and does not require a dedicated resource to perform the
function
within the current structure.
6.
“No rate increase during employment period.” Historically
Merchants
has applied a consistent approach as stipulated in labour
law and there is no contracted expectation of guaranteed annual
increases.’
[21]
The evidence is that the respondent had a commercial rational to
retrench the applicant and consulted
him properly and it considered
alternatives he proposed. The fact that the applicant disagreed with
the respondent’s operational
structure and the commercial
reasons necessitating his retrenchment does not entitle him to be
retained. It is further undisputed
that the respondent delayed the
retrenchment date, took measures to assist the applicant to secure
alternative employment within
its business and further considered his
job applications as an internal candidate for a further three moths
after his termination
date. It can therefore not be said that the
applicant’s dismissal for operational reasons was unfair nor
that the procedure
followed was unfair. As such, it follows that the
applicant’s claim falls to be dismissed.
Costs
[22]
With regard to costs, I am of the opinion that the requirements of
law and fairness dictate that
there should be no order as to costs.
[23]
Accordingly, 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:
Advocate S. Kunene
Instructed by:
Charmain Gibbens Attorneys
For
the Respondent: Mr M. Magawulana, Employee Relations
Specialist
[1]
Act 66 of 1995, as amended.
[2]
(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.’