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[2019] ZALCJHB 183
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National Union of Metalworkers of South Africa and Others v Assmang Machadodorp Chrome Works (Pty) Ltd (JS469/15) [2019] ZALCJHB 183; 2019 (2) SACR 505 (GJ) (31 July 2019)
IN
THE LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG
Not reportable
Case No: JS 469/15
In the matter between:
NATIONAL UNION OF
METALWORKERS
OF SOUTH AFRICA
First Applicant
R JELE & 12
OTHERS
Second Applicant
And
ASSMANG MACHADODORP
CHROME WORKS (PTY)
LTD
Respondent
Heard: 7 -
8 December 2017 - 10-11 December 2018
Delivered:
31 July 2019
JUDGMENT
TLHOTLHALEMAJE,
J
Introduction
and background:
[1]
The individual applicants as assisted by NUMSA approached this Court
by
way of a statement of claim, to seek an order declaring their
dismissal by the respondent (Assmang) on account of operational
requirements
to be substantively unfair. In particular, the
applicants submit that Assmang failed to apply a fair selection
criterion as agreed
to in terms of the Facilitation Agreement
concluded between the parties under the auspices of the
Commission
for Conciliation Mediation and Arbitration (CCMA) dated
14 October 2014
.
[2]
Assmang operates in the mining industry in the Northern Cape
Province.
It mines ore which is then transported to Machadodorp in
Mpumalanga Province for smelting. As at 2011, Assmang had a staff
complement
of 712 employees. Following a restructuring process in
2012, three hundred and eight (308) employees were retrenched.
[3]
In August 2014, Assmang again initiated a restructuring process
in
terms of the provisions of section 189A of the Labour Relations
Act (LRA) owing to its operational requirements. The parties agreed
to a facilitation by a CCMA Commissioner as 200 employees were
affected by the process.
[4]
On 14 October 2014, a Facilitation Agreement was entered
into
between Assmang, NUMSA, and other trade unions. Clause 2 (3) of
that agreement, which is central to the determination of this dispute
provides that;:
2. SUBSTANTIVE
CLAUSES
…
3.
Selection Criteria
The parties agree that
the employer will use LIFO with the retention of skills to select the
employees that will be affected. The
Company will implement the
selection criteria and then provide the unions with a copy of the
spreadsheet to justify the deviation
from the pure LIFO principle.
The employer undertakes to provide justifications to the committee
made up of organized labour whether
deviations from LIFO are to be
implemented.
[5]
On 27 October 2014, the applicants referred a dispute to
the
Metal and Engineering Industries Bargaining Council (MEIBC) for
conciliation. The retrenchment process was nevertheless concluded
in
April 2015. On 24 April 2015, the MEIBC issued a
certificate of non-resolution of the dispute. In their statement
of
claim, the applicants contend that Assmang deviated from the agreed
selection criteria and thus their dismissals were unfair.
The
evidence:
[6]
Assmang lead the evidence of its Human Resources Superintendent, Mr
Dirk
Hattingh (Hattingh). His testimony pertained to the
implementation of the selection criteria in accordance with the
provisions
of clause 2 (3) of the Facilitation Agreement. He further
testified in regards to the necessity to deviate from pure LIFO in
favour
of the retention of skills in respect of the individual
applicants. In this regard, he testified that:
6.1.
He was employed by Assmang since October 2011 and was involved
in the conclusion of
the Facilitation Agreement. Flowing from that
agreement, at least four meetings were held with the representatives
of the individual
applicants. The full time shop-steward and also one
of applicants in these proceedings, Mr Mandla Phakathi attended those
meetings,
at which management had presented spreadsheets in order to
explain the necessity for deviation from LIFO is respect of the
affected
employees.
6.2.
In regards to specific individual applicants, Hattingh testified that
Mr Ronnie Jele (Jele)
was employed in the Raw Material and/or
production department. As he was affected by the restructuring, he
was provided with an
opportunity to apply for another position in a
different department. This was on basis that he was the only employee
within that
department.
6.3.
In respect of Mr Jacob Duma (Duma), the evidence was that he occupied
one of the four positions
which were rendered redundant. The new
structure only contemplated one position and as such, all the
employees were given an opportunity
to apply for the one available
position. Duma was not successful in his application.
6.4.
The position of receptionist which was occupied by Ms Irene Sibanda
(Sibanda) had also
become redundant. Assmang took the decision to
consolidate the position of the receptionist with that of the
administrator. In
respect of Mr Paulos Mnisi (Mnisi) and Ms Sibongile
Ntuli (Ntuli), there were initially eleven positions which were
reduced to
just four positions. LIFO was implemented and the
employees with four years’ service and job experience were
retained.
6.5.
In respect of the human resources department, the number of positions
was reduced from
nine to three. This meant that Mr Legodi Tema (Tema)
had to compete with the human resource development officer, with the
retention
of skills being the primary focus. Taking into account a
variety of factors including that Tema and the human resources
development
officer were on the same salary level, and that Tema
lacked the relevant experience in skills development, a decision was
taken
to retain the human resource development officer over Tema.
6.6.
In respect of the Second Assistance Raw Material section, the number
of positions was reduced
from 20 to eight. The eight employees
retained had possessed certain licenses which were a requirement for
those positions. Ms
Gugu Mahlangu (Mahlangu)
and
Ms Thabile Sindane (Sindane)
, who were on maternity leave
during the retrenchment process, did not have the required licenses.
They were however represented
in the consultations by NUMSA, and were
only informed of their retrenchment upon their return from leave.
6.7.
In respect of the Raw Material Controllers, only two employees were
retained on the basis
that they possessed six licences which were a
requirement for the job. The individual applicants who came from that
section and
those who were not retained did not possess the required
licences.
[7]
Under cross-examination, Hattingh further testified that:
7.1.
Although Mahlangu and Sindane were on maternity leave during the
retrenchment process,
they were however members of NUMSA and
Hattingh
had telephonically communicated the commencement and conclusion of
the retrenchment process to both of them. He could however
not recall
the specific details of the telephone calls.
7.2.
Hattingh insisted that Assmang had
consistently
applied the selection criteria with the purpose of skills
retention. He further maintained that the employees who were
retrenched
had limited skills notwithstanding the fact that they were
afforded training opportunities during the course of their
employment.
He further rejected the allegation that some employees
were denied an opportunity to acquire additional skills through
training.
7.3.
He maintained that Jele was not retained as his position was
redundant and further since
he was the only employee in that
department who reported directly to a supervisor. He denied that two
other shift leaders were
retained in that section.
Hattingh
further reiterated that Jele had an opportunity to apply for other
positions in other departments and had not done so.
7.4.
When confronted with the allegation that Sibande
had a diploma in public administration, Hattingh’s contention
was that the
position of receptionist was amalgamated with that of
administrator and the new position was benchmarked at a higher salary
level.
Notwithstanding the amalgamation, Sibande had refused to apply
for the new position, leading to the appointment of another person
who had less service than her.
7.5.
Hattingh maintained that the deviation from LIFO
was done as a last resort with the sole purpose of retaining skills.
This included
considerations of whether the employees were in
possession of relevant licences to operate the machinery, and
invariably this meant
that some employees with less service were
retained to the detriment of those with more service.
[8]
Mr Mandla Phakathi (Phakathi) was a full time shop-steward and is
also
one of the individual applicants. His evidence is summarised as
follows:
8.1.
His understanding of the selection criteria was that LIFO would be
applied together with
the retention of skills as per the provisions
of clause 2 (3) of the Facilitation Agreement. The respondent
however retained
the obligation to justify any deviation from LIFO.
8.2.
Phakathi participated in the facilitation process and testified that
NUMSA did not
agree to the deviation from LIFO.
8.3.
In respect of the position of foreman, he testified that Duma had the
most working service
with Assmang and ought to have been retained. He
further contended that although there were interviews held for other
positions,
the decision to advertise these positions and to conduct
interviews was not an issue agreed to by NUMSA.
8.4.
In the Metal Recovery Plant, another employee, Mr Vusi Mokoena, was
appointed to the position
notwithstanding the fact that he was
previously employed in the Palates Plant and had less working
service. In Phakathi’s
view, the deviation from LIFO in this
instance constituted unfair treatment towards Duma.
8.5.
Phakathi further disputed that Jele did not attend the job interview
and moreover testified
that Jele ought to have been retained in the
light of his longer working service than those retained. A Mr Bongani
Motha was ultimately
retained in the position despite having less
service as opposed to Jele.
[9]
Under cross-examination, Phakathi further confirmed that:
9.1.
NUMSA had initially proposed pure LIFO as selection criteria, but in
the end, had agreed
to clause 2(3) of the Facilitation Agreement. He
further confirmed that the spreadsheet in respect of how the
deviation was to
be implemented was presented and explained at the
facilitation meetings.
The
legal framework and evaluation:
[10]
It being common cause that the only issue for consideration in this
case is whether Assmang
had applied the selection criteria fairly and
in accordance with the provisions of the Facilitation Agreement, the
starting point
is that the provisions of section 189(2)(b) of the LRA
read with those of section 189(7) of the LRA requires of the employer
to
consult on selection criteria to be applied and adopted, and to
select the employees to be dismissed according to selection criteria
that have been agreed to by the consulting parties. If no criteria
have been agreed, the employer is required to apply and adopt
criteria that are fair and objective.
[11]
In this case the agreed selection criteria is that to be found in
clause 2 (3) of the Facilitation
Agreement from which it is apparent
that;
(a)
The parties agreed that the employer would use LIFO with the
retention
of skills to select the employees that were to be affected.
(b)
The Company would implement the selection criteria and then provide
the
unions with a copy of the spreadsheet to justify the deviation
from the pure LIFO principle.
(c)
The employer undertook to provide justifications to the committee
made
up of organized labour whether deviations from LIFO are to be
implemented.
[12]
Central to the applicants’ arguments as advanced by Mr Masutha
on their behalf was
that the manner with which the selection criteria
was implemented was not in accordance with the provisions of the
Facilitation
Agreement, and that LIFO was to be strictly applied
unless certain skills required deviations.
[13]
It is
accepted as can be gleaned from various decisions of this Court
[1]
that although the objectivity of the LIFO is recognised, that
principle on its own was never endorsed as the only fair and
objective
criterion. Other criteria such as experience and skills
have been regarded as equally fair. Obviously the primary
consideration
is that since any such criteria might have an element
of subjectivity, the issue remains whether it was applied in a
transparent,
consistent
and objective manner, taking into account that
a
retrenchment is ordinarily a “no-fault dismissal”. If the
evidence demonstrates that the employer met the threshold
of
objectivity and fairness, there would be no basis for a Court to find
unfairness.
[14]
The evidence of Phakathi that NUMSA did not agree to LIFO with the
retention of skills
is belied by the very provisions of the clause
2(3) of the Facilitation Agreement. In any event, he had conceded
under cross-examination
that the agreed position was that as
stipulated in the provision in question.
[15]
The facts of this case points to the fact that in line with those
provisions, once LIFO
with the retention of skills was agreed upon as
a fair and objective criterion, Assmang was required to implement it
and then provide
the unions with copies of the spreadsheet to justify
the deviation from the pure LIFO principle, and to further
provide
justifications to the committee made up of organized labour whether
deviations from LIFO were to be implemented.
[16]
It was correctly pointed out by Mr Van As on
behalf of Assmang that the allegations made on behalf of the
applicants that the deviations
from LIFO were not justified were
without substance. The applicants spent considerable amount of energy
in identifying various
departments or sections where the deviations
were not justified. The complaints come about in circumstances where
Messrs
Masutha and Phakathi had conceded that Assmang had
provided the union with spreadsheets explaining the need for
deviations. Masutha
however contended that there was a need for more
engagement on those spreadsheets before a final decision could be
taken, and that
in the end, the deviations were implemented
subjectively.
[17]
In circumstances where there is such a concession, and where it was
also not
in dispute that subsequent to the
conclusion of the Facilitation Agreement at least four consultative
meetings were held with the
unions where they were provided with the
necessary spreadsheets and charts, and where management had at length
made attempts to
justify the deviations, I fail to appreciate what
else or what further engagements would have led to the
non-retrenchment of the
applicants.
[18]
In my view, it is not sufficient for the applicants to nick-pick as
to who and under what
circumstances certain employees should or
should not have been retained. References by Mr Masutha to certain
employees with longer
services being unfairly retrenched despite
showing allegiance to the company, and that it was unfair to select
them on the basis
of skill retention, the result of which was that
employees without skills were effectively punished, clearly lack
substance. A
show of allegiance to the company was not a criterion,
nor can it be regarded as a fair and objective one in any event.
[19]
The aim of the retrenchment exercise was not to punish any employee,
but purely to implement
the agreed provisions of the Facilitation
Agreement, and to make an assessment amongst the employees as to who
had the necessary
skills to keep the company going given its parlous
financial circumstances. It was therefore of no consequence as to
whether the
one employee had more years of service or not, as that
was not the sole criterion. In any event, more years of service
cannot by
necessity, be equated to more skills or experience. It is
purely a factor to be considered within the context of a strict
application
of LIFO.
[20]
The same views are expressed in regards to the contention that Tema,
who was employed in
the HR Department, had a degree in HR and was
retrenched, whilst another employees with a mere certificate in
HR was retained.
The fact that an employee has a degree does not make
him/her more skilled than another employee who holds a certificate,
unless
of course such academic qualifications are a known
requirement. More was required to put up a case as to the reason the
person
with a degree ought not to have been retrenched.
[21]
It was further submitted on behalf of the applicants that even though
some of them had
applied for advertised posts, there was never an
agreement reached with Assmang that available posts would be
advertised or that
employees would be required to avail themselves
for interviews.
[22]
The
applicants’ complaint as above again lacks merit. In the case
of Jele for instance, he was the only person affected in
his
department and was required to apply for a different post in another
department. The criterion surrounding the retention of
skills was
aimed at retaining employees
best
suited to the positions available in the restructured operations.
Clearly if there were employees who were affected and considered
themselves as being on the same footing with others in terms of
skills and or service, a method requiring those employees to apply
for the vacant limited positions in order to determine the skills to
be retained can hardly be unfair. This is further borne out
by the
fact that some of the individual applicants had indeed applied for
some of the positions and were unsuccessful. The applicants
cannot
complain about a process which they allege they did not bargain for,
in circumstances where some of them unsuccessfully
took part in it.
They can further not complain about that process unless it can be
demonstrated that the method of its application
was unfair. In any
event, as it was held in
Mweli
and Another v MTN Group Management Services (Pty) Ltd
[2]
,
making
an employee to apply for a position is not a selection method but a
means to avoid that employee’s dismissal. To that
end, the
issue of fairness and objectivity does not in any event arise in such
a situation
[3]
.
[23]
In regards to the two female employees who were retrenched whilst on
maternity leave, it
was submitted that there was an obligation on
management to communicate with them prior to effecting their
retrenchment, and that
by merely sending ‘SMSs’ to them
informing them of their retrenchment, they were treated unfairly.
[24]
It is accepted that in accordance with the provisions of section 189
of the LRA, the employer
is obliged
to consult
with all employees likely to be affected as soon as it “contemplates
retrenchment”. In this case, it was
common cause that the two
female employees who were on maternity leave at the time that the
restructuring process was initiated
were members of NUMSA. There is
nothing stipulated in the Act, and in particular, the provisions of
section 189 of the LRA, as
to what is expected of the employer to do
when initiating a restructuring process that would affect employees
who are on maternity
leave or any other leave for that matter. In the
light of this
lacuna
,
one can only surmise that by virtue of the provisions of section
200(1)(b) and (c) of the LRA, in such circumstances, NUMSA as
the
representative union of such employees would also be acting on their
behalf and in their interests in their absence in the
consultative
process. Furthermore, Hattingh’s evidence was that for the
purposes of implementing the agreed criteria, the
two female
employees did not possess the necessary licenses for the positions in
question, and there was nothing coming from the
applicants that
suggested otherwise. To this end, there is no basis for any
conclusion to be reached that the two female employees
(Mahlangu and
Sindane), were treated unfairly. In any event, it was not seriously
disputed that their retrenchment was delayed
until they returned from
maternity leave. Thus, it was not as if they were not kept informed
about the restructuring process and
consultations in that regard.
[25]
In summary, it is concluded that the parties had agreed on LIFO with
the retention of skills,
which selection criterion they had
considered to be fair and objective. Assmang had in applying the
criteria, complied with the
provisions of the Facilitation Agreement
by providing NUMSA and other unions with copies of the spreadsheet
and charts, to justify
the deviation from the pure LIFO principle.
Assmang had further complied with its obligations and justified the
need for deviations.
The case by case and specific individual
applicants circumstances were explained and deviations were
justified. NUMSA and the individual
applicants may not necessarily
agree with the final outcome, but this does not imply that Assmang
did not meet the threshold of
objectivity, transparency and fairness
in implementing the agreed criteria. To this end, it follows that the
retrenchment of the
individual applicants was fair.
[26]
I have further had regard to the requirements of law and fairness in
regards to an award
of costs. Inasmuch as I agree with Assmang’s
contentions that the applicants’ claim had no merit, I hold the
view that
a costs order is not warranted in this case.
Order:
[27]
In the premises, the following order is made;
1.The individual
applicants’ dismissal on account of the respondent’s
operational requirements was fair.
2.The applicants’
claim is accordingly dismissed.
3.The is no order as to
costs.
___________________
Edwin
Tlhotlhalemaje
Judge
of the Labour Court of South Africa
APPEARANCES:
For
the Applicant:
N
Masutha of NUMSA (Union
Official)
For
the Respondent: M
van As, instructed
by Cliffe Dekker Hofmeyr Incorporated
[1]
See
National
Union of Metalworkers of South Africa and Others v Columbus
Stainless (Pty) Ltd
(JS529/14) [2016] ZALCJHB 344 (30 March 2016);
Mweli
and Another v MTN Group Management Services (Pty) Ltd
(JS610/16) [2019] ZALCJHB 119 (22 May 2019) at paras 18 - 25
[2]
Supra
Fn (1)
[3]
At
para 35; See also
South
African Breweries (Pty) Ltd v Louw
(CA16/2016, C285/2014)
[2017] ZALAC 63
;
[2018] 1 BLLR 26
(LAC);
(2018) 39 ILJ 189 (LAC) at para [22], where it was held that;
“
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 sections 189(2) (b) or 189(7). The filling
of posts
after a restructuring 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.”