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[2019] ZALCJHB 186
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Mvubu v Pharmaceutical Contractor (Pty) Ltd (JS845/17) [2019] ZALCJHB 186 (31 July 2019)
THE LABOUR COURT OF
SOUTH AFRICA, JOHANNESBURG
Not reportable
Case no: JS845 /17
In the matter between:
RICHARD MFANIMPELA
MVUBU
Applicant
and
PHARMACEUTICAL
CONTRACTOR (PTY) LTD
Respondent
Heard:
6 June 2019
Delivered:
31 July 2019
Summary:
Dismissal based on operational requirements – no
bona fide
consideration of alternatives –
employee was confronted with a
fait accompli
.
JUDGMENT
NKUTHA-NKONTWANA, J
Introduction
[1]
The
applicant (Mr Richard Mfanimpela Mvubu) referred a dispute of unfair
dismissal based on operational requirements in terms of
section 189
of the Labour Relation Act
[1]
(LRA), alternatively, that his dismissal was automatically unfair.
However, he withdrew the automatically unfair dismissal claim
at the
commencement of the proceedings.
[2]
The applicant is challenging both the
substantive and procedural fairness of his retrenchment and is
seeking reinstatement with
full back pay, alternatively, maximum
compensation. The respondent, Pharmaceutical Contractors (Pty) Ltd,
is defending its decision
to retrench the applicant.
Background
[3]
The respondent is a pharmaceutical company
that manufactures and packs the pharmaceutical products for third
party companies. The
drugs are made from raw products and the
ingredients used have high value. The respondent is licenced to keep
the drugs and raw
products in its premises. The scheduled drugs and
raw products are kept under lock and key as breaches in the safe
keeping of these
commodities may jeopardise the respondent’s
licence.
[4]
The applicant was employed by the
respondent on a permanent basis in the manufacturing and granulation
unit, earning R3 850.00 per
month.
[5]
It is common cause that on or about
February 2017 the respondent experienced an incident of attempted
armed robbery and demand for
a ransom. On 25 May 2017, the respondent
convened a meeting with all its night shift employees and it was at
that meeting that
a notice in terms of section 189(3) of the LRA was
issued. According to the section 189(3) notice, the need to retrench
arose as
a consequence of,
inter alia
,
the economic situation at the time and security concerns due to the
attempted armed robbery at the respondent’s premises.
The
section 189(3) notice clearly stated 25 May 2017 as the date for
commencing and concluding the consultation process; and the
retrenchment would be effected on 31 May 2017.
[6]
It is disputed that there was a second
consultation meeting on 29 May 2017. On 31 May 2017, the respondent
went ahead to effect
the retrenchment of employees who worked night
shift on 25 May 2017, including the applicant. The applicant was also
issued with
a certificate of service and a letter of reference, dated
2 June 2017.
[7]
The applicant, together with other
employees, represented by a trade union, referred the matter to the
Commission for Conciliation,
Mediation and Arbitration (CCMA). The
matter was set-down for conciliation on 24 July 2017 and remained
unresolved. The other employees
have since withdrawn from the matter.
Issues for
determination.
[8]
The Court is called upon to determine the
following issues:
8.1
Whether there was a need to retrench;
8.2
Whether the notice issued in terms of section 189(3) constituted
sufficient notice;
8.3
Whether there was a proper consultation in terms of section 189;
8.4
Whether the applicant is entitled to relief prayed for or any other
relief.
Respondent’s
case
[9]
Mr Hendrich Adriaan Pretorius (Mr
Pretorius), the respondent’s Human Resources Manager, testified
that the respondent operated
a two shift system; the day shift which
ran from 07:45 to 16:30, and night shift which ran from 18:00 to
06:00. Night shift only
worked from Monday to Thursday.
[10]
The respondent decided to stop the night
shift because it could not put the safety of its employees and the
products at risk. During
the attempted robbery in February 2017, the
robbers held the employees at gunpoint and demanded the raw products.
Fortunately for
the respondent, the keys are not kept at the
premises. The robbers left empty handed and there were no casualties.
On 25 May 2017,
the respondent received a tipoff from an anonymous
caller about a robbery that was planned to take place that Thursday
night. Consequently,
the respondent decided to restructure its
operations, particularly the night shift.
[11]
The night shift employees were told not to
work that night, 25 May 2017. Instead, Mr Pretorius held a
consultation meeting with
the night shift employees as they were the
only ones affected. The copies of the section 189(3) notice were
handed to individual
employees and each signed them in acknowledgment
of receipt. He, Mr Pretorius, went through the section 189(3) notice
paragraph
by paragraph, explaining the respondent’s position so
that employees understood what was stated in the document.
[12]
The section 189(3) notice informed the
employees that the respondent was contemplating embarking upon a
retrenchment process which
may lead to possible termination of
employment contracts due to the following reasons:
12.1
The bad economic situation and the sudden
downfall of work. The work that was done by the night shift could be
done by day shift.
12.2
The security reasons due to the attempted
armed robbery.
[13]
Despite the final day of consultation being
25 May 2017, there was an agreement to hold another consultation
meeting on 29 May 2017.
The employees were placed on paid leave for
security reasons.
[14]
Mr Pretorius was adamant that the second
consultation meeting did take place on 29 May 2017 and he again took
the affected employees
through the amended section 189(3) notice in
detail. However, no alternatives or proposals were forthcoming from
the employees.
He told the employees that the matter would be taken
back to the respondent’s management. The respondent’s
management
decided to shut down the night shift because the work was
not enough for two shifts.
[15]
During cross examination, Mr Pretorius was
confronted with an incident that allegedly took place on 12 July 2017
where he called
the applicant to report back to work. His response
was that he could not recall that incident.
Applicant’s case
[16]
The applicant testified that, on 25 May
2017, the employees attended night shift duty as usual. However, they
were told not to go
to their work stations but directed to the
boardroom. Mr Pretorius informed them that they would be retrenched
and handed each
one of them with a copy of the section 189(3) notice.
The employees were shocked by the news. Mr Pretorius is the only one
who
spoke during the meeting and the employees were never afforded an
opportunity to propose any alternatives. At the end of the meeting,
Mr Pretorius forced them to sign the section 189(3) notices by
threating them with armed security guards.
[17]
The applicant denied that there was a
consultation meeting on 29 May 2017. He testified that after the
meeting that was held on
25 May 2017, all employees who were on night
shift duty were placed on a leave of absence. On 31 May 2017, he was
called back to
the respondent’s premises and was presented with
a copy of the amended section 189(3) notice dated 29 May 2017 and Mr
Pretorius
forced him to sign the document. He was also presented with
his retrenchment letter together with a long service certificate and
a letter of reference.
[18]
He further asserted that had the respondent
gave him an opportunity to suggest alternatives, he would have
suggested that the contracts
of temporal employees who were on day
shift be terminated instead of retrenching the permanent employees.
His department had six
permanent employees and six temporal
employees. No employee was permanently appointed to work night shift
or day shift as alleged
by Mr Pretorius. Both shifts were rotating
every two weeks.
[19]
On 12 July 2017, the respondent called the
applicant back to work. However, he worked half a day as Mr Pretorius
told him that he
was called back by mistake. He was paid R200.00 and
told to go back home and wait for a call from Mr Pretoruis on 7 July
2017.
However, that never happened and Mr Pretorius turned down his
calls.
Legal Principles and
application
[20]
In terms of section 189(1)(d) of the LRA, an employer who
contemplates dismissing one or
more employees for reasons based on
operational requirements is enjoined to consult with the employees
likely to be affected by
the proposed dismissals or their
representatives nominated for that purpose. Section 189(2) provides
that consulting parties must
engage in a meaningful joint
consensus-seeking process and attempt to reach consensus on the
following:
“
(a)
Appropriate measures –
i)
To avoid 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;
(c)
The severance pay for dismissed employees.’
[21]
Similarly, section 189(3) unequivocally require an employer to issue
a written notice inviting
the effected employees to a consultation
and to disclose in writing all relevant information,
inter alia,
the following:
‘
(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
operation requirements
in the preceding
12 months.’
[22]
In
SA
Clothing and Textile Workers Union and Others v Discreto - A Division
of Trump and Springbok Holdings
[2]
the
Labour Appeal Court (LAC), dealing with the issue of the rationality
of the retrenchment, stated:
‘
For
the employee fairness is found in the requirement of consultation
prior to a final decision on retrenchment. This requirement
is
essentially a formal or procedural one, but, as is the case in most
requirements of this nature, it has a substantive purpose.
That
purpose is to ensure that the ultimate decision on retrenchment is
properly and genuinely justifiable by operational requirements
or,
put another way, by a commercial or business rationale. The function
of a court in scrutinising the consultation process is
not to
second-guess the commercial or business efficacy of the employer’s
ultimate decision (an issue on which it is, generally,
not qualified
to pronounce upon), but to pass judgment on whether the ultimate
decision arrived at was genuine and not merely a
sham (the kind of
issue which courts are called upon to do in different settings, every
day). The manner in which the court adjudges
the latter issue is to
enquire whether the legal requirements for a proper consultation
process has been followed and, if so, whether
the ultimate decision
arrived at by the employer is operationally and commercially
justifiable on rational grounds, having regard
to what emerged from
the consultation process
.
’
(Emphasis added)
[23]
In the present case, the respondent’s
section 189(3) notice dated 25 May 2017 categorically states the
reasons for retrenchment
as, firstly, the ‘bad economical and
the sudden downfall of work’; and secondly; the ‘security
reasons due to
the attempted armed robbery two weeks ago’.
Conversely, the respondent’s statement of defence reflect that
the respondent
had experienced robberies in May and July 2017 and as
a result it had to restructure its operations and particularly the
night
shift. During trial, the respondent led a totally different
case. Mr Pretorius testified that the attempted armed robbery took
place in February 2017 and on 25 May 2018 the respondent received a
tip-off that there was going to be another robbery that same
night.
[24]
Counsel for the applicant correctly
submitted in his written submissions that the pertinent part of the
respondent’s case
was hinged on facts that were not pleaded. In
fact, counsel for the respondent seemed to acknowledged in her
written submissions
that the facts pleaded in the respondent’s
statement of defence clearly contradict the evidence of Mr Pretorius
in relation
to the dates as to when the attempt robbery or robberies
took place. However, she ascribed these contradictions to error. I
disagree.
[25]
In
National
Union of Metalworkers of South Africa and Another v Clear Creek
Trading 167 (Pty) Ltd t/a Wireforce
,
[3]
an
unreported judgement, this Court dealt with the purpose of pleadings
and stated:
‘
[13]
It is important that we remind ourselves of the purpose of Pleadings
in a lawsuit. Mainly, Pleadings
are statements of what each party’s
contentions will be at the trial and give all such details as
opponents need to know
in order to prepare their case in answer. It
is a cardinal rule that parties are bound by their Pleadings and are
not allowed to
adduce facts which they have not pleaded. Obviously,
the reason is that cases must be decided on the issues that are on
record
and if it is desired to raise other issues, they may be placed
on the record by way of an amendment.
[4]
[14]
By the same token, the pre-trial minute, a consensual document, is a
binding contract between
the parties and it obliges the Court to
decide only the issues set out therein.
[5]
Hence, it impermissible for Wireforce to rock up in court with a new
version of defence without, at least, seeking an amendment
to its
pleaded case. Wireforce must accordingly stand and fall by its
pleaded version of defence. It is not for this Court to construe
or
infer from the asserted facts in the statement of opposition that
they sustain another claim even though it is not pleaded.’
[6]
(Footnotes incorporated)
[26]
Similarly,
in the present case the respondent must stand and fall by its pleaded
case. As such, the evidence of Mr Pretorius that
on 25 May 2017 the
respondent received a tip-off that there was going to be another
robbery that same night stands to be rejected.
Therefore, the
respondent is bound by the reasons for the retrenchment stated in the
section 189(3) notice.
[7]
[27]
Even though the applicant is challenging
the rationality of the decision to retrench him, his evidence mainly
pointed at the adequacy
of the consultation process. In fact, the
evidence of Mr Pretorius that the respondent’s workload was
seasonal was not disputed.
In addition, the applicant did not dispute
the evidence of Mr Pretorius that the armed robbery which had taken
place previously
presented a risk to both the employees and the stock
on site.
[28]
The crux of the matter is, therefore,
whether there was a due consideration of alternatives to
retrenchment.
[29]
The applicant was adamant that the
respondent ought to have considered terminating the contracts of
temporal employees before retrenching
permanent employees. Mr
Pretorius conceded during cross-examination that in March 2017 the
respondent engaged the services of temporal
employees as the industry
is such that work is seasonal and workload is based on orders from
clients.
[30]
Clearly, there was no need for the temporal
employees after May 2017 as the busy season seems to have come to the
end and workload
at that time could be handled by the day shift
according to the evidence of Mr Pretorius. Also, the applicant’s
evidence
that there were no employees attached to a particular shift
was not vigorously challenged. Mr Pretorius, conversely, testified
that no one objected to being a night shift employee during the
consultation meetings. Notwithstanding, it was incumbent upon the
respondent to consider alternatives to retrenchment and to disclose
the reasons for rejecting those alternatives even before it
commenced
with the consultation process.
[31]
I am persuaded that the respondent failed
to properly consider alternatives to retrenchment and that rendered
the dismissal of the
applicant substantively unfair.
The sufficiency of the
notice in terms of section 189(3) and overall consultation process
[32]
According to the section 189(3) notice
dated 25 May 2017, the consultation process was to commence and be
completed on the very
same day. It is common cause that the affected
employees were only issued with the section 189(3) notice during the
consultation
meeting that was held on 25 May 2017 at the commencement
of the night shift. Clearly, it is inconceivable that the respondent
could
have expected a proper engagement from the employees who had
just been told for the first time that their jobs were at stake.
[33]
In my view, the meeting of 25 May 2017
could not have been a proper consultation meeting as there was no
prior notice. To make matters
worse, the respondent had intended to
commence and conclude the consultation in one day, 25 May 2017.
[34]
Nothing much turns on the consultation
meeting of 29 May 2017. Even if I accept that it did take place, it
is not clear what purpose
it could have served as the respondent had
already decided to shut down the night shift and retrench all the
affected employees
even before the meeting of 25 May 2017. It is also
instructive that the amended section 189(3) notice dated 29 May 2017,
which,
according to Mr Pretorius, was discussed on the same date and
was signed by the applicant as proof that he was in attendance,
contradicts
his evidence that the decision to proceed with the
retrenchment was taken after this meeting. The document states:
‘
Timing
for retrenchment
It is
intended that the consultation process be finalized by 29 May 2017 no
proposed alternatives was brought to the table from
yourselves. The
company has decided to continue with the process and your last day of
work will be 31 May 2017 you were placed
on paid leave from 25 May
2017 to date and will be paid to 31 May 2017.’
[8]
[35]
I
am accordingly not convinced that the downturn in terms of the
workload and security risk that was presented by the attempted
robbery that had taken place in February 2017 justified the galloped
manner in which the consultation process was undertaken.
Clearly, t
his
is a typical case where the employee was confronted with a
fait
accompli
.
[9]
The respondent had categorically decided to retrench the applicant by
the time it commenced the consultation process. As a result,
there
was no meaningful joint consensus-seeking process as contemplated in
terms of section 189(2).
Conclusion
[36]
In all the circumstances, I am satisfied that the applicant’s
retrenchment was substantively and procedurally unfair. The
respondent failed to prove that it had properly considered
alternatives to retrenchment and adequately embarked on a joint
consensus-seeking
process.
Remedy
[37]
The
applicant seeks reinstatement with full back pay, alternatively,
compensation. It is trite that reinstatement is a primary remedy.
In
Equity
Aviation Services (Pty) Ltd v Commission for Conciliation, Mediation
and Arbitration and Others,
[10]
the Constitutional Court reaffirmed reinstatement as ‘the
primary statutory remedy in unfair dismissal disputes…aimed
at
placing an employee in the position he or she would have been but for
the unfair dismissal… by restoring the employment
contract…The
extent of retrospectivity is dependent upon the exercise of a
discretion by the court or arbitrator. The only
limitation in this
regard is that the reinstatement cannot be fixed at a date earlier
than the actual date of the dismissal. The
court or arbitrator may
thus decide the date from which the reinstatement will run, but may
not order reinstatement from a date
earlier than the date of
dismissal.’
[38]
In the present case, there are no
compelling reasons tendered by the respondent to debar the applicant
the primary remedy in terms
of the LRA. Mr Pretorius conceded that
there was no temporal employee effected by the retrenchment. Also, it
would seem that the
respondent has since resumed the night shift.
Given the fact that retrenchment is a no fault dismissal and that the
respondent’s
Production Manager, Mr Van der Westhuizen, gave
the applicant a positive reference for future employment after his
retrenchment,
there is no reason why the applicant should not be
reinstated.
[39]
When it comes to amount of the back pay, I
have considered that there has been a delay of almost two years in
finalising this case,
an issue that was not canvassed in evidence.
However, from the perusal of the file it is clear that the
applicant’s statement
of claim was filed three days out of
time. He apparently only discovered that reality during the pre-trial
conference where he
was represented by his counsel, who is instructed
by the SASLAW
Pro-bono
Office. Despite the inconsequential degree of lateness, the
respondent vigorously opposed the applicant’s application for
condonation. The condonation application was heard on 1 June 2018 and
accordingly granted by Mabaso AJ.
[40]
Clearly, the blame for the delay must be
apportioned between the parties. Having considered the above delay
and the fact that the
applicant is still unemployed, I deem it just
and equitable to order reinstatement with a back pay equivalent to 12
months’
salary (R3 850.00 x 12 = 46 200.00).
Costs
[41]
The parties did not pursue the issue of costs. In any event,
it is trite that costs do not follow the result in this Court.
[42]
In the circumstances, I make the following order:
Order
1.
The
dismissal of the applicant, Mr Richard Mfanimpela Mvubu, is
substantively and procedurally unfair.
2.
The
respondent, Pharmaceutical Contractors (Pty) Ltd, is to reinstate the
applicant and pay him Forty-six Thousand Two Hundred Rand
(R46 200.00) within two weeks from the date of this order.
3.
There
is no order as to costs.
_________________
P Nkutha-Nkontwana
Judge
of the Labour Court of South Africa
Appearances:
Applicant:
Advocate B Bobison-Opoku
Instructed
by:
SASLWA
Pro-bono
Office
Respondent:
Advocate L Pillay
Instructed
by:
Yusuf Nagdee attorneys
[1]
Act 66 of 1995 as amended.
[2]
(1998)
19 ILJ 1451 (LAC);
[1998] 12 BLLR 1228
(LAC) at para 8
[3]
National
Union of Metalworkers of South Africa and Another v Clear Creek
Trading 167 (Pty) Ltd t.a Wireforce (JS656/16) [2018]
ZALCJHB 340
(12 October 2018)
at
paras 13 and 14.
[4]
See:
Gcaba v Minister of Safety and Security
and
Others
[2009]
ZACC 26
;
2010 (1) SA 238
(CC);
2010 (1) BCLR 35
(CC) at para 75;
Khumalo
and Another v Member of the Executive Council for Education: KwaZulu
Natal
[2013]
ZACC 49
;
2014 (3) BCLR 333
(CC); (2014) 35 ILJ 613 (CC);
2014 (5) SA
579
(CC) at para 90. See
also
Molusi
and Others v Voges N.O. and Others
2016 (3) SA 370
(CC);
2016 (7) BCLR 839
(CC) at para 28.
[5]
See:
MEC for Economic Affairs, Environment and Tourism, Eastern Cape v
Kruizenga and Another
2010 (4) SA 122
(SCA) [also reported at
[2010] 4 All SA 23
(SCA) – Ed];
Filta-Matix
(
Pty
)
Limited
v Freudenberg and Others
1998 (1) SA 606
(SCA) [also reported at
[1997] ZASCA 110
;
[1998] 1 All SA 239
(A) – Ed];
NUMSA
v Driveline Technologies (Pty) Ltd and Another
[2007] ZALC 66
;
[2000] 1 BLLR 20
(LAC);
Shoredits
Construction (Pty) Ltd v Pienaar NO and Others
[1995]
4 BLLR 32
(LAC) at 34C–F);
Chemical,
Energy, Paper, Printing, Wood and Allied Workers' Union and Others v
CTP Ltd and Another
[2013] 4 BLLR 378
(LC);
Mosiane
and Others v Murray and Roberts Cementation (Pty) Ltd
[2014] ZALCJHB 518 (12 December 2014) at paras 25 and 25;
Sethole
and others v Dr Kenneth Kaunda District Municipality
[2018] 1 BLLR 74 (LC).
[6]
Gcaba
supra
n 4.
[7]
See:
South
African Commercial, Catering and Allied Workers Union and Others v
Woolworths (Pty) Limited
2019
(3) BCLR 412
(CC); (2019) 40 ILJ 87 (CC);
[2018] JOL 40545
(CC);
[2018] ZACC 44
(CC);
[2019] 4 BLLR 323
(CC) at para 32 and 33.
[8]
See: Page 10 of the pleadings bundle.
[9]
SASBO
v Standard Bank of SA
[2011]
JOL 26928
(LC) at para 36.
[10]
[2008]
ZACC 16
;
[2008] 12 BLLR 1129
(CC);
2009 (1) SA 390
(CC); (2008) 29
ILJ 2507 (CC);
2009 (2) BCLR 111
(CC) at para 36.