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[2019] ZALCJHB 284
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De Almeida v Reeflords Property Development (Pty) Ltd (JS69/17) [2019] ZALCJHB 284; (2020) 41 ILJ 637 (LC) (15 October 2019)
THE
LABOUR COURT OF SOUTH AFRICA, HELD AT JOHANNESBURG
case no: JS 69/17
Of
interest to other judges
In
the matter between:
LAUREN
DE ALMEIDA
Applicant
and
REEFLORDS
PROPERTY DEVELOPMENT (PTY) LTD
Respondent
Heard
:
31 July, 1 - 2 August 2018
Delivered
:
15 October 2019
Summary:
(S 187(1)(e) – Automatically unfair dismissal – pregnancy
– issues leading to retrenchment
predating pregnancy -
absolution from the instance granted. S 189 – unfair
retrenchment – agreement on alternative
employment reached
orally but not confirmed – failure to clarify whether employee
was rejecting written offer or offer which
was agreed on orally –
retrenchment unjustified – procedure tainted with bad faith at
the end of the consultation process).
JUDGMENT
LAGRANGE
J
Background
[1]
The applicant, Ms L De Almeida (‘De Almeida’) brought a
case against her former
employer (‘Reeflords’) for
alleged automatically unfair dismissal for a reason related to
pregnancy or, alternatively,
a substantively and procedurally unfair
retrenchment.
[2]
By agreement, the respondent’s application for absolution from
the instance in relation
to De Almeida’s claim of automatically
unfair dismissal for a reason related to her pregnancy was only
argued after Ms D
Cheng (‘Cheng’), a witness of
Reeflords, had given part of her evidence in chief. The application
was granted and the
ex tempore
reasons are summarized in the
judgment below.
Summation of evidence
[3]
I do not intend to summarise all the evidence that was led during the
trial, but will to
highlight the main features in the narrative of
events leading to De Almeida’s retrenchment.
[4]
De Almeida started working for the respondent in 2014. When she began
she was the only employee
in the sales department except for the
office manager. After her probation she set up a sales office in
Midrand ‘from scratch’.
Her functions included recruiting
staff for the department, managing contractors of various kinds
engaged in Reeflords different
projects, managing leases and other
duties. Prior to being employed by Reeflords, De Almeida had worked
in various property related
jobs in which she had gained experience
over a twelve-year period.
[5]
In February 2015, De Almeida was made the operations coordinator of
the sales department.
Her responsibilities were managing staff,
budgets for operations and marketing projects, procurement for show
days, HR functions
and the like. However, she was adamant that her
exposure to marketing was limited, both in her previous employment
and with Reeflords.
Although she managed the contracts with marketing
agencies based on service level agreements (SLAs), she did not
perform the marketing
function herself and had no knowledge of
digital marketing technology or other marketing techniques and
strategies.
[6]
The sales department of the business was one of five departments, the
others being finance,
procurement, construction and development
departments.
[7]
After the office manager left, tensions developed between herself and
Cheng, who had moved
to the Department afterwards. Cheng was also
designated as a senior manager and had been working for Reeflords in
the development
department before De Almeida was employed. When Cheng
was transferred to the sales department she continued to perform some
of
her development work with the project and development manager, Mr
W Huang (‘Huang’). Cheng also did invoicing in the
sales
department.
[8]
Another senior manager, Ms S Moonsamy (‘Moonsamy’), had
joined the Department
in May or June 2015 after De Almeida had been
promoted to the position of regional business and operations manager.
[9]
In October 2015 Cheng expressed unhappiness with her job title,
because she had worked longer
for Reeflords than De Almeida had. A
meeting was held with Cheng and Mr H J Zhang (‘Zhang’),
the CEO, the same month.
At that meeting Zhang told De Almeida, Cheng
and Moonsamy should run the sales department’ hand in hand’.
According
to De Almeida, most of the work and the contracts still
came to her. However, there was also a practice at the company that
on
Saturday mornings Zhang held a meeting with representatives from
all departments, which was conducted in mandarin. Previously, the
office manager from the sales department who was Chinese attend those
meetings. De Almeida was effectively excluded from these
meetings on
account of the language used in the meetings. After the erstwhile
office manager left, Cheng replaced him as the departmental
representative at those meetings.
[10]
Conflicts developed between Cheng and De Almeida because Cheng did
not want to report to De Almeida. At the
meeting in October it was
agreed that staff will continue to report to De Almeida but Cheng
would assist her in performing her
duties in the sense that, if she
was unable to do something for one other reason, then Cheng would
substitute for her. The other
staff in the department reported to the
three senior managers separately in respect of those aspects of their
work which fell within
the area of responsibility of each manager.
However, there were still problems in the management of staff, who
were coming late
or taking extended lunch breaks.
[11]
By November 2015, sales were improving dramatically and changes were
needed and it was agreed that there
needed to be greater
clarification of duties, which also required staff to be given
clearer job titles to facilitate working with
third parties. It was
at this stage that De Almeida’s title was changed to regional
business and operations manager, though
it did not involve a change
in her duties. At the time, the company had wanted to change her
title to chief marketing officer,
but she declined this because she
explained she had no background in marketing and such marketing work
she did perform was limited.
De Almeida had suggested she be given
the title of chief operating officer (‘COO’) instead.
Eventually, a compromise
was reached on the title she was ultimately
given, namely Regional Business and Operations Manager. At the same
time, Cheng’s
title changed from office manager to head of
department, and sales agents were re-designated as sales executives.
[12]
De Almeida fell pregnant in September 2015 and went on maternity
leave during 2016. In terms of an addendum
to her contract, she was
paid part of her salary during maternity leave and her statutory
maternity leave period was extended by
one month. De Almeida implied
that Reeflords only agreed to this arrangement because the same
arrangement had been made with Cheng,
who had fallen pregnant around
the same time. At that time, De Almeida reported to Zhang, and one
“Grace”, whom De
Almeida considered to be the chief
operating officer who also managed finance.
[13]
De Almeida returned from maternity leave in September 2016, three
weeks’ earlier than she was required
to. She testified that
when she returned the ‘vibes in the office’ were
different. Without any prior warning, on 29
September she was called
to a meeting with Cheng, Zhang and Huang. She was asked if she was
still happy with her work and position
in the sales department and if
she felt that there were any things that could be changed by way of
adding or removing duties from
her. They wanted her to move to work
under Huang in the development department as his assistant. De
Almeida was not aware what
prompted the discussion but she asked if
it was up to her if she accepted this. Zhang gave her until 5
November to consider the
proposal.
[14]
De Almeida said she was anxious about the proposal because it would
entail new responsibilities in an area
she did not have the
background experience in, namely dealing with government officials.
She agreed that she had some experience
in marketing but only from
the point of view of contract management and measuring whether
service level agreement requirements
had been met. However, De
Almeida said she had no experience in design or the development of
advertisements and could not approve
draft material prepared by the
firm Caxtons which did Reeflords’ advertising.
[15]
De Almeida was referred to the job specifications of the marketing
position and it was pointed out that in
relation to a number of
functions she would not be the only person responsible. For example,
when it came to managing websites
another staff member was also
allocated responsibility for that. The job description did require
her to perform market research,
which she seemed to have less
concerns about. Amongst other things that she would be expected to do
would be to propose a detailed
marketing strategy and perform design.
Additional functions included: planning exhibitions, launches and
events; budgeting and
budget reconciliation; quality control;
presales, sales and post sales functions; human resources work (on
request from Cheng);
teambuilding and attending to office
administration. While acknowledging that in a number of functions she
would be assisted by
the department or specific staff members,
according to the job specification sheet, she contended that, merely
because another
person was also identified as having a particular
responsibility, it did not mean in practice they would actually
perform that
role. She claimed she had raised this issue before the
consultation process took place.
[16]
The next day, 30 September, at the weekly sales meeting attended by
all staff, Zhang was also attended the
meeting. De Almeida said this
was unusual because he seldom came to sales meetings. Zhang told the
meeting that there was no hierarchy
or structure in the department.
In De Almeida’s view there was a hierarchy because there were
three senior managers in the
department. According to De Almeida,
prior to the meeting on 30 September, the sales department had been
run jointly by herself,
Cheng and Moonsamy, with staff in the
department reporting to each of them for different reasons.
[17]
In future, Zhang explained, there would be one manager of the sales
department and one line of reporting.
He told the meeting that he had
decided to appoint Cheng, as head of the sales department because in
previous years she had worked
with him for long periods. A discussion
ensued in which a realignment of roles and functions was set out,
including the work scope
of Cheng. De Almeida claimed this
essentially involved Cheng essentially taking over De Almeida’s
functions such as handling
HR matters, procurement and contracts.
During cross-examination, De Almeida expressed the view that Cheng
was given her duties
because she could speak Mandarin and participate
in the Saturday meetings. When Cheng testified she said that the need
to speak
Mandarin was the least of Zhang’s concerns. Rather,
attendance at Saturday meetings was determined by the position held
in
the company. Thus, Saturday meetings were attended by heads of
department and the CEO, Zhang. However, this was one of a few
instances in which Cheng was effectively offering hearsay testimony
and, in any event, this particular explanation of who was to
attend
Saturday meetings was not specifically put to De Almeida during her
cross-examination.
[18]
Moonsamy was told her duties would be confined more to conveyancing
work. Moonsamy, who was a qualified conveyancing
attorney, asked if
the proposal amount to a demotion, which Zhang denied. In addition to
the reallocation of duties mentioned,
no staff were to report to De
Almeida or Moonsamy. Notably, Zhang is recorded as stating that the
only manager in the sales department
would be Cheng and that there
would be no second or third managers in the department. Zhang told
staff they must sign a minute
of the meeting, but De Almeida refused,
because she did not agree with the reallocation of duties. She did
not dispute the correctness
of the minutes. In her testimony, Cheng
confirmed that Moonsamy’s responsibilities and remuneration did
not change with the
change in her job title and she was not demoted.
[19]
On 5 October, De Almeida responded to the development department
proposal by saying she was content to remain
where she was in the
sales department but that she would find a replacement for Huang’s
assistant.
[20]
The following day, De Almeida said Cheng had ‘rushed’
into the department and summoned her and
Moonsamy to a meeting in the
boardroom. Zhang was present and he announced that there would be
changes in the sales department.
He said there were “too many
chiefs” in the department and a new structure was needed in
terms of which they would
all report to Cheng. He claimed to have
been unaware that Moonsamy and De Almeida were also senior managers
because this had never
been previously related to him by one ‘Grace’,
who performed the function of finance manager according to De
Almeida.
De Almeida agreed that the sales department was the only
department which did not have one manager, but claimed that the level
of work they each performed required them to be at managerial level.
This was necessary in order to get subordinates to do things
without
having to seek higher authority to instruct them.
[21]
De Almeida was called to another meeting around 11 October which was
attended by Cheng and Zhang. She was
given a sheet of paper
containing the job specifications of a marketing director and was
advised that she would not be doing any
more operational work but
would be doing marketing instead. She explained that she had no
marketing degree or diploma and she could
not fulfil the requirements
of a marketing position. She claimed that Cheng phoned her and
implied that she must sign acceptance
of the position. Nonetheless,
she agreed to consider the responsibilities set out and revert to
them.
[22]
On 13 October, De Almeida lodged a grievance. In essence, she
complained that the new job, which entailed
her being removed from
all operational duties she previously was responsible for constituted
a demotion. She claimed that it entailed
changes to the reporting
structure, job description, title terms and conditions of employment
and duties and functions she performed.
The second part of her
grievance related to her reluctance to sign the minutes of the
meeting of 30 October because she believed
if she signed the minute
she would be accepting her demotion. De Almeida submitted detailed
written opening and closing statements
at the grievance hearing.
Issues canvassed in her statements concerned:
22.1 the
changes in the management structure announced by Zhang at the staff
meeting on 30 September;
22.2 De
Almeida’s perception that she had been stripped of her former
duties and job title as COO and that these
responsibilities had been
given to Cheng, even though she had more management experience at
Reeflords and in her previous employment
than Cheng had working for
Reeflords;
22.3 her
perception that Cheng’s and Zhang’s demeanour towards her
had changed since she had returned from
maternity leave. For example,
Cheng no longer responded to important emails she sent her, and she
was being required to do things
that took her away from the office
and made it difficult for her to attend to her other duties and meet
her deadlines.
22.4 Cheng
was communicating with Reeflords’ labour consultants, Invictus,
about herself and was also questioning
employees in the sales
department to obtain “evidence” against her, which made
her feel that Cheng had a personal vendetta
against her. This
information she had gleaned from seeing emails on Cheng’s
computer when looking for certain material on
Cheng’s desk, and
22.5 a claim
that her workstation had been meddled with in her absence.
[23]
As a resolution of her grievance, De Almeida proposed that she be
reinstated retrospectively to her former
position as COO on the same
terms and conditions of employment she enjoyed prior to going on
maternity leave. De Almeida also required
an apology from the company
for “these unfair procedures” and an apology to her
colleague Moonsamy, whose alleged demotion
was announced in the
presence of other staff in the sales department.
[24]
The chairperson of the grievance hearing recorded that Zhang
responded by reiterating that the department
needed restructuring as
there were three managers for nine employees and owing to the
language barrier, by which the court understands
he meant De
Almeida’s inability to participate in the Saturday morning
meetings, Cheng should be the head of the department.
Further, Zhang
said the company needed a local person to run the marketing
department which was very important to it and although
De Almeida’s
role and job as head of that department was changed, it did not
amount to a demotion because a lot of trust
was placed in her
occupying that position and there was no change in her remuneration
or working hours. In any event, she could
not be reinstated in the
position of chief operating officer because he had taken over the
responsibilities of that position as
well as performing the roles of
CFO and CEO.
[25]
In her testimony, Cheng confirmed that De Almeida’s former
duties as COO had been reassigned to Zhang
and herself. Cheng also
echoed Zhang’s view there were too many managers in the
department and, as CEO, he wanted a single
point of contact with the
department. All other departments only had one manager.
[26]
The chairperson of the grievance hearing concluded that the parties
could not resolve the dispute about De
Almeida’s position in
the company and proposed they embark on a formal consultation
process.
[27]
On about 28 October, De Almeida received notice of her possible
dismissal based on operational requirements,
which invited her to
attend a consultation meeting on 31 October. The reason for the
anticipated retrenchment was the redundancy
of certain positions
resulting from restructuring the business. The letter further
proposed as an alternative position for her
the position of marketing
executive. She was also invited to consider and propose any
alternatives. In all other respects the notice
contained the usual
requirements of a notice issued in terms of section 189 [3] of the
Labour Relations act, 66 of 1995 (‘the
LRA’).
[28]
De Almeida claims that she only received the outcome of the grievance
hearing on the day of the first scheduled
retrenchment consultation
meeting. She raised this as an issue in the consultation
meeting. Cheng confirmed that she had
received the grievance outcome
on 23 October, but it had not been forwarded to De Almeida before 28
October.
[29]
During the first consultation meeting the redundancy of De Almeida’s
previous position as COO was discussed
and the meeting adjourned on
the basis that she would have to think about the marketing position.
A detailed minute of the consultation
meeting was provided. In terms
of the minute, it appears that De Almeida said she was there to
listen on that occasion and would
like to have her union
representative present at the next meeting. The chairperson of the
meeting was a consultant from Invictus,
Hennie Bierman (‘Bierman’).
He commenced the consultation meeting by saying that the purpose of
the meeting was to
explain the consultation notice fully and to
discuss any alternatives that already existed. Reeflords’
representative
was Cheng. It was suggested to De Almeida during her
cross-examination that Bierman was really performing the function of
a facilitator,
but in her view he was biased in favour of the
employer, because she felt he was pushing for her to be retrenched.
[30]
According to the minute of the meeting it was explained that only De
Almeida and a gardener were affected
by the possible retrenchment and
that she was selected for possible retrenchment on the basis that it
was her position that had
become redundant. Cheng repeated that the
company was proposing the marketing position as an alternative to
retrenchment. De Almeida
queried the timing of the restructuring
which coincided with her return from maternity leave and asked when
it had first been contemplated.
Cheng did not directly answer the
question about the timing of the restructuring, but explained in
essence that De Almeida’s
and Moonsamy’s positions as
managers had never really been confirmed by Zhang, even though the
department had historically
run on the basis that there were three of
them. The title she held as COO ought to have been the title of
operations manager (OM),
because a COO oversees the operations of the
entire business, which was a role performed by Zhang. De Almeida
challenged this contention
about her job title because her contract
of employment containing it had been signed both by Cheng and Zhang.
A constant refrain
in Cheng’s testimony was that titles were
not that important: what was important were the functions performed.
[31]
De Almeida made it clear that she had not accepted the alternative
position and was not comfortable about
it. Nonetheless, she was
performing the work in the meantime. The meeting ended on the basis
that De Almeida would think about
the marketing position again and
both parties were invited to present any other alternatives they
might have the next meeting,
but preferably beforehand.
[32]
At the second consultation meeting, on 7 November 2016, De Almeida
was represented by a union official, Paul
du Plessis (du Plessis),
though De Almeida subsequently made complained that a union official
did not afford her the same level
of representation the company
supposedly had by using Bierman as the facilitator of the
consultation process.
[33]
In her evidence, she claimed that she only learnt that Bierman was an
attorney late in the consultation process.
That is why she only
mentioned it in her letter to Zhang and Cheng, which she appeared to
have sent to them on 28 November. De
Almeida claimed she approached
Bierman after the first meeting about who could represent her, and he
suggested a trade union representative
when she asked if she could
bring a lawyer. The section 189(3) notice and the minute of the first
consultation meeting confirm
that De Almeida was permitted outside
representation and no express limitation was put on whom that
representative could be. In
any event, at the last consultation
meeting, De Almeida did not mention her claim that HB had suggested a
trade union representative
to her outside the first consultation
meeting. She also did not mention her claim that she had been
misled about having a
legal representative in the letter of 28
November. When asked why she only sent the letter
thirteen days after receiving
the proposed contract, De Almeida said
that she had discussed the contract with Cheng, but could not explain
why she made no reference
to such a conversation, apart from
suggesting that she was very busy with other commitments. She
testified that she rejected the
marketing position because her
conditions (discussed below) were not met and she saw no prospect of
anything changing in this regard
in the last consultation meeting.
[34]
At the second meeting, the marketing position as an alternative to
retrenchment was discussed in more detail.
Du Plessis made it clear
that De Almeida accepted the position but subject to certain
conditions, such as: her employment would
be continuous; because she
would be doing considerable driving, she ought to receive a mileage
allowance of up to 500 km per month
for a particular vehicle with
mileage to be recorded in a logbook, and, importantly, training and
guidance in the new position.
De Almeida agreed he was mandated by
her to say this. He also expressed her concern, given her lack of
marketing skills, that she
did not want to take the position if she
was being set up for failure, which could lead to a constructive
dismissal. No specific
AA rate was discussed according to Bierman. De
Almeida had merely said that she wanted to be compensated at the “AA
rate”
and he understood the company had agreed to this in the
meeting. However, when du Plessis tabled De Almeida’s two
conditions
near the beginning of the second consultation meeting, the
AA rate mentioned was quite specific, even if not stipulated in rands
and cents. The minutes read:
“
Paul:
Okay, secondly we are going to drive a lot, in this new position, as
I understand we’ve got an allowance of 500 km,
together with an
AA rate,
on a certain vehicle.
That was not previously
included in her contract. So that needs to be included.
The
vehicle that she is driving, the AA rates on that specific vehicle,
of the 500 km, of which we are prepared to keep a log even to our own
detriment;…”
(emphasis
added)
[35]
De Almeida wanted the key performance indicators [KPIs] of the
marketing job to be determined. She was concerned
about being
evaluated against KPIs and being “performance managed out of
the job” if she had not received the necessary
training to
allow her to perform those duties. She claimed that this had happened
to another employee, Mr M Malulese, who had been
“performance
managed” out of his job with the assistance of Invictus. Her
suspicion in this regard was aroused by the
sight of emails between
Cheng and Invictus which she had seen on Cheng’s computer
screen. Cheng said the emails on her computer,
which De Almeida would
not have seen without activating the computer screen, did not concern
any vendetta against De Almeida, but
related to the anticipated
restructuring of the department.
[36]
As Bierman recalled, at the second consultation meeting Reeflords had
agreed to assist her with training
in the new position but the
specific nature of the training was not discussed and that De Almeida
was to specify this. Under cross-examination
he agreed that it would
not be reasonable of the employer to exclude training from the
addendum to the contract if that was something
agreed upon.
[37]
By the end of the meeting De Almeida conceded there was agreement
that she would take the new marketing position,
subject to the
kilometre rate and the KPIs being settled. Bierman did not recall a
specific AA rate being discussed in the second
consultation meeting.
Cheng was under the impression that by the end of the second
consultation meeting De Almeida had accepted
the marketing position
and had agreed to the terms and conditions discussed in that meeting.
[38]
A few days after the consultation meeting, De Almeida received a
contract with an addendum making provision
for a medical allowance,
which De Almeida said was part of her original employment contract as
a COO, and a petrol allowance. The
petrol allowance contained two
components. The first component was a fixed transport allowance of R
2000 per month. In addition
to that, the company offered to reimburse
De Almeida, R2.53 per kilometre subject to maintenance of a logbook
and submission of
fuel slips for conducting development survey work
and land sourcing, which were part of the marketing job
specifications.
[39]
De Almeida was happy to agree to the petrol allowance but not with AA
mileage rate mentioned in the addendum,
because the car she drove was
a diesel SUV for which the rate was R 4.65 per kilometre. In
cross-examination she said she
had responded to the incorrect rate in
an email. She was not happy about the omission of any mention of KPIs
or training in the
draft contract or addendum. Accordingly, because
De Almeida was of the view that it was agreed at the second
consultation meeting
that she would take the position if her
conditions were met, she decided to decline the position. Cheng
denied that after the second
consultation she had received any
communication from De Almeida about what the ‘correct’ AA
rate should have been,
contrary to De Almeida’s testimony. No
documentary evidence was adduced of the alleged email specifying the
required AA rate.
[40]
De Almeida claims that Cheng phoned her late at night on 14 November
telling her to sign the documents before
further legal actions were
taken against her. Although it was not put to De Almeida during her
testimony, Cheng claimed that the
reference to “further legal
actions” was intended to refer to the continuation of the
consultation and retrenchment
process.
[41]
The following day, De Almeida met and discussed the contract
documents with du Plessis. They agreed that
the documents did not
contain all that was agreed on at the previous meeting. She then
advised him that she would contact the labour
consultant. From that
point, du Plessis played no further role in the consultations. De
Almeida claimed the reason she did not
use him beyond that point was
because she felt his representation was inadequate and she had
discussed this with her attorney before
the third consultation.
[42]
On 28 November 2016, De Almeida addressed a letter to Cheng and Zhang
about her proposed retrenchment in
which she stated that she was of
the view that the decision to issue her with a section 189 [3] notice
was prompted by her lodging
her grievance. She also complained that
the company had been assisted by the labour consultant, whereas she
had no similar assistance
from an external party. She expressed the
view that there was no reason to embark on the process, or to change
the job she originally
had. Lastly, she claimed that the alternative
position offered was not a reasonable one as she could not do the job
because she
lacked the necessary experience and skill and that they
had “refused” to provide her with the necessary training
for
the new job. Nonetheless she committed herself to attending the
last consultation meeting when it was to be held. De Almeida never
got a response to this letter before the third consultation meeting.
When she was challenged about the fact that during the second
consultation it had been agreed she would receive training, she
defended her claim that they had refused to give her training on
the
basis that it was not set out in the contract she was given. De
Almeida also could not explain why she had not mentioned her
dissatisfaction with the AA rate in this letter.
[43]
Cheng was adamant that the company had agreed at the second
consultation meeting that it would provide training
for the marketing
position. De Almeida ultimately conceded that the word “refused”
in her letter was an incorrect characterisation
of Reeflords’
stance on training. In any event, it was common cause in the
pre-trial minute that it had been agreed that
training would be
provided to her because she had no qualifications or skills in
marketing, and that she could not be subjected
to performance or KPI
assessments until she had completed the training in question. A good
deal of both De Almeida’s and
Cheng’s testimonies
canvassed the comparison between the existing marketing duties
performed by De Almeida before the restructuring
and the proposed
duties she would perform in the position of marketing executive. The
tenor of Cheng’s evidence was that
the new position would not
have entailed a significant change in the marketing functions De
Almeida previously performed, thereby
implying that there probably
was no need for her to undergo training. Be that as it may, there was
an understanding at the end
of the second consultation meeting that
Reeflords would provide De Almeida with any necessary marketing
training.
[44]
During Cheng’s evidence she said the company did not care
whether De Almeida had a qualification in
marketing. All that
mattered was if she could do the tasks contained in the job
specification for the post. She also referred to
De Almeida’s
annual work report for 2015 in which she had recorded the marketing
work she was doing then, though De Almeida
was not asked to comment
on this document during her testimony. Cheng confirmed that the
marketing position still existed and had
been occupied by two
individuals since De Almeida left. The first to occupy the position
had no marketing qualification but the
current occupant did have one.
[45]
On Monday 21 November, De Almeida was notified of a further
consultation meeting scheduled for 23 November,
but she did not
attend the meeting as she was booked off ill from 23 to 28 November.
She received news from other staff in the
department that Cheng had
said she was looking for someone else to fill the position that she
had/was offered. On 28 November De
Almeida sent an email to Zhang and
Cheng that she would not be accepting the proposed marketing
executive position.
[46]
On 29 November, De Almeida claimed that Cheng told her that she does
not need her there and would find someone
else to fill her position.
[47]
The third consultation meeting was held on 30 November in which it
was concluded that she would not accept
the marketing position. She
was then retrenched and told she did not have to work notice and must
leave the company by 17:00 that
day. De Almeida was issued with a
retrenchment notice in the meeting together with a termination
agreement requiring her to agree
that she would not refer a dispute
to the CCMA over her retrenchment. She declined to sign the
retrenchment agreement. This meeting
was also minuted and De Almeida
also produced a transcript of a recording she had made of the
proceedings, with the company’s
knowledge. Parts of the
transcript reflected that the recording was indistinct and there was
some controversy during the court
proceedings about what was said in
a particular exchange in the consultation meeting. However, in the
written heads of argument
submitted, neither party made anything of
any apparent discrepancy between the transcripts referred to in
evidence and the audible
recording, so nothing turns on that.
[48]
At one stage, in her own transcript of the third consultation, the
following exchange was recorded near the
start of the meeting:
Chairperson:
Okay? Alright. So, just to clarify, but I’ll ask Dora just to
clarify as well, the nature of this consultation,
I remember in the
second consultation we, well, there was an agreement reached
according to me as per you and the representative.
It was being
stated that everything will be signed off, everything will be
finalised, and then if no, of course, then unfortunately
we have to
consult again.
Ms
De Almeida: Ja
Chairperson:
And so I’m assuming that’s why we are here today. Okay?
Ms
De Almeida: Ja. Well, we’re here for two reasons.
Chairperson:
Ja.
Ms
De Almeida: Obviously one of them is that the documentation, an
addendum and everything that was put into writing was not, actually
agreed upon verbally in the consultation, so that is a problem, and
secondly, I have relooked at everything and I have found that
it is
unreasonable…[intervenes]
Chairperson:
Okay, so you’re …[intervenes]
Ms
De Almeida: … to actually change – I will not be
accepting the position [indistinct – speaking simultaneously].
Chairperson:
Okay, so you’re not accepting the position?
Ms
De Almeida: No.
Bierman
clarified that De Almeida was entitled to revoke her acceptance and
Cheng commented that she did not think the offer was
unreasonable as
claimed by De Almeida in her letter of 28 November. Cheng said the
company had not responded to the letter because
the third
consultation was pending. From Reeflords’s side either the
position was taken or there was no such position anymore.
Bierman
then reaffirmed that the position was still being offered to De
Almeida but that if it was not accepted Reeflords would
have no
option but to proceed with the retrenchment, viz:
Chairperson:
But, to make it clear if that isn’t accepted, they don’t
have any option but proceeding, okay?
Ms
De Almeida: Okay.
Chairperson:
Once again, are you sure you don’t want the alternative?
Ms
De Almeida: Yes.
Chairperson:
Okay.
However,
De Almeida then proceeded to read out the letter she had sent,
clearly intending to make some point about it by doing so.
Bierman
testified that De Almeida did not state in the consultation under
which circumstances she would have accepted the offer
and maintained
that if she had come up with another alternative in the third
consultation he would have entertained discussion
of this in that
meeting. Bierman said he could not comment on the portions of the
transcript which were unclear but he was satisfied
that what was
clear was that De Almeida had rejected the offer. When challenged
that it was obvious that she did not accept the
post because it was
unconditional, Bierman responded: “I interpreted that to mean
even if it was unreasonable she still rejected
it.” He was
unwilling to accept that what De Almeida had rejected was the post
without the conditions she wanted included.
He was also reluctant to
agree that by repeatedly asking her whether she accepted the offer,
he was effectively asking De Almeida
if she accepted the offer
without the variations which had been agreed upon orally concerning
AA rates and the provision of training.
Under re-examination, Bierman
said his understanding at the second meeting was that the company had
agreed to provide training,
and De Almeida did not state at the third
consultation under what circumstances she would have accepted the
offer.
[49]
When Cheng was questioned as to why the agreement on training and
payment of AA mileage rates were not included
in the addendum, she
said that she never understood, merely because those issues had been
agreed upon in the second consultation,
that there was a need to do
so,. The addendum was not intended to deal with non-monetary issues
in her view. If she had been asked
to put those issues in the
addendum she would have considered doing so. Moreover, even though
she could have done so, she was not
instructed to do so. Cheng
claimed that she only became aware of De Almeida’s unhappiness
with the addendum at the third
consultation meeting. Cheng was asked
what was done to establish why De Almeida was not accepting the
position. Initially she responded
that, in the absence of a further
alternative position being tabled, no discussion on this took place.
She claimed that the process
was guided by Bierman who had asked the
parties to present alternatives and that De Almeida had rejected the
position offered by
Reeflords. When it was put to Cheng that De
Almeida made it clear that one of her difficulties with the written
contract and addendum
was that things that had been agreed in the
previous consultation were not included in it and this was not an
unreasonable concern,
Cheng response was that this was not the only
reason De Almeida rejected the alternative. Cheng referred to the
further comments
by De Almeida that she had “relooked at
everything” and “found that it was unreasonable”,
was why nobody
questioned further why she was rejecting the marketing
position. At the time she was under the impression that it was an
outright
rejection of the offer and it had been unreasonable of De
Almeida to decline it. When asked if it was not unreasonable of the
employer
to have excluded the items orally agreed upon from the
addendum, Cheng’s response was that De Almeida had not said
that the
exclusion of the terms was unreasonable, and Bierman had
given her an opportunity to confirm her rejection of the position
which
she did. Cheng was further pressed on her understanding of
Bierman’s statement that De Almeida was not accepting the
position
for “certain reasons”, namely whether it was not
obvious that this was a reference to the AA rate and training issues.
Cheng answered that she could not assume that was the case in
circumstances where matters had been agreed upon and there was no
communication from De Almeida on those issues. Under re-examination,
Cheng was later referred to a portion of the minutes of the
third
consultation where she stated:
“…
I really don’t find
that the contract in the addendum as well as the scope of work was
actually in any way unfair or unreasonable.
However, if you do not
take it and then I see on the letter you sent me on Monday, I think,
you find it unreasonable and then that’s
where I do understand
that you don’t want to actually accept the position…”
On
reading this, Cheng reaffirmed her view that De Almeida had not
elaborated on the circumstances under which she would have accepted
the position.
[50]
In keeping with her perception that her previous duties had simply
been reallocated to Cheng or assumed by
Zhang, De Almeida was adamant
that there was no need for her position to be declared redundant.
Application for
absolution
[51]
The application for absolution in respect of De Almeida’s claim
of automatically unfair dismissal for
a reason related to her
pregnancy was granted for the following reasons:
51.1 The mere
proximity in time of De Almeida’s retrenchment to the chain of
events which began shortly after
she returned from maternity leave is
not sufficient to establish a causal link.
51.2 This
is particularly so where the events which unfolded in September to
November 2016 were plainly foreshadowed
in developments relating to
the management of the sales department which started as far back as
October 2015. There is nothing
to suggest that those developments
prior to her going on maternity leave were in any way related to De
Almeida’s pregnancy
or imminent maternity leave.
51.3 There
was also no evidence that her absence from work on maternity leave
led to developments taking place which
would not otherwise have
happened.
Evaluation of the unfair
retrenchment claim
The applicant’ s
case
[52]
The essential elements of De Almeida’s claim regarding the
substantive and procedural fairness of her
dismissal was that there
was no need to retrench her from the position of COO. Further, the
consultation process was inadequate
and Reeflords failed to
meaningfully assist De Almeida in finding an alternative position in
the company.
Substantive fairness
[53]
In the closing arguments submitted by De Almeida, she maintains that
the company failed to make out a case
that Reeflords had discharged
the onus of proving that the retrenchment was justified because
Zhang, who made the decision to restructure,
was not called to
testify.
[54]
Having regard to the evidence, there was ample elaboration of
Reeflords’s reasons for embarking on
the retrenchment exercise
in the minutes of the various meetings which were canvassed in
evidence, without any serious dispute
being raised about the accuracy
of those documents. Furthermore, in so far as Cheng gave evidence for
the company, the bulk of
her evidence simply confirmed what was
already self-evident from the minutes and, for the most part, was not
an attempt to lead
evidence of what Zhang had said. De Almeida’s
dispute about the rationale for her retrenchment was essentially
twofold. Firstly,
that the work she did as a COO did not cease to
exist, but had been reallocated between Zhang and Cheng. This was
common cause
between the parties. Secondly, she was denied the
opportunity of taking the marketing position because Reeflords was
not prepared
to honour the oral agreement reached in the second
consultation meeting on the terms and conditions attached to that
position.
The respondent’s position was that De Almeida’s
job as COO had become redundant as a result of restructuring and she
had refused to accept the marketing post as an alternative to
retrenchment.
[55]
The reallocation of De Almeida’s duties to Cheng and Zhang
resulting in her redundancy was essentially
linked to the broader
restructuring of the sales department management, which was decided
upon before any notice of possible retrenchment
was issued. The
alternative marketing position also was offered to De Almeida before
any retrenchment consultations commenced.
Consequently, De Almeida’s
contested redundancy had materialized as a consequence of the
restructuring it had already implemented
in the sales department, and
before any discussions on retrenchment ensued.
[56]
The department was the only one in the firm having three senior
managers, with the staff reporting to different
managers according to
the functions those managers were responsible for. The ratio of staff
to management before the restructuring
was 3:1. I can see nothing
mala fide
in Reeflords wanting to simplify managerial lines of
reporting in the departmental structure to bring the sales department
in line
with other departments. As, De Almeida’s job functions
were largely of a managerial nature, unlike those of Moonsamy, whose
duties were essentially those of a conveyancing specialist, the
appointment of a single manager necessarily meant that managerial
responsibilities previously performed by De Almeida would be
performed either by the new head of Department or someone else in
the
existing managerial hierarchy above the level of the department.
[57]
Nonetheless, despite the rationale being one that can be construed as
operationally legitimate, that does
not detract from the fact that it
embarked on this step and simultaneously reallocated De Almeida’s
duties thereby precipitating
her redundancy without embarking on the
s 189 process beforehand. In Moonsamy’s case, by contrast, her
job functions appear
to have remained more or less intact as a result
of the management restructuring, save for the loss of her title as a
senior manager.
In fact, the process of diminishing De Almeida’s
managerial status in the sales department started before she went on
maternity
leave in 2015, when Cheng was given the title of head of
department, having previously been performing her own functions and
providing
ancillary support to De Almeida.
[58]
The real crux of the case relating to substantive unfairness
concerned the failure to appoint De Almeida
to the marketing
executive post as an alternative to her retrenchment. By the end of
the second consultation meeting it appears
to have been common course
that De Almeida was willing to accept the position subject to being
provided with training in respect
of any areas of the marketing
position where she lacked proficiency and that she would be provided
with a transport allowance based
on AA mileage rates. It must be said
that when Cheng testified, she somewhat grudgingly agreed that there
was consensus on these
issues.
[59]
It was apparent that Reeflords was of the view that there was nothing
materially different about the marketing
duties De Almeida would
perform in the new post compared with the marketing work she was
previously performing, and that consequently
there would be little if
any need for additional training. However, it ought to have been
obvious from the discussions in that
meeting that De Almeida was
particularly anxious that she might be subjected to performance
review in the new position and performance
managed out of the job
because of areas of marketing expertise in which she might be found
lacking. Although this concern might
appear to have been unwarranted
when the existing work she performed was compared with the job
specification of the new post, her
insecurity about the new position
was not without any foundation given the way in which she had been
gradually eased out of a managerial
role in the sales department
which had taken place in tandem with the ascension of Cheng to the
position of head of the department.
In the consultation process, the
representative of Reeflords was the very person who had been her
rival who had succeeded in supplanting
her in the principal
managerial role in the sales department. Cheng downplayed the
importance of job titles to herself during her
testimony, but the
fact remains that functionally she gradually assumed the role of
managing the department, while De Almeida’s
managerial role was
marginalized. In consequence, De Almeida’s sensitivity about
protecting her ability to retain any new
position was not baseless.
[60]
In relation to the agreement on the application of AA rates, in her
proposal in the second consultation meeting,
as conveyed by du
Plessis, De Almeida had identified on what basis the AA rate should
be determined in her view. It was never suggested
in the meeting that
the applicable AA rate would not necessarily be linked to the vehicle
she drove. It was not unreasonable therefore
to believe that, in
principle, the AA rate that would apply would be the one determined
for her vehicle.
[61]
The contract and addendum forwarded to De Almeida by Cheng did deal
with the travel allowance but the AA
rate of R 2.53 per kilometre was
approximately half of what De Almeida would be paid if it had been
calculated on her own vehicle.
No explanation of how the rate was
determined was contained in the covering email from Cheng and Cheng
herself was unclear how
the figure in the addendum was arrived at
when she testified. Training was not mentioned at all in the
contract, nor even in the
covering email. On the face of it, it was
not unreasonable to assume that the additional conditions proposed by
De Almeida, which
the parties had agreed upon were, at best, only
partly reflected in the documents which was supposed to embody the
terms governing
her appointment as the marketing executive. Cheng did
not satisfactorily explain why she felt it was unnecessary to mention
the
agreement on training. It is clear from Bierman’s
concluding remarks in the second consultation meeting that Cheng was
expected
to embody the changes agreed upon in writing and that only
if there was still no agreement would there be a need for a further
consultation.
[62]
It is apparent from De Almeida’s letter of 28 November, she was
still unhappy about the fact that she
had been identified as
redundant and that she believed the company was refusing to provide
her with training, despite what had
transpired at the previous
consultation. The letter criticized the fundamental rationale for her
proposed retrenchment and characterized
the offer of alternative
employment as unreasonable, with particular reference to the issue
that appeared to have caused her the
most anxiety in the previous
consultation, namely the apparent absence of a commitment to provide
training for a role she felt
she might not be able to perform well
in. At the very least, the letter signified that there was no
consensus about De Almeida
accepting the alternative and that another
consultation meeting would be necessary. This much was recognised by
the employer.
[63]
However, the opportunity provided by the third consultation meeting
to clarify matters before reaching a
conclusion that nothing more
could be done to obviate De Almeida’s retrenchment was not
utilised. Thus, even if the company
was not prepared to revisit the
overall rationale for restructuring on account of the fact that the
consultation process had already
moved on to the discussion of an
alternative position, given that an oral consensus had been reached
at that consultation, it should
nonetheless have been self-evident
that the reasons for not crystallising the oral consensus in writing
ought to have been the
first item in the order of business in the
third consultation meeting.
[64]
Because of the ramshackle way the meeting was conducted, the reasons
for De Almeida’s refusal to accept
the written terms of the
offer were never properly canvassed. Had it been done properly the
two reasons which made her reject the
written contract and addendum
could have been easily rectified. Further, whether in truth there
were any additional reservations
she had about accepting the
alternative position, those would have been identified and
discussed. As it turned out, at the
end of the meeting
Reeflords could not have genuinely known whether De Almeida had
rejected the offer of the alternative position
as set out in the
written terms of the contract and addendum or, had rejected the
position even if the missing terms, which flowed
from the consensus
in the second meeting, were to be included in the written offer. It
is apparent neither Bierman nor Cheng wanted
De Almeida to unpack the
specific reasons she was not accepting the position.
[65]
In order to show that a proposed alternative had been considered in
good faith but abandoned, Reeflords needed
to be sure there was no
misunderstanding between it and De Almeida about the terms of that
alternative, particularly in circumstances
where there had previously
been manifest consensus. In this regard, it must be remembered that
one of the objectives of the consultation
process is to seek
consensus. Section 189(2) of the Labour Relations Act, 66 of 1994
states:
‘
189(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.’
[66]
Consequently,
when consensus on one of the issues identified in section 189(2) has
been reached but breaks down, the need to understand
why that
breakdown occurred to see if it can be remedied should be readily
apparent. The need to do so is also closely linked to
the principle
that retrenchment should be avoided where possible, as it is a no
fault dismissal. Without doing this, Reeflords
could not confidently
say that De Almeida’s retrenchment was operationally justified
because she had failed to accept a reasonable
alternative. In
Oosthuizen
v Telkom SA Ltd
,
[1]
the LAC put it thus:
‘
[5]
The obligation of an employer not to dismiss an employee for reasons
of its operational requirements where it can avoid such
employee's
dismissal as now provided for implicitly in s 189 (2)(a) (i) and (ii)
and 189 (3)(a) and (b) of the Act is not a new
obligation that came
with the enactment of the Act. It is as old as our modern law of
retrenchment in this country. (See Halton
Cheadle 'Retrenchment: The
New Guide-lines' (1985) 6 ILJ 127 at 128-9 particularly guideline no
5 at the top of 129 and the case
of Gumede & others Richdens
(Pty) Ltd t/a Richdens Foodliner (1984) 5 ILJ 84 (IC) at 91B-C.)
Recently this court re-affirmed
this principle in General Food
Industries Ltd t/a Blue Ribbon Bakeries v FAWU & others (2004) 25
ILJ 1655 (LAC). In this regard
it is to be noted that article
13(1)(b) of ILO Convention 158, the Termination of Employment
Convention, provides that the employer
must give workers'
representatives an opportunity to consult on measures to be taken to
avert dismissals or to find alternative
employment. This obligation
also includes that, where the employee may need some training in
order to be able to perform the duties
attached to an alternative
position, the employer should afford the employee the opportunity to
get such training. Naturally, this
has to be within reason because,
obviously, the employer should also not be burdened with an exercise
that may have undue cost
implications. I note that para 21 of ILO
Recommendation 166, the Termination of Employment Recommendation 1982
provides as follows:
'The
measures which should be considered with a view to averting or
minimising termination of employment for reasons of an economic,
technological, structural or similar nature might include, inter
alia, ... internal transfers, training and retraining ....' (Emphasis
added.)’
[2]
[67]
On the probabilities, if the training issue and the AA rate
applicable to De Almeida’s vehicle, as
orally agreed, had been
included in the written terms and conditions of the marketing
executive post, De Almeida would not have
rejected the offer of the
post as an alternative to retrenchment and accordingly there would
have been no need to retrench her.
Insofar as De Almeida’s poor
articulation of the reasons for her apparent turnaround from the
second consultation meeting
might have contributed to the confusion
about what was being rejected, she must bear some of the
responsibility for that and this
is dealt with under the compensation
awarded.
[68]
In conclusion, I am satisfied that De Almeida’s retrenchment
was substantively unfair because on the
evidence, the employer has
failed to establish that De Almeida had unreasonably refused to
accept alternative employment and accordingly
her dismissal could
have been avoided.
Procedural fairness
[69]
It was submitted on the basis of the failure of Reeflords to act in
good faith in not resolving the written
terms of the Marketing
position, that the whole consultation process was a sham and not done
in good faith. It is true that Reeflords
should have embarked on
consultations before reallocating her duties in the sales department
to Cheng and Zhang because that action,
in and of itself, made her
existing post redundant and raised the possibility of her
retrenchment if an alternative could not be
found.
[70]
However, I do not think that the entire process after that was a
sham. Rather, the company was prepared to
offer the alternative
position, which was a genuine post as evidenced by other persons
occupying it after De Almeida was dismissed.
Where matters went
seriously awry was when the issues agreed upon in the second
consultation meeting were not reduced to writing.
The confusion
between what had been agreed orally and what was reduced to writing
appeared to provide Reeflords with an opportunity
not to retain De
Almeida. It was obvious that rivalry existed between De Almeida
and Cheng and that Cheng had limited enthusiasm
to actively try and
retain De Almeida. In short, during the first two consultations, the
process had the hallmarks of a
bona fide
consultation process,
but this broke down during the last consultation meeting where
Reeflords no longer pursued a joint consensus
seeking agenda. To this
extent and bearing in mind that the consultation process ought to
have commenced before making her post
redundant, De Almeida’s
dismissal was procedurally unfair.
Relief and costs
[71]
De Almeida did not seek reinstatement. Consequently, it is only
necessary to determine how much compensation
the applicant is
entitled to. There was effectively consensus on retaining De Almeida,
but no attempt was made to rectify the situation
when the discrepancy
between the oral undertakings and written undertakings came to light.
At this point, Reeflords had acted in
bad faith. De Almeida’s
retrenchment ought to have been avoided.
[72]
Although Reeflords bears the primary responsibility for not trying to
ensure that De Almeida’s dismissal
was avoided, De Almeida’s
less than clear representations after the second consultation and
jettisoning her representative
at an advanced stage, helped to
exacerbate the difficulty of resolving matters. Another factor
bearing on the compensation to be
awarded is that the applicant only
started working for Reeflords in February 2015.
[73]
The time taken to lead evidence in De Almeida’s case in
respect of the claim of automatically
unfair dismissal was limited,
but she ought to have abandoned that claim at the end of her own
evidence without Reeflords having
to argue for absolution.
Accordingly, law and fairness dictate an apportionment of costs.
Order
[1]
Within 15 days’ of the date of this judgment, the respondent
must pay the applicant
compensation in the amount of six months’
remuneration amounting to R 132,000.00
[2]
The respondent must pay the applicant’s costs save that the
applicant must pay the
respondent’s costs incurred in preparing
and presenting argument in the application for absolution.
_______________________
R
G Lagrange
Judge
of the Labour Court of South Africa
APPEARANCES
For
the Applicant:
M
L Mashele instructed by Cliffe Dekker Hofmeyr Inc
For
the Respondent:
M
A Lennox instructed by Birch-Stewart-Jordan Attorneys
[1]
(2007) 28
ILJ
2531 (LAC).
[2]
At
2354.