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[2020] ZALCJHB 43
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National Union of Metalworkers of South Africa (NUMSA) obo Members and Another v South African Airways (SOC) Ltd and Others (J149/20) [2020] ZALCJHB 43; [2020] 6 BLLR 588 (LC); (2020) 41 ILJ 1402 (LC) (14 February 2020)
THE
LAOUR COURT OF SOUTH AFRICA, JOHANNESBURG
Not
Reportable
case
no:
J
149/20
In
the matter between:
NATIONAL UNION OF
METALWORKERS
OF
SOUTH AFRICA (NUMSA) obo MEMBERS First
Applicant
SOUTH AFRICAN CABIN
CREW ASSOCIATION
(SACCA)
obo MEMBERS Second
Applicant
And
SOUTH AFRICAN AIRWAYS
(SOC) LTD
(IN
BUSINESS
RESCUE) First
Respondent
LES
MATUSON
N.O. Second
Respondent
SIVIWE
DONGWANA N.O. Third
Respondent
AVIATION
UNION OF SOUTH AFRICA (AUSA) Fourth
Respondent
NATIONAL
TRANSPORT UNION (NTM) Fifth
Respondent
SOUTH
AFRICAN AIRLINE PILOTS
ASSOCIATION
(SAAPA) Sixth
Respondent
SOUTH
AFRICAN TRANSPORT AND
ALLIED
WORKERS UNION (SATAWU) Seventh
Respondent
SOLIDARITY
TRADE UNION (SOLIDARITY) Eighth
Respondent
NON-UNIONISED
EMPLOYEES
Ninth to Further Respondents
Heard
:
13 February 2020
Delivered
:
14 February 2020
Summary:
Application to compel consultation and or follow a fair procedure
in terms of section 189A (13) of the LRA. Parties are in dispute
as
to whether a dismissal has been contemplated within the meaning of
the provisions of section 189 of the LRA. The issue whether
the
application was authorised within the contemplation of section 133 of
the Companies Act not dealt with given the view taken
at the end.
Conclusions – a dismissal was not contemplated and the duty to
consult did not arise. The procedure contemplated
in section 189A
(13) of the LRA is unavailable to the applicant. There is no basis to
declare any action to be unlawful and to
issue an injunction. Held
(1): The application is dismissed. Held (2): There is no order as to
costs.
JUDGMENT
MOSHOANA, J
Introduction
[1]
This
opposed application rotates on two fulcrums. The first is whether
this Court is authorised to entertain this application despite
the
gag imposed by section 133 of the Companies Act
[1]
.
The second is whether the employer has contemplated retrenchment to
give rise to the obligation to consult within the meaning
of section
189 (1) of the Labour Relations Act, 1996, as amended (“the
LRA”). Given the view I take at the end it is
unnecessary to
decide the first issue. The first point was raised as a
jurisdictional point. In truth, it is not, it is, in my
view, the
issue of authorisation. This court retains jurisdiction under section
189A (13) of the LRA on applications of this nature.
I take a view
that once a conclusion is arrived at that no dismissal is
contemplated, that is the end of the matter for the applicants.
Background
facts
[2]
It is unnecessary to meticulously deal with
all the facts of this matter. For the longest of time the South
African Airways (“SAA”)
has been ailing and limping
financially. It depends on bail outs from the government. In an
attempt to address its quandaries,
the management of SAA opted for a
section 189 process, which would have seen around 900 employees
losing their jobs. Whilst the
section 189 process was on course, a
strike action hit the SAA. Such an action culminated into a
collective agreement which deferred
the retrenchment process to
sometime in January 2020.
[3]
During the deferment period, the Board of
SAA resolved to invoke the provisions of the Companies Act. Around
December 2019, SAA
went into business rescue within the contemplation
of the Companies Act. One of the decisions taken by the business
rescue practitioners,
which ignited the present application, was to
cancel certain routes operated by the SAA. The decision was taken and
announced around
06 February 2020. What further ignited and
fast-tracked the present application was the briefings that occurred
in order to explain
the impact of the decision to cancel the routes.
According to the applicants, employees in Durban and Cape Town were
informed that
as a result of the decision to cancel the routes, come
1 March 2020, the employees would be dismissed for operational
reasons.
Owing to that, the applicants took a view that the business
rescue practitioners are intent to dismiss their members without
following
the provisions of section 189 of the LRA. Given that view,
on 09 February 2020, the applicants launched the present application,
to be heard on 13 February 2020. Some respondents, filed notices to
abide. However, SAA opted to oppose the application. After
listening
to arguments, judgment was reserved to be delivered on 14 February
2020.
Evaluation
[4]
As pointed out above, this Court retains
jurisdiction to entertain applications of this nature by virtue of
the provisions of section
189A (13) of the LRA. The first issue,
requiring an interpretation of section 133 of the Companies Act,
shall not decidedly be
entertained in this judgment, since my
conclusions on the factual question whether retrenchment is
contemplated is dispositive
of this matter either way.
[5]
It is common cause that in November 2019, SAA
contemplated a dismissal for operational reasons. It is also common
cause that the
process was deferred in respect of certain categories
of employees and in others, it was simply never proceeded with after
SAA
went into business rescue.
[6]
It is further common cause that SAA went into
business rescue in December 2019. Once a company undergoes business
rescue, certain
legal implications arise. One such implication is the
temporary supervision of the company and the management of its
affairs, business
and property. A person known as a business rescue
practitioner (“the BRP”) is appointed to oversee a
company during
business rescue proceedings. During business rescue,
the terms and conditions of the employees are insulated.
[7]
As part of the duties of the BRP is the
development of a business rescue plan. In the business rescue plan,
the BRP may contemplate
retrenchment of employees. Section 136 (1)
(b) of the Companies Act, obligates the business rescue plan to
subject itself to the
provisions of section 189 and 189A of the LRA.
In other words, if retrenchment is contemplated in the plan published
by the BRP,
such retrenchment would be subjected to the provisions of
the LRA. In this matter, there is no business rescue plan that has
been
developed suggesting engagement in a retrenchment process. On
this basis alone, there is merit in a submission that this
application
is premature. A company that is under business rescue,
can only contemplate retrenchment in a statutory document known as a
business
rescue plan. In my view, the retrenchment process
contemplated by SAA before business rescue proceedings has since
become obsolete.
[8]
Regard being had to the salutary provisions of
section 136 (1) (b) of the Companies Act, if the business rescue plan
would suggest
a retrenchment process, sections 189 and 189A would
have to kick in. Since there is no business rescue plan in place, it
is only
speculative to suggest that a retrenchment exercise would be
considered.
[9]
It appears to be the applicants’ view that
the notice of 6 February 2020 contemplates retrenchment. In my view,
it is not.
However, of importance, the notice is not a business
rescue plan, nor was it contended in argument that it is. The bulk of
Mr Ngcukaitobi’s,
who appears for the applicants, argument was
that retrenchment was contemplated. This assertion that SAA
contemplates retrenchment
is vehemently disputed by SAA. If a
business rescue plan was presented, it would be easy to deal with
this dispute of fact. The
contents of the business rescue plan would
have presented a
res ipsa loquitur
.
Thus absence of a business rescue plan resolves the dispute in favour
of SAA.
[10]
It becomes unnecessary to apply the
Plascon-Evans
rule. However, with reference to the replying affidavit, the
applicants persistently make the point that this Court must on the
basis of that return a finding that SAA contemplated retrenchment. To
this, firstly, it is trite law that in motion proceedings
a party
makes its case in the founding papers. Confronted with this
principle, the applicants’ counsel argued that such a
case is
foreshadowed in their founding papers. I disagree. What was
foreshadowed in the founding affidavit, which is pertinent
to the
issue in the dispute of fact, was the following:
“
62
The aforesaid
announcement
invariably
includes imminent
massive dismissals
and it is reiterated that the first, second
and third respondents
are on record
that mass retrenchments
are imminent.
63
In fact, employees based in Durban and Cape Town were subsequently
addressed by their
local management and
advised of the fact that
they were to be retrenched as from March 2020…
64
Since the deferment of the section 189A consultations on 22 November
2019
no
attempt whatsoever was made to restart such consultations…”
[2]
[11]
This case as foreshadowed in the paragraphs above
seeks to suggest that the retrenchment was contemplated and recorded
in the announcement.
I already found that the announcement is not a
business rescue plan. Further, it seeks to suggest that some “local
management”
have orally contemplated retrenchment which is to
occur from March 2020. The pleaded case specifically distances the
“deferred”
consultation process from this alleged
contemplated retrenchment. Differently put, this Court must not be
under an illusion that
the announcement was a restart of the deferred
process. On their own version, there is no connection between the
announcement and
what occurred before the deferment. Therefore, I
accept and agree that there is no connection between what SAA did
before business
rescue and the announcement by the BRP.
[12]
Assuming for a moment that the announcement
equates to a business rescue plan, then in line with section 189 (1),
the employer,
being SAA must firstly, in regard to the textual
meaning of the section, contemplate dismissal for reasons based on
its operational
requirements. The evidence of SAA is that it has not.
The Applicants’ counsel urged this Court to reject this
evidence regard
being had to the objective facts. I am not persuaded.
In my view, no court of law can contemplate a decision to dismiss on
behalf
of an employer. A contemplation must be an unequivocal
business decision of an employer. There are judgments of this Court
and
the Labour Appeal Court which decreed that a commercial rationale
of an employer cannot be second-guessed by a Court of law. That
being
the case, how can this Court say to SAA, as a Court I am entitled to
conclude that you are contemplating dismissal for operational
reasons. That would be nothing but judicial overreach.
[13]
It
ought to be remembered that an employer is entitled to undergo
certain processes, which in the eye of a third party like this
Court
perhaps and or the applicants may attract the duty to consult. That
is not the consultation envisaged in section 189 (1)
of the LRA. The
one envisaged in that section requires the SAA to formulate a view
that it must dismiss some of its employees.
Once that view is
formulated, which is a contemplation
[3]
in my view, then the duty to consult arises. The dictionary meaning
of the word contemplates is to look at attentively and thoughtfully,
to consider carefully and at length or to have in mind as an
intention or possibility. Therefore, how can a court conclude that
SAA contemplates dismissal? It cannot, even if it accepts the
invitation of the applicants’ counsel to conduct an objective
evaluation.
[14]
The myth that must be dispelled with adequate
immediacy is that it does not axiomatically follow that an
announcement of cancelling
routes in of itself is written the word
“retrenchment” in bold all over it. The announcement
notice said amongst others
the following:
“
In line with SAA’s
commitment to take urgent action to
conserve
cash
, and
create a viable platform for a successful future
, key measures
need to be implemented now.
These
measures
include targeted changes to the route network…”
[15]
It is not difficult to fathom that the
announcement to change the route network was actuated by the need to
conserve cash and to
create a viable option for a successful future.
It is not smoke and mirrors as contended for by the applicants’
counsel.
To a point that this Court rejects the evidence that no
retrenchment is contemplated by an act of the cancellation of routes.
At
a superficial level, one may wrongly conclude that cancellation of
routes inevitably leads to possible dismissals. However, what
the LRA
requires to bolster the superficial thinking, is the unequivocal
careful consideration and a possible intention to dismiss
on the part
of the employer as a result.
[16]
The applicants’ counsel correctly conceded
that if there is no contemplation to dismiss, the legal duty to
consult does not
arise. On the facts of this case, as presented, this
Court comes to a palpable conclusion that SAA has not contemplated
dismissal
and as such the duty to consult does not arise.
[17]
The section 189A (13) procedure, is reserved for
consulting parties. Since I hold a view that the duty to consult has
not manifested
itself, it follows that this application must fail.
With regard to costs, this Court retains a wide discretion. I do not
believe
that a cost order is warranted in this matter. The case
relating to a contractual right to be placed on the training lay-off
scheme
was not pursued with any vigour before me. However, in terms
of the applicants’ notice of motion its fate was dependent on
the Court compelling a consultation process.
[18]
In summary, it is this Court’s conclusion
that SAA has not contemplated dismissal and the duty to consult
within the contemplation
of section 189 (1) of the LRA did not arise.
The procedure in section 189A (13) is available to consulting parties
and since the
duty to consult has not arisen, the powers of this
Court to compel a fair procedure and or interdicting and restraining
SAA are
severely circumscribed.
[19]
For all the above reasons, the application must
fail.
[20]
In the results I make the following order:
Order
1.
The application is dismissed
2.
There is no order as to costs.
_______________________
G. N. Moshoana
Judge
of the Labour Court of South Africa
Appearances
For the Applicants:
Mr T Ngcukaitobi
Instructed
by: Minnaar
Niehaus Attorneys, Port Elizabeth.
For the Respondent: Mr
A Redding SC with him Mr V Mndebele
Instructed
by: ENS
Attorneys, Sandton.
[1]
Act 71 of 2008
[2]
See the founding affidavit at page 21.
[3]
See
Atlantis
Diesel Engine (Pty) Ltd v Numsa
199 (3) SA 22
(A).