THE LABOUR APPEAL COURT OF SOUTH AFRICA , CAPE TOWN
Not reportable
Case no: CA 04/2024
In the matter between:
VISHAL JANYNARAYAN First Appellant
VINORJOHANNESAN PILLAY Second Appellant
HENDRIKUS HERBST Third Appellant
and
FUGRO SURVEY AFRICA (PTY) LTD Respondent
Heard: 20 February 2025
Delivered: 6 March 2025
Coram: Savage AJP, Waglay and Davis AJJA
JUDGMENT
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DAVIS, AJA
Introduction
[1] This is an appeal against an award by the court a quo in which compensation
was awarded to the appellants on the basis that their retrenchment had been both
substantially and procedurally unfair . The court a quo found in their favour holding that
respondent ’s conduct w as substantially and procedurally unfair.
[2] Briefly the facts , the essence of which were uncontested, are that the respondent
is a South African based company which is part of an international group of companies.
The r espondent ’s core business is geophysical survey work . It has a counterpart in the
Netherlands which undertakes construction work .
[3] It appears that the appellants , who are construction survey engineers , had been
seconded to the Netherlands entity but when Covid -19 occurred much of this work
terminated and their secondment was cancelled.
[4] The respondent , which had no construction work in South Africa, was thus
unable to utilise the services of the appellants . It thus embarked on a process of
consultations prior to their ultimate dismissal for operational requirements .
[5] In his judgment La grange J found that the macro- economic conditions
confront ing the respondent were such that ‘ the immediate consequences ( thereof ) was
that planned projects were cancelled or postponed indefinitely and existing operations were restricted by the limitations and free movement of staff . This effectively meant a
loss of clients . Consequently existing staff compliments exceeded the number of
personnel needed for available work. ’
1 The court a quo observed further that the impact
on the respondent’s business was dramatic as reflected in a reduction of 50% of its
1 Judgement of the court a quo at p. 62.
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work and 65% of its operational revenue. Thus, i t was compelled to cut its work force
proportionately to the amount of available work.
[6] On the basis of these business conditions , the court a quo found that the only
options available to the parties were to consider alternatives to retrenchment. After an
exhaustively careful analysis of the evidence in relation to alternatives to retrenchment ,
the court a quo came to the conclusion that the only viable option, insofar as softening
the blow of retrenchment was concerned, turned on what was referred to as the unpaid
leave alternative. In essence, this involved a proposal that the appellant s be permitted
to work on a freelance basis and that the respondent would market the appellants ’
availability within the group as well as to third parties. T his proposal , included a series of
alternatives which were raised in discussions , all of which were designed to minimise or
eliminate the impact on the wage bill up on the respondent for an indeterminate period.
The essence however of the proposal w as that the appellants be placed on some form
of unpaid leave until such time as fresh work opportunities arose. This could have
constituted either a partial reduction in their salaries , increasingly longer periods of
unpaid leave with or without provision of the costs of medical aid and provident fund
benefits.
[7] It was this proposal, in the view of the court a quo, which constituted the only
viable option. As Lagrange J stated, this proposal ‘would have cost Fugr o SA nothing
and would have staunched the flow of any unfunded remuneration costs immediately ,
albeit temporarily . It would have given both parties more time to explore pending work
opportunities and see if they materialised . In the circumstances it is odd that Fugro SA
did not seize on this option at least on a trial basis.’
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[8] For this reason, the court a quo found that there had been a failure to implement
a viable alternative to retrenching the appellants in that this proposal held the potential
of prolonging the paid employment of the appellants which would have been to the
benefit of all parties . To the extent that this particular proposal was not considered
2 Judgement of the court a quo at para 78.
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favourably by the respondent , it, in the view of the court a quo, justified the conclusion
that the retrenchments were substant ively and procedurally unfair.
The appeal
[9] The essence of the appeal against the order of the court a quo is that it failed to
exercise its discretion judicially. In particular, it was contended that there was a failure to
consider the appellants ’ length of service and the hurt caused to them . Further the
justification offered by the court a quo was ‘terse’ and hence constituted a failure to
provide proper reasons.
[10] It is important to emphasise that the decision to award compensation in a case,
such as the present one, is a discretionary one to be taken by the court a quo. An
appellate court has a limited basis to interfere . As this Court said in Zeda Car Lensing
(Pty) Ltd t/a Avis Fleet v Van Dyk 2020 (6) BCLR 549 (LAC):
‘It is impossible, and undesirable to attempt to arrive at a formula of how much
compensation should be awarded for any specific type of unfairness, and as
such there is not much value in comparing compensation awarded in other cases
with what was awarded in this instance.
This court held that:
Awards of compensation, like awards of damages in civil matters, are b y their
nature matters of estimation and discretion, and hence appellate courts should
hesitate to interfere with such awards which are necessarily “somewhat rough and ready”. An appellate court should not simply substitute its own award for that
of the trail court. However, an appellate court will interfere where there has been
an irregularity or misdirection such as considering irrelevant facts or ignoring
relevant ones; or where the decision was based on totally inadequate facts resulting in there being no sound or reasonable basis for the award. Where there
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is a substantial variation or a striking disparity between the award made by the
trial court and the award that the appeal court considers ought to have been
made on its own assessment, the award will be unreasonably and the appeal
court is entitled and obliged to interfere. ’3
[11] As noted, La grange J provided detailed and a carefully constructed analysis of
the various proposals raised to present retrenchments. There is simply no plausible, let
alone justifiable basis , to interfere with his findings to the effect that the leave proposal
was the viable one and there had been inadequate engagement from the respondent in
this connection; hence the finding of substantive and procedural unfairness ; with the
consequence of the award of compensation. A s the leave pay option was, at best, a
very limited form of relief, limited compensation was clearly a justifiable decision.
[12] Hence within the context , of the facts of this case, the award made is
unassailable on appeal. Indeed the only troubling question is why leave to appeal was granted.
[13] Accordingly, the following order is made
Order
1. The appeal is dismissed with no order as to costs.
D. Davis
Acting Judge of the Labour Appeal Court
Savage AJP and Waglay AJA agree.
APPEARANCES:
3 At para 31.
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FOR THE APPELLANT: Adv CS Bosch
Instructed by Herold Gie Attorneys
FOR THE RESPONDENT: Adv L Myburgh
Instructed by Greenberg & Associates