About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Johannesburg Labour Court, Johannesburg
SAFLII
>>
Databases
>>
South Africa: Johannesburg Labour Court, Johannesburg
>>
2025
>>
[2025] ZALCJHB 292
|
|
Nagapan v Yum Restaurants International (Pty) Ltd ta KFC (JS227/21) [2025] ZALCJHB 292 (25 March 2025)
FLYNOTES:
LABOUR
– Dismissal –
Operational
requirements –
Inadequate
consultation process – Failed to provide sufficient time for
employees to prepare for consultations –
Rejected
counterproposals without justification – Inadequately
explained selection criteria – Rendered process
procedurally
unfair – Genuine rationale for restructuring accepted –
Substantive unfairness arose from flawed
application of selection
criteria – Failure to justify decisions – Dismissal
substantively and procedurally unfair
–
Labour Relations Act
66 of 1995
,
s 189.
THE
LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG
Not
Reportable
Case
No: JS227/21
In
the matter between:
SHARLENE
NAGAPAN
Applicant/Plaintiff
and
YUM
RESTAURANTS INTERNATIONAL (PTY) LTD
t/a
KFC
Respondent/Defendant
Heard:
9 to 12 September 2024
Closing
arguments filed: 27 September 2024
Delivered:
24 March 2025
JUDGMENT
PHEHANE,
J
Introduction
[1]
The applicant brings this referral to seek an order declaring her
dismissal from the respondent for operational requirements
as both
substantively and procedurally unfair and seeks compensation
equivalent to nine months’ salary. The respondent opposes
this
referral and contends that the applicant’s dismissal was fair
and in the premises. The respondent seeks an order that
the referral
be dismissed with costs.
Background
[2]
The respondent, KFC, is part of a global company known as Yum!
Restaurants based in the United States of America, which
has various
brands across the world, including KFC. Approximately 50 KFC
restaurants are owned by Yum! and are referred to as equity
stores.
The majority of restaurants are franchises.
[3]
It is common cause that
the Human Resources (HR) division of the respondent, prior to the
restructuring, comprised HR partners that
supported various franchise
partners in South Africa and in the rest of the sub-Saharan Africa
region called ROSSA. At that point
in time, the HR support team in
the respondent comprised three employees, being the applicant and Ms
Unathi Ncunyana, who occupied
the two HR Field Manager roles, and Ms
Lizelle Revell, who occupied the HR business partner role. In April
2020, the effect of
the COVID-19 pandemic brought about a need for
the respondent to review its HR division. To this end, the respondent
announced
that Ms Ncunyana’s role would be to provide HR
support to ROSSA Franchisees and HR Leads; the applicant’s role
would
be to provide HR support to SA Franchisees and HR Leads, and Ms
Revell’s role would be to provide HR support to SA Franchisees
and HR Leads. The changes that were to be implemented were to be of a
temporary duration, from 29 April 2020, for the duration
of the
pandemic.
[1]
[4]
A week prior to 31 August
2020, Global Business communicated a need for structural change in
the entire organization aligned to
its business strategy.
[2]
The result of this structural change is that the two HR Field Manager
roles were collapsed into one role, resulting in two roles
in the HR
function. Following consultation meetings on 5, 8 and 13 October
2020, the applicant and Mesdames Ncunyana and Revell
competed for
these two available roles. The applicant was not successful and was
ultimately dismissed on 30 November 2020.
Evidence
[5]
Ms Akhona Qengqe, General Manager for the respondent, gave evidence
on behalf of the respondent. The applicant gave evidence
on her own
behalf.
[6]
Ms Qengqe confirmed that the applicant’s role prior to the
structural change was an HR Field Manager role. In this
role, the
applicant supported both the South African and ROSSA Franchisees.
When the changes were implemented, the new HR Field
Manager role was
to only support South African Franchisees. The role of the HR Field
Manager was to ensure that Franchisees follow
HR policies and
procedures and that the people strategy in the Franchisees aligns
with the global YUM! and KFC strategy.
[7]
Ms Qengqe referred to the
notification by the respondent’s then General Manager, Rudi van
Schoor on 31 August 2020, when he
informed staff of the Restaurant
Support Centre (RSC) of the upcoming organizational restructure
driven by the global business
and that there was no clarity at that
point what this would entail for Africa.
[3]
[8]
Staff who were within the
scope of the
restructure
received letters in terms of
section 189(3)
of the
Labour Relations
Act
[4]
(LRA) on 5 October
2020.
[5]
[9]
On 5 October 2020, Mr.
van Schoor took the staff through a presentation
[6]
incorporating the rationale for the restructure, which was to ensure
that the structure of the organization would deliver on the
organization’s strategy based on five strategic elements that
were common across the global business.
[7]
The global business needed the right capabilities with digital skills
to deliver its strategy. This presentation was followed by
functional
meetings with staff to discuss what the new structure would look
like. Ms Qengqe explained that when KFC became aware
of the
restructure that was on the horizon, cost-saving interventions were
implemented – vacancies were frozen, and early
retirement was
considered along with critical skills retention.
[10]
Ms Qengqe stated that the first consultation meeting took place on 5
October 2020. She referred the Court to page 7 of
the trial bundle,
which shows the following agenda items for the meeting of 5 October
2020:
‘
1.
Alternatives explored and potential impact on our people
2.
Time frames
3.
Proposed severance benefits
4.
Proposed criteria to be applied; and
5.
Proposed team structure.’
[11]
The second consultation
took place on 8 October 2020 for the staff to present proposals.
However,
the evidence was that this online meeting was only for the duration
of 39 minutes and 42 seconds.
[8]
[12]
The third and final team
consultation took place on 13 October 2020 where the respondent
considered the counterproposals made and
gave feedback to the
employees. The timeline was extended to 21 October 2020 for the
closure of applications, and the impacted
employees were advised of
the one-on-one consultations that were to follow. In an email dated
13 October 2020 at 19:41 pm, Ms Qengqe
confirmed to the impacted
employees that the application process would open on 15 October
2020.
[9]
The counterproposals
received were consolidated by the respondent.
[10]
[13]
After each consultation, on 6, 9 and 14 October 2020, frequently
asked questions (FAQs) were published. The FAQ incorporated
the
consolidated questions asked by staff and answers provided by the
respondent. Ms Qengqe’s evidence was that the FAQs
formed part
of the consultation process.
[14]
Ms Qengqe further stated that on 15 October 2020, one-on-one
consultations were held with the impacted employees, including
the
applicant, where the way forward was discussed on an individual basis
regarding the online application for available roles
from 15 to 19
October 2022. The respondent considered the feedback from employees
that the online application process was too short,
after which the
process was extended to 22 October 2020.
[15]
On 30 October 2020, feedback on the changes was provided to
Franchisees and Global Business.
[16]
The evidence of Ms Qengqe
was
that as there was reduction of roles, the proposed selection criteria
were the following: relevant experience or skills counted
for 40% of
what was considered, relevant qualifications counted for 35%, and
performance counted for 25%.
[11]
With respect to the latter, the performance in the previous year of
2019 was considered. Her evidence was that the selection criteria
were objective. While experience and skills comprised greater
percentages of what was considered, qualifications were critical,
and
it was important to appoint employees who performed well.
[17]
The
current and proposed HR structure was shared with the employees.
[12]
Nine roles were impacted, including the two HR Field Manager roles
and two Equity HR Business Partners, which were each reduced
to one,
as the duplicate roles were reduced to one. The new proposed
structure showed the creation of new roles, including the
HRBP
Franchise role, which supported South African franchises and a junior
HRBP Equity role. There were also changes in reporting
lines. The two
HR Field Manager roles became the HR Field Manager ROSSA role, as the
South African and ROSSA markets are
separate, and therefore,
there was a need for a strategic role to support the ROSSA region.
The applicant applied for both the
HR Field Manager ROSSA role, a
level 10 role and the HRBP Franchise role, a level 8.
[13]
Staff were restricted to apply for two roles only.
[18]
Ms Qengqe sent an email
to staff on 5 October 2020 at 17:31 pm
[14]
incorporating the old and proposed structure. On 6 October at 08:07
am, the applicant responded to this email and
inter
alia,
sought
clarity
regarding the application of the selection process and inquired
whether it would be possible to share the proposed structures
to aid
in decision-making of which roles would be most suitable for her to
apply for. The applicant also sought clarity on the
composition of
the new HRBP Franchise role.
[15]
In response to the applicant’s queries, Ms Qengqe stated that
the respondent would reply through the FAQs. She referred to
such
FAQ, which was posted on 6 October 2020,
[16]
where the response by the respondent to the consolidated questions,
including that of the applicant, were as follows:
‘
10.
What
is the process for applying for roles where there are more people
than roles?
Once the consultation
process has been concluded, affected individuals will be invited to
submit an expression of interest setting
out their 1
st
and 2
nd
preference for roles. A desktop
exercise, based on the expression of interest and applying the
proposed election criteria,
will be done to determine the best fit
for the role.
…
16.
Will it be possible to share the other proposed
structure so as to assist me in deciding which roles to apply for?
Once the consultation
process has been completed on the 13
th
October, all
affected individuals i.e. individuals whose roles are confirmed as
impacted in the final structure within their function,
based on the
availability of suitable roles in a different function, may be
considered. The aim will be to limit the impact within
the Function
first before opening up for people from other functions.
17.
Please clarify how the selection process will
work.
The proposed criteria as
shared in the 1
st
Engagement is as follows; Experience,
Qualifications, Performance. These criteria are subject to any
counter proposals that the
business may receive during the
consultation process.’
[19]
On 8
October 2020, following the second consultation meeting, the
applicant sent an email to Ms Qengqe, in which the applicant
inter
alia
,
provided several counterproposals, asked questions relating to the
proposed structure, and sought
clarity
on
the weighting of the selection criteria, demotions, bonus payments,
and the short timeline.
[17]
[20]
On 9
October
2020, the
respondent replied in the FAQ as follows with respect to the
applicant’s query on the application of the selection
criteria:
‘
11.
Please provide more clarity on the proposed selection criteria. Will
the 3 elements (Experience (40%)
/ Qualification (35%) / Performance
(25%)) that have been presented have a weighting to them?
Yes the 3 elements in the
selection criteria are proposed to be weighted as presented on the
5
th
October as follows:
Experience (40%)
Qualification (35%) Performance (25%)
Once
agreed on, or at least attempts have been made to agree on, the
selection criteria will be applied in the case where there
are more
people than roles available.’
[18]
[21]
The applicant’s other queries were also
responded to in the FAQs posted on 9 October 2020.
[22]
Following
the applicant’s one-on-one session
on 15 October 2020, the applicant sent an email to Ms Qengqe
requiring clarity on the proposed
structure, selection criteria,
demotion, redeployment, an option for affected employees to purchase
cell phones and laptops, and
timelines. Ms Qengqe’s evidence is
that these counterproposals were a repetition of what had already
been canvassed in the
team consultation process.
[23]
Following
the applicant’s termination notice dated 26 October 2020, when
she was unsuccessful in the two roles that she applied
for, the
applicant posed further questions to Ms Qengqe seeking clarity on why
she was not successful in the two positions she
had applied for, as
she had more experience than what was required. The applicant also
wanted to understand what rating scale was
used. Ms Qengqe referred
to the scoring sheet
[19]
in
the application process, which revealed that the applicant’s
qualifications were in line with the expectations of both
roles,
however, her
limited
experience
in ROSSA and average performance put her at a disadvantage in respect
of both roles. Ms Qengqe also clarified to the
applicant that a scale
of 1 to 10 was used and although the applicant was a strong
candidate, the best fit for the role was considered.
[20]
In this regard, Ms Qengqe stated that the level 8 role of HRBP
Franchise is a junior role and is more operational than strategic.
The successful candidate in this role, Ms Revell, worked in the role
since the COVID-19 temporary changes, and her experience was
more
relevant. In relation to the HR Field Manager role, although the
applicant had 15 years of experience, the successful candidate,
Ms
Ncunyana, had more KFC and ROSSA experience than the applicant.
[24]
During
cross-examination, it
was
put to Ms Qengqe that the consultation on 5 October 2020 was not
meaningful in that the employees were called to the first
consultation on the day they received the
section 189
notice
[21]
and could not provide input. Ms Qengqe had no comment to what was put
to her. It was further put to her that the employees complained
that
information was inadequate
and
not
freely shared, and they did not have a full view of the available
vacancies for which they could apply. Ms Qengqe could not
dispute
this. Ms Qengqe did not dispute that the respondent could not share
the other structures and stated that this could not
be done until the
structures had been finalised.
[25]
It was further put to Ms Qengqe that the applicant
queried the responsibilities of the ROSSA role and asked whether the
role could
be broadened, and in response was only told about the
structure
afte
r
the consultations and could not make any input. Ms Qengqe responded
that the consultation was kept in the function to minimise
the impact
of the restructuring. It was put to her that it is little comfort for
an employee whose job is impacted to be unable
to consult on
unavailable positions only to be told about the structure at the time
when the consultations had ended. Further,
there was no consultation
on employees being limited to applying for two roles. Ms Qengqe
admitted that this was not considered
during the consultation and it
was only considered after the consultation.
[26]
Ms Qengqe was challenged during cross-examination
that the FAQs did not comprise proper consultation, to which she
responded that
the consultation was to obtain inputs. Ms Qengqe
disagreed and stated that the engagements were meaningful. Ms Qengqe
admitted
that the one-on-one consultation was not part of the
consultation process as the consultation process ended on 13 October
2020,
and this is common cause. It was put to Ms Qengqe that the
alternatives that the respondent considered to dismissal were
irrelevant
as they had nothing to do with the advancement of the
strategic or structural changes. Ms Qengqe disagreed. Ms Qengqe
stated that
the selection criteria were objective.
[27]
The
evidence of the applicant was that in her role
as HR Field Manager, she oversaw the franchisees in South Africa and
the ROSSA markets
for a period of three years. Following the
temporary changes due to the COVID-19 pandemic, in 2020, she was
allocated only to oversee
the South African franchisees. She
confirmed her experience as a human resources generalist, operations
manager and senior HR business
partner. After her retrenchment, she
obtained a consulting role in a franchisee and was paid an eighth of
her previous total earnings
and it is only in July 2024 that she came
to earn the salary that she earned in 2020. The applicant further
confirmed her qualifications
as being a BCOM degree in human resurces
management, marketing and IT, a BCOM honours degree in human resource
management and a
master's degree in business administration with a
dissertaion in human
[28]
According to the applicant, only two consultation
meetings were held, the first being on 8 October 2020 and the second
on 13 October
2020. Her evidence was that on 5 October 2020,
information was shared only, and she could not reasonably consult on
the content
of the
section 189
LRA notice later on the same day. At
the next meeting on 8 October 2020, which meeting lasted online for
approximately 30 minutes,
a number of questions were posed by the
employees. It was the evidence of the applicant that the engagement
on 8 October 2020 was
not open and welcoming, and that the respondent
was not open to listening to the views of the impacted employees.
Given the duration
of the meeting, the applicant stated that this
consultation was not meaningful. According to the applicant, a more
meaningful engagement
would entail listening to the proposals of the
employees as opposed to posting FAQs where there is no engagement.
The applicant
stated that, still to this date, she is uncertain as to
what the rating scale was that was used by the respondent in the
selection
process.
[29]
The applicant confirmed that she was comfortable
with the percentages as proposed by the respondent but was not clear
on what the
rating scale was. She confirmed that in her question, she
wanted to understand how the respondent came to this eventual
structure
and that this question remains unanswered today. Further,
she wanted to understand how the selection criteria worked, but no
meaningful
engagement took place, and therefore, she did not
understand how the selection criteria were applied.
[30]
Her further evidence was that she inquired
post-retrenchment how employees would obtain the list of vacancies,
and this was not
responded to. The applicant further denied
being consulted on the appropriate alternatives to dismissal. She
stated that
the alternatives, in any event, were not linked to the
structural change, which was the respondent’s rationale of the
change.
She stated that the burning issue in the retrenchment process
was the application of the selection criteria. The applicant was
adamant that she had more experience than the successful candidates,
and she stated that there was no input in respect of what the
job
descriptions would be in the new structure.
[31]
The evidence of the applicant was that during her
one-on-one meeting with Ms Qengqe on 15 October 2020 after the
consultations had
closed, this was the only opportunity for her to
clarify the available roles in respect of experience and to ask
questions and
during this one-on-one meeting. Ms Qengqe did not
inform her that she was overqualified for the HRPP franchise role.
With respect
to the evidence of Ms Qengqe that it was an oversight on
the part of the respondent not to invite the applicant to apply for
the
available role post her retrenchment, and she stated that she was
denied the opportunity to apply for this role. The applicant stated
that had she known that she was overqualified for the HRBP franchise
role, she would have reconsidered her application.
Evaluation
Was
the dismissal of the applicant procedurally fair?
[32]
The
Code
of
Good
Practice on Dismissal based on Operational Requirements
[22]
(Code) reads as follows:
‘
(1)
The
Labour Relations Act &hellip
; (“the Act”) defines a
dismissal based on the operational requirements of an employer as one
that is based on the economic,
technological, structural or similar
needs of the employer. ... As a general rule, economic reasons are
those that relate to the
financial management of the enterprise.
Technological reasons refer to the introduction of new technology
which affects work relationships
either by making existing jobs
redundant or by requiring employees to adapt to the new technology or
a consequential restructuring
of the workplace. Structural reasons
relate to the redundancy of posts consequent to a restructuring of
the employer's enterprise.
…
(3)
The obligations placed on an employer are both procedural and
substantive. The purpose of consultation
is to enable the parties, in
the form of a joint problem-solving exercise, to strive for consensus
if that is possible. The matters
on which consultation is necessary
are listed in
section 189
(2). This section requires the parties to
attempt to reach consensus on, amongst other things, appropriate
measures to avoid dismissals.
In order for this to be effective, the
consultation process must commence as soon as a reduction of the
workforce, through retrenchments or redundancies, is contemplated
by
the employer, so that possible alternatives can be explored. The
employer should in all good faith keep an open mind throughout
and
seriously consider proposals put forward
.
(4)
The Act also provides for the disclosure by the employer of
information on matters relevant to the consultation
. Although the
matters on which information for the purposes of consultation is
required are specified in section 189(3), the list
in that section is
not a closed one. If considerations other than those that are listed
are relevant to the proposed dismissal
or the development of
alternative proposals, they should be disclosed to the consulting
party….
(5)
The period over which consultation should extend is not defined in
the Act. The circumstances
surrounding the consultation process are
relevant to a determination of a reasonable period. Proper
consultation will include:
(a)
the opportunity to meet and report back to employees;
(b)
the opportunity to meet with the employer; and
(c )
the request, receipt and consideration of information.
(6)
The more urgent the need by the business to respond to the factors
giving rise to any contemplated
termination of employment, the more
truncated the consultation process might be. Urgency may not,
however, be induced by the failure
to commence the consultation
process as soon as a reduction of the workforce was likely. On the
other hand, the parties who are
entitled to be consulted must meet,
as soon, and as frequently, as may be reasonably practicable during
the consultation process.
(7)
If one or more employees are to be selected for dismissal from a
number of employees, the Act
requires that the criteria for their
selection must be either agreed with the consulting parties or, if no
criteria have been agreed,
be fair and objective criteria.
…
(9)
Selection criteria that are generally accepted to be fair include
length of service, skills and
qualifications. Generally the test for
fair and objective criteria will be satisfied by the use of the “last
in, first out”
(LIFO) principle. …
Exceptions may also
include the retention of employees based on criteria mentioned above
which are fundamental to the successful
operation of the business.
These exceptions should, however, be treated with caution.
…
(12)(1)
Employees dismissed for reasons based on the employer’s
operational
requirements should be given preference if the employer
again hires employees with comparable qualifications, subject to:
(a)
the employee, after having been asked by the employer, having
expressed within a reasonable time
from the date of dismissal a
desire to be rehired.
(b)
a time limit on preferential rehiring. The time limit must be
reasonable and must be the subject of consultation.
(2)
If the above conditions are met, the
employer must take reasonable steps to inform the employee
,
including notification to the representative trade union,
of
the offer of re-employment
.’
(Own
emphasis added)
[33]
A notice in terms of section 189(3) of the LRA
commences a retrenchment process.
In
casu
, this notice
was issued to the impacted employees on 5 October 2020, the same date
on which the first consultation was held. However,
the reduction of
the workforce through redundancies was contemplated in the week prior
to 31 August 2020, with the leadership team
alignment session held on
30 September 2020.
[34]
It is
common
cause
that the date of 5 October 2020 marked the start of the consultation
process.
[23]
[35]
In
NEHAWU
v Medicor (Pty) Ltd t/a Vergelegen Medi-Clinic
,
[24]
this Court held that a notice in terms of section 189(3) of the LRA
must be given a reasonable time before the
commencement
of
the consultations.
[36]
In
Louw
v Micor Shipping
[25]
,
this
Court emphasised the importance of reasonable notice before
commencing consultations as follows:
‘
In my view,
the
failure to give timeous notice to enable the applicant time to ponder
her situation and to come up with suggestions on alternatives,
was a
fatal one. The whole structure of section 189 is that there should be
a notification period which enables those to be consulted
to prepare
and be ready to meaningfully take part in the discussions envisaged
in that section. The section envisages meaningful
participation.
There can only be meaningful participation if those consulted have
had enough time to ponder on the reasons provided
as well as to
prepare themselves to ask for information and to make informed
suggestions
.
An employee who does not get the benefit of a notification period is
in no position to meaningfully take part in a proper consultation
process as he or she is given no notice and he attends that meeting
unprepared. In my view, therefore, the dismissal of the applicant
was
procedurally unfair
.’
(Own
emphasis
added)
[37]
In
view of the afore-going, there was insufficient notice to the
employees, including the applicant, to prepare for meaningful
engagement during the first consultation meeting on 5 October 2020.
Having received the notice on 5 October 2020, and being called
to a
consultation meeting on the same date was an ambush, as the applicant
was
not
afforded
a reasonabe oportunity to consider the content of the section 189(3)
notice in order to be prepared to consult meaningfully
in the first
consulation meeting. It is not disputed that the first consultation
meeting on 5 October 2020 was an information-sharing
session and was
for the duration was 38 minutes.
[26]
Therefore, in my view, there was no meaningful engagement on that
occasion to achieve the objective of joint problem-solving or
consensus-seeking.
[38]
The second consultation on 8 October 2020 lasted
for 39 minutes. Given the extent of the structural changes and that
the amended
proposed structure being communicated at 19:34 pm on 7
October 2020 by Ms Qengqe, the respondent did not fully appeciate
that not
all employees would have had sight of it to consider it
before
08:00 am, the scheduled time of the
second consultation on the following day. In my view, the information
was not provided with
sufficient time for the employees, including
the applicant, to consider the proposed structure and provide
meaningful and informed
inputs during the second consultation
meeting.
[39]
The applicant submitted her detailed
counterproposals in an email following this second consultation
process, shortly after 09:00
am on 8 October 2020. The applicant’s
questions and counterproposals and those of other employees were
deferred to the FAQs,
where
counterproposals
and
questions were consolidated, and generalised responses were provided
by the respondent. Thus, the counterproposals of the employees
and
the applicant were not seriously considered by the respondent. No
reasons were provided for rejecting the applicant’s
detailed
counterproposals. In my view, this does not constitute meaningful
consultation.
[40]
In
Solidarity
on behalf of Members v Barloworld Equipment Southern Africa and
Others
[27]
(
Barloworld
),
the Constitutional Court restated the principles for a meaningful
consensus-seeking consultation as follows:
‘…
for
a consultation process to be meaningful, in the context of section
189, the employer must keep an open mind
,
disclose sufficient information to enable consulting parties to make
informed representations, and seriously consider the representations.
This entails that the employer is under an obligation to furnish
reasons for rejecting representations after it has considered
them
carefully.
Approaching
the consultation with a pre-determined outcome and
failure
to provide reasons for rejecting representations will render the
consultation process not meaningful
.’
(Own
emphasis added)
[41]
The Constitutional Court
in
Barloworld
described
sufficient information to include information that would assist an
employee party to make contributions about ways of
avoiding
dismissals.
[28]
[42]
In
National
Education Health and Allied Workers Union v Minister of Trade,
Industry and Competition and Another
[29]
,
this
Court held that the purpose of consultation should be
considered
as
a process which entrenches the values of social partnership and joint
problem-solving, aimed at affording all parties a proper
opportunity
to make contributions towards a consensus-seeking process.
[43]
In
SA
Commercial Catering and Allied Workers Union v JDG Trading
(Proprietary) Ltd
[30]
,
the
Labour Appeal Court (LAC) held that the requirements of a meaningful
joint consensus-seeking process were satisfied where an
employer
showed a willingness to
respond
to
requests for further information, considered the proposals received,
and provided reasons for rejecting proposals. The LAC further
held
that information must be disclosed to make the process of
consultation meaningful, and this includes information concerning
the
need for retrenchment, as well as information that will assist
employees or the trade union, as the case may be, in making
contributions about the ways of avoiding retrenchment.
[44]
The Code provides that for consensus-seeking to
avoid dismissals to be effective, the consultation process must
commence as soon
as the reduction of the workforce
through
retrenchments or redundancies is contemplated by
the employer, and the employer must keep an open mind and seriously
consider the
proposals put forward.
[45]
The section 189(3) notice
stated that employees could be considered for re-employment within
six months of retrenchment if a role
which requires their specific
skill set becomes available. This is in line with item 12 of the
Code. In February 2021, one such
role became available, however, not
only did the respondent fail to consult within the time frame of six
months with dismissed
employees for possible future re-employment,
but it did not consider the mechanics of recalling employees for
re-employment and
it failed to give preference to the applicant and
failed to take reasonable steps to inform the applicant of this role
for possible
re-employment. Various reasons were provided for such
failure, ranging from an oversight to the re-employment process not
being
thought through to the applicant being employed by a franchisee
at the time. None of these reasons are cogent in view of the
applicant’s
question posed in her email of 15 October 2020
regarding how dismissed employees would be contacted about possible
re-employment.
[31]
[46]
The applicant contends that the application of the
selection criteria was not fair and objective. She did not dispute
the percentages
accorded to each of the selection criteria being
experience
, qualifications and performance
– her contestation is that the respondent was not able to
demonstrate how it applied the
selection criteria and was not able to
provide ratings in the application of the selection criteria.
[47]
The
respondent failed to consult meaningfully on the selection criteria.
The applicant made a counterproposal on the performance
element of
the selection criteria following the second consultation meeting on 8
October 2020 and suggested an average score of
2 or 3 years should be
considered.
[32]
No reason was
provided for rejecting this counterproposal. The applicant once
again, made the same counterproposal following the
one-on-one session
on 15 October 2020
[33]
and
stated an average of 3 years’ performance should be considered.
Mrs Qengqe stated that this was a mere repetition. The
problem with
this stance is that there was no meaningful engagement; hence, the
same questions by the applicant resurfaced. The
applicant’s
questions for clarity on the application of the selection criteria
and the rating scale used continued after
she received the
termination notice on 26 October 2020. Her evidence is that to date,
she is unclear on the rating scale that was
used and applied. Had
this issue been consulted on meaningfully, the applicant would still
not have been in the dark as to how
she was selected for dismissal.
[48]
Therefore, in view of the
rushed consultations; insufficent notice and information being
provided to employees to enable them to
make meaningful contributions
in the consultations; the final structure being released on 13
October 2020;
[34]
job
descriptions being made available after the functional consultations
closed on 13 October 2020; the applicant not having had
an
opportunity to consult meaningfully on the the proposed structure
notwitstanding her detailed contributions and the lack of
clarity on
her questions regaring the application of the selection criteria; and
the generalised responses to counterproposals
embodied in the FAQs, I
am of the view that there was no meaningful consultation as
no
reasons were provided for rejecting the counterproposals
of the applicant, hence
she continued to ask questions on the application of the selection
criteria after she was unsuccessful in
her applications for the two
availabe roles. Therefore, the dismissal of the applicant was
procedurally unfair.
Was
there a genuine rationale for change
?
[49]
The rationale for the change was based on the need
to align the organisational structure to meet and achieve the
strategic objectives
of the respondent, driven by the global
business
. In my view, this structural
change was geared to make the respondent deliver on its strategy and
to eradicate a duplication of
functions.
[50]
The applicant contends that the cost-saving
initiatives implemented by the respondent were economic and,
therefore, not related
to the structural need for change. It is not
disputed that the structural change involved a change in
organizational
structure
; however, as there
was no meaningful consultation on this rationale for change, there
was no fair reason for dismissal.
[51]
In the
circumstances
, I
find that the applicant’s dismissal was both procedurally and
substantively unfair.
[52]
The applicant does not seek reinstatement. She
seeks compensation equivalent to nine months’ remuneration as
she obtained
permanent employment in 2021 at the level that she
occupied before she was dismissed from the
applicant.
In my view, nine months’ compensation is just and equitable in
the circumstances.
[53]
In the premises, the following order is made:
Order
1. The dismissal of
the applicant/plaintiff is both
substantively and
procedurally unfair.
2.
The
respondent is to pay the applicant/plaintiff compensation equivalent
to nine months’ remuneration calculated at the date
of the
applicant’s/plaintiff’s dismissal.
3. There is no
order as to costs.
M.
T. M. Phehane
Judge
of the Labour Court of South Africa
Appearances:
For the
Applicant:
Adv F. Sangoni
Instructed by:
Malcom Lyons
Brivik Inc.
For the
Respondent: A. Dippenaar of
Kichmanns Inc.
[1]
This was the evidence of Ms Akhona Qengqe for the respondent, with
reference to the communique by the respondent’s HR Field
Director, Mr Rudi Richards on p 1 of the trial bundle.
[2]
Trial bundle at p 2.
[3]
Trial bundle at p 2.
[4]
Act 66 of 1995, as amended.
[5]
Trial bundle at pp 19 to 22.
[6]
Trail bundle at pp 3 to 18.
[7]
Trial bundle at p 5.
[8]
trial
bundle at p 40.
[9]
Trial bundle at p 51.
[10]
Trial bundle at pp 67 to 80.
[11]
Trial
bundle at pp 14 an 15.
[12]
Trial
bundle at pages 17 to 18 and 34 to 35.
[13]
Trial bundle at pp 135 and 136.
[14]
Trial bundle at p 27.
[15]
Trial bundle at pp 26 to 27.
[16]
Trial bundle at pp 30 to 31.
[17]
Trial bundle at pp 37, 41 and 42.
[18]
Trial bundle at p 44.
[19]
Trial bundle p 134.
[20]
Trial bundle pp 96 and 97.
[21]
Section 189
of the
Labour Relations Act 66 of 1995
, as amended
(LRA).
[22]
Published under GN1517 in GG 20254 of 16 July 1999.
[23]
See:
Pre-trial
minute at para 2.7.
[24]
[2005] 1 BLLR 10
(LC) at paras [69] to [73].
[25]
(P86/98)
[1999] ZALC 188
(14 June 1999) at para [23].
[26]
Trial bundle at p 24.
[27]
[2022] ZACC 15:
(2022) 43 ILJ 1757 (CC) at para [46].
[28]
Ibid
at
para [44].
[29]
(2021) 42 ILJ 1992 (LC) at para [21].
[30]
[2018] ZALAC 38
; (2019) 40 ILJ 140 (LAC) at para [28].
[31]
See: trial bundle at p 88.
[32]
See: trial bundle at p 37.
[33]
See trial bundle at p 88.
[34]
See: pre-trial minute at para 2.9.2, where the common cause fact is
stated that the final structure was released on 13 October
2020.
Parties are bound to the content of their pre-trial minute. I
emphasize that the evidence of Ms Qengqe and the applicant
is the
team consultations closed on 13 October 2020 and the one-on-one
consultation between them took place on 15 October 2020.
See also:
the email by Ms Qengqe dated October 2020 at p 51 of the trial
bundle, which she testified on, which confirms the position
that the
functional team consultation meetings ended on 13 October 2020.