IN THE LABOUR COURT OF SOUTH AFRICA
(HELD AT JOHANNESBURG)
NOT REPORTABLE
CASE NO: JS319/2022
In the matter between:
PRATIBA GOVINDER Applicant
and
HARTMANN VITAMED (PTY) LTD Respondent
Date heard: 8 August 2025
Judgment delivered: 14 October 2025
Summary: Alleged automatically unfair dismissal - dismissal not automatically
unfair but procedurally and substantively unfair - claim in contract not proven -
respondent ordered to pay compensation for unfair dismissal.
JUDGMENT
2
DANIELS J
Introduction
1. The applicant alleges that she was dismissed for reasons based on her
race and her religion, and her dismissal was therefore automatically unfair
as contemplated in section 187(1)(f) of the Labour Relations Act No. 66 of
1995 as amended (the “LRA”).
2. In the alternative, the applicant alleges that she was dismissed for reasons
based on the respondent’s operational requirements, but her dismissal
was both procedurally and substantively unfair.
3. In addition, the applicant alleges that the respondent unlawfully breached
her employment contract and its policies by failing to pay her a
performance bonus, by unfairly applying its travel policy, and by failing to
honour its agreement to pay for the bursary it had awarded to her son.
Contractual claims
4. The claim is brought under section 77(3) of the Basic Conditions of
Employment Act No. 75 of 1997. The applicant bears the onus of proving
the terms of the contract, proving the breach, and providing evidence of
the contractual damages resulting from the breach.
1 For the reasons set
out below, the claims cannot be sustained.
4.1. In respect of the performance bonus, the applicant pleaded that she
did not have the financial figures at her disposal to quantify the
amount claimed but that the respondent could do so. The applicant
did not give evidence that she had satisfied the requirements for the
1 SM Goldstein & Co v Gerber 1979 4 SA 930 (A) at 937G
3
bonus, only that she was ‘on track’ to do so at the time of her
dismissal. The respondent provided no evidence as to the quantum
of the performance bonus and gave evidence that the bonus is only
payable if the employee is in employment at the time the bonuses
are paid. 2 Furthermore, the respondent testified, whether the
applicant qualified for a bonus can only have been determined after
the end of the financial year - 31 December. In these circumstances,
the applicant has not proven her entitlement to the bonus.
4.2. The applicant alleged that she suffered damages because she was
required to take a loan of R79 000, 00 because of the respondent’s
alleged breach of its travel policy. H owever, no evidence was
presented demonstrating that such a loan was taken. The applicant
alleged that her damages arose from the ‘shortened time period’
allocated to her to purchase a new vehicle. The applicants given six
months, from 1 October 2020 to 31 March 2021, to purchase a new
vehicle. I t is unclear what period the applicant alleges she was
entitled to. It is also unclear why the applicant could not secure a new
vehicle within the six months period provided to her. If the applicant
and her husband had purchased a vehicle which complied with the
policy, the applicant would have suffered no damages. In the
circumstances, any damages which occurred resulted from the
applicant’s own negligent conduct. In any event, as I explain later, I
do not accept that the respondent breached the travel policy.
4.3. The applicant presented no evidence that she suffered damages in
respect of the bursary. She did not present evidence that her son did
in fact study, and that he paid R40 000, 00 or more for such studies.
Furthermore, although the respondent pleaded that the bursary was
subject to a work back period which was impossible after the
dismissal, the applicant did not dispute this.
22 See clause 4.7 of the applicant’s employment contract, Bundle C p109
4
Witnesses called by the parties
5. The respondent called four witnesses:
5.1. The respondent called Mr Bruce Atkinson (“Atkinson”), its chief
financial officer. Atkinson testified about the rationale for the
retrenchment, the absence of any alternatives to the retrenchment,
and the travel policy.
5.2. Next, the respondent called Mr Jean Du Preez, an employee of the
Guardian Employers Organisation, who assisted and advised the
respondent through the retrenchment consultation process.
5.3. Thereafter, the respondent called Ms Julia O Grady (“O Grady”), the
managing director. O Grady testified about the allegation that she
had victimized the applicant and discriminated against her.
5.4. Finally, the respondent called Ms Tatjana Konig (“Konig”), its regional
human resources business partner, who testified about the grievance
laid by the applicant in respect of the application of its travel policy.
6. The applicant testified on her own behalf and called no further witnesses.
Material facts
7. The facts, as extracted from the testimony and the pleadings, are
summarized below. Note that this part excludes any facts relating the
retrenchment which are dealt with separately.
8. The respondent is a supplier of medical devices and health care products ,
forming part of the Hartmann Group headquartered in Germany.
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9. The applicant commenced employment with the respondent on 2
September 2019 as its national sales manager. The applicant was
responsible for sales in the respondent’s three main divisions namely ,
Incontinence, Wound Care and Risk Prevention.
10. The Incontinence division was composed of three “channels” namely: (1)
Nursing Homes, (2) Hospitals, (3) Wholesalers and Pharmac ies. Within
the respondent, the w holesalers and pharmacies channel is also referred
to as “channel 30”. Channel 30 brings in the bulk of the revenue of
incontinence division. Each division, and channel, has its own financial
reporting systems. The c osts of the business are allocated and shared
among the divisions and channels.
11. When the applicant commenced her employment, there were twelve sales
representatives nationally who reported to her. The applicant herself
reported to O Grady until 1 April 2020, when a new line manager was
assigned, namely Ms Paayal Seechoonparsad (“Seechoonparsad”).
12. The applicant gave evidence about several occasions when she clashed
with O Grady:
12.1. The applicant testified that O Grady was dissatisfied with her
selection of a venue for the national sales conference because
several individuals became sick with gastroenteritis. The applicant
testified that O Grady accused her of selecting a venue with poor
food because she (the applicant) was fasting for religious reasons. O
Grady denied this and testified that, while she also became sick, she
understood that the venue had been selected by the applicant and
the Hollister Sales Manager. In addition, O Grady testified, she was
disappointed that the applicant was often not available during the
conference.
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12.2. The applicant testified that, while on a business trip, she commented
to her team that she felt uncomfortable with flying because there was
inadequate social distancing. O Grady was critical of her comments.
O Grady admitted that she was critical of the applicant’s comments
because they could have increased the sales team’s anxiety about
flying during the COVID19 pandemic.
12.3. The applicant testified that O Grady lost her temper with her, shouted
at her, and told Seechoonparsad to get the applicant out of her office.
O Grady admitted this occurred and explained that she had become
frustrated at the applicant’s persistent refusal to accept her decision
in relation to the travel policy. The applicant complained to head
office, and O Grady was asked to apologize, which she did.
13. There is no need to resolve the factual disputes referred to in paragraph
12 above, because such clashes do not suggest any form of hostility to the
applicant based on race, ethnicity, or religion. These kinds of personality
clashes, although unfortunate, are common in most workplaces.
Sue Doyle
14. One of the sales representatives, who reported to the applicant, was Ms
Sue Doyle (“Doyle”). The applicant clashed with Doyle on several
occasions. The applicant highlighted the following:
14.1. Doyle failed or refused to submit her daily call logs to the Customer
Relationship Management system,
14.2. Doyle took two days sick leave, on a Friday and a Monday, but failed
to produce a medical certificate in contravention of the sick leave
policy,
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14.3. Doyle failed to report for work for three days without informing the
applicant of her absence,
14.4. Doyle accused the applicant of failing to submit a reimbursement
claim to the finance department. It transpired that the supplier had
not been paid for over four months, al though the applicant had
instructed Doyle to pay the supplier and thereafter submit a claim for
reimbursement to the finance department.
14.5. Doyle made disparaging statements about the applicant on a
WhatsApp group for the sales team.
14.6. The applicant believed Doyle made “ghost calls” to customers, a
dismissible offence under the disciplinary code and procedure.
15. The inferior performance, and misconduct, of Doyle, as explained above,
resulted in the applicant laying a grievance against Doyle, the issu e of a
written warning to Doyle, and the resignation of Doyle in May 2021.
16. The applicant perceived that O Grady was friendly with, and protective of,
Doyle. However, O Grady denied that Doyle was her friend and denied
that she was protective of Doyle.
17. The applicant testified that O Grady delayed the performance appraisal of
Doyle, delayed the taking of disciplinary action against Doyle, and
downplayed Doyle ’s lack of respect for the applicant . O Grady disputed
this and testified that there was no evidence that Doyle was making “ghost
calls.”
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18. The applicant testified that O Grady approved the provision of “advanced
paid leave” for Doyle, while denying this to others . However, the applicant
did not call those employees to corroborate her version that , though
similarly placed, they were denied “advanced paid leave.” Accordingly, this
testimony constituted inadmissible hearsay evidence.
19. The applicant testified , when Doyle failed to pay the supplier as she had
instructed, O Grady reprimanded them both. O Grady admitted that she
had reprimanded them both and explained that she had done so because
they were both being nasty to each other and behaving unprofessionally.
20. The applicant testified that O Grady defended Doyle by saying: “perhaps
Sue is going through personal issues.” O Grady testified, while she did not
favour Doyle, give her preferential treatment, or obstruct disciplinary action
against Doyle. O Grady explained that her lenient approach to Doyle was
informed by Doyle’s medical condition and her fragile mental health, of
which the applicant was unaware.
Application of the travel policy
21. The respondent has a Travel Allowance Policy (the “travel policy ”), the
relevant parts of which are reflected below:
“2. Acquisition of Vehicles
a. The employee is free to purchase any new vehicle, provided
that:
i. it is deemed to be adequate for the performance of
duties,
ii. it reflects the image that the Company wishes to present
to its customers, partners and any other business
associates.
b. Management reserve ( sic) the right to disqualify any vehicle
chosen by an employee that is considered unsuitable or
impractical for business use.
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c. The vehicle must meet the following requirements: if in doubt
about any of the definitions below, please consult your Line
Manager.
i. Vehicle must have at least 4 doors
ii. 4 adult seats
iii. Less than 7 years old or inside of maintenance plan
iv. Must be a sedan or SUV
4.General
g. For new employees whose vehicles do not the requirements in
terms of paragraph 2 above, they must change their vehicle to
comply with the requirements as determined in discussion with
their Line Manager, but in any event by no later than 12
months.
h. For existing employees whose vehicles do not comply with the
requirements of paragraph 2 above, when they replace their
vehicle, the new vehicle must be in compliance with these
requirements.”
22. It is apparent from a purposive interpretation of the travel policy, taking
into consideration the language, grammar, and context, that:
22.1. While the words “new employees” relates to those employed after the
introduction of the policy , clause 4(g) applies only to new employees
who, at the time of their engagement, do not own a vehicle that
complies with the policy. Accordingly, clause 4(g) did not apply to the
applicant, who had a compliant vehicle when she was engaged.
22.2. The words “existing employees” relates to individuals in respondent’s
employ when the policy was introduced. Accordingly, clause 4(h) did
not apply to the applicant, who was engaged after the policy was
introduced.
22.3. The policy did not contemplate that employees may dispose of their
compliant vehicles and thereafter, either deliberately or mistakenly,
purchase a vehicle that did not comply with the policy.
10
22.4. The purpose of the policy is to guarantee that senior managers, who
are required to use their own vehicles for business purposes are paid
a travel allowance - provided their vehicle complies with the policy.
23. During September 2020, the applicant and her husband began searching
for a new vehicle for the applicant . On 28 September, the applicant’ s
husband purchased a new two door, four seat, BMW 220i coupe (the
“BMW”) for the applicant. I accept that the applicant’s husband concluded
the deal by himself, without the knowledge of the applicant. The applicant
admitted that she had failed to make her husband aware of the policy
requirement that the vehicle must have four doors.
24. On 1 October, the applicant emailed Seechoonparsad and asked her for
permission to purchase the BMW , even though the vehicle did not comply
with the travel policy. Seechoonparsad consulted human resources, who
informed her that the final decision lay with O Grady . Neither human
resources, nor Seechoonparsad, had any difficulty with the request.
25. Later that same day, O Grady emailed Seechoonparsad and informed her
that she was not prepared to “break policy” to accommodate the applicant .
In her email, O Grady gave reasons for her decision. O Grady indicated
that the applicant may be requested to transport two overseas visitors, and
she must be able to transport them comfortably. O Grady also indicated
that the applicant was a senior employee and must be a role model.
26. The applicant did not accept the decision of O Grady and implored her to
change her mind. The applicant made a proposal to rent a vehicle, at her
own cost, if she is required to either transport customers to an event or
take more than one person on a field trip. The applicant suggested there
were other employees who do not comply with the travel policy.
27. O Grady convened a meeting with the applicant for 6 October. O Grady
asked the applicant to explain when she planned to secure a vehicle that
11
was compliant with the travel policy. O Grady also asked the applicant to
explain which vehicle she had used to travel to the meeting. At the
conclusion of the meeting, O Grady handed the applicant a written
warning, which had earlier been signed by Seechoonparsad. The warning
was issued to the applicant for her alleged disregard of the travel policy.
28. On 14 October, the applicant appealed against the warning and, following
an appeal hearing, the written warning was set aside. In her appeal , the
applicant stressed that she had not purchased the vehicle and that she did
not deliberately breach the travel policy. In her evidence, O Grady readily
admitted that she had overreacted when she issued the warning.
29. On 15 October, O Grady emailed the applicant and advised her that she
may not use the BMW for business purposes.
30. On 1 December, the respondent informed her that she would be permitted
to use the BMW for a period of six months , but she was also required to
change the vehicle during that period.
31. On 17 December, the respondent informed the applicant that her travel
allowance would be stopped if she were unable to register a vehicle which
was compliant with the travel policy by 1 April 2021.
3
32. The applicant alleged that the respondent applied the travel policy
inconsistently and highlighted the following as examples:
32.1. Mr Thabo Mokhobo (“Mokhobo” ) was employed in May 2019 at
which time he had a vehicle that was not compliant with the travel
3 Although the applicant was dismissed on 15 December 2021, her travel allowance never
terminated. It was unclear from the evidence whether or when the applicant purchased a vehicle
that was compliant with the travel policy.
12
policy. Mokhobo obtained a new vehicle in October 2020, but that
vehicle was also not compliant. When Mokhobo fell ill , respondent
granted him until March 2021 to purchase another vehicle. Mokhobo
was given from May 2019 to March 2021, a period of approximately
22 months, to obtain a vehicle that was compliant with the policy.
32.2. Ms Mohau Shole (“Shole”) was given more than twelve months to
obtain a vehicle that was compliant with the travel policy. However,
as respondent point s out, Shole was an “existing employee” as
contemplated in clause 4(h) of the travel policy.
33. The applicant appealed to Konig, respondent’s regional human resources
partner, regarding the respondent’s implementation of its travel policy.
Konig considered the matter and found there was no merit in the appeal.
Konig noted that the applicant was aware of the travel policy and had
failed to inform her husband of the policy , although they were both
involved in the search for a new vehicle.
34. The applicant was given from 1 October 2020 to 31 March 2021 to
purchase a vehicle that was compliant with the policy. She was also
permitted to drive the vehicle to and from work between 17 December
2020 to 31 March 2021.
Legal principles: alleged automatic unfairness of the dismissal
35. Section 187(1)(f) of the LRA states that a dismissal is automatically unfair
if the reason for the dismissal is that the employer unfairly discriminated
against the employee, whether directly or indirectly, on the grounds inter
alia of race, ethnic origin, or religion. The applicant contends that her
dismissal is automatically unfair because the true reason for her dismissal
was her race, ethnic origin, or religion.
13
36. By reference to the evidence, this Court must objectively determine the
reason for the dismissal of the applicant. Our courts have provided ample
guidance as to how to approach this task:
36.1. In South African Chemical Workers Union and others v Afrox Ltd
4
Froneman DJP (as he then was) held as follows:
“[32] The enquiry into the reason for the dismissal is an objective one, where
the employer's motive for the dismissal will merely be one of a number
of factors to be considered. This issue (the reason for the dismissal) is
essentially one of causation and I can see no reason why the usual
twofold approach to causation, applied in other fields of law, should not
also be utilized here (compare S v Mokgethi & others 1990 (1) SA 32 (A)
at 39D41A; Minister of Police v Skosana 1977 (1) SA 31 (A) at 34). The
first step is to determine factual causation: was participation or support,
or intended participation or support, of the protected strike a sine qua
non (or prerequisite) for the dismissal ? Put another way, would the
dismissal have occurred if there was no participation or support of the
strike? If the answer is yes, then the dismissal was not automatically
unfair. If the answer is no, that does not immediately render the
dismissal automatically unfair ; the next issue is one of legal causation,
namely whether such participation or conduct was the 'main' or
'dominant', or 'proximate', or 'most likely' cause of the dismissal. There
are no hard and fast rules to determine the question of legal causation
(compare S v Mokgethi at 40). I would respectfully venture to suggest
that the most practical way of approaching the issue would be to
determine what the most probable inference is that may be drawn from
the established facts as a cause of the dismissal, in much the same way
as the most probable or plausible inference is drawn from circumstantial
evidence in civil cases. It is important to remember that at this stage the
evidence in civil cases. It is important to remember that at this stage the
fairness of the dismissal is not yet an issue (see para [33] below). Only if
this test of legal causation also shows that the most probable cause for
the dismissal was only participation or support of the protected strike,
can it be said that the dismissal was automatically unfair in terms of s
187(1)(a). If that probable inference cannot be drawn at this stage, the
enquiry proceeds a step further.”
(own emphasis)
36.2. In Kroukam v SA Airlink (Pty) Ltd5 Davis AJA (as he then was) held:
“In my view, s 187 imposes an evidential burden upon the employee to
produce evidence which is sufficient to raise a credible possibility that an
automatically unfair dismissal has taken place. It then behoves the
employer to prove to the contrary , that is to produce evidence to show
4 (1999) 20 ILJ 1718 (LAC)
5 (2005) 26 ILJ 2153 (LAC)
14
that the reason for the dismissal did not fall within the circumstance
envisaged in s 187 for constituting an automatically unfair dismissal.”
(own emphasis)
37. The applicant’s evidence that O Grady treated other Black employees less
favourably than Doyle in respect of sick leave was vehemently disputed by
O Grady. The evidence that O Grady favoured Doyle over other Black
employees, besides herself, constituted hearsay evidence.
38. There being no direct evidence that O Grady treated Doyle more
favourably was because of her race or ethnicity, the applicant sought to
draw an inference to that effect. O Grady testified that she wished to deal
with Doyle in a manner suited to her medical condition and her fragile
mental health. The applicant did not dispute that Doyle had a medical
condition and suffered from poor mental health. As our courts stated the
“process of inferential reasoning calls for an evaluation of all the evidence
and not merely selected parts. The inference that is sought to be drawn
must be ‘consistent with all the proved facts: If it is not, then the inference
cannot be drawn’ and it must be the ‘more natural, or plausible, conclusion
from amongst several conceivable ones’ when measured against the
probabilities.”
6 Here, the inference is not consistent with all the proved
facts, and is therefore inappropriate. In the circumstances, I accept that
any indulgences granted to Doyle, resulted from her medical condition, not
because she was White.
39. The applicant sought to show that respondent treated her less favourably
than others in respect of the travel policy. However, the two comparators,
Mokhobo and Shole, were both B lack. Thus, those examples cannot
signify that O Grady, and the respondent, applied the policy more strictly
to the applicant because she was Black . To the extent that Mokhobo was
6 South African Post Office v De Lacy and Another 2009 (5) SA 255 (SCA) at para [35]
15
treated more leniently than the applicant, and he was, this can hardly be
called racist given that he was Black . Atkinson and O Grady both testified
that the travel policy was not designed, or implemented, to favour White s
and there is no reason to doubt their evidence. As explained in para 22, I
do not accept that the respondent breached its travel policy. The applicant
presented no credible evidence showing that she was treated less
favourably than White employees in respect of the travel policy. The travel
policy was designed not to disadvantage existing employees because it
would be unfair to introduce a policy which would have a negative impact
on existing employees. This was a deliberate policy decision, and, in my
view, it was neither irrational nor unfair . O Grady and Atkinson testified
that, insofar as their vehicles were not compliant, this was because they
were existing employees, and their vehicles were purchased before the
policy came into effect.
40. For the reasons set out above, the applicant failed to discharge the
evidential burden by raising a credible possibility that she was dismissed
based on her race, ethnicity, or religion.
Substantive fairness
41. On 11 November 2021, Mr Marc Perez Pey, the regional director for the
Hartmann Group, sent an email to O Grady recording that the Board had
decided that, during 2022, the respondent must inter alia increase MEBIT
7
within incontinence by 100 000 euros. At current exchange rates, this
required respondent to either increase sales or reduc e costs, within
incontinence, by R1.8million.
42. On 30 November, the respondent addressed a letter to the applicant
advising that two channels within incontinence, namely nursing homes,
and hospitals, were not achieving the desired revenue and profit margin
7 management earnings before interest and taxes
16
levels and were forecasted to deliver negative EBIT 8 during 2022. The
respondent indicated that it required all its divisions to achieve profitability
at the EBIT level, which may be achieved by increasing sales or cutting
costs related to ‘sales, general and administration’ (“SGA”) by R1.8m illion.
The respondent informed the applicant that it had already implemented
measures to cut costs such as by reducing marketing and advertising,
reducing BBBEE relat ed costs, not replacing the sales representative for
Johannesburg (Northern Suburbs), and reducing its travel and conference
related expenditure. As a result of the financial pressure, the respondent
advised the applicant that it needed to consolidate two existing positions,
namely the national sales manager position and product manager
(incontinence). The respondent called for the employees holding these two
positions to volunteer for retrenchment and set out its proposed voluntary
retrenchment package. The package was open for acceptance until 2
December.
43. The applicant did not volunteer for retrenchment and neither did the
product manager for incontinence, Ms Caroline Cromb (“Cromb”).
44. The applicant communicated her rejection of voluntary retrenchment by
email on 3 December. In the same email, the applicant suggested various
alternatives including the reduction of the 13th cheque, dissolution of the
incentive scheme, the suspension of bonuses, and elimination of the home
office allowance. The applicant also questioned the appointment of a data
analyst, and the business development manager.
45. That same day, 3 December, the respondent issued, to the applicant, a
notice contemplated in section 189(3) of the LRA. The notice informed the
applicant that two positions would be affected, the product manager
(incontinence) position and the national sales manager position. The
respondent stated that the selection criteria would be LIFO (“Last In - First
88 earnings before interest and taxes
17
Out”) with skills. The respondent indicated that the first consultation
meeting would be held on 8 December.
46. On 8 December, the consultation meeting was attended by the applicant,
Cromb, Atkinson and Mr Jean Du Preez (“Du Preez”), an advisor from the
Guardian Employer’s Organisation. According to the applicant, the
duration of meeting appear s to have lasted no more than an hour. The
issues discussed were those set out in the section 189(3) notice read with
the information in the respondent’s letter dated 30 November. The
rationale for the retrenchment was discussed further. The applicant
questioned the inclusion of the hospital channel in the motivation for the
retrenchment and stated that , during 2021, that channel had seen growth
and the respondent had achieved its target for that channel for the year.
Atkinson responded that the respondent forecast a loss for the channel
during 2022. He undertook to respond further in writing. Atkinson and Du
Preez indicated that the process would continue through correspondence
and further consultation meetings would only be held if required. T he
applicant and Cromb stated that the retrenchment was a fait accompli.
47. During the consultation, there was little discussion of alternatives and no
discussion about what criteria would be used to fill the new position arising
from the consolidation of the two affected positions (the “consolidated
position”). Atkinson agreed both affected positions were considered
‘business critical’.
48. On 9 December, the applicant sent an email to Atkinson. In her email, she
made various suggestions to cuts costs. She noted that the incontinence
division constitutes 70.2% of the respondent’s business and most salaries
are paid from that division. She pointed out that the hospital channel had
grown by 46.6% year to date. She questioned why the two affected
positions were being consolidated. She stated that, with the selection
positions were being consolidated. She stated that, with the selection
criteria being LIFO with skills, she was not the last person engaged by the
respondent.
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49. On that day, 9 December, the applicant emailed to the respondent a one
and half page written motivation for her appointment to the consolidated
position. The applicant indicated that success of the incontinence division
would depend on the ability of the sales team to be flexible, agile, and
motivated. The applicant indicated that she had ten years of experience in
sales, moving from being a medical representative, to a regional sales
manager and finally a national sales manager. The applicant indicated that
she had mentored individuals who are now in product management , and
she indicated that she had been recognized as a ‘ sales representative of
the year ’ on two occasions . Finally, the applicant indicated that product
management was an extension of the sales function and could be learnt
on the go. The respondent did not respond to the motivation.
50. Atkinson testified that Cromb, while experienced in product management,
had little to no sales experience while the applicant , while experienced in
sales, had little to no experience in product management.
51. On 10 December, Atkinson responded to the applicant by letter. In his
letter, Atkinson stated that costs are allocated to each division and
channel based on the ‘most appropriate allocation method.’ Atkinson
stated that the savings proposed by the applicant were small and the
proposals would be detrimental to the business. He indicated that the
reduction or elimination of bonuses, incentives, and home allowances
would undermine staff morale. He advised that at least one of the two
affected positions had become redundant because of the decision to
combine the positions. He agreed that the hospital channel had done well
in 2021, but this was due to opportunistic demand created by the
COVID19 pandemic. Atkinson agreed that the timing of the process was
“less than ideal ” but the respondent was also cognisant that a drawn- out
process would create anxiety for all those involved. He stated that the
process would create anxiety for all those involved. He stated that the
applicant was the last employee to join the I ncontinence division because
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her role would be consolidated with product manager (incontinence) and
she had the least service of two affected positions.
52. On 14 December, the applicant emailed Atkinson in response to his letter
dated 10 December . In her email , the applicant requested figures
concerning the costs saved in respect of marketing, travel, conferencing,
and BBBEE expenditure. She questioned why the sales team of the
incontinence division was being targeted when there are many other
employees in the division. The applicant requested the figures
demonstrating that channel 30 was behind the planned revenue for 2021,
and the benefits from sales to pharmacy groups at higher prices. The
applicant pointed out that savings from the home office allowance would
be closer to R100 000, 00 and not R50 000, 00 as the respondent had
indicated. She pointed out that the elimination of the 13th cheque which
was already budgeted would contribute significantly to saving the costs
required. The applicant indicated that suspension or elimination of the
bonuses would cut costs of between R800 000, 00 and R1million. She
pointed out that the decision not to fill “ Allisons’ position ” and the sales
position in Port Elizabeth would save the respondent about R800 000, 00.
53. Later that day, on 14 December, Atkinson addressed a letter to the
applicant. In the letter, among other things, Atkinson advised that the
respondent was not prepared to disclose any detailed information relating
to the monies saved through cost cutting measures. Atkinson also stated
that the respondent was not prepared to disclose information relating to
the profitability of channel 30. During his evidence, Atkinson stressed that
the respondent could not share financial information requested because
this could be given to competitors and hurt its business. Significantly , in
that letter, Atkinson informed the applicant that the respondent considered
the consultation process to be closed.
the consultation process to be closed.
54. At 06h55 on 15 December, the applicant emailed Atkinson. She informed
Atkinson that he had misunderstood her on certain issues raised in her
20
previous email and she recorded that Atkinson had failed to clarify certain
issues she had raised. Atkinson did not respond.
55. Later that day, 15 December, the applicant was informed of her dismissal
and Cromb was informed that she would be appointed to the consolidated
position. No interview was convened beforehand. Atkinson confirmed that,
as of 15 December, there was no job description for the consolidated
position.
56. Despite the early indications that the respondent would use “LIFO with
skills”, only LIFO was applied. Atkinson did not clarify when the selection
criteria was changed, or why.
57. Furthermore, in Oosthuizen v Telkom SA Ltd 9 the Labour Appeal Court
(“LAC”) held:
“[4] …Implicit in s 189(2)(a) (i) and (ii) and s 189(3)(a) and (b) of the Act is an
obligation on the employer not to dismiss an employee for operational
requirements if that can be avoided. Accordingly, these provisions envisage that
the employer will resort to dismissal as a measure of last resort. Such an
obligation is understandable because dismissals based on the employer's
operational requirements constitute the so-called 'no-fault terminations'. … [8] In
my view an employer has an obligation not to dismiss an employee for
operational requirements if that employer has work which such employee can
perform either without any additional training or with minimal training. This is
because that is a measure that can be employed to avoid the dismissal and the
employer has an obligation to take appropriate measures to avoid an
employee’s dismissal for operational requirements. Such obligation particularly
applies to a situation where the employer relies on the employee’s redundancy
as the operational requirement. . . . A dismissal that could have been avoided
but was not avoided is a dismissal that is without a fair reason.”
(own emphasis)
58. In his article titled “ Corporate Restructuring and Applying for Your Own
Job”10 Professor Rycroft states:
Job”10 Professor Rycroft states:
9 [2007] 11 BLLR 1013 (LAC) at paras 4 and 8.
21
“South African labour law does not formally make the retrenchment/redundancy
distinction. In fact, the word 'redundancy' is used in many other jurisdictions to
mean what South African law means by 'dismissal for operational requirements'
(see W L Keller International Labor and Employment Laws (1997)).… In
summary, an employer intending to restructure by way of defining jobs and
making all or a group of existing jobs redundant must be able to show: (i) a
reasonable and commercial rationale for the decision to restructure; (ii) that the
particular decision has been taken in a manner which is also fair to the
employees to be retrenched; (iii) that the retrenchment of the employees is
essential to achieve the purposes of the restructuring; (iv) that the criteria for
appointment to the 'new' jobs are clear and justifiable, linked specifically to the
new job descriptions; (v) that guidance is given to employees as to which of the
restructured jobs they might be eligible; (vi) that employees are given an
opportunity in the interview to answer any concerns about past performance
that might be used as a criterion for not appointing them to the job; and (vii) that
the eventual selections are objectively justifiable.”
(own emphasis)
59. It is clear therefore that an employer is duty bound to avoid the
retrenchment of an employee wherever this is possible. This flows from
the constitutional right against unfair dismissal , the purpose being to
advance job security.
60. Accordingly, an employer, who restructures the business and declares
certain posts redundant because of the restructuring, is duty bound to
afford the affected employees a fair opportunity and process to compete
for the restructured posts.11
61. In SA Breweries (Pty) Ltd v Louw 12 the LAC held: “an incumbent of a
redundant post is not automatically dismissed; that person is merely
dislocated and only after the opportunities to relocate that person in
10 (2002) 23 ILJ 678
dislocated and only after the opportunities to relocate that person in
10 (2002) 23 ILJ 678
11 It may be that, in this context, the duties on an employer go further. See Greig v Afrox Ltd
(2001) 22 ILJ 2102 (ARB) where the arbitrator held that the only justifiable 'prerequisites' for a
job may be used to avoid the random exclusion of employees and Food & Allied Workers Union
& others v SA Breweries Ltd (2004) 25 ILJ 1979 (LC) where the court held that an employer
must inform the affected employees in clear and unequivocal terms of the inadequacy of their
qualifications and provide reasonable means for those employees to obtain the requisite levels
of competence.
12 (2018) 39 ILJ 189 (LAC) at paras [19]
22
another suitable post have been explored and exhausted, may they be
fairly dismissed ”. This does not concern selection criteria in the same
sense envisaged by section 189(2). Instead, the process is concerned with
ensuring that there is a fair process to discern the relative strengths and
weaknesses of the candidates with a view to selecting candidates that can
best perform the new role.
62. In Telkom SA SOC Ltd v Van Staden & Others13 the LAC held that:
“where legitimate operational justification for restructuring exists, there is
nothing innately unfair in requiring an employee with job security whose position
is affected by such restructuring to apply for placement into a position in the
restructured operation. The dismissal of an employee is not, however, made
easier because it arises out of a restructuring process. An arbitrator or court in
the context of a retrenchment dispute is entitled to scrutinise the placement
process and the decisions taken in terms of it given that an employee enjoys
job security. That scrutiny does not however entitle the arbitrator or court to
decide what process it would have adopted or the placement decision it would
have preferred, but whether the process put in place and decisions taken in
terms of it by the employer were fair.”
(own emphasis)
63. In the present context, the applicant’s post was declared redundant, and
her function subsumed into the consolidated post. The respondent was
duty bound to clarify the job description and the requirements for the
consolidated position. The respondent ought to have invited the applicant,
and the former product manager , to compete for the post in fair and
transparent process. However, here, the applicant was not invited to apply
and was simply excluded. In the circumstances , the dismissal of the
applicant was substantively unfair.
Procedural fairness
64. Section 189 of the LRA places certain obligations on an employer to
64. Section 189 of the LRA places certain obligations on an employer to
ensure that the dismissal of an employee, for operational reasons, is fair .
13 (2021) 42 ILJ 869 (LAC) at para 33
23
For instance, an employer must initiate the consultation process when it
contemplates dismissals for operational reasons, it must disclose relevant
information to the other consulting party ; it must allow the other consulting
party an opportunity to make representations about any matter on which
they are consulting; it must consider those representations and, if it does
not agree with them, it must give its reasons.
65. All these obligations are geared to a specific purpose, namely, to attempt
to reach consensus on the objects listed in s 189(2). The ultimate purpose
is to achieve a joint consensus seeking process . The LRA recognizes an
employer's right to dismiss for operational reasons, but only if a fair
process aimed at achieving consensus has failed.
14 The object of the
consultation process is to genuinely attempt to reach consensus on
various issues, particularly measures to avoid dismissals, measures to
change the timing of dismissals, measures to mitigate the adverse effects
of the dismissals and the method for selecting employees to be
dismissed.
66. These principles were recently confirmed by the National Union of
Metalworkers of SA & others & Aveng Trident Steel (A Division of Aveng
Africa (Pty) Ltd) & another
15 where the Constitutional Court held as
follows:
“[40] Retrenchments should not be resorted to until ‘certain procedural
requirements intended to minimise the impact on employees’ have been
complied with. When employers contemplate dismissing their employees for
operational requirements, they are required to consult in terms of s 189(1) of
the LRA. The nature of such a consultation process, including ‘its objective and
agenda,’ is prescribed by s 189(2) of the LRA. This consultation ‘requires
engagement by all the consulting parties with the purpose of reaching
consensus.’ It is important to note that the approach to this consultation must
not merely be a checklist approach — that is, it must not be purely
not merely be a checklist approach — that is, it must not be purely
formalistic. There is both a procedural and substantive aspect to this
consultation process. This has been clarified by the Labour Appeal Court
in Afrox where the court stated: ‘It is implicit in the terms of s 189(2) that an
employer, apart from taking part in the formal consultations on the aspects set
14 See Johnson & Johnson (Pty) Ltd v Chemical Workers Industrial Union (1999) 20 ILJ 89
(LAC) at para 27
15 (2021) 42 ILJ 67 (CC)
24
out in the section, should also take substantive steps on his or her own initiative
to take appropriate measures to avoid the dismissals ; to minimize the number
of dismissals; to change the timing of the dismissals ; to mitigate the adverse
effects of the dismissals; to select a fair and objective method for the dismissals
and to provide appropriate severance pay for dismissed employees.”
(own emphasis)
67. Furthermore, in Solidarity obo Members v Barloworld Equipment Southern
Africa and Others16 the Constitutional Court held:
“… 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)
68. In my view, the consultation process fell well short of the genuine joint
consensus seeking process envisaged by section 189 of the LRA . The
respondent failed to make disclosure of relevant information to enable
constructive engagement. The restructuring process was conceived based
on saving costs and increasing profitability. Information relating to these
issues ought to have been disclosed. Instead, t he respondent refused to
disclose such information but did not explore alternative methods to make
disclosure. There was a single consultation meeting during which the
process commenced but was hardly completed. The transcription of that
meeting shows that alternatives were not explored. In particular, the
nature, duties, and requirements for the consolidated position were not
explored. The subsequent correspondence between the parties did not
explored. The subsequent correspondence between the parties did not
deal with these issues either. The consultation process was not thorough
and did not rise to the level of a joint consensus seeking process.
Furthermore, the respondent did not, during the process, respond to all the
queries raised by the applicant. For these reasons, the dismissal of the
applicant was procedurally unfair.
16 (2022) 43 ILJ 1757 (CC) at paras 45 - 46
25
Remedy
69. The applicant sought reinstatement. Section 193(2) states that, where the
dismissal is substantively unfair, the court must require the employer to
reinstate (or re-employ) the employee unless the employee does not wish
to be reinstated, the circumstances surrounding the dismissal are such
that a continued employment relationship would be intolerable, or it is not
reasonably practicable to reinstate the employee.
70. In my view, reinstatement of the applicant would be intolerable, given the
serious, but unsubstantiated, allegations levelled by the applicant against
the respondent – that it discriminated against her based on her race,
ethnic origin, and religion. The relationship between the applicant and the
respondent remains strained, and the relationship between the applicant
and the managing director, who was labelled as racist, is less than less
than congenial . It is clear the trust relationship has been irretrievably
damaged. A further reason not to order reinstatement exists, the
applicant’s position no longer exists. Accordingly, it is not reasonably
practicable to order reinstatement.
71. Section 193(1)(c) provides that the court may award compensation where
reinstatement (or re-employment) is not appropriate. Such compensation
must be just and equitable in all the circumstances, but it may not exceed
twelve months’ remuneration calculated at the employee’s rate of
remuneration on the date of dismissal. Our courts have set out various
guidelines and principles, to be applied in the exercise of the discretion, to
determine what is just and equitable:
71.1. Firstly, compensation for the loss of a procedural right17 is in the form
of a solatium 18 and it does not relate to patrimonial loss . However,
17 Zeda Car Leasing (Pty) Ltd t/a Avis Fleet v Van Dyk (2020) 41 ILJ 1360 (LAC) at para 50
26
when substantive unfairness is involved, the patrimonial loss does
play a role.19
71.2. Compensation constitutes relief for the humiliation suffered by the
employee, and the impairment of his or her dignity.20
71.3. Compensation relates to the loss of the constitutionally protected
right against unfair dismissal.21
71.4. Compensation does not assume a punitive character.22
72. In Kemp t/a Centralmed v Rawlins 23 the Labour Appeal Court articulated
other factors, some of which are relevant: (a) the nature of the reason for
dismissal; ( b) whether the unfairness of the dismissal is based on
substantive or procedural grounds or both
; (
c) if the dismissal is only
procedurally unfair, the nature and extent of the deviation from the
requirements; (
d) …. (e) the consequences to the parties if compensation
is, or is not awarded
; (
f) the need for the courts, generally speaking, to
provide a remedy where a wrong has been committed - though there are
cases where no remedy should be provided, despite a wrong having been
committed; (g
) whether the employee committed a wrong which gave rise
to his dismissal ; (
h) any conduct by either party that promotes or
undermines any of the objects of the LRA, for example, the effective
resolution of disputes.
73. I
n McGregor v Public Health and Social Development Sectoral Bargaining
Council and Others24 at para 35 the Constitutional Court stated:
18 Johnson and Johnson (Pty) Ltd v CWIU [1998] 12 BLLR 1209 (LAC) at para 41
19 Kemp t/a Centralmed v Rawlins (2009) 30 ILJ 2677 (LAC) at para 20 ; Le Monde Luggage CC
t/a Pakwells Petje v Dunn NO & others (2007) 28 ILJ 2238 (LAC) at para 30
20 ARB Electrical Wholesalers (Pty) Ltd v Hibbert (2015) 36 ILJ 2989 (LAC) at paras 22 and 23
21 Ibid.
22 Maroveke v Talane NO & others (2021) 42 ILJ 1871 (CC) at para 27
23 See fn. 30
24 (2021) 42 ILJ 1643 (CC)
27
“It is true that generally speaking, procedural unfairness in a dismissal is not
insignificant and invites compensation to ensure that dismissals take place with
the ‘sensitivity and care’ properly required when the fate of people’s livelihoods
is at stake. The rationale behind an award of compensation is to give meaning
to the right not to be unfairly dismissed ; to discourage a ‘shotgun approach’ to
dismissals; and, as Dr McGregor avers, ‘to recognise the right of an employee
to be heard before action is taken against them. It is an acknowledgment of an
employee’s worth as a person.” (own emphasis)
74. In the exercise of my discretion, an award of compensation in an amount
equal to five months remuneration (three of which relates to procedural
fairness and two of which relates to substantive unfairness) is just and
equitable. In arriving at this conclusion, I considered all the relevant factors
but the following resonated most strongly:
74.1. The applicant’s dismissal was both procedurally and substantively
unfair.
74.2. Compensation is a means to address the humiliation suffered by the
applicant, and the impairment of her dignity,
74.3. The extent of the procedural unfairness was significant, as was the
extent of the substantive unfairness,
74.4. The cavalier approach of the respondent to the consultation process
was problematic, and
74.5. The dismissal left its blemish on the applicant’s employment record.
74.6. The applicant was dismissed in mid- December, shortly before the
festive period, at a time when finding alternative employment would
have been extremely difficult and stressful.
74.7. The applicant has two dependants, her son, and her mother.
28
74.8. The applicant failed to present any evidence of the financial harm
occasioned because of her dismissal.
Costs
75. There is no reason to depart from the usual rule in this court that costs do
not follow the result. Accordingly, there is no order as to costs.
Conclusion
76. In the result, the dismissal of the applicant, by the respondent, is
procedurally and substantively unfair. The dismissal is not automatically
unfair. The applicant’s contractual claims are dismissed.
Court Order
77. In the circumstances, the following order is made:
77.1. The applicant’s dismissal by the respondent was not automatically
unfair, but was procedurally and substantively unfair,
77.2. The applicant’s contractual claims under the BCEA are dismissed,
77.3. The respondent is ordered to pay the applicant compensation
equivalent to five months of remuneration, to be paid within ten ( 10)
court days,
77.4. There is no order as to costs.
Reynaud Daniels
Judge of the Labour Court of South Africa
29
For the Applicant:
Adv Z Navsa
Norton Rose Fulbright SA Inc
By email: Mohammed.Chavoos@nortonrosefulbright.com
For the Respondent:
Mr D Berry
Guardian Employers Organisation
DannyB@geo.org.za