Sayles v Tartan Steel CC (J1384/97) [1999] ZALC 9; (1999) 20 ILJ 1290 (LC) (22 January 1999)

45 Reportability

Brief Summary

Labour Law — Dismissal — Compensation — Applicant claiming compensation for dismissal without compliance with section 189 of the Labour Relations Act — Court finding that respondent did not contemplate dismissal and that applicant accepted alternative position — No entitlement to compensation established.

IN THE LABOUR COURT OF SOUTH AFRICA
HELD IN JOHANNESBURG
Case No: J1384/97
In the matter between:
Applicant
and
Respondent 
___________________________________________________________
________
JUDGMENT 
(COMPENSATION)
___________________________________________________________
________
MLAMBO J,
[1] The   purpose   of   this   judgment   relates   to   the   entitlement   or   not   to  
compensation by the applicant.  It is so that in my judgment regarding the

merits I found that the applicant was dismissed and importantly, that the  
respondent did not comply with the provisions of section 189 of the Labour  
Relations Act no 66. of 1995.
[2] The   position   regarding   entitlement   to   compensation   is   to   be   found   in  
Johnson   &   Johnson   (Pty)   Ltd   v   Chemical   and   Industrial   Workers  
Union case no PA15/97 (LAC).  In terms of this judgment the Court has a  
discretion   whether   to   grant   compensation   or   not.     Any   compensation  
awarded is in the nature of a solatium for the loss of the right to a fair  
procedure.   In that judgment Froneman DJP confirmed that an important  
purpose of section 189 is the achievement of a joint consensus seeking  
process.
[3] In paragraph 30 of the judgment the point is made that if that purpose is  
achieved then there was compliance with section 189.  The judgment goes  
further to make the point that if the purpose is not achieved the reason for  
not achieving it must be sought.  This is important as once the reason for  
the non compliance with section 189 is found then the Court is placed in a  
position where it is able to decide on the entitlement to compensation.
[4] In   the   matter   before   me   the   respondent’s   case   is   that   it   never  
contemplated   dismissing   the   applicant   as   a   result   of   the   closure   of   the

slitting division.   The respondent’s case is further that on 24 July 1997 a  
discussion   took   place   between   Mr   Gardner   the   respondent’s   managing  
member, and the applicant.   In his testimony Gardner stated that on the  
24th July 1997 the grim financial situation of the respondent was discussed  
and the applicant was told that he would not be dismissed but would be  
utilized at the other division with no loss of income.  Gardner testified that  
the applicant understood the situation and accepted the offer of working in  
the other divisions.   The applicant denies that any meeting took place on  
24 July 1997 and that the accepted the offer.
[5] If   I   uphold   the   respondent’s   version   I   cannot   grant   the   applicant   any  
compensation.     In   order   to   resolve   this   dispute   I   need   to   revisit   the  
situation when the respondent first contemplated the closure of the slitting  
division.   It is common cause that the respondent, at that stage, sent a  
letter   to   the   Bargaining   Council   for   the   Iron,   Steel,   Engineering   and  
Metallurgical Industry.  The notice advised the Council that the respondent  
intended   to   close   its   slitting   division   and   that   four   employees   would   be  
retrenched as a result.  A similar notice was sent to the National Union of  
Metalworkers   of   South   Africa   (NUMSA)   which   represented   the   four  
employees mentioned in the notice.   Notice of Numsa also invited it to a  
consultation meeting on 12 August 1997.

[6] The fact that the respondent invited Numsa to a consultation meeting must  
mean that it was aware of the provisions of section 189.   It is also clear  
that the fact that the applicant was not one of the employees mentioned in  
the   notice   and   the   fact   that   he   received   no   similar   notice   confirms   the  
respondent’s version that it never contemplated dismissing him as a result  
of the closure of his division.
[7] There   is   no   mention   of   any   discussion   between   the   applicant   and   the  
respondent other than the disputed one of 24 July 1997 and the one on 18  
September 1997 mentioned by the applicant.  According to the applicant it  
was at this discussion (18 September 1997) that he was formally informed  
of the closure of his division and his redeployment elsewhere.  He testified  
that   he   had   heard   of   the   closure   from   other   employees   before   18  
September 1997.   He had however not done anything in that regard by  
way of clarifying his own situation.
[8] In considering which version to accept I have to consider the probabilities  
in each version.  If as the applicant states, he was aware of consultations  
with other employees, he did not appear to me as a person who would  
simply   sit   back   and   do   nothing.     After   all   he   was   the   manager   of   the  
employees who were being consulted.  In my view he could sit back and  
do nothing if some discussions had already taken place with him about the  
same matter.

[9] In my view probabilities appear to favour the respondent’s version.  This is  
based on the following factors: no notice was given to the applicant, the  
fact that there was compliance with section 189 regarding other employees  
and the fact that the notices to the Council and to NUMSA were sent at the  
same time span  as the disputed meeting of  24  July 1997.    Further  the  
manner   in   which   the   respondent   dealt   with   other   employees   militates  
against   the   respondent   simply   taking   things   for   granted   about   the  
applicant’s   situation   without   having   discussions   with   him.     Another  
important   fact   is   to   be   found   in   the   letter   sent   to   the   applicant   on   19  
September 1997 where the respondent says:
“I   informed   you   of   the   inevitable   retrenchment   of   the   four   slitter  
employees and as you know, this took place on 18 th September 1997.
I also informed you that your services could be utilized  in the two  
other   divisions   of   the   company   with   no   adjustment   to   your  
remuneration.  This you accepted and understood.”
When one reads the letter in context one gets the sense that it refers to a  
discussion which took place long before 18 September 1997.
[10] In my view therefore the reason for the failure of the respondent is that as  
far as it was concerned it had discussed the matter with the applicant in  
July   1997   and   he   accepted   the   alternative   offered.     Once   there   was  
acceptance   of   the   alternative   position   it   is   inconceivable   that   the

respondent could still be expected to consult with the applicant.
[11] I   am   therefore   of   the   view   that   the   respondent’s   failure   to   comply   with  
section   189   was   as   a   direct   result   of   the   applicant’s   acceptance   of   the  
alternative   position   in   July   1997.     Under   the   circumstances   I   am   not  
persuaded that the applicant is entitled to any compensation.
[12] In relation to the issue of costs it is so that the parties are ad idem that  
costs should follow the event.  It is also correct that applicant was able to  
prove   that   he   was   dismissed   and   that   there   was   no   compliance   with  
section 189.  However in view of my decision regarding compensation I am  
of the view that no costs order should be made.
I therefore make the following order:
1. The applicant is not entitled to compensation.
2. There is no order as to costs.
__________________
Mlambo J

Date of judgment: 22 January 1999
For the applicant: Mr Jackson instructed by Gillian Lieberman Katz Attorneys.
For the respondent: Mr Beaton instructed by Yusuf Nagdee Attorneys.