IN THE LABOUR COURT OF SOUTH AFRICA
(Held at Cape Town)
Case Number:
C 295/98
In the matter between:
Applicant
and
CC Respondent
JUDGEMENT
Revelas J :
[1] The respondent in this matter is a closed
corporation, duly registered with the Department
of Manpower and on the evidence before me, it
regularly paid its dues thereto as an employer.
The respondent is also a well- known restaurant
situated in the picturesque town of Stellenbosh.
[2] The applicant’s wife, a Mrs Louise Obertüfer, had a
hundred percent membership interest in the
respondent. The applicant had none.
[3] The respondent’s erstwhile accountant, Mr B Ankers
testified that, he discussed with the applicant
and his wife, the possibility of the applicant
taking over a forty percent interest in the
respondent. A twenty percent interest would be
sold to another employee of the respondent at the
time, namely the chef, Mr Phillipe Moro. Mrs
Obertüfer would retain only a forty percent
interest in the respondent. This however never
transpired and the applicant never acquired a
forty percent interest or any other percent.
[4] The applicant was the manager of the respondent
restaurant.
[5] According to the applicant, he was entitled to a
salary from the respondent in an amount of R 11
000-00 per month, which he himself effectively
took from the till every month this was confirmed
by Mr Ankers.
[6] On 1 November 1997, the Doornbosch Restaurant CC
was sold as a going concern by the applicant’s
wife when she sold her one hundred percent
membership interest in the respondent, to the new
owners of the respondent namely Mr Axel Zerrouk
and Anna Marie France Zerrouk.
[7] It was undisputed evidence before me, that the
applicant’s wife never told him that she was gong
to sell the restaurant. Mr Zerrouk, who was the
only witness for the respondent, and who appeared
in person on behalf of the respondent testified
that he was never told that the applicant was an
employee of the respondent.
[8] According to Mr Zerrouk’s evidence he was given a
list of the employees that would, in terms of the
agreement between himself and the applicant’s
wife, be employed as employees. The applicant is
not mentioned in the list. Mr Zerrouk disputes
strongly that the applicant is an employee of the
respondent. The applicant’s wife was to become one
of the respondent’s employees herself. Her
services were however terminated three months
after the respondent took over the business,
according to Mr Zerrouk’s evidence.
[9] The applicant testified that on the night of 1
November 1997 he arrived at the restaurant and
noticed Mr Zerrouk whom he did not know busy
lighting the candles. He asked Mr Zerrouk what he
was doing and Mr Zerrouk informed him that he now
owned the restaurant. There was a slight
altercation where upon the applicant left, upon
learning that the business was sold to Mr Zerrouk.
He found his wife in the parking area of the
respondent, where she confirmed that she had sold
the business to him.
[10] The applicant was highly upset when his wife told
him that the business interest in the respondent
was sold for approximately R 580 000-00. The
applicant testified that some time prior to the
sale, a prospective Dutch buyer was interested in
purchasing the respondent for approximately R 750
000-00. He could therefore not understand why his
wife would want to sell the business for such a
low amount, when a greater purchase price could
have been fixed. After the sale, the applicant and
his wife were separated.
[11] It is common cause before me, that no one
attempted to discuss with the applicant the sale
of the respondent or what his position would be
thereafter. He was clearly no longer welcome on
the premises and had to leave. Mr Zerrouk disputed
that he asked the applicant to leave. However,
considering that an argument took place, a fact
which is common cause, it is highly probable, that
Mr Zerrouk, being the owner at that time asked the
applicant to leave, particularly if it was during
a heated argument. In any event I have no reason
to disbelieve the applicant. He made a good
impression on me. He appears to be a very honest
person. It was never the case for the respondent
that the applicant could remain as a manager.
[12] The applicant who regarded himself as dismissed in
the circumstances, decided to challenge the
fairness of his dismissal on both procedural and
substantive grounds and consequently referred the
dispute to the Commission for Conciliation,
Mediation and Arbitration (“the CCMA”) on 22
December 1997. The certificate of outcome reflects
that the dispute which was conciliated was an
“alleged unfair dismissal for operational reasons”
and the certificate is dated 18 February 1998.
[13] The applicant consequently, on 17 March 1998
referred the dispute between himself and the
respondent for arbitration. At the time the
applicant was represented by labour consultants,
who had a problem as to how to frame the dispute
to determine of whether it should go to
arbitration at the CCMA or for adjudication by the
Labour Court.
[14] The labour consultant acting on behalf of the
applicant, consequently wrote to the CCMA
presenting the applicant’s problem with regard to
jurisdiction. A senior commissioner of the CCMA,
Ms Sarah Christie informed the labour consultant
that she was of the view that the dispute was
about the termination of the applicant’s
employment in consequence of the sale of business.
She did however caution that, although she was of
the view (correctly in my opinion) that the CCMA
did not have jurisdiction, only disputes which
were included in the LR 7.11 form, requesting
conciliation and issues which were in fact
ventilated during that process, may be used to
found arbitration jurisdiction or adjudication
jurisdiction in the Labour Court.
[15] The applicant thereupon referred the matter to the
Labour Court where the question of jurisdiction of
the Labour Court was not raised. I believe I
should deal with it.
[16] On the evidence, this is a matter which should
have been adjudicated, since it appears that the
termination was clearly in consequence of a change
in ownership of the respondent therefore of an
operational nature.
[17] In my view, the dismissal can also be construed as
a constructive dismissal in that Mr Zerrouk did
not make it possible, by his conduct, for the
applicant to remain in the respondent’s employ and
did not offer him employment.
[18] On Mr Zerrouk’s own version, he did not expect to
have the applicant in his employ and all the other
evidence also seems to suggest that there was much
animosity between the applicant and Mr Zerrouk.
[19] I have to decide two issues in this case. The one
is whether the applicant was an employee and the
other is whether the applicant was dismissed.
[20] An employee is defined by section 213 of the
Labour Relations Act, No 66 of 1995 (“the Act)
as :
“any person, excluding an independent contractor, who works
for another person or for the State ad who receives, or who
is entitled to receive, any remuneration” and also as,
“any other person who in any manner assists in carrying on
or conducting the business of an employer.”
[21] The applicant worked for the respondent. He was
not the owner of the business and even if he was a
manager he was still an employee because he
received remuneration from the respondent and he
assisted from carrying on the business of the
respondent. There are no facts to suggest that he
was an independent contractor.
[22] The fact that Mrs Obertüfer did not discuss the
matter with the applicant or inform Mr Zerrouk of
the applicant’s presence, is of no consequence in
determining the issue before me. I find it
unlikely that a businessman who wishes to buy a
restaurant, omits to find out who the manager
thereof is, and what is to become of such a
manager after the sale, as managers are employees.
[23] If Mr Zerrouk feels that the applicant’s wife had
misrepresented certain facts about the respondent
restaurant to him, then it is open to him to take
whatever legal steps he deems necessary against
her.
[24] No consultation took place between the respondent
and the applicant in terms of section 189 of the
Act.
[25] The respondent was the employer of the applicant.
The new owners of the respondent, as well as the
previous owner made it impossible for the
applicant to remain in the service of the
respondent. Consequently the applicant was
dismissed by the respondent as a result of the
sale of the business to Mr Zerrouk and his wife.
[26] The respondent is not able to show any fair reason
for dismissing the applicant and no fair procedure
was followed. This situation is clearly borne out
by the facts. Consequently, the application must
succeed.
[27] According to section 193(2) of the Act the Labour
Court must require the employer to reinstate an
employee when there is no fair reason for the
employee’s dismissal unless the employee does not
wish to be reinstated or re-employed which is the
case with the applicant. Therefore he must be
compensated.
[28] The applicant was dismissed on 1 November 1997 and
in terms of section 194 of the Act the
compensation awarded to the applicant must be just
and equitable in all the circumstances but not
less than an amount specified by section 194(1) of
the Act where the compensation for procedural
unfairness must be equal to the remuneration that
the applicant would have been paid between the
date of his dismissal and the last day of the
hearing, but not more than twelve months.
Consequently, I must compensate the applicant for
twelve months remuneration calculated at his rate
of remuneration at the date of his dismissal which
was R 11 000-00 per month.
[29] In so far as costs are concerned, there are no
special circumstances which exist which could
persuade me that costs should not follow the
result. In the circumstances the respondent should
pay the applicant his costs.
[30] Accordingly I make the following order:
1. The applicant was an employee of the respondent on 1 November 1997 which is the
date of his dismissal
2. The applicant was not dismissed for a fair reason by the respondent. His dismissal was
substantively and procedurally unfair.
3. The respondent is to pay the applicant compensation in the amount of R 132 00000
which is the equivalent of twelve months’ remuneration calculated at the applicant’s
rate of remuneration on the date of his dismissal, which was R 11 00000 per month.
4. Interest is payable by the respondent on the aforesaid amount of R 132 00000, at the
rate of 15.5% per annum, from the date of judgement to date of payment.
5. The respondent is to pay the costs of this application on the High Court scale, as
between party and party.
---------------------
E REVELAS
For the applicant : Mr Whyte of CHENNELLS ALBERTYN
For the Respondent : Mr Zerrouk (In person)
Date of Judgement : 25 February 1999
This Judgement is also available on the Internet
at the following Website:
http//www.law.wits.ac.za/labourcrt