IN THE LABOUR COURT OF SOUTH AFRICA
HELD AT JOHANNESBURG
Case Number: J1407/98
In the matter between
Applicant
and
Respondent
JUDGMENT
de VILLIERS A J
[1] On 1 June 1998 the Applicant was dismissed from his position as an oxygen mask
assembler and supervisor with the Respondent. The reason for the dismissal was
based on the Respondent’s operational requirements. Unhappy, he referred the
matter to the Metal and Engineering Industries Bargaining Council for
conciliation. When conciliation failed to resolve the dispute, he referred it to this
Court for adjudication.
[2] During the pretrial conference and discussions between the parties prior to the
hearing, the parties agreed that the only issues in dispute were (a) whether the
Respondent consulted adequately with the Applicant prior to the retrenchment and
(b) whether the Respondent, having chosen to select employees for retrenchment
on the basis of LIFO (Last In First Out) and skills, applied this to the Applicant,
who alleged that employees who had shorter service than himself had not been
retrenched.
[3] As the Court understands it, therefore, the issue for determination is whether the
dismissal of the Applicant by the Respondent was substantively and procedurally
fair, in that the Applicant contends that the Respondent failed to consult with him
as provided for in section 189 of the Labour Relations Act 66 of 1995 (“the Act”)
and that the Respondent’s own selection criteria were not followed in respect of
his dismissal.
Consultation
[4] The Respondent relied on the testimony of Alan Pollard (“Pollard”), the Managing
Director of the Respondent, in support of its assertion that it had complied with
the requirements of s189 of the Act. Pollard testified that the Respondent was
involved in the manufacture of medical products, and was heavily dependent on
the receipt of state tenders for its business. In February 1998 the Respondent was
advised that it had not won two state tenders. Because the Respondent was
awaiting the outcome of a further tender, which would involve the appointment of
35 additional employees, it decided not to reduce the number of employees but
rather to institute short time arrangements in the hope that its bid would succeed.
It therefore issued a memorandum to its staff, informing them that they would in
the future be employed on a short time basis, until “decent awards” on its tenders
were received. Employees were invited to take voluntary retrenchment packages
rather than work short time and to make suggestions “to help us get through the
next difficult months”. They were also advised that if the awards did not
materialise, then a “program of retrenchment will have to follow”. Pollard testified
that the staff were called in department by department to discuss the matter, and
that the memorandum was presented to them when they met.
[5] By the end of April no new tenders had been received. The Respondent called
together the production supervisors to discuss retrenchment and they agreed that
retrenchments would be done according to the LIFO principle, within departments
with regard to skills. The employees were called to a meeting on 15 April 1998 at
which a discussion of the Respondent’s situation took place, and after which the
employees selected for retrenchment were handed letters terminating their
contracts of employment.
[6] The Respondent subsequently discovered that, in terms of the Bargaining Council
agreement, it was obliged to give employees three weeks’ notice, rather then the
two it had given. It therefore recalled all the employees, held a further meeting on
1 May 1998, and handed them a letter asking them to attend a further meeting on
15 May 1998 at which the following issues would be discussed:
(a) The reasons for the proposed retrenchment/redundancy;
(b) The need to effect the proposed retrenchment/redundancy;
(c) The measures taken and to be taken to reduce the effect of the proposed
retrenchment/redundancy;
(d) The manner of the proposed retrenchment/redundancy;
(e) The proposed number of employees to be retrenched;
(f) The proposed effective date of the retrenchment/redundancy;
(g) The basis of the selection of employees to be retrenched;
(h) The means to be adopted to ameliorate the hardship of the
retrenchment/redundancy.
[7] At the meeting on 15 May 1998, which was attended by the Applicant, Pollard
testified that, in addition to the matters listed, the selection criteria were explained
to the employees and they were invited to see him after the meeting if they had
any difficulties. Several employees did approach him pleading not to be
retrenched. The Applicant was not amongst them.
[8] Under crossexamination, the Applicant conceded that he had been present at the
meeting in February, and the meeting in May 1998 (he had been absent from the
meeting in April), and confirmed that discussions as described by Pollard had
taken place. He further confirmed that the employees been asked if they had any
input to make, and that he had not offered any.
[9] On the evidence before me, I am satisfied that the Respondent complied
substantially with the requirements of s189, insofar as they relate to consultation.
When it was advised that the first process had been defective, it immediately
remedied the situation by recalling the employees and holding further discussions
with them. The Applicant confirmed that he had been party to those discussions
and that he had nothing to suggest which could change his situation.
The Selection Procedure
[10] The Respondent alleged that the dismissals had been effected according to LIFO,
with regard to skills categories. This was disputed by the Applicant, who claimed
that employees with shorter periods of service than his had not been retrenched
and that people had been recalled and employed in his position after he had been
retrenched. He supplied several names to the Court, specifically Chantelle
Damons, Sharon Botha, George Jacobs, Anna Moloi and Andrew Dzhombe.
Pollard testified that all five of these employees were skilled workers, and thus not
in the same skills category as the Applicant. This evidence was not challenged by
the Applicant.
[11] Pollard testified further that one of the tenders that had been lost was for oxygen
mask assembly, and as a result that department had been closed down. While a
small number of masks were still produced for other private tenders, this work was
now done by workers in the intravenous department, in addition to their normal
tasks, and the position of the Applicant no longer existed.
[12] Pollard testified further that the Applicant did not have sufficient skills to be
employed in any of its other departments. Although he was described as an acting
supervisor, this entailed only supervision of the two other employees in his
department. This too was not disputed by the Applicant.
[13] The Applicant also alleged that employees dismissed at the same time as himself
were reemployed by the Respondent. Pollard gave evidence that certain
employees had in fact been employed by its competitors, although he had assisted
by circulating the names of all the retrenchees amongst them.
[14] In response to Pollard’s testimony that several employees with both longer service
than the Applicant and better skills were also retrenched, the Applicant questioned
Pollard about Julia Motsepe (“Motsepe”), one of the employees mentioned by
Pollard, whom, the Applicant claimed, had shorter service than himself and who
he claimed had not been retrenched. Pollard denied this, saying that Motsepe had
been employed by a competitor after he had given the competitor the names of all
retrenched employees. However, after the Applicant had given evidence under
crossexamination that he had seen Motsepe after his retrenchment at the
Respondent’s premises assembling masks when he went to collect his provident
fund cheque, the Respondent applied to reopen its case and Pollard testified that it
was possible that the Applicant had seen Motsepe working as a casual employee
in one of the “clean” rooms which the Respondent had hired out to a former
employee, one Ian Evans.
[15] Motsepe was thus called to give evidence as to her current employment and length
of service. She testified that she was retrenched by the Respondent in 1998, her
last working day being 23 August 1998 and that she was subsequently employed
by the Respondent’s competitor. She also testified that she had visited the
Respondent’s premises after that date and that while she had been there she had
helped out “because I knew the job”.
[16] The Respondent submitted the IRP 2 forms of both Motsepe and the Applicant,
which were admitted into evidence after confirmation by Motsepe and the
Applicant that the information contained thereon was correct. These indicate that
Motsepe had been employed on 6 July 1993 and that the Applicant had been
employed on 17 June 1994.
[17] Section 189 (7) of the Act obliges an employer to select employees to be
dismissed according to selection criteria that are either agreed to by the parties or
which are fair and objective.
[18] With regard to selection criteria which are fair and objective, the Code of Good
Practice on Dismissals Based on Operational Requirements has this to say.
(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. There may be instances where
the LIFO principle or other criteria needs to be adapted. The LIFO principle for
example should not operate so as to undermine an agreed affirmative action
programme. 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.
(See also Jones v KPMG Aiken and Peat Management Services
Limited [1995] 3 BLLR 49 (IC); Môrester Bande (Pty) Ltd v
NUMSA & Another (1990) 11 ILJ 687 (LAC); Le Roux and Van
Niekerk The South African Law of Unfair Dismissal pp. 253262)
[19] On the evidence before me I am satisfied that the Respondent has proved that the
selection criteria used by it in choosing employees for retrenchment were fair and
objective and that employees, including the Applicant, were retrenched on this
basis. Those named by the Applicant either had different skills or longer service,
justifying their continued employment by the Respondent. While the Applicant
may have honestly believed, as he argued in his closing statement, that:
(a) others with less service and the same skills had remained on;
(b) other people were employed to take his position after he was dismissed; and
(c) other employees who were retrenched at the same time as him were recalled to
service,
he was unable to support this with any hard evidence and therefore I must find
that the Applicant was retrenched in accordance with fair and objective criteria.
[20] While costs should follow the result in accordance with normal principles, the
Respondent’s representative indicated in closing that the Respondent would not be
pursuing its prayer for costs as it believed the Applicant was entitled to approach
the Court for relief. I therefore make the following order:
[21] I find that the dismissal of the Applicant was both substantively and procedurally
fair. There is no order as to costs.
I de VILLIERS A J
Acting Judge of the Labour Court
DATE OF HEARING: 03 04 March 1999
DATE OF JUDGMENT: 25 March 1999
For the Applicant: In person
For the Respondent: Bell Dewar & Hall