IN THE LABOUR COURT OF SOUTH AFRICA
(Held at Braamfontein)
Case No J 949/98
In the matter between
SIPHIWE SIKHOSANA AND OTHERS Plaintiff
and
SASOL SYNTHETIC FUELS Defendant
BRASSEY AJ:
The applicants, erstwhile employees of the respondent, were dismissed on 31 January
1998 following a decision by the respondent to ‘outsource’ the work being done in
their department. Their dismissal, which was plainly for operational reasons within the
contemplation of the Act, is alleged by them to be unfair, and they now seek an order
reinstating them in their employment with the respondent.
In their statement case they set out a number of complaints but in both the evidence
they tendered and the argument they mounted through their representative, Mr
Luthuli, they confined their attack on their dismissal to the following grounds.
The dismissal was in breach of their respective contracts of employment, which (they
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say) gives them a contractual right to remain in employment until retirement age;
The defendant failed to consult over the dismissal with the union to which they belong,
viz the United Peoples Union of South Africa (UPUSA);
The defendant took insufficient steps to place them with the outside firms that were
taking over the outsourced work.
The first issue was not pleaded and is thus not one on which I am required to
pronounce. For completeness, however, I shall say a few words about it. The
defendant’s witnesses accepted in evidence that the employment contracts under
which the applicants were engaged contain a stipulation regulating the age on which
they are to retire. Mr Luthuli argued that this provision gave them an absolute right to
remain in employment until the arrival of the specified date. Such a conclusion, which
is so obviously contrary to conventional practice, would be insupportable in the
absence of contractual provisions of the clearest and most unambiguous sort. There is
nothing to suggest that the present contracts contained such language, and I should
be most surprised if they did. The point must be dismissed as baseless.
The defendant’s answer on the second point (the failure to consult with UPUSA) is
twofold: first, that its duty to consult was exhaustively delineated by a collective
agreement by which the three recognized unions, which represent eighty percent of
the non-managerial staff of the company, regard themselves as bound; and secondly,
that the company in any event consulted with UPUSA over the retrenchments in a
manner consistent with the dictates of fairness. I shall deal with each defence in turn.
The collective agreement upon which the defendant relies was formally concluded
with the Chemical Workers’ Industrial Union alone, but the company’s evidence
(which on this point was undisputed) makes it clear that this agreement was treated
(which on this point was undisputed) makes it clear that this agreement was treated
by the other two unions, the Mine Workers’ Union and the South African Workers’
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Union, as equally applicable to, and binding, upon them. The agreement commences
by recording a general commitment to fairness, consistency, objectivity and honesty
in dealing with ‘overstrength employees’ (by which is meant employees who are
redundant). It then goes on to make detailed and specific provision on the manner in
which the need to retrench or outsource is to be determined, the steps to be taken
before dismissal is invoked, the criteria by which employees are to be selected for
dismissal and the means by which the impact of dismissal will be cushioned. Judged
by current standards, the terms are generous to employees: prospective retrenchees
are, for instance, to be given two months’ notice of dismissal in order to allow for a
thorough exploration of lesser alternatives, and severance pay comprises, in addition
to certain other benefits, four months’ salary in lieu of further notice plus three
weeks’ pay for every year of service.
Under the agreement no provision is made for consultation with unions other than the
CWIU, but the company accepts that, since its terms apply mutatis mutandis to the
two other recognized unions, it must consult with them as well. Consultation on
outsourcing occurs in an outsourcing committee on which the unions are entitled to
representation. During 1996 the committee met to consider the continuing viability of
the department (reprographics) in which the applicants were employed and which,
according to the unchallenged evidence of the company, was no longer cost-effective.
Initially the committee refused to sanction the outsourcing of the work, but the matter
was considered once again in 1997 and outsourcing was approved.
What happened thereafter was contested in evidence by the applicants’ witnesses
(the first applicant and Sipho Mvubelo, the UPUSA worker representative in the
company), but the issues they raised had actually been put out of contention by
company), but the issues they raised had actually been put out of contention by
agreement at the pre-trial conference and so I must proceed as though they are
undisputed. Moreover, since the agreement reflects the company’s version, I must
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accept the elaboration upon them that the company proffered in evidence. What this
evidentiary material reveals is that Eben Kok, a member of the company’s labour
relations department, spoke to Mvubelo on 29 October 1997 about the closure of the
department and its implications for the employees within it. Mvubelo, after
questioning Kok on various aspects, expressed himself to be satisfied with what he
had been told. What emerges, in addition, is that Johan van Rooyen, the head of the
reprographics department, called his subordinates together on 13 November 1997,
told them of the impending closure, and explained the effect it would have on their
employment.
What followed next is common cause between the parties. Letters in the same terms
were written to the employees in the department confirming what they had been told
and notifying them that their work would terminate on 1 December and their
employment on 31 January 1998. The letters invited them to use the services of the
Career Transition and Development Centre, a unit specifically established by the
company to handle the consequences of its restructuring and downsizing, in order to
explore the opportunities for redeployment within the company. The letters were
dated 25 November but were apparently only distributed on the 28th.
In December the workers reported to the CTDC as suggested and efforts were made
to find them alternative employment within the company. Some interviews were held
with the employees but ultimately only one member of the department was placed
elsewhere within the organization. The cudgels, meanwhile, were being taken up by
UPUSA, which by now had recruited most members of the department. Its opening
blow was a letter to the respondent of 26 November 1997, in which it complained that
the proposed retrenchments were unfair and invited the company to suspend the
process until a meeting could be held in an effort to resolve the problem. The parties
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met on 11 December 1997 but were unable to achieve more than an exchange of
viewpoint. The meeting ended with an undertaking by the union that it would suggest
ways of avoiding retrenchment ‘in addition to the CTDC option of looking for
placement options in other Divisions’ (the words are taken from the respondent’s
letter to UPUSA of 11 February 1997 confirming what transpired at the meeting).
Nothing was volunteered by the union before the termination of the applicants’
employment; indeed, there were no further communications of consequence between
the two sides until 11 February 1997, when a meeting was held which ended as
inconclusively as its predecessor. By then the dismissals had been effected and the
respondent, believing it had acted fairly, adamantly rejected UPUSA’s demand that
they be reinstated. The correctness of the belief is what i must now consider.
Section 189 of the Labour Relations Act 66 of 1995 is normally regarded as the source
of the law governing dismissal for retrenchment, but in fact it does no more than set
out a a number of duties with which an employer must comply when she
contemplates dismissing employees for operational reasons. None of its provisions
deal expressly with dismissal, let alone with whether and when a dismissal will be fair.
There is, for instance, no provision stating that non-compliance with the section
makes a dismissal for operational requirements unfair nor any provision stating the
converse – ie that compliance with the section makes the dismissal fair. For the
provisions that have this effect, we must first look to s 185, which gives employees
the right not to be unfairly dismissed, and then at s 188, which states (so far as is
now relevant) that a dismissal is unfair unless it is actuated by a fair reason based on
the employer’s operational requirements and is effected in accordance with a fair
procedure. Section 189 has nothing expressly to say on matters of fairness.
procedure. Section 189 has nothing expressly to say on matters of fairness.
What purpose, then, does s 189 serve?
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First it provides a set of self-standing duties with which an employer must comply or
run the risk of the retrenchment being declared invalid. A declaration of invalidity,
which I accept is seldom made, is competent when the duty with which the employer
fails to comply is held to be peremptory (as opposed to merely directory) and the
facts of the case reveal good grounds for an exercise of discretion in favour of an
order for specific performance. On these matters it is unnecessary to say more than
that the remedial discretion is more likely to be exercised before the retrenchment
has occurred than afterwards. This, I take it, provides one explanation why proposed
retrenchments are sometimes interdicted on the grounds of non-compliance with the
section but retrenchments that have been carried out in breach of the section are
seldom condemned as invalid and reversed.
The second purpose served by s 189 is to shed light on what constitutes an unfair
retrenchment. By setting down the processes to be followed before a retrenchment
takes place, the legislature plainly reveals a belief that retrenchment without
following those processes would be wrong, and the step from what it is wrong to what
is unfair is but a small one. The relationship between the dictates of s 189 and those
of fairness is not one to one, however. It cannot be assumed that every breach of s
189 necessarily makes the retrenchment unfair: every invalid dismissal will doubtless
be unfair but, as I have tried to make clear, not every dismissal in conflict with the
section will necessarily be - or be treated as - invalid. It would be even more
dangerous to assume that every retrenchment in compliance with the section is
necessarily fair. Section 189, which (with one exception of no relevance here) deals
only with matters of consultation, is obviously not intended to be exhaustive. A court
determining the fairness of a retrenchment must consider, in addition to the matters
determining the fairness of a retrenchment must consider, in addition to the matters
for which the section provides, whether the employer really needed to retrench, what
steps she took to avoid retrenchment, and whether fair criteria were employed in
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deciding whom to retrench. Compliance with s 189, in short, is neither a necessary
nor a sufficient condition for the fairness or unfairness of the applicable act of
retrenchment. The section gives content and colour to fairness in retrenchment and
its significance as such should not be underrated; but ultimately it provides only a
guide for the purpose, and cannot be treated as set of rules that conclusively
disposes of the issue of fairness.
The precise impact of s 189 depends to an extent on the precision with which it
regulates a specific topic. When a provision is comprehensive in its coverage and
specific in its terms, it is easier to conclude that conduct which goes unregulated is
permissible and so fair. This is well illustrated by an examination of subsection (1) of
s 189. This is the provision which delineates the party whom the employer must
consult when retrenching and so the provision that is most pertinent to the question
now under consideration (which, lest we forget, is whether the respondent was
obliged to consult with UPUSA). The provision reads as follows:
‘1) When an employer contemplates dismissing one or more employees for reasons
based on the employer’s operational requirements, the employer must consult-
(a) any person whom the employer is required to consult in terms of a collective agreement;
(b) if there is no collective agreement that requires consultation, a workplace forum, if the
employees likely to be affected by the proposed dismissals are employed in a
workplace in respect of which there is a workplace forum;
(c)if there is no workplace forum in the workplace in which the employees likely to be
affected by the proposed dismissals are employed, any registered trade union whose
members are likely to be affected by the proposed dismissals;
(d) if there is no such trade union, the employees likely to be affected by the proposed
dismissals or their representatives nominated for that purpose.’
dismissals or their representatives nominated for that purpose.’
No one reading this section can fail to be struck by its comprehensiveness and the
pains it takes to identify the body with whom the employer must consult. Four levels
of consultation are set out but the section goes out of its way to stress that only one
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can be applicable. It does this by making each duty except the first conditional on the
inapplicability of its predecessors: para (d) can apply only if (a) (b) and (c) are not, (c)
becomes applicable only if (a) and (b) are not, and so on.
It is impossible to believe that this hierarchy of obligations has anything but
intentional: care has too obviously been taken in the choice of language to permit the
conditional clauses to be dismissed as mere rhetorical flourishes. The interpreter is
driven to the conclusion, therefore, that an employer, to satisfy her obligations under
the subsection, need only consult the employees likely to be affected by the proposed
dismissals (or their representatives) if there is no registered union whose members
are likely to be affected by the dismissal, no workplace forum in the workplace in
which the dismissal might occur and no collective agreement governing consultation.
The union, in turn, need be consulted only if there is no such workplace forum and no
such collective agreement, and so on up the ladder. Under the unfair labour practice
jurisdiction of the previous Act, there were suggestions that the employer had a duty
to consult at two levels: first with the collective bargaining representative of matters
such as the need to retrench and the criteria for retrenchment, then with the
prospective retrenchees over matters specific to their individual future and fate.
Section 189(1) quite deliberately renounces dual consultation in favour of the single
level of consultation for which it provides. The change evinces, I take it, more than
just a concern to make the process of consultation simple and speedy: it embodies a
desire, evident elsewhere in the Act too, that bargaining and consultation should be
collective rather than individual and that the legitimacy of the representative with the
best claim to be consulted should not be undermined by the claims to consult made
best claim to be consulted should not be undermined by the claims to consult made
by lesser interests. The effect of the section, thus, is to vest the appropriate
collective representative with sole power of representation; if others claim the right
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to be consulted, they must look beyond the section, indeed beyond the Act, and point
to some juristic act – an agreement, undertaking or commitment of some sort – in
terms of which the employer concedes that she will engage in such consultation.
Subsection (1) cannot, for reasons I have been at pains to stress, be treated as
conclusively determining the scope of the employer’s duty to consult. Cases can arise
in which consultation, though strictly in terms of the hierarchy, nevertheless falls
short of what fairness requires. I think, for example, of a case in which the collective
representative that is entitled to consult under the section discriminates against non-
members in its dealings with the employer or of the problems that can arise when the
collective agreement contemplated in the first paragraph of the subsection is the
product of collusion between the employer and a minority or ‘sweetheart’ union. But
the present case is not of this ilk. Here it is plain, first, that the collective agreement
has the support of unions representing the overwhelming majority of the company’s
blue-collar workforce and secondly, that it sets up structures within which
consultation can conveniently and properly proceed. Agreements such as this are
precisely the kind the drafters of s 189(1) must have had in mind when they placed
unions who conclude them at the top of the hierarchy that the subsection creates. We
can comfortably assume that they wanted these unions to say ‘We and we alone will
consult’ and employers to have the right to echo this statement.
If this was their desire when they fashioned s 189(1), it must equally have been what
they wished to see as informing the court’s decisions on unfair retrenchment.
Believing that the employer acts correctly when consulting in terms of the hierarchy,
they must have considered that a dismissal will not normally be unfair if the employer
declines to consult on some other basis.
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In the present case, the respondent, in consulting with the majority unions, heeded
the dictates of the section. The unions had the right to consult with the respondent in
terms of a collective agreement with it and, as a result, were at the top of the
hierarchy. Nothing in the agreement suggests that it is the processes for which it
provides are discriminatory or oppressive; nor is there anything to suggest that the
application of the agreement in the present instance was in some way unfair or
improper. The applicants simply say that the company should in addition have
consulted with UPUSA since it is the union to which they, the prospective retrenchees,
mostly belong. UPUSA, however, has no status under the agreement and, having
recruited only a handful of the company’s employees as its members, cannot
seriously suggest that in morality or equity it should have. All it can assert is its
strong representation in the department being outsourced; but this claim, which
ranks lowest in the hierarchy created by subsection (1), is trumped by the right of
consultation given to the three majority unions by reason of the conclusion of the
collective agreement. This right entitles these majority unions to speak on behalf of
the company’s employees, whatever their union affiliation, in matters of
retrenchment. Respect for the legislative policy underlying the hierarchy of rights
requires a court, in deciding an unfair dismissal case, to give effect to the terms of
the collective agreement unless it is evident that to do so would be to perpetrate an
unfairness going beyond any inequity stemming from the hierarchy itself. In the
present case I can find nothing to justify such a conclusion. As a result, I find that the
company was under no duty to consult with UPUSA over the dismissals and its failure
to do so prior to dismissing them was not unfair.
If I am wrong and the respondent was indeed under some duty to consult UPUSA, the
If I am wrong and the respondent was indeed under some duty to consult UPUSA, the
duty, I consider, would perforce been a very light one. Having consulted with the
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three unions in the majority, there would have been little more for the respondent to
consider in consultation with UPUSA. The majority unions had been invited to consider
whether the outsourcing was justified and, after initially demurring, had agreed that it
was. They had also agreed that retrenchment would be appropriate if no alternative
work could be found for the members of the reprographics department. Armed with
this agreement, the respondent would have been entitled to approach its discussions
with UPUSA on the basis that these questions had been settled. All that would have
been left to discuss was whether there was anything in the personal circumstances of
the members of the department to which it should pay special attention. This, and
more, was what the respondent did. It spoke to the UPUSA shop steward about the
impact of the outsourcing on the people he represented and then spoke to the union
itself, inviting it to make whatever representations it wished. I consider, therefore,
that if the respondent bore a duty to consult with UPUSA, it fully discharged it.
I turn now to the applicants’ final complaint – that is, that the retrenchments were
unfair because the respondent failed to make efforts to place the applicants with the
outside contractors. No provision in s 189 specifically covers this complaint, but s
189(2)(a)(iv) gives us some guidance on what is required. It states that an employer
who contemplates retrenchment must, together with the applicable collective
representative, attempt inter alia ‘to reach consensus on … appropriate measures …
to mitigate the adverse effects of the dismissals’. In the present case the respondent
complied with this provision. It made the prescribed attempt and in fact succeeded in
reaching consensus with the majority unions. They accepted the closure of the
department, the outsourcing of its work and the retrenchment of its members upon a
department, the outsourcing of its work and the retrenchment of its members upon a
specified set of agreed terms. No charge can, therefore, be levelled against the
respondent based on a breach of the subsection.
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The agreement concluded with the majority contained no provision obliging the
respondent to seek work for the members outside the company. Mr van As, who
appeared on the respondent’s behalf, refrained from arguing that the omission of
such a provision constituted a waiver of the applicants’ rights and correctly so. The
agreement could operate to bind non-members of the unions only if it contained a
provision specifically making it so (s 23(1)( d)), and it contained no such provision. It
would, moreover, be extremely difficult to infer a waiver from the mere fact that the
agreement was silent on the point. The applicants were, in consequence, entitled to
stand on their rights under the Act.
What were those rights? By now it should be clear that I consider s 189 to be
illustrative, but not exhaustive, of an employer’s equitable obligations on matters
concerning dismissal. I believe it is proper to deduce from s 189(2)( a)(iv) an equitable
obligation actually to take the appropriate measures contemplated by the provision in
order to mitigate the effects of retrenchment. The section, it is true, deals only with
matters of process; but there would be little purpose in obliging an employer to seek
consensus on mitigating measures unless the legislature considered it desirable that
such measures should in fact be explored and implemented before retrenching. I
consider, therefore, that employers are bound to take appropriate measures to
mitigate the effects of retrenchment if the retrenchment is to escape condemnation
as unfair.
Do these measures include the taking of steps to place retrenchees in employment
outside the firm? Past decisions on the question are by no means harmonious. In no
case that I can trace has a retrenchment positively been condemned as unfair merely
because the employer failed to take these steps; all I can find are a few stray dicta
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suggesting that the employer must indeed take them. Of these the most emphatic
seems to be contained in the judgment in Hlongwane & another v Plastix (Pty) Ltd
(1990) 11 ILJ 171 (IC) at 171C-D, where the presiding officer stated that ‘the employer
can consider the following alternatives: … (d) to find alternative employment for the
employee with another enterprise.’ By way of contrast, one can cite the case of
Building Construction & Allied Workers Union & others v Masterbilt CC (1987) 8 ILJ 670
(IC) in which the industrial court held (at 680E) that an employer did more than was
required of it by seeking to place the retrenchees in employment with another firm
within the area. The presiding officer, it is true, was interpreting the provisions of a
procedural agreement with the union when he made this statement, but he would, I
imagine, have framed his point rather differently if he had believed in the existence of
a residual duty covering the matter. Between the two is a range of cases in which the
dicta are inconclusive: some decisions, for instance, say that the employer is obliged
to seek out alternative employment for retrenchees but fail to indicate whether the
duty extends to outside as well as internal employment (see, most notably, Imperial
Cold Storage & Supply Co Ltd v Field (1993) 14 ILJ 1221 (LAC) at 1226E; see too
United African Motor & Allied Workers Union & others v Fodens (SA) (Pty) Ltd (1983) 4
ILJ 212 (IC) at 230E); other decisions suggest that the employer’s duty goes no further
than to give the employee time off to approach outside employers himself (see, for
instance, General Workers Union & another v Dorbyl Marine (Pty) Ltd (1985) 6 ILJ 52
(IC) at 58A-B, C-D, Food & Allied Workers Union & Others v Ameens Food Products &
Butchery (1988) 9 ILJ 659 (IC) at 668G, Commercial Catering & Allied Workers Union
of SA & others v Status Hotel (1990) 11 ILJ 167 (IC) at 171G). Further see Liebenbergh
of SA & others v Status Hotel (1990) 11 ILJ 167 (IC) at 171G). Further see Liebenbergh
& Others v Franz Falke Textiles (Pty) Ltd (1986) 7 ILJ 513 (IC) at 519A-D. They derive
support from Edward Yemin, who writes under the auspices of the International
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Labour Organization. In his authoritative work ‘Workforce Reductions in
Undertakings’, he says:
‘When anticipated workforce reductions cannot be avoided, attention turns to how
and to what extent the adverse effects of these reductions on the workers concerned
can be attenuated. Certain rights often afforded to such workers are relevant in this
connection. These include rights regarding selection for redundancy …, advance
notice of dismissal or lay-off so as to enable the workers concerned to seek
alternative employment, time off from work during the notice period for this purpose,
provision of compensation or income protection to workers dismissed or laid off and
entitlement to re-employment by the employer when he again recruits workers with
the same qualifications.’ (The quote is taken from Engineering Industrial & Mining
Workers Union & another v Starpak (Pty) Ltd (1992) 13 ILJ 655 (IC).)
When the authority on the point is so equivocal, there is no option but to return to a
consideration of the matter on first principles. This requires an examination of the
purpose of the unfair dismissal jurisdiction and, since this is nowhere set out, a
broader enquiry into the objects of the Act as a whole. These objects can be found in
s 2 of the Act and need not be recited in full in this judgment. It is their spirit that is
important here, and this is best divined from the following salient provisions: ‘( a) to
give effect to and regulate the fundamental rights conferred by section 27 of the
Constitution’ and ‘( d) to promote … (iii) employee participation in decision-making in
the workplace; and (iv) the effective resolution of labour disputes.’ (The Constitution
referred to is the interim Constitution, which was in force when the LRA was enacted.
The successor to s 27 is s 23 of the final Constitution, which confers on every worker
a right to fair labour practices.)
a right to fair labour practices.)
Strikingly, the preservation of industrial peace is omitted from the list. This omission
cannot be accidental, for everyone with some knowledge of labour is aware that the
preservation of industrial peace was the main, and arguably the sole, objective of the
Act’s predecessors. It is idle to speculate on the reasons why the drafters decided to
omit this object; it is enough to say that they were right to do so. The rubric
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‘preservation of industrial peace’ is broad enough to justify legal intervention to
placate and mollify interest groups who have no better claim to it than is implicit in
their ability to cause unrest and create havoc. Employers and unions should, no
doubt, have scope to flex their muscles; by doing so they promote the proper
redistribution of scarce resources within the market. Within a constitutional
dispensation, however, there can be little reason for the law to take sides with the
powerful simply because of their power; ‘might above right’ is, I take it, inimical to the
culture of human rights enshrined in our Constitution. There are, besides the ethical,
also good consequentialist reasons for declining to favour the powerful: a system
built on justice and fair play produces solutions that foster a form of workplace peace
and harmony, not merely more just, but altogether more solid than the ‘peace’
meretriciously pursued by the previous statutes.
Outside the sphere of statute law, the previous Labour Relations Act in particular, the
law declines to pander to power simply for the sake of peace. So much is clear from
the decision of Gründling v Beyers & others 1967 (2) SA 131 (W), which went off on
the common law. It concerned an application for an interdict to restrain the general
secretary of the Mine Workers’ Union from continuing in office after his occupancy of
it had, as the court found, lawfully been terminated by a resolution of the executive
committee. On his behalf it was argued that the granting of the interdict ‘would
probably cause further unrest within the Union and might have serious consequences
to the national economy’. Trollip J emphatically rejected the submission:
considerations of this sort, he said (at 155B-F), could not properly be taken into
account in the exercise by the court of its discretion to refuse an interdict. The judge’s
account in the exercise by the court of its discretion to refuse an interdict. The judge’s
sole concern was with the rights created by law and it was by the law that he must be
ruled.
15
Since then the rights conferred by the law have been much developed: the Bill of
Rights simultaneously elaborates upon them and expands their scope. The underlying
principle, however, remains unchanged, and it is one that the drafters of the LRA
must surely have understood when they crafted the statute’s terms. It is that power
and might, important as they might be in daily life, deserve no recognition in a
constitutional state by reason of their potency alone. It is justice that is the proper
object of the law, however imperfectly that noble aim might be realized in practice.
Justice is what the Act aims at - much seems to be clear from an examination of the
objects I have cited above – and justice is likewise the object of the unfair dismissal
regime. Here as in other branches of law, however, its attainment entails the striking
of balances. Employees have rights but they must be weighed against the rights of
others, who include, in this context, not merely employers but also work-seeker who
compete within the labour market for their jobs. The competition exists but is latent
for so long as the employee remains in the job; when he leaves the job and enters the
labour market it becomes overt and then he vies head-on with existing work-seekers
for new employment. As between an ex-employee and a work-seeker, I can discover
nothing that, in justice, entitles the former to better treatment than the latter. There
are, no doubt, some important reasons of social policy why ex-employees should be
re-employed quickly: they have skills which the economy can exploit and are, as
consumers, still participants in a market that depends for its viability on them and
others like them; they have, moreover, developed aspirations and expectations that,
when frustrated, quickly turn to bitterness and rebellion. I am just as sure that some
unions see nothing wrong in using their power to secure better access to jobs for their
unions see nothing wrong in using their power to secure better access to jobs for their
members. But these are considerations of expediency, not justice, and the court,
interpreting the LRA, should decline to recognize them unless satisfied that the
16
statute plainly directs it to do so, and then only if satisfied that, unconstitutional
though their recognition seems to be, they nevertheless warrant recognition under
the limitations clause in the Bill of Rights.
This analysis, it might be thought, strikes at the very foundations of the law of unfair
dismissal. Does the unfair dismissal regime not give employees protection from
dismissal and thereby place them in a position of privilege when they are compared
to the work-seekers who are in competition with them? To a question so stated, the
answer cannot but be yes, but the real question is whether this is the object, rather
than simply an inevitable consequence, of the regime. In my view it is not.
One object of the provisions protecting workers from retrenchment is to keep up
levels of employment. A few, somewhat banal, observations are necessary to explain
what I mean. Employees are in competition not only with work-seekers but also with
machines and it is a competition that, in certain segments of the labour market, they
are losing. The inexorable process of mechanization produces the restructuring and
down-scaling to which employers resort to extract greater productivity from fewer
employees and more and more workers are being relegated to the ranks of the
unemployed, where they increase the demands on the public purse by their claims on
welfare. By making retrenchment costly and difficult, the legislature encourages
employers to keep workers on their books if they can and so puts a brake on the
process of job-shedding. Its effectiveness is immaterial to this judgment; what is
material is the fact that it self-evidently provides a justification for at least that
segment of the unfair dismissal that relates to redundancy.
The regulation of dismissal for reasons of misconduct or incapacity is less easily
explained and dispatched. In cases of this sort no jobs are saved by the unfair
17
dismissal regime; the job vacated by reason of the dismissal must still be done and
will be filled by someone else in the labour market. If it is so, as I have suggested,
that job incumbents have no legitimate claim over work-seekers to preference within
the job market, why are they sheltered by the Act against dismissal based on their
misconduct or incapacity? The answer, I consider, lies in a recognition of a second
object of the unfair dismissal regime (which, as we shall see, applies equally to cases
of retrenchment): it is the pursuit of acceptable standards of conduct in the workplace
in order to forestall potential abuse, oppression and undue exploitation of employees.
Underlying this object is a belief that employees should be treated as more than just
instruments of the employer’s will: they are people who, by reason of that and that
alone, are entitled to be treated with dignity and humanity. ‘Labour is not a
commodity’ is a well-known slogan and this, I consider, is the spirit in which the
protection against dismissal for misconduct and incompetence has been enacted.
How does the protection serve this goal? The answer is, by policing the exit the law is
able to police what happens within. The point can be illustrated by likening
employment to a lecture room in which students are vocal enough to irritate the
lecturer; by acting as door-keeper and seeing to it that only those who deserve it are
ordered out, the University authorities do much to ensure that the lecturer treats
them properly. Likewise, it is by regulating and redressing the exit of dismissal that
the Act endeavours to create a climate in which employees can work without fear of
unjust treatment and freely exercise their legitimate rights. They include trade union
rights – a fair dismissal regime is a powerful antidote to dismissal – but they embrace
other human rights as well.
Neither of these two objects is promoted by obliging employers to seek positions for
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ex-employees in other enterprises. The sphere within which the objects operate is the
employment relationship, whose existence and continuance is pre-supposed, whereas
the suggested obligation has no purchase until the relationship is over. At this pont
there is nothing to be gained by continuing to give him preferential treatment: he
must now takes his place in the ranks of work-seekers and compete with them for a
new job on his merits. To give him a preference without a sound reason for doings so
would be an act of discrimination and I can see no basis for inferring, from the Act’s
objects or otherwise, that such discrimination is legitimated by the statute, still less
that it is positively mandated. As a result, I hold that employers, in retrenching
employees, have no duty to seek positions for them with outside employers.
In the remarks I make, I refrain from considering whether a company within a group
must seek positions for its retrenchees within its corporate affiliates. The answer to
this may depend upon how close the affiliates are, but this is a matter on which I
prefer to say no more than that. I likewise say nothing about the effect of s 197 of the
Act, which deals with the extent to which employment continues when a business is
sold: the rights given by the section were not relied upon by the applicants in their
pleadings or argument and I have in no way considered their relevance to the present
case.
If I am wrong and the Act does indeed oblige employers to seek work for retrenchees
outside the firm, I would still find for the respondent on this point. The applicants
appointed UPUSA to represent them generally and clearly contemplated that it would
act on their behalf in the discussions concerning their retrenchment. At its meeting
with the union in December, the employer invited representations on the manner in
which the retrenchment might be avoided or its effect ameliorated. The union made
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no response to the invitation and the respondent was, as a result, entitled to conclude
that it had nothing to proffer. The work previously being done by the retrenchees was
not handed over holus bolus to a single enterprise but was given out piecemeal to
whichever suppliers could most effectively do the job. Without a guaranteed stream
of orders, the suppliers would by no means necessarily be looking for new staff. The
respondent was, I consider, justified in believing that they would make appropriate
enquiries if they were looking for staff and believed the retrenchees could supply the
need. If UPUSA knew, or even suspected, otherwise, it should have alerted the
respondent by responding to the invitation it had received to make representations.
The respondent’s duty, assuming its existence, was to do no more than take
reasonable steps to place the retrenchees elsewhere; it was not obliged to pursue a
course that, in view of the silence of the contractors and UPUSA, could not but have
appeared futile.
Accordingly, I conclude that the applicants have made out no case against the
respondents and their application must be dismissed. I can see no reason why costs
should not follow the event. Mr van As argued that UPUSA should be ordered to pay
the costs jointly and severally with the applicants as it had acted on their behalf in the
litigation. The submission is made even though UPUSA was not a party to the
litigation, having dropped out of the case when the CCMA proceedings were over.
To make such an order I have to find, first, that the court can exercise a costs
jurisdiction over a non-party; secondly, that the order would be justified on the merits
of this case; and thirdly, that the non-party has been given a proper hearing on the
issue. I shall deal with each in turn.
The jurisdictional question is complex. At common law it is clear that orders for costs
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can be given against persons who are not parties to the litigation. The subjects of
such orders are, typically, legal practitioners who act improperly in conducting the
case; but costs are sometimes given against other non-parties who have support the
litigation or have some other connection with it. See, for an example of such a case,
Francarmen Delicatessen (Pty) Ltd v Gulmini And Another 1982 (2) SA 485 (W). In the
absence of some contrary stipulation in the Act, there is no reason why the Labour
Court should not have the same power. It is a court that, within its province, is of
equal status to the High Court and is expressly vested with the power to make orders
for costs in the exercise of its discretion (see, in addition to s 162(1), s 158(1)(a)(vii)).
The Act contains no express stipulation excluding the court’s power to make such an
order and an implication to this effect can only be based on s 162. The section reads
as follows:
‘(1) The Labour Court may make an order for the payment of costs, according to the
requirements of the law and fairness.
(2) When deciding whether or not to order the payment of costs, the Labour Court
may take into account-
(a) whether the matter referred to the Court ought to have been referred to arbitration in
terms of this Act and, if so, the extra costs incurred in referring the matter to the
Court; and
(b) the conduct of the parties-
(i) in proceeding with or defending the matter before the Court; and
(ii) during the proceedings before the Court.
(3) The Labour Court may order costs against a party to the dispute or against any
person who represented that party in those proceedings before the Court.’
Subsection (1), it will be observed, is in the most general terms. Standing alone, it
justifies no inference that the Labour Court cannot exercise the same jurisdiction over
non-parties as the High Court; quite the contrary. To come to this conclusion, it is
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necessary to treat subs (3) as limiting its scope by exhaustively delineating the third
parties against whom a costs order can be made. If this interpretation is correct, then
no order can by made against UPUSA. Non-parties only fall within the compass of the
subsection if they appear on behalf of a party in the proceedings, that is, if they act
as her spokesperson in court. Rights of appearance, which are determined by s 161,
are extended to union officials and office bearers under subs 161( c), but when they
act as such, they discharge their duties eo nomine and not as agents of their
organization.
The argument for treating subs (3) as exhaustive draws its strength from the
comprehensiveness of its language and the fact that it is framed in more limited
terms than its predecessor in the 1956 Act, which sanctioned an order against ‘a
trade union, employer’s organization, office bearer or official acting on behalf of or in
any manner assisting’ a litigant in the proceedings (see s 17(12( a)). It derives extra
support from the fact that the Labour Appeal Court in Moloi & another v Euijen NO &
another (LAC 12/8/99, unreported) seemed to assume, without deciding, that subs (3)
does exhaustively determine the reach of the power to order costs against non-
parties. I am, nevertheless, impressed by the breadth of the language of subs (1),
which empowers the court, without any express limitation, to make an order for costs
according to the requirements of law and fairness. Language so sweeping and general
should not be cut down unless there is good reason to do so and I can find none.
Moreover, I regard it as significant that subs (3) contains no such word as ‘only’ or
‘exclusively’, which would, if employed, have made its exhaustiveness plain. If the
drafters wished to cut back on the wide wording previously employed and intended
orders for costs to be awarded only against the people referred to in subs (3), I feel
orders for costs to be awarded only against the people referred to in subs (3), I feel
sure some words as these would have been used for the purpose. In my view, the
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legislature’s intention in inserting subs (3) was simply to place the issues it covers
beyond doubt. It is, like subs (2), simply explicatory and enabling. I find therefore that
this court does have the power to make orders for costs, not merely against legal
representatives and other spokesman appearing on a litigant’s behalf in the court, but
also against other third parties who support or are otherwise connected with the
litigation.
In the present case Mr Luthuli candidly acknowledged, in his submissions from the
bar, that UPUSA had given the applicants both moral and financial support in the
bringing of this litigation. This, it seems to me, provides a sufficient ground for
granting an order for costs against it if fairness so dictates: by supporting litigation,
the union creates the circumstances by which the respondent is brought before court
and, in the process, forced to incur the attendant legal costs. Supporting indigent
people who seek to vindicate their rights is, however, highly laudable conduct, even
when actuated by less than completely altruistic motives, and deserves no
discouragement when honestly undertaken. In most cases, therefore, it would be
wrong to mulct a union that takes up the cudgels for the benefit of its members
unless it acted frivolously, vexatiously or for some indirect and improper purpose in
bringing or pursuing the action. This principle, it seems to me, applies irrespective of
whether the union makes itself a party to the litigation or not. Its status as litigant
bears on the question of whether the court can, as a matter of jurisdiction, order costs
against it, a matter on which I have already pronounced. It is of no consequence when
considering the present question – that is, the manner in which the court should
exercise its jurisdiction. (Of course, the position becomes quite different if the union,
in its capacity as a joint applicant, itself presses for costs against the respondent:
in its capacity as a joint applicant, itself presses for costs against the respondent:
then it would normally be right to make costs follow the event, for the union cannot
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claim costs without running the risk of an equivalent order being made against it.)
In the present case, Mr van As rightly conceded that this action was not improperly
brought by UPUSA. There is, therefore, no basis for making an order for costs against
it. For completeness, however, I should say that I would have been satisfied that the
union had been given enough of a hearing to entitle me to make an order against it
had one been warranted. Mr Luthuli was here as the official of the union deputed to
deal with the case; he could therefore speak on its behalf on matters concerning its
liability for costs.
In the circumstances I make the following order:
The application is dismissed.
The applicants must pay the respondent’s costs jointly and severally.
There will be no order for costs against UPUSA.
M S M Brassey AJ
9-Oct-99
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