IN THE LABOUR COURT OF SOUTH AFRICA
HELD AT BRAAMFONTEIN CASE NO J2807/98
In the matter between:
JOSEPH NTULI Applicant
and
FONTANA HOLDINGS (PTY) LTD Respondent
JUDGMENT
JAMMY AJ
1.At the time that his employment by the Respondent was
terminated on 21 May 1998, the Applicant in this matter, Mr
Joseph Ntuli, held two significant positions. He was the
National President of the Distributive, Catering, Hotels and
Allied Workers Union ("DICHAWU") and, by agreement
between that union and the Respondent in the course of
earlier substantive negotiations, he was that union's full-
time shop steward representing its members employed in
the company. To this latter end he occupied by a
designated office and utilised administrative facilities in a
building in Johannesburg forming part of the company's
property portfolio.
2.The Applicant alleges that he was retrenched on 21 May
1998 in circumstances which he contends were unfair and
which entitle him to appropriate compensation in terms of
the Labour Relations Act 1995. The Respondent contends
that, as far as practicably possible in the particular
circumstances in which that retrenchment occurred, the
requirements of Section 189 of the Act were complied with
and that the basis upon which the Applicant's services were
terminated, and the payment to him of the amounts
calculated to be due to him as a consequence thereof, were
unconditionally and unreservedly accepted by him in writing
at the time, as constituting a full and final settlement of any
and all claims which he might as a consequence have had
against it.
3.THE RESPONDENT'S CASE
The company's principal witness was Ms E F Smith, its
Industrial Relations Officer. The Respondent, she stated,
recognises two trade unions which organise within its
employee complement. They are DICHAWU and the South
African Commercial Catering & Allied Workers Union
("SACCAWU"). At all material times DICHAWU represented
the majority of eligible employees within the bargaining
unit.
4.The company had for some time been under severe financial
pressure, necessitating rationalisation and retrenchment
programmes during the preceding three years which
resulted in a reduction in its total workforce by
approximately two-thirds, the closure of certain retail
outlets, the outsourcing of certain of its hotel cleaning
activities and, pertinently in relation to this matter, the
outsourcing of its cashier and merchandising functions.
5.Prior to the substantive negotiations in 1996/97, she
testified, the Applicant had been employed as a full-time
cashier and merchandiser. By subsequent agreement with
the union, he performed that function for two weeks in
every month, the other two weeks being devoted to union
activities in his capacity as a shop steward. That agreement
in turn was re-negotiated the following year to provide that,
whilst he would continue in the employ of the Respondent,
the Applicant would thenceforth function as a full-time union
shop steward, utilising accommodation and facilities
provided by the Respondent for that purpose.
6.In the course of negotiations related to the downsizing,
restructuring and retrenchment programmes referred to,
the union had been represented, inter alia, by the Applicant
and by its National Organiser, certain Oscar Malgas, who, in
that context, had become well-known to management. On
19 May 1998 and at its Highpoint branch, the Respondent
received a letter on the union's letterhead and signed on
behalf of Mr Malgas and over his name in his capacity as
National Organiser. It was marked for her attention, said Ms
Smith, and read as follows:
"Re Union Office at Fontana
Please be informed that the union hereby wishes to
suspend the use of the union office and that our
permanent shop steward should be transferred to
one of branches until further notice."
A copy of that letter was a component of a bundle of
documents tabled in this matter.
7.The letter was received late in the afternoon and was duly
faxed to her the following morning at the company's Head
Office where she was based, she testified. On receipt
thereof she telephoned the company's Attorneys and was
advised to act in terms of that directive and suspend the
Applicant's functions and office as directed. She then
telephoned the Applicant, informed him of the receipt of the
letter and requested him to come and see her. She then
prepared a letter to him which was also submitted in
evidence. It is necessary, in my view, that I record its
contents in their entirety. It read as follows:
"Dear Joseph
I enclose a copy of a letter which I have received from the National
Organiser of DICHAWU, Mr Oscar Malgas, the contents of which
are self explanatory.
As you are aware, during the course of previous substantive
negotiations on terms and conditions of employment with
DICHAWU, a representative trade union at our respective
workplaces, you were appointed into the position of permanent
shop steward on terms and conditions no less beneficial to you
and in respect of which you would, for all intents and purposes,
attend to trade union affairs with regard to Fontana Holdings
(Pty) Limited.
In the light of this letter, we are placed in the position where your
portfolio as full time permanent shop steward now becomes
redundant with the result that you are required to resume your
duties as a shelf packer at one of our stores.
Unfortunately, since you assumed the position of full time shop
steward, these positions have now been declared redundant,
alternatively have been outsourced to an external concern.
Effectively, this means that there would be no position for you
within the group.
However, I would appreciate it if you were to attend a consultation
with me on Thursday 21st May 1998 at 10h30 in order that we
may canvas alternatives to your retrenchment.
Should there be no alternatives, it is envisaged that your
employment with us would terminate on 31st May 1998 and you
would be compensated one week for each year of service you have
enjoyed with the company.
As with other retrenchments, you would be given preference when
other positions become available in the near future and we shall
communicate with you in this regard should the need arise.
We must emphasize that no decision has as yet been taken pending
the consultations with you.
Until such time as this is resolved you are required not to attend at
Until such time as this is resolved you are required not to attend at
the offices and shops of the company including that of Legal
House.
Yours sincerely
FONTANA HOLDINGS (PTY) LIMITED
LYN SMITH"
8.The Applicant duly collected that letter, together with the
copy of the letter from Malgas which accompanied it and
later that day telefaxed a letter to the Respondent, for the
attention of one of its directors and herself which it is also
necessary, in my view, to set out in full.
"Dear Sir/Madam
Re: The letter addressed to you by O Malgas
I hereby wish to put on record that Malgas is not a union. Further
note that it is Joseph Ntuli who is the president of DICHAWU (the
union).
Therefore it is incorrect for any member and/or official of DICHAWU
to perform duties not authorised by myself.
My intention of writing this letter is to request you to have a meeting
with myself to fully address my company on supra.
It should be noted that all what he saying in the letter is incorrect.
DICHAWU should solve its internal problems, not by using
Fontana.
I have high respect of the chairman of Fontana, my employer and the
directors of the company including the noble man Ari Soldatos. I
do not wish them to soil their good names by playing dirty tricks.
I was appointed by Fontana to this office. I understand that as terms
and conditions of employment are negotiated annually, my
employer can put this discussion and/or reviewal but not on any
individual's bidding.
I would like to reiterate my position that I will continue to investigate
allegations made by workers to me as their President about the
way Malgas is doing this in the office.
Oscar Malgas will be suspended as such. He must wait I will call him
to answer in defence.
I shall likewise inform the employers about things which may affect
our relations with us regarding Malgas.
There is no secret about this, Malgas may be invited to listen to what
I have to say as the President of DICHAWU.
Hoping that you will find this in order.
Yours faithfully
Joseph Ntuli
Permanent shopsteward."
9.She met with the Applicant later in the day, Ms Smith
continued, when he again read the letter which she had
addressed to him. She informed him that any probolem that
he had with Mr Malgas had nothing to do with the
Respondent. The Applicant became angry and aggressive
but eventually left and, by arrangement, met with her again
in the company's boardroom the following day. She again
explained to him that the Respondent could not get involved
in union matters. The Applicant apologised for his
aggressive behaviour the previous day and calmly informed
her that he could not suggest any alternatives to his
retrenchment and had decided to accept the retrenchment
package. He was requested to wait while she "fixed
everything up" but informed him that if he was interested,
she could guarantee him a job with an organisation known
as Jazz Sales & Marketing, to which the cashier and
merchandising functions within the company had been
outsourced. He indicated however that he was not
interested.
10.The Applicant then waited on the premises for
approximately a half hour during which the amount due to
him was calculated and recorded and a cheque for the
amount due to him was prepared. He was then handed that
cheque, in an amount of R9 683,22 together with a letter in
the following terms:
"Following our consultation we enclose herewith a
cheque in the amount of R9 683,22 in full and final
settlement of all or any claims which you may have
arising from or in connection with your employment
with us and the subsequent termination thereof.
Yours faithfully
FONTANA HOLDINGS (PTY) LIMITED"
That letter was signed by the Applicant and witnessed,
beneath an endorsement below her own signature to the
letter, reading as follows:
"Agreed and accepted this 21st day of May 1998."
11.Thereafter, on 25 May 1998, the following letter was
addressed by her to the union for the attention of Oscar
Malgas:
"This serves to confirm that following your letter of
19th May 1998, consultations were held with Joseph
Ntuli and regrettably, there were no alternatives
within our structures but to terminate his
employment on the basis of our operational
requirements."
12.Cross-examined by the Applicant, Ms Smith acknowledged
that, whilst she had had no communication directly with Mr
Malgas for some two months prior to these developments,
she had been telephoned by the manager of one of the
Respondent's shops who advised her that leaflets
distributed by a third union, the United Peoples Union of
South Africa ("UPUSA") were being distributed on the
premises. He was instructed not to interfere but
commented that he thought that the Applicant had been
involved in organising that distribution. She herself did not
believe it, she said. She could not comment on the source
of the telefax from the union on 19 May to the Highpoint
store - she had received it only the following morning. She
presumed that it had been sent there late the previous
afternoon because the Respondent's Head Office was
already closed for the day. She had not invited the other
shop stewards to be present on 20 and 21 May in her
meetings with the Applicant because he had not suggested
that she should do so and he himself had, to that point,
been the permanent shop steward in the company. It was
not true, she stated emphatically, that she was part of any
conspiracy either to exclude the shop stewards from the
process or to remove him from his office.
13.Mr D L Afeltra was the Respondent's second witness. He is
employed as a General Manager and the union's letter of 19
May 1998, he testified, was faxed to and received by him at
its Highpoint branch at approximately 5.30 pm that day.
14.Approximately a week to ten days earlier, a store manager
at its Twist Street branch had telephoned him to advise that
there was a problem- a third union was "speaking to the
people." His reaction was to telephone the Applicant but
when he could not make contact with him, he telephoned
the DICHAWU National Organiser, Oscar Malgas, who
informed him that he knew nothing about this but would
investigate it.
15.He heard nothing further until the letter of 19 May was
received. That letter was marked for the attention of the
Respondent's Industrial Relations Officer, Lyn Smith, and he
faxed it to her at Head Office the following morning. The
next day, he instructed the caretaker at Eagle House, the
Respondent's building where the Applicant had the use of an
office, to lock that office and a couple of days later, made
arrangements to meet the Applicant at the premises to
enable him to remove his personal possessions.
16.Mr Afeltra was questioned by Mr Ntuli regarding his
personal relationship with Mr Malgas who, he stated, was
not his friend, although he had on occasion lent him money
which, in one instance, had not yet been repaid. It was not
true that he and Mr Malgas were colluding and co-operating
to get rid of the Applicant, he said. He had, he reiterated,
initially tried to communicate with the Applicant and had
only telephoned Mr Malgas when he was unable to do so.
17.THE APPLICANT'S TESTIMONY
Mr Joseph Zwane, called by the Applicant, testified that he is
employed at the Highpoint branch of the Respondent's
business and knows the General Manager, Mr Afeltra.
Approximately a week before the Applicant's dismissal,
Oscar Malgas had visited the shop and enquired from him
whether he had noticed forms from another union
circulating on the premises. He knew nothing of this, he
said, and Mr Malgas then informed him that the Applicant
had been "recruiting employees for UPUSA." He had been
told this, Mr Malgas stated, by Mr Afeltra, the General
Manager.
18.On 20 May 1998, on which date a meeting of union
members was scheduled to take place at the branch, he
received a telephone call from Ms Smith at the Respondent's
Head Office, who informed him that the Applicant had been
dismissed and that he, Mr Zwane, was "to look after the
other employees." Employees had been advised that they
were not allowed to receive telephone calls at that time and
he subsequently learned that a message left for him by the
Applicant had not been conveyed to him for the reason that
the Applicant had allegedly been dismissed. He was denied
permission to meet the Applicant that day on the company's
premises.
19.As far as he was concerned, said Mr Zwane, the Applicant
had had nothing to do with UPUSA or any other union and
when he heard that he had been dismissed he went to his
office at Eagle House, only to be informed by the caretaker
that he had been "chased away." He then communicated
with UPUSA to ascertain whether there was any truth in the
allegation that the Applicant was now involved with them.
They had never heard of the Applicant, he said.
20.Cross-examined by Mr Soldatos, representing the
Respondent, Mr Zwane stated that any problem between
the Applicant and Malgas was a union matter and not
management's concern. It was, in his opinion, similarly no
concern of management if a third union was in fact now
organising within the company. Employees had the right to
join whichever union they chose.
21.Referred to an Affidavit which he had signed in support of
the Applicant's Statement of Case and in which there was no
reference to his having been informed by Ms Smith that Mr
Ntuli had been dismissed, whereas he was now testifying to
that effect, Mr Zwane was compelled to concede that this
"might have been a mistake." He was adamant however,
that that is what she had told him.
22.Testifying himself, the Applicant stated that on Tuesday 19
May 1998 he was approached by Oscar Malgas, the union's
National Organiser, at the union offices at approximately 1
pm. He was informed by Mr Malgas, in the presence of "a
few colleagues" that he had heard rumours that Fontana
employees were joining UPUSA and had been told that he,
the Applicant, was planning a meeting of employees but not
at the union's offices. He responded that he knew nothing
about the UPUSA allegations but was entitled, in his capacity
as National President of the union, to call any meeting that
he wished. He was then accused by Mr Malgas of refusing
to co-operate, that it was useless to discuss anything with
him, that he was using his shop steward office at the
Respondent's premises "to fight him" and that he would
instruct the Respondent to close that office and suspend
him. At that point Mr Malgas began to dictate a letter to the
union secretary and he, the Applicant, left to go to his own
office.
23.This was an internal union matter, said the Applicant, but
he thought it wise to inform the Respondent that it should
expect a letter from Malgas but that it should not involve
itself in union affairs. He realised, he said, that Malgas was
"using the only method available to make me lose my job."
He accordingly prepared a letter to the Respondent which
he faxed to it on the morning of 20 May, requesting a
meeting at which he could explain the prevailing situation.
24.Later that day he received a call from Lyn Smith at the
company's Head Office to the effect that both his letter and
the letter from Malgas had been received. He was
requested to come to the office to collect a letter which the
company had written to him, regarding consultations which
it required with him. When he arrived there, he was told by
Ms Smith that the company was required "as a question of
law" to implement the union's direction to suspend him. He
was greatly upset by this and became very angry,
exchanging "hurtful" words with Ms Smith, in the course of
which she referred to his position as National President of
the union, as being a "token." He was then requested to
take the company's letter, leave and return the following
day at 10.30 am for further discussions. He was told that he
could go to his office but at 12 noon that day Mr Afeltra
arrived and instructed him to move out - an instruction
subsequently confirmed by Ms Smith when he telephoned
her to query it.
25.He duly attended the meeting the following day, still feeling
angry and frustrated. As far as he was concerned, an
individual member of the union, acting without authority,
was receiving the Respondent's co-operation. Having been
told that he was being retrenched, no alternative proposals
were made by the company and when asked whether he
was able to offer any suggestions, he replied that he could
not. They knew the position "and so", he concluded, "I
accepted the retrenchment package."
26.He had however, he said, done so under duress and with
the full intention of pursuing the matter as an unfair labour
practice. It was for that reason that he eventually referred it
to the appropriate Bargaining Council and then to this Court.
27.Asked by Mr Soldatos, in the course of cross-examination,
who had assisted him in drafting his papers in this matter,
the Applicant replied that he had done so himself. He had a
Standard 10 education and had studied for a certificate in
Human Resources at UNISA.
28.He agreed, as Mr Zwane had stated, that it was not possible
for the company to enquire whether, in addressing the letter
to the Respondent of 19 May, the union had complied with
its own internal procedures but, in the context that he was
employed by it, it was obliged to consider whether or not
what it was being requested to do was an unfair labour
practice. It should at least have made enquiries to ascertain
whether the proper procedures had been followed in order,
he said, "to protect its employees against unfair treatment
by the union."
29.Earlier in his career with the company, it had been
indicated to him by a director that he had management
potential and would eventually be promoted to that position.
He did not however mention this to Ms Smith in the course
of their discussions. In the second meeting on 21 May he
had not asked for more time to consider his position. As far
as he was concerned, "the doors were closed for me."
30.The Applicant was then intensively questioned regarding his
ostensible acceptance, as indicated by his signed receipt on
21 May 1998, of the amount paid to him on that date in full
and final settlement of his claims against the Respondent.
He had, however, he stated, signed that acceptance under
duress. Asked why he had not stated this or endorsed the
document to that effect, he replied that he was "not a
lawyer." He had decided himself to accept what was being
offered and challenge his dismissal later. As far as he was
concerned the settlement agreement signified by the
document was void because it had, he repeated, been
signed by him under duress.
31.CONCLUSION
It seems to me, on the conspectus of the evidence presented
in this matter, that whether or not it considered it prudent to
distance itself from what was patently an internal dispute
between two high-ranking union officials, the company's
conduct in implementing the direction conveyed in Mr
Malgas' letter of 19 May without further query or
investigation, was precipitate in the circumstances and a
potential source of the further disruption and confrontation
which, according to its evidence, it was at pains to prevent.
No evidence was presented regarding the rationale
underlying the advice from its Attorneys which it apparently
received in that regard but it seems to me, in all the
circumstances of the matter, that the issue was not a legal
one but rather one in which the exercise of prudent
discretion and a considered course of action was indicated.
32.I am not persuaded however, that the Applicant's
perspective of some form of mala fide collusion between the
Respondent's General Manager on the one hand and Mr
Malgas on the other, was justified in the circumstances. Mr
Malgas, as far as he was concerned, was a subordinate in
the union hierarchy, with no authority to act as he did. That
however, as was repeatedly stressed, was not the
Respondent's concern although, as I have stated, some
further enquiry on its part, perhaps in the form of the
convening of a meeting with the relevant union officials,
may well have been the better industrial relations option.
33.I am also prepared to accept that, in the peculiar
circumstances governing the Applicant's ongoing
employment at the time, coupled with the financial
constraints under which the Respondent was clearly
operating and the restructuring process necessitated
thereby and in which the Applicant had been directly
involved, no conventional employment position to which the
Applicant might have been transferred was available and it
is common cause that the Applicant himself was either
unable or unwilling to make any suggestions of his own in
that regard. The very fact that those discussions ensued
negates the Applicant's contention that he was dismissed at
the behest of a third party. Mr Malgas' letter of 19 May
1998 did not require his dismissal but merely his suspension
from the office of permanent shop steward.
34.Even if this were not the case however, the Applicant's case
is comprehensively compromised by his signature to the
document of 21 May recording his acceptance of the
retrenchment package offered to him at that time in full and
final settlement of any and all claims which he might have
had arising from his employment and its termination. There
is substance, in my view, to the Respondent's submission
that the Applicant is an intelligent, experienced and high-
ranking union official, well-schooled in the exigencies of
employment relationships, and with a sufficient working
knowledge of the basic legal niceties involved, to have at
least accepted that package conditionally, or with the
reservation of his rights, or expressly under protest, had
that been his state of mind at the time. I do not believe him
when he says that that was in fact the case and the
probabilities in my view, are, as suggested in argument, that
his decision to characterise what had occurred as an unfair
labour practice, was one made some significant time after
labour practice, was one made some significant time after
the events in question and probably in the cold hard light of
his continued festering resentment towards his union
adversary.
35.For all of these reasons, the Applicant has failed, in my
opinion, to establish that the termination of his employment
in the circumstances in which it occurred was either
procedurally or substantively unfair and his application is
accordingly dismissed. The Respondent did not seek an
order for costs and none is made.
B M JAMMY AJ