IN THE LABOUR COURT OF SOUTH AFRICA
HELD AT JOHANNESBURG
CASE NO J 2908/98
In the matter between:
ENTERTAINMENT CATERING COMMERCIAL
& ALLIED WORKERS UNION OF SOUTH AFRICA First Applicant
BENNET MBATHA & 37 OTHERS Second and Further
Applicants
and
SHOPRITE CHECKERS t/a OK KRUGERSDORP Respondent
______________________________________________________________________________
JUDGMENT
_____________________________________________________________________________
BASSON, J
[65] The individual applicants were dismissed by the respondent during November/December 1997.
[65] The applicants contended that the issue to be decided was whether the respondent, Shoprite Checkers
trading as OK Krugersdorp, was entitled to dismiss the individual applicants for refusing to work new shift
patterns unilaterally implemented by the respondent.
[65] The respondent viewed the matter differently, contending that the crisp issue for determination was whether
or not the respondent was entitled, given its operational requirements, to retrench the individual applicants
when and in the manner it did.
[65] The evidence that OK Bazaars Ltd was in a very severe financial crisis or predicament during 1996 to 1997
was not contested by the applicants. In fact, it faced financial ruin. OK Krugersdorp was then still a store of
OK Bazaars Ltd before that company was sold as a going concern to Shoprite Checkers. I will use the term
“respondent” to refer either to Shoprite Checkers or its predecessor.
[65] The evidence that OK Bazaars Ltd entered into consultations both with the majority union (SACCAWU)
and with the first applicant (ECCAWUSA) was also not contested. It was further common cause that
1
SACCAWU had a membership of approximately 8000 employees at OK Bazaars Ltd stores nationally
whilst ECCAWUSA had a membership of some 800 employees. The applicants contended, however, that
ECCAWUSA had majority membership at the respondent, that is, the OK Krugersdorp store.
[65] The respondent led evidence to show that OK Bazaars Ltd concluded a socalled “Job Security Agreement”
with SACCAWU during February 1996.
[65] The rationale of the agreement appeared clearly therefrom, especially from the preamble (the Bundle,
exhibit B2): “The parties agree that the maintenance of growth of employment levels in the company are of
vital importance to the wellbeing of the union and its members and the company as a whole. The parties
agree that employees have a right to expect that the company and the union will take all reasonable
measures to avoid any loss of jobs and to secure their long term employment” (emphasis supplied).
[65] In order to achieve the above objectives, OK Bazaars Ltd and SACCAWU agreed on the implementation of
certain principles. These included the principle of job flexibility: “The parties agree that flexible work
practices are important to ensure the continued viability of the business” (paragraph 1.3 of the said
agreement, exhibit B3 emphasis supplied).
[65] In other words, the principle of “job flexibility” was introduced (see paragraph 2.1 of the said agreement
exhibit B4). Shift patterns “that will meet the trading patterns/volumes of the store/operating unit in the
area” were thus introduced (at paragraph 2.2 exhibit B7). Job flexibility entailed, inter alia , that
permanent employees would be required to work shifts different from the shifts they had worked before.
This would have enabled the respondent to use less casual labour, thereby reducing the casual wage bill.
[65] Mr G Lotz, an industrial relations manager at the head office of OK Bazaars Ltd at the time (hereinafter
referred to as “Lotz”), gave evidence in regard to this agreement and confirmed that the introduction of the
said new shift patterns was aimed at reducing the wage bill.
[65] Lotz explained that the wage bill of OK Bazaars Ltd was much higher than that of its competitors’.
Moreover, Lotz explained that SACCAWU would not have entered into this agreement if it was not
understood that their members’ jobs were on the line due to OK Bazaars Ltd confronting a financial crisis.
In other words, the cooperation of SACCAWU and its members were obtained in the interests of saving
their jobs.
2
[65] Lotz further identified the various measures that were introduced to address the financial crisis faced by OK
Bazaars Ltd and explained how the introduction of altered or flexible shift patterns for permanent
employees would have reduced the casual wage bill. In the new retailing environment, stores had to be open
later and on weekends to meet the increased demand for trading during these times. During these new peak
trading times, permanent employees would have to work new shifts in preference to employing casuals.
[65] In addition, Lotz explained that reduced reliance on casuals would have the further operational benefit of
reducing shrinkage and boosting sales as the permanent employees were more committed to the business
and were better trained than casuals, resulting in the improvement of customer service during the peak
trading hours.
[65] The respondent’s evidence that OK Bazaars Ltd entered into consultations with ECCAWUSA during
September 1996 with the aim of concluding exactly the same agreement as had been concluded with
SACCAWU was not contested in any meaningful way.
[65] It was further common cause that the respondent disclosed its desperate financial position to ECCAWUSA
and, following a dispute between the parties, disclosed additional information sought. However, no
consensus could be reached between ECCAWUSA (the first applicant) and OK Bazaars Ltd concerning the
introduction of new flexible shift patterns.
[65] OK Bazaars Ltd then issued letters of retrenchment and in fact retrenched certain of the individual
applicants during November 1996 at its OK Krugersdorp store as a result of their refusal to work new shift
patterns. The applicants were so dismissed on a Saturday and Sunday only.
[65] Eventually, an agreement of settlement was reached on 29 November 1996 (exhibit B296 and B297). The
agreement stated at paragraph 1 that “[w]ith immediate effect they [ECCAWUSA and OK Bazaars Ltd] will
enter into meaningful consultations arising out of the operational requirements of the company, as well
as the possible need to retrench members of the union” (emphasis supplied).
[65] As it was abundantly clear from this paragraph as well as from the other documentation presented during
the meetings between ECCAWUSA and OK Bazaars Ltd up to this stage of their consultations, the
employer was engaging ECCAWUSA in a retrenchment exercise.
[65] Indeed, it was also clear from the agreement between SACCAWU and OK Bazaars Ltd that this agreement
3
was entered into to prevent job losses and, hence, it was labelled a “job security” agreement ( supra at
paragraph [6] ).
[65] Much was made of the fact that Lotz stated that “retrenchment was not the answer” and that “[r]etrenchment
will be a last resort” at a consultative meeting on 15 October 1996 (exhibit B75) as well as the evidence of
Mr A Lehmann (industrial relations consultant at OK Bazaars Ltd at the time) that the respondent did not
contemplate retrenchment at the time.
[65] However, these statements must be viewed against the background of Lotz’s evidence that the company
took every precaution to preserve jobs as well as the clear evidence that the whole process was driven by
the need to save the company from financial ruin, as it was also clear from minutes of other meetings (see
also Lehmann’s letter, exhibits B160 to B161).
[65] In fact, it was clearly stated at later meetings and in communication between the parties that the object of
the consultation exercise was to avoid job loss (see, inter alia , exhibits B149; B150; B158; and B177). See
also the terms of the settlement agreement of 29 November 1996 quoted above at paragraph [17].
[65] In the event, I am satisfied on the evidence presented by the respondent that the consultations between OK
Bazaars Ltd and the two unions was a retrenchment exercise aimed at saving the jobs of the permanent
employees by ensuring that OK Bazaars Ltd became financially viable. In other words, this exercise was
driven by the operational requirements of the company and must be viewed against the background of the
severe financial crisis faced by the company.
[65] In the event, the fact remained that the need to introduce new shifts was an alternative to the retrenchment
of the individual applicants.
[65] Further, the fact that this entailed the altering of the employment contracts of the permanent employees who
previously worked from Monday to Saturday at 13H00 does not take away from the fact that this was a
retrenchment exercise.
[65] There is accordingly no merit in the applicants’ argument that the respondent had embarked upon
negotiations to unilaterally change the contracts of employment of the individual applicants and therefore
had to resort to economic power play by locking them out when a dispute about its demand to unilaterally
change the shift patterns arose. In other words, the employees in casu were not dismissed for refusing to
work according to terms and conditions of employment which were unilaterally introduced by the employer.
4
[65] In my view, care should be taken not to equate a bona fide retrenchment exercise which is aimed at avoiding
job losses to a negotiating exercise which is aimed, not at avoiding job losses, but is primarily aimed at
unilaterally amending terms and conditions of employment to suit the operational requirements of an
employer.
[65] In other words, where the amendment to terms and conditions of employment is proffered by an employer
as an alternative to dismissal during a bona fide retrenchment exercise and it is a reasonable alternative
based upon the employer’s operational requirements, the employer will be justified in dismissing employees
who refuse to accept the alternative on offer.
[65] In practical terms, the respondent has further satisfied me that it made commercial sense and was reasonably
necessary for the continued viability of the company’s business that the proposed new flexible shift patterns
be introduced, also at the OK Krugersdorp store. The evidence that the peak of trading at the OK
Krugersdorp store was on a Friday, Saturday, Sunday and Monday could not be meaningfully challenged
and was borne out by documentary evidence.
[65] In the event, the refusal by the applicants to take their dayoff on the slow days (Tuesday, Wednesday or
Thursday) and their insistence in taking off either on a Friday or a Monday (on their own evidence) clearly
went against the operational requirements of the company that wanted its permanent employees to work
during peak trading times in terms of the operational requirements discussed above. This would namely
have saved on the casual wage bill and this saving would have made it easier for the company not to
retrench its permanent employees.
[65] The mere fact that the business did not survive in the end does not mean that there was no such commercial
rationale at the time. In fact, it showed that OK Bazaars Ltd found itself in severe financial difficulties at the
time.
[65] The fact that the casual wage bill remained the same up to today at the OK Krugersdorp store also does not
persuade me that there were no such operational requirements at the time.
[65] It was clear from the evidence that the new shifts were never properly introduced at the store during 1996 to
1997 due to the recalcitrance of the individual applicants and the effect of such shifts on the casual wage bill
could therefore not be assessed.
[65] The fact that employees at the OK Krugersdorp store now work the ordinary working hours from Monday
5
to Saturday at 13H00 also does not persuade me that the economic rationale was suspect. This was
explained in the light of the very few permanent employees who remained behind, making it possible to
work with less permanent employees and more casuals. Had this alternative been followed in 1997 it would,
of course, have meant retrenching the permanent employees to ensure the same decrease in their numbers.
This was also explained at paragraph 21 of the pretrial minute dated 25 August 1999 (filed on 17
September 1999).
[65] In the event, I am satisfied that the respondent offered a reasonable alternative to retrenchment when the
respondent required the individual applicants to work new shifts to assist the respondent in reducing its
wage bill and thereby alleviating (albeit in a small way) its financial crisis. See in this regard also the
judgment of SA Chemical Workers Union v Afrox (1998) 19 ILJ 62 (LC) at 66AB: “The enterprise which
provides the employment must maintain its way, grow and prosper for rights to a job to have meaning. If it
fails then the right to a job fails with it. Economics dictate that if it is necessary to shed jobs so that the
enterprise may survive or alter or adapt its business then so be it. This basic economic premise has been
incorporated in the LRA by way of the exception permitting dismissal for operational requirements”.
[65] In my view, this would be so also where it makes commercial sense to change the terms and conditions of
employment (the altered shift patterns) to ensure the continued viability of the business.
[65] The applicants conceded that the dismissal was preceded by consultations.
[65] In any event, the only witness on behalf of the applicants, Ms J Malebye (hereinafter referred to as
“Malebye”), stated categorically that the individual applicants were not going to entertain the different shift
system proposed by management. Malebye added that this view was shared by all the individual applicants.
[65] In the event, I am satisfied that, regardless of the respondent’s operational requirements and proposals put
forward by management at their various meetings, the applicants who worked at the OK Krugersdorp store
were not going to work the different or altered shift patterns proposed. Malebye made it clear that the main
reason for this stance was that it was “inconvenient” for the individual applicants not to have long weekends
off every second week (apparently because some of them had family members staying a distance away).
[65] In the event, given the unwillingness of the individual applicants to entertain the change to the shifts
suggested by management, the applicants can now hardly complain that consultations on this alternative
offered was not exhaustive enough or that the respondent countenanced no other alternative.
[65] Further, Malebye conceded that the employer’s financial crisis and the resultant need to reduce wages by
6
way of job flexibility were explained to the individual applicants in meetings which took place even after
the meeting of 26 September 1997 (the date that consultations ended according to the respondent’s
witnesses see, inter alia , exhibits B428 and B430).
[65] Malebye also could not dispute the fact that consultations broke down because the shop stewards (she
herself was not one of them) walked out of this meeting (see exhibit B424). Malebye added that the union
officials who conducted consultations on behalf of the individual applicants did not assist them with the
subsequent consultations at store or branch level. The union (the first applicant) can therefore not be heard
to complain that its advice was not sought during the consultations at store level. After all, ECCAWUSA
was a signatory to the settlement agreement of 29 November 1996 (see paragraph [17] above).
[65] After all, consultations remain a joint problemsolving exercise and no viable alternatives were offered by
the applicants during the consultation process or in evidence before Court that could have reduced the wage
bill and assisted to address the financial predicament of the respondent. The remark that the individual
applicants were willing to assist the respondent in its predicament (made by Malebye when giving evidence)
therefore rings hollow and cannot be accepted.
[65] In fact, in was clear from Malebye’s evidence (discussed at paragraph [38] above) that it would have been
futile to try to persuade the individual applicants to take their dayoff on a Tuesday, Wednesday or
Thursday.
[65] See in this regard also the judgment in SA Chemical Workers Union v Afrox Ltd ( supra at paragraph [35]) at
75A B: “Consultation during a process of retrenchment is the opportunity allowed by law and fairness to
the consulting party, such as the union, to influence the exercise of the managerial prerogative. A failure to
utilise this opportunity closes this avenue. Criticism after the event is no substitute for cooperation when it
is called for during the consultation process. It would be far too paternalistic to insist that where a union
declines the opportunity to involve itself in seeking solutions to a retrenchment situation the employer
should mero motu engage in unilateral attempts to accommodate union members elsewhere”.
[65] In the event, as far as the question of the procedural fairness of the dismissal is concerned, I am satisfied
that the respondent complied with its obligation to consult and that the dismissal was accordingly
procedurally fair.
[65] The fact remains that the individual applicants were not committed to assist the respondent in addressing its
financial crisis. The economic rationale underlying the need for changing the shift pattern was fully
7
explained to the individual applicants and to their representative union. However, the individual applicants
were not interested to give their commitment to save the business and, in the result, their jobs themselves, if
this entailed taking their dayoff on a Tuesday, Wednesday or Thursday. This was the reason why they
steadfastly refused their cooperation to ensure the respondent’s viability.
[65] In the event, there is also no merit in the argument that the individual applicants were dismissed because
they refused to work unlawfully in terms of provisions of the Basic Conditions of Employment Act, (“the
BCEA”) at the time.
[65] The fact remained that the individual applicants were dismissed for their failure to give a commitment to
meet the respondent’s operational needs if this meant that they could not have long weekends off every
other week.
[65] After all, the fact that the respondent required the applicants to take their dayoff on a Tuesday, Wednesday
or Thursday was not, in itself, an unlawful request in terms of the provisions of the BCEA at the time. In
fact, it was Malebye’s evidence and the applicants’ case that before their dismissal the individual applicants
worked a shift pattern, each shift taking off a long weekend every other week. If this was so, the individual
applicants worked a shift from Monday to the following Thursday. Taking their dayoff in the middle of the
week would therefore not have required them to work a longer work week than they already did voluntarily.
[65] Further, the concession that the applicants may have worked more hours per week than permitted in terms
of the BCEA was elicited in cross examination by the applicants’ legal representative. It was, however,
never pleaded that the individual applicants were dismissed for refusing to work unlawful hours of work,
whether unbeknown to the parties at the time or not.
[65] In the event, this question was never fully ventilated in evidence as the respondent was not alerted that this
was the case it must meet. This dispute was raised only at the argument stage of the proceedings and
addressed by way of further heads of argument. It can further be noted that it was always possible for the
respondent to obtain an exemption in terms of the BCEA and that the prohibition was therefore not absolute.
This may even have been possible because the hours of work per week did not exceed the prescribed limit
on average (see exhibit B418).
[65] Be that as it may, I reiterate that I am satisfied that the individual applicants were not dismissed for refusing
to work unlawfully. Accordingly, I need not deal with the respondent’s argument that proposed hours of
work were, in any event, lawful in terms of the BCEA.
8
[65] Further, the principles enunciated in the judgment of Boardman Brothers Natal (Pty) Ltd v CWIU (1994)
ILJ 517 (SCA), which dealt with a dismissal for misconduct and therefore are clearly distinguishable from
the present matter, are not applicable. I accept that one’s sense of fairness may in given circumstances
dictate that an employer cannot dismiss employees for refusing to work unlawfully. This is especially so in
the circumstances which presented themselves in the above judgment (where a reasonable employer should
have realised that the employees were not able to cope with the long hours of work expected from them) but
this was simply not the case on the facts which were presented in evidence in casu . It can therefore not be
said that the Labour Court, in taking this view, is condoning an unlawful employment practice.
[65] It follows from the aforegoing that the individual applicants were retrenched when they refused to commit
themselves to assist the respondent in addressing its severe financial predicament in an effort, not only to
make the business viable but also, in the process, to save their jobs. As the proposed new shifts, which
would have enabled the respondent to have the permanent employees working over the busy weekends by
taking their dayoff during the middle of the week, was a reasonable alternative based upon a sound cost
saving rationale and proposed in an effort to avoid job losses, the dismissal for their refusal to cooperate in
this process was substantively fair.
[65] In view of the above finding that the dismissal was also procedurally fair (at paragraph [46]), the application
based upon an alleged unfair dismissal falls to be dismissed.
[65] In view of the above conclusion, I do not have to deal with the contention that the first applicant did not
have the authority to act in this matter for and on behalf of the individual applicants, save to state that they
appeared to have locus standi in their own names.
appeared to have locus standi in their own names.
[65] Further, it is not necessary to decide whether the agreement between the respondent and ECCAWUSA
concluded on 29 November 1996 ( supra at paragraph [17]) amounted to an agreed change to the terms and
conditions of employment of the individual applicants because the fairness or otherwise of the retrenchment
dismissal was not predicated on such change having been agreed to. The disciplinary steps taken by the
respondent in regard to a possible breach of such agreement were abandoned, in any event.
[65] In this regard it can merely be noted that such change would have to have been consulted upon at the level
of the store management and the individual applicants to ascertain the operational needs of the store before
its implementation. The fact that the individual applicants never worked the proposed shifts appeared to
suggest that no such agreement had been obtained. This does had been not mean, however, that the fact that
9
such agreement was concluded is irrelevant. I reiterate that it was clear from the terms of this agreement that
the parties were engaged in a retrenchment process (see the agreement quoted at paragraph [17] above).
[65] For the sake of completeness, it must be noted that the applicants’ contention that there was an agreement
reached on 2 December 1996 in terms of which it was agreed that the individual applicants at the OK
Krugersdorp store would work shifts according to which they were entitled to take off a long weekend every
other week was not supported by the evidence or the probabilities. It seems highly improbable that the
respondent would have agreed to permanent employees taking off on a Friday or a Monday when it was
clear from the evidence that these were the busy trading times.
[65] Even if the individual applicants were allowed to and did work such shifts until October/November 1997
(and there were indications to the contrary that some permanent employees did take their dayoff during the
middle of the week) this did not mean that when Mr B Makhonza (the store manager as from October 1997)
tried to “implement” the shifts with the dayoff in the middle of the week he was thereby seeking to alter an
agreed term and condition of employment.
[65] In any event, as it was fully explained above, there were clear operational requirements for taking the day
off in the middle of the week and it was this need of the respondent that the individual applicants outrightly
refused to meet.
[65] In other words, even if the respondent required from the individual applicants to work new shifts as from
July/October 1997, the economic rationale for working such shifts to cover the peak trading hours from
Friday to Monday was fully explained and it was the individual applicants themselves who made it
abundantly clear that they were not going to assist the respondent and take their dayoff on a Tuesday,
Wednesday or Thursday, whatever the operational requirements of the respondent may be (see the
discussion at paragraphs [38] to [41] above).
[65] In exercising my discretion to award costs against the applicants, I take into account also the fact that they
were the authors of their own misfortune. Indeed, there appears to be no reason why the applicants should
not be ordered to pay the costs, jointly and severally, the one paying the other to be absolved. This would
include the first applicant as it was made clear that the union was, in fact, a party before Court.
10
[65] I make the following order:
The application is dismissed. The applicants are to pay the respondent’s costs, jointly and severally, the one
paying the other to be absolved.
____________________________
BASSON, J
Appearing on behalf of the applicants: Adv TJ Bruinders instructed by Nomali Tshabalala
Attorneys.
Appearing on behalf of the respondent: Adv G Aber instructed by Deneys Reitz.
Dates of hearing: 20 March 2000; 22 March 2000 to 24 March 2000;
27 March 2000 to 31 March 2000. Written
argument closed on 18 April 2000.
Date of judgment: 26 April 2000.
11