REPORTABLE
IN THE LABOUR COURT OF SOUTH AFRICA
(HELD AT CAPE TOWN)
CASE NO: C635/99
DATE: 1972000
In the matter between:
Applicant
and
Respondent
J U D G M E N T
PILLAY, AJ:
1. A dispute was referred in terms of section 191(5)(b)(ii).
2. The applicant was employed by the respondent since 2 December 1996 as an administration clerk on
the recommendation of a manager, Mr Colin Schmidt.
3. When the applicant accepted employment at the respondent at the respondent's Cavendish Mazda
dealership, she did so on the express condition that she would not be required to work beyond
4:00pm and that she would be provided with parking. Although her contract of employment was not
amended to include these terms, they were observed until about 1999.
4. The respondent purchased Electromac, an autoelectrical business, which it conducted from the same
premises as the Mazda dealership at Cavendish. The applicant did the banking and answered the
telephones for Electromac, in addition to her administrative duties for the Mazda dealership.
5. The respondent was awarded the Pajero dealership. Mr Scmidt returned from the Rondebosch branch to
Cavendish to manage the dealership.
6. The applicant was informed that she would be required to work until 5:30pm and that she would no
longer have space to park her car because the new dealership brought with it additional stock.
Furthermore, as an upmarket dealership, it had to ensure that it maintained a suitable image.
7. The applicant objected to the changes in her conditions of service and Mr Allie Ryklief, an organiser for
NUMSA, was approached to represent her. The outcome of the discussions was that the applicant
was required to work exclusively for Electromac. She was able to keep the same working hours as
before and she was also given two weeks to find alternative parking.
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8. Another employee, Agnes Engels, who had been employed in 1988 was transferred to take over the
applicant's responsibilities at the Pajero dealership. Ms Engels had become redundant and had
previously been transferred to a position that was not entirely suitable. She was better suited to the
Pajero dealership and was able to work after 5:00pm. Furthermore, her salary was R 2700.00 which
was less than the applicant's salary of R 3 400.00.
9. The applicant resisted the transfer to the Electromac, even though it accommodated what she
considered to be the two material conditions of her employment, namely the parking and the hours of
work.
10. On her version, the applicant was forced to take the Electromac position. The respondent alleged that
she was transferred pursuant to an agreement with NUMSA. From the evidence of Mr Ryklief it would
appear that although the transfer was not desired, there was a degree of acquiescence, even if it was
under protest, as it was accepted practice for the respondent to transfer its employees from time to
time.
11. Accordingly the applicant started working at Electromac exclusively from 17 May 1999. When
Electromac was moved to Rondebosch the applicant also went along.
12. On or about 22 July 1999 the staff and the union NUMSA were informed about the closure of
Electromac. The closure was occasioned by John Gordon, a partner and shareholder in Electromac,
emigrating to Australia and the fact that Electromac sustained a loss of more than R60 000.00 over
the previous seven months.
13. The respondent invited NUMSA to consult about the retrenchments. Most of the Electromac employees
were absorbed in other branches. Two of them were unavoidably retrenched.
14. In the applicant's case Mr Ryklief confirmed that there had been indepth discussions about the
alternatives to the retrenchment. One of the options proposed by the respondent was that the
applicant be transferred to Noordhoek into the position held by one Ms Rosendorff who would in turn
"bump" Ms Lendes in Diep River. After conferring with the applicant, Mr Ryklief indicated to Mr
Welter that the proposal would be acceptable.
15. The respondent contended that it did not make an offer to bump Ms Rosendorff but had merely indicated
that it would explore that option, provided Ms Rosendorff was prepared to accept voluntary
retrenchment. If she refused it then Ms Lendes would have to be "bumped" to make way for the
applicant.
16. The reason why Mr Welter identified Ms Rosendorff was that she seemed unhappy, as evidenced by her
frequent absenteeism. Mr Welter felt that the applicant would be a better candidate for the position.
The respondent was also prepared to contribute to the applicant's petrol expenses with the extra
travelling to Noordhoek in exchange for her ferrying documents between the head office and
Noordhoek.
17. It is clear that the most desirable outcome for both parties was the transfer of the applicant to Noordhoek
and the "bumping" of Ms Rosendorff. Perhaps Mr Welter expressed his enthusiasm for his proposal
in such a manner that it was perceived as a firm offer. Mr Rycliff's version was that it was an option. I
am satisfied that Mr Welter did not intend it to be a firm offer.
18. When MISA, the union representing Ms Rosendorff, protested about the possibility of her being
retrenched, the respondent abandoned "bumping" her as an option. The respondent tried to steer the
consultation towards selecting the most suitable person to have been employed last in the
administration category. That person was Ms Lendes at Diep River. The applicant was willing to be
transferred there until it became apparent to her that she would have to sustain a salary reduction of
about R800.00. She refused the alternative employment at Diep River.
19. NUMSA accepted that the administrative position attracted varying rates of pay, depending on the job
content. The applicant also accepted that the salary for the Diep River position had been validly set
by the management at Diep River. However, she contended that a recently employed person should
have been given the lower paying Diep River position.
20. The consultations broke down. The respondent was not prepared to consider any other alternatives. The
applicant and NUMSA were not prepared to negotiate the retrenchment package, believing that the
retrenchment of the applicant could have been avoided.
21. Mr Vazi of NUMSA conceded on behalf of the applicant the substantive fairness of the retrenchment by
accepting that there was a commercial rationale for the closure of Electromac. The crux of the
dispute which remained substantive is the selection criteria applied by the respondent, and more
specifically the application of "bumping" as a method of selecting employees for retrenchment.
22. The respondent's stance was that LIFO had been agreed as a criterion for selection. It had been
practised in the past and MISA, the other trade union, having a presence amongst the respondent's
employees, relied on LIFO as a criterion. The application of LIFO was qualified by the skills and
operational needs of the respondent and practical "commonsense" considerations. The respondent
denied that salary was a criterion for selection or qualification of the application of LIFO, as
contended by the applicant and NUMSA.
23. It is common cause that LIFO was agreed as a criterion for selection. What is not clear is the full terms
of the agreement as to how LIFO would be applied. The parties had agreed to use the full list of
administrative personnel employed in all the branches of the respondent as a basis for discussion.
There was also acceptance that LIFO would be qualified having regard to the skills and operational
needs of the respondent and practical considerations. This was evidenced from the mutual
consensus not to select Ms Vermeulen, even though she was the last to be employed.
24. However, the parties were in dispute as to whether a salary match was an agreed or fair qualifying
criterion. It is clear that the salary match was not an agreed criterion to qualify the application of
LIFO.
25. The question for determination by the Court then is whether it was a fair and objective qualifying criterion
in terms of section 189(7).The Court would not embark on this line of enquiry if the terms of the
agreement for the application of LIFO were clear and complete, as the primacy of private agreements
should be respected. In the absence of any agreement as to whether to apply or not to apply
comparative salary scales as a criterion to qualify LIFO, the Court is free to consider whether it is in
the circumstances, a fair criterion. Similarly, in the absence of any agreement to use or not to use
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"bumping" as a tool in retrenchment, the Court may also evaluate whether it would have been a fair
method of selecting retrenchees in this case.
26. From the evidence of Mr Ryklief, it emerged that the identification of Ms Rosendorff was not arbitrary. It
was consistent with NUMSA's submission that the application of LIFO should be qualified by
comparative remuneration. It was common cause that Ms Rosendorff was the person most recently
employed to have a salary and skills that were comparable to those of the applicant. Hence NUMSA
proposed that Ms Rosendorff be selected for retrenchment.
27. The respondent rejected this proposal once Ms Rosendorff and MISA, her union, indicated their
resistance to any suggestion that she might be "bumped" downwards into Ms Lendes' position, to
make way for the applicant. The respondent was firmly of the view that in the absence of agreement
from Ms Rosendorff, it was bound to apply LIFO strictly.
28. As the respondent was prepared to qualify the application of LIFO in order to address its own interests,
its refusal to consider qualifying criteria in order to meet the interests of the applicant was
unreasonable. The respondent was able to and did modify the application of LIFO whenever it suited
its own interests.
29. The respondent was mindful of the inconvenience and costs caused generally by restructuring during
"bumping" and the socalled "domino effect". Hence it was not a practice that it usually applied.
However, it was prepared to implement "bumping" in these circumstances. Therefore the
disadvantages of "bumping" was not a primary consideration for the respondent in this case where it
was prepared to bump sideways to substitute Ms Rosendorff with the applicant.
30. This also confirms that the respondent was able to apply LIFO flexibly, if necessary.
30. This also confirms that the respondent was able to apply LIFO flexibly, if necessary.
31. The respondent should have explored the application of "bumping" and a salary match as qualifying
criteria further. However, it had closed its mind to considering these as qualifying criteria to
ameliorate the adverse effects of the retrenchment on the applicant.
32. The triangular "bumping", as it was referred to during the trial, would have minimised the adverse
effects of the retrenchment on the applicant. Mr Rosendorff and Lendes would have been brought
into the equation to share the brunt of the retrenchment, a result which would have been predictable
for employees with lesser service, and in an environment where LIFO was the primary basis for
retrenchment. NUMSA confirmed that it had prepared its member, Ms Lendes, for the retrenchment.
33. The applicant was required to bear a R800.00 reduction in her salary. She would have suffered a
R200.00 loss if she went into Ms Rosendorff's position. Ms Rosendorff would have sustained a
R600.00 loss of income monthly. To have imposed the full burden of the R800.00 salary deduction
on the applicant who had longer service than Ms Rosendorff was unfair in the circumstances.
34. The respondent adopted the stance that NUMSA and the applicant became inflexible and positional by
insisting on Ms Rosendorff. The respondent had anticipated that NUMSA would counteroffer,
amongst other things, allowing
the applicant to take Ms Lendes' position at a higher salary. From the records of the meetings it
appears that both parties became positional and mutually agreed to disagree.
35. However, the conduct of the respondent must be criticised because the onus rests on it to ensure that all
options are explored to avoid the retrenchment, or minimise its adverse effects.
36. Consultations about retrenchment is not the same as negotiations in collective bargaining, during which
the parties wrangle with each other to secure the best deal for their respective constituencies, often
by bluffing and trying to outwit or outmanoeuvre each other. Collective bargaining is usually
positional. It tends to close the mind to exploring in good faith all options for finding mutually
acceptable solutions.
37. Retrenchment calls for a joint problemsolving approach so that the needs of all parties can be explored.
Consequently if the respondent foresaw the possibility of a solution involving the substitution of the
applicant for Ms Lendes at a higher salary, it should have proposed it. I refer to this option specifically
since the respondent contemplated it at the time. I do not suggest that an employer is expected to
propose every conceivable option, but only such options that are shored up in the dynamic of
consultation.
38. An employer is, like the driver of a bus, the best person to determine what options would be viable for
the organisation. Trade unions often have to accept the employer's evidence about the commercial
rationale that underlie restructuring. Consequently, the onus rests on the employer to propose
alternatives to retrenchment. It should not wait on the union to do so, since the union does not bear
the onus of establishing that the dismissal was unavoidable and therefore fair. If, after proposing all
reasonable options that it considered during the consultations, the union remains recalcitrant, an
employer cannot be faulted (see Fletcher v Elna Sewing Centres (Pty) Ltd 2000 Vol. 21 ILJ 603).
employer cannot be faulted (see Fletcher v Elna Sewing Centres (Pty) Ltd 2000 Vol. 21 ILJ 603).
39. It was submitted for the applicant that the retrenchment was carried out with the ulterior motive of getting
rid of her. She relied on her transfer from the Pajero dealership to Electromac and the issuing of a
written warning for being absent without permission when she was ill. The applicant's submissions
were refuted by the respondent's willingness initially to transfer her to Noordhoek. It was also
prepared to contribute to her petrol expenses so that she could perform certain courier functions for
the respondent. Therefore I find that there was no ulterior motive on the part of the respondent to get
rid of the applicant.
40. The applicant withdrew her claim for reinstatement as regards the procedural fairness. NUMSA
conceded that the consultations were indepth. However, the application of the selection criteria and
the selection of the applicant per se ultimately renders the dismissal procedurally and substantively
unfair.
41. The parties indicated that a ruling of this Court was desired so that "bumping" as a principle can be
established. Hence the Court is disinclined to award costs to the successful party. The Court grants
the following order.
1.The selection of the applicant for retrenchment was
substantively and procedurally unfair.
2.The applicant is awarded R 27 200.00 as compensation.
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SIGNED AND DATED AT DURBAN ON THIS 10TH DAY OF AUGUST 2000.
Date of hearing: 13 July 2000
Date of judgment:
For the applicant: NUMSA
For the respondent: Mr R L Brown of Herold, Gie & Broodhead Attorneys