NOT REPORTABLE
IN THE LABOUR COURT OF SOUTH AFRICA
HELD IN DURBAN
CASE NO D208/99
DATE 2000/08/01
In the matter between:
KHWEZI CLEMENT ZUMA & ANOTHER Applicants
and
Respondent
JUDGMENT DELIVERED BY THE HONOURABLE MR JUSTICE LANDMAN
ON 2 AUGUST 2000
TRANSCRIBER
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SNELLER RECORDINGS (PROPRIETARY) LTD - DURBAN
D385/99-SFHJ/T1 - 3 - JUDGMENT
J U D G M E N T
LANDMAN J
[1] Mr Zuma and Mr Ndlovu were employed by Richardson Electrical CC until their
retrenchment on 13 March 1998. They had been in the employ of the CC for a
period of 20 and 18 years. Subsequently they launched an application in this
court complaining that their dismissal on 13 March 1998 constituted an unfair
dismissal.
[2] The case for the CC, as it appears from the evidence which was led in this court, was
that there was a decline in work. So much so that the employees were obliged to
work short-time work on a rotation basis commencing in July of 1997. This
continued intermittently. At a later stage the firm of accountants, who assisted the
CC in drawing up its accounts, informed them that in view of the deteriorating
financial situation they would face insolvency unless the business was turned
around.
[3] The principal member of the CC, Mr Bob Richardson, decided that there seemed to
be little future in continuing with the business and he consulted the Electrical
Contractors Association, in particular Mr Hall and Mr Greager, for advice on how to
retrench his workforce.
[4] Ms Cathy Fitzpatrick, Mr Richardson's daughter, was employed as a secretary/Girl
Friday. She liaised with Mr Hall and obtained details as to how the retrenchment
should be done. Some time prior to 23 February 1998 she faxed a letter to him
which he corrected. She subsequently transcribed that letter on a letterhead
addressed to the three employees who were involved. One of the employees was
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boarded and therefore would not have received this letter.
[5] The letter, dated 23 February 1998, was signed by Mr Richardson and, on the same
day, after wages were paid out, he distributed these letters to the recipients,
including Mr Zuma and Mr Ndlovu. He also explained the content of this letter to
them in English and in the Zulu which he was able to speak. The letter informs
the addressees that:
"As you are aware, there is a critical shortage of work at the moment and, as a
result, you were placed on short time. As far as I can see there is no prospect of
any major work either. As my business is now running at a financial loss even the
short time is becoming a burden. As all employees will be retrenched there is no
selection process necessary. I envisage your last working day to be 13 March
1998 (a two-week consultation period and one week's statutory notice). However,
should you find alternative employment before that you will be free to leave
immediately without the requirement of working the notice period. You will
receive one week's pay for every year of completed service as severance pay. If
in future I have sufficient work again you will be considered for re-employment.
Your pension and UIF cards will be handed over to you on the last day of your
work. Please be aware that your pension can only be claimed after one year
should you no longer be employed in the electrical industry."
Ms Fitzpatrick was also present while the letters were distributed and the
discussion took place.
[6] None of the employees, including Mr Zuma and Mr Ndlovu, had anything to say when
they were presented with these letters. They made no contribution as to what
should be done about the business or what should be done about them or their
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circumstances.
[7] On 9 March 1998 a notice of termination of their services were given to the three
employees, again including Mr Zuma and Mr Ndlovu. This letter informed them
that their services would be terminated on 13 March 1998. On 13 March their
services were terminated. They were paid their wage for the week. They were
provided with severance pay. Severance pay was calculated at one week for
every year of service even though the maximum required in terms of the
Bargaining Council Agreement was fixed at nine years' service. The severance
paid was deposited in their banking accounts to protect them from the burden of
carrying money with them on that day. They were also provided with letters
which constituted a notice of service. They were told that if there was an increase
in work they would be re-employed and they were asked to keep in touch with Mr
Richardson.
[8] During April contact was made with Mr Zuma and he returned to work and was paid
for 36 hours for work which he did, including work at the Meadows Dairy.
[9] The applicants' case (and it is important to bear in mind that the applicants
commenced leading evidence in this court) at the time their case was closed, was
that they admitted that some short time had been worked. They said they were
unaware whether or not the CC had work to do. They denied receiving the letter
of 23 February 1998 which I have set out above. They denied that any meeting
took place or that any explanation was given to them regarding their impending
dismissal. They denied that there was any consultation and they denied receiving
a letter of termination of their services, or notice to terminate their services, dated
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9 March 1998.
[10]Under examination-in-chief they were referred to pages 58 and 59 of the bundle.
Those pages refer to a letter dated 9 March 1998 which reads as follows:
"Final Notice of Retrenchment.
Referring to our letter dated 23 February 1998, as no major work has come in in
the last two weeks, I hereby give you one week's notice. Your last day of work
shall therefore be 13 March 1998.
Yours faithfully,
Bob Richardson."
[11]These notices were not on letterheads, as may be expected of copies. Both
applicants denied that they had received them. However, it later transpired that
Mr Zuma and Mr Ndlovu were each in receipt of the final notice of retrenchment
dated 9 March 1998. Now at pages 83 and 84 of the bundle these letters state:
"Final Notice of Retrenchment.
You are hereby given one week's final notice of retrenchment. Your final working
day will, therefore, be 13 March 1998.
Thank you for your loyal service.
Yours faithfully,
Bob Richardson."
These letters are on a letterhead and they are on yellow paper. These letters
were not in the bundle which had been prepared by Mr Reheman of the Help-In-
Hand Trade Union, which represented the applicants. They were not put to Mr
Zuma or to Mr Ndlovu while they were giving evidence-in-chief. The impression
that this Court was left with when their case was closed, was that no documents of
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D385/99-SFHJ/T1 - 7 - JUDGMENT
any nature whatsoever had been given to them by the CC at the time of their
retrenchment.
[12]During cross-examination of Mr Richardson, Mr Reheman produced the documents,
pages 83 and 84, the letters of the final notice of retrenchment on the letterheads,
and this was put to Mr Richardson. It then became clear that notice was in fact
given and that the evidence of Mr Zuma and Mr Ndlovu in-chief was incomplete.
They were consequently recalled to the witness stand and admitted receiving
these documents. They were also asked to explain why they had not said so
earlier.
[13]The result is that there was, in my opinion, an attempt to mislead the Court by
withholding crucial evidence. This has a detrimental effect on the credibility of Mr
Zuma and Mr Ndlovu. I do not accept their evidence save where it coincides with
the evidence which was given by Mr Bob Richardson, Mrs Elizabeth Richardson
and Miss Cathy Fitzpatrick, who I find to be credible witnesses.
[14]I accept, in all the circumstances, therefore, that the dismissal of the applicants was
occasioned by the decision of the principal member, Mr Richardson, to close the
business because of the impending financial loss which was attributable to the
lack of work. It is not a requirement of our law that an employer should continue
with his business until he goes insolvent. An employer is entitled to make a
decision at an earlier stage and that decision, if a bona fide one, is one which will
be upheld by this Court.
[15]In the circumstances, therefore, I am satisfied that there was a fair and substantial
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reason for retrenching the two applicants.
[16]I now turn to the question whether the dismissals were done in a fair manner and
whether they complied with section 189 of the Labour Relations Act 66 of 1995. I
have already referred to the fact that a letter dated 23 February was prepared
which set out all the relevant information which should have been brought to the
attention of the employees who were about to be retrenched. It is true that it is
difficult to say whether any meaningful consultation took place. Certainly the
employees were aware that they had been working short time. They were then
informed that there was impending retrenchment, and what the reasons were.
There was no reaction from their side. It is difficult to think that they could really
have said anything which would have persuaded Mr Richardson from taking the
decision to retrench, because there was no work to do and his CC was suffering
financial loss. In consequence the decision was followed up by notice of
retrenchment. That in turn was followed up by the actual dismissal of the
employees, the provision of a notice of service and the payment of all benefits and
severance pay, which was generous, and which reflected the good relationships
which all parties say had existed between management and labour.
[17]In the circumstances, therefore, I am satisfied that the dismissal of the employees
was also procedurally fair. The result, therefore, is that the application should be
dismissed.
[18]In terms of the pre-trial minute the parties have agreed that if the Court finds the
retrenchment is unfair, the Court should order the respondent to pay the costs of
the application. The parties have also agreed that the costs of the pre-trial
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proceedings be reserved. As no argument was addressed to me in this regard I
think that the costs of the pre-trial proceedings should be costs in the cause.
[19]These costs of course, because the parties are not represented by legal practitioners,
are to be restricted to disbursements. In my opinion, taking into account the
factors that I have set out, the conduct of this case by Mr Reheman and the Help-
in-Hand Trade Union which, had it not been for the fortuitous production of
documents 83 and 84 at a later stage while Mr Richardson was being cross-
examined, would have left the Court with a total misapprehension of this matter,
that is a matter which calls for censure. In the circumstances I order Mr Zuma, Mr
Ndlovu, the Help-in-Hand Trade Union and Mr Reheman to pay the costs, being
the disbursements of the respondent, jointly and severally, the one paying the
other to be absolved.
LANDMAN J
Date of hearing: 1 & 2 August 2000
Date of judgment: 2 August 2000
For the applicants: Mr Reheman of the Help-In-Hand Trade Union
For the respondent: Mr Greager
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