R
EPORTABLE
IN THE LABOUR COURT OF SOUTH AFRICA
(HELD AT CAPE TOWN)
CASE NO: C612/2000
DATE: 31-8-2000
In the matter between:
NATIONAL EDUCATION HEALTH & Applicant
ALLIED WORKERS UNION
and
Respondent
MEDI CLINIC
JUDGMENT : EX-TEMPORE
WAGLAY, J:
[1] The applicant seeks a final order interdicting and restraining the respondent from
terminating the contracts of employment of the person listed in Annexure A to its
papers on the basis of respondent's operational requirements;
(i) without first having given each of the persons listed in the Annexure at least one
calendar month's notice of such termination, or alternatively but only where such
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period exceeds one calendar month, without having given each such employee at
least four weeks notice of such termination as envisaged in section 37(1)(c) of the
Basic Conditions of Employment Act, and
(ii) without first having negotiated and concluded a retrenchment and redundancy
procedure with the applicant as envisaged in Clause 18 of the Recognition and
Procedural Agreement concluded between the applicant and the respondent on 13
December 1999.
[2] Applicant further seeks for this Court to grant a declaratory order directing the
applicant and the respondent to negotiate and agree a retrenchment and redundancy
procedure as envisaged in Clause 18 of the aforesaid Agreement.
[3] The relevant facts giving rise to this application can be summarised as follows:
3.1. On 13 December 1999 the parties concluded a recognition and procedural agreement
(hereafter referred to as "the agreement"). Clause 18 of the said agreement provides
as follows "Retrenchment and Redundancy Procedure
“A retrenchment and redundancy procedure shall be negotiated as soon as the
company deems it necessary for such action to be taken.”
On 20 March, respondent handed a letter to the staff employed in its
housekeeping and laundry units headed "Notice in terms of section 189
of the Labour Relations Act No. 66 of 1995". In this letter it notified its
employees referred to above that it was contemplating out-sourcing the laundry and
housekeeping services and thus wanted to commence the consultation process as
provided for in section 189 of the Act.
3.3. A number of meetings were held thereafter and various correspondence passed
between the parties. From the correspondence and minutes of meetings presented it
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is evident that respondent had, from the outset, or at least on 12 April 2000,
suggested that an agreement needed to be concluded between it and the applicant
with regard to the procedure relating to the retrenchment exercise. At best for the
applicant it remained non-committal on this issue.
3.4. On 25 April 2000, respondent presented applicant with a document headed "Process
to be followed in case of termination of contracts based on operational requirements
in terms of the Recognition Agreement between Vergelegen Medi Clinic and
NEHAWU" (the respondent and applicant respectively). Some time on or after 25
April 2000, applicant adopted the position that until such time as the procedure
envisaged by clause 18 is agreed upon, there can be no discussion in respect of
retrenchment.
3.5. On 15 May 2000, applicant forwarded a letter to the respondent, the contents
whereof were as follows:
"With reference to your proposal on termination of contracts based on operational
requirements; On 20 March 2000 notices were served to the employees
stating that the company is planning to start a consultation process regarding
operational requirements.
We are of the opinion that the company is breaching the Recognition Agreement in terms of
clause 18.
Therefore we believe that the company should apologise to the
employees in writing and withdraw the said notices and the company will honour the
Recognition Agreement that was on
13 December 1999"
3.6 The respondent, in response to the aforesaid letter, forwarded a circular letter to its
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housekeeping and laundry staff stating:
"I would like to inform you that your union representatives have brought to my
attention that no reference was made to clause 18 of the Recognition Agreement in
the notification sent to you on 20 March 2000.
On behalf of management I would like to apologise for any misunderstanding that
might have been created. According to clause 18 of the Recognition Agreement, the
union, on behalf of all employees that might be affected by the possible out-sourcing,
has the right to negotiate with the company the procedure which is to be followed.
I am pleased to make mention that the union and management are now in a position
to negotiate this procedure."
Before despatching the circular letter referred to above, respondent discussed the
contents thereof with the applicant to ensure that it had addressed the complaint
raised by the applicant and this was done at the meeting held on 16 May 2000. At
this meeting, and after finalising the circular letter aforesaid, respondent then
enquired if the "way was now clear for the negotiations on the procedure to start."
Applicant responded that it was. The respondent then called upon the applicant to
forward its proposals in that respect.
3.7. On 6 June 2000, the applicant presented its proposals with regard to the
retrenchment and redundancy procedure at the meeting held between the parties.
From a reading of the minutes of this meeting, it is clear that applicant held the view
that before the respondent could embark upon any process in respect of
retrenchment or redundancy, an agreement as provided for in clause 18 of the
Agreement had to be negotiated. The meeting ended without any agreement on the
retrenchment procedure and on 10 June 2000, respondent, in a letter to the applicant,
stated, inter alia, the following:
"In terms of clause 18 of the Recognition Agreement the company and the union has
"In terms of clause 18 of the Recognition Agreement the company and the union has
to negotiate the procedure that has to be followed. Clause 18 reads as follows."
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It then records the contents of clause 18 of the Agreement and adds "The union was
of the strong opinion that such procedure could not be negotiated until such
time as the reasons for the contemplated retrenchments were provided by
management, scrutinised by the union and the final decision to go ahead
was taken."
(I must add that at this stage that what is recorded in the paragraph infra is in
accordance with the various minutes which have been presented to this Court.)
"Subsequently management provided the union with written reasons for the
contemplated retrenchments on 24 March 2000 and on 17 April 2000, and verbally at
more than three meetings ,confirmed by written minutes. This was done
notwithstanding the fact that management repeatedly stated to the union that they
see this as one of the first steps to be taken in the negotiated procedure and
therefore such a procedure should be negotiated first of all. In support of this,
management provided the union with a written proposal of such procedure on 25
April 2000. In the meantime the union still further explored the reasons provided by
management but until today management have not received any form of counter-
proposals from the union to avoid the possible retrenchments."
The letter then goes on to state:
"A further delay was caused when the company acceded to a request by the union to
postpone a further meeting in order to give them time to get a union official to join in
the process and help them with a counter-proposal regarding the proposed
retrenchment procedure. Eventually, but without the union official being present,
management received counter-proposals from the union regarding the proposed
process at the meeting of 6 June 2000. This counter-proposal, however, does not
constitute a process at all, but rather reads like a list of demands largely based on
constitute a process at all, but rather reads like a list of demands largely based on
what section 189(2) to (7) of the Labour Relations Act, No. 66 of 1995, envisages the
parties to consult about and try to reach consensus on before dismissals based on
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operational requirements take place. It has become apparent to the company that
the views of the union and the company respectively regarding the process to be
followed in the case of termination of contracts based on operational requirements
are irreconcilable at the present moment.
In an attempt to bring order to the process, management would like to extend a final
invitation to the union to put any alternatives to retrenchments in writing to them
before the next meeting on 12 June 2000. In the absence thereof, management will
assume that the union has no viable alternatives to table. Further, management will
treat the proposals tabled at the meeting of 6 June 2000 as proposals based on
section 189(2) to (7) of the Labour Relations Act and would like to make the following
information available in writing as counter-proposals in line with the requirements of
section 189(3) of the LRA."
3.8. The letter then goes on to deal with the disclosure of such information as is required
in terms of section 189(3) of the Act. The aforesaid letter was handed to the
applicants on 12 June 2000 at the meeting held between the parties. At this
meeting, respondent, having rejected the applicant's proposals dated 6 June 2000,
expressed the view that it was still willing to negotiate the procedures required by
clause 18 of the Agreement. The applicant's response reiterated that unless the
procedures required by the above clause was concluded:
"The employees' jobs cannot be made redundant."
3.9. In response, the minutes record that respondent explained that since the parties
disagree on what the negotiated process should be and the proposals submitted by
the applicant did not constitute a process, and further that since there has been no
progress over this matter, the respondent was:
"Going to default to the provisions of the LRA section 189."
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Thereafter the respondent requested that applicant suggest any
alternatives it may have to the proposed out-sourcing. The applicant refused
participate in the process. The applicant thereafter declared a dispute in terms of
the Agreement and the matter was eventually referred by the applicant to the
Commission for Conciliation, Mediation and Arbitration ("CCMA") for conciliation.
3.10. In referring the matter to the CCMA, the applicant fashioned the dispute as follows
under the heading "Nature of the dispute":
"The dispute is about the refusal of the employer to bargain as is required by the
provisions of clause 18 of the Recognition
Procedural Agreement concluded between the parties on 13
December 1999."
Under the heading "Result of the conciliation" it records:
"The outcome we would like is an agreement between the parties that they shall,"
negotiate and agree a retrenchment and redundancy procedure as is required in
terms of clause 18 of the Recognition & Procedural Agreement”.
3.11. The dispute was set down for conciliation on 19 July 2000. The
Commissioner seized with the dispute refused to entertain the dispute on the basis
that respondent had agreed to the outcome sought by the applicant in its referral of
the dispute to the CCMA. Notwithstanding the CCMA's refusal to entertain the
dispute, applicant sought an undertaking at the conciliation from the respondent that
it will not proceed with the redundancy proposals pending the finalisation of the
process agreement as required by clause 18 .Respondent refused to give such an
undertaking. The demand for the undertaking was repeated by the applicant at the
meeting held between the parties on 21 July 2000. It was again refused by the
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respondent.
3.12. On the same day, 21 July 2000, applicant again referred a dispute to
the CCMA and this time under the heading of the nature of dispute
and the results of conciliation it expressed its dispute more clearly.
3.13 On 8 August 2000, the parties received notification from the CCMA that it would
conciliate the referral dated 21 July on 30 August 2000. In the meantime, and after
the applicant referred the initial dispute to the CCMA, the respondent appears to have
continued with the process, albeit in the absence of the applicant, and between 1-4
August 2000, gave notice to all of its employees in the laundry and housekeeping
units, all of whom are members of the applicant, terminating their services due to
operational requirements with effect from 31 August 2000. On 23 August 2000,
respondent launched this application.
[4] The relief sought by applicant, as recorded earlier, is to interdict and restrain the
respondent from unlawfully terminating the employment of its members on the basis
of respondent's operational requirements; more particularly, that the dismissal of the
applicant members should be interdicted pending the negotiation of a retrenchment
and redundancy procedure as envisaged by clause 18 of the Agreement which
regulates the relationship between the parties. Applicant also prays for this Court to
interdict and restrain the retrenchment pending the giving of proper notice in terms
of the employee's individual contracts of employment or in terms of the BCEA.
Further, that I direct the parties to negotiate and agree a retrenchment and
redundancy procedure. The application is fashioned in the form of a final interdict
and a declaratory order.
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[5] Dealing firstly with the final interdict, the requirements for such an order to be granted is
that the applicant must satisfy this Court that it has a clear right, a reasonable
apprehension of harm and the absence of an adequate alternative remedy. In
determining the above requirements, this Court is obliged to base its decision on the
facts as stated by the respondent, read together with the facts as stated by the
applicant - which are admitted by the respondent - provided that this Court may
refuse to accept allegations or denials by the respondent where such allegations or
denials are clearly untenable that the Court is justified in rejecting them on the
papers (see Plascon Evans Ltd v Van Riebeeck Paints (Pty) Ltd 1984(3) SA
623 (A).)
[6] With regard to the issue of clear right, applicant claims it has a clear right to the relief
claimed as:
6.1. The parties were obliged in terms of clause 18 of the Collective Agreement to
negotiate a retrenchment and redundancy procedure once the respondent deemed it
necessary for such action to be taken. In the absence of such a procedure having
been agreed to, to proceed with the retrenchment constitutes a breach of the
agreement and is, therefore, unlawful and renders the dismissals unfair.
6.2. That the respondent is obliged in terms of the contracts of employment of the
affected employees to give them one calendar month's notice .This the respondent
failed to do; alternatively, that the respondent is obliged to comply with the
provisions of section 37 of the BCEA in giving notice of termination and the
respondent as failed to comply with such provisions of that Act.
[7] Applicant's argument is that since clause 18 of the Agreement requires that an
agreement on retrenchment and redundancy should be negotiated as soon as the
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company deems it necessary to retrench, such clause ipso facto precludes the
effecting of any retrenchment prior to the conclusion of the retrenchment procedure
referred to in clause 18. The respondent disagrees. As I understand respondent's
argument, respondent states that notwithstanding the absence of an agreed
procedure in terms of clause 18, it may still proceed with the retrenchment as long as
the procedure adopted by it does not fall foul of section 189 of the Act. Alternatively,
respondent argues that clause 18 only requires that the parties negotiate and that
this term "negotiate" does not include a conclusion of an agreement. Finally, it
argues that this Court has no jurisdiction to interpret or apply the agreement which is
the real dispute before this Court as it is precluded from doing so in terms of section
158(5) read with section 26(5) of the Act.
[8] Having regard to the facts as I have recorded above, it is clear that respondent's view
was at all times, or at least prior to 10 June 2000, that the parties were required to
negotiate procedure as required by clause 18, before the matter of retrenchment
could be dealt with. To then argue that such procedure is not a prerequisite to any
consultation or negotiations on retrenchment cannot be seen to be as a serious or an
honest belief held by the respondent. To further argue that negotiations does not
imply concluding an agreement is rather simplistic. The purpose of negotiation is
nothing other than to arrive at an agreement acceptable to the parties involved
in the negotiations. When negotiations fail to result in an agreement it does not
imply that the matter negotiated about falls away, particularly where the need to
negotiate is part of an agreement that provides for dispute resolution mechanisms.
Hence, when an agreement requires that the party thereto conclude a side or axillary
agreement to the main agreement by negotiations, where such agreement is not
agreement to the main agreement by negotiations, where such agreement is not
arrived at by the parties, the parties are required to resolve the matter in terms of the
dispute resolution process that may be provided for in the main agreement.
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If this is not so, an agreement to negotiate would have no meaning. Having regard
to the agreement of which clause 18 is a part, it is clear that what was required was
that an agreement be concluded between the parties on the procedure to be followed
once respondent contemplated retrenchment or redundancy by negotiation.
[9] I therefore find that respondent's submission that negotiations does not imply
concluding an agreement, to be without merit. Negotiations is described by
Chambers 20th Century Dictionary to mean "bargain, to confer for the purpose of
mutual agreement, to arrange for by agreement, to manage, to transfer or exchange
for value". It is, therefore, not simply a matter of coming together to haggle and
wrangle without more. It means to come to a conclusion by mutual consent.
[10] Respondent's further argument that since section 26(5) provides that the application
and interpretation of the collective agreement, (and in this respect it is common
cause that the agreement referred to herein is a collective agreement) must be
referred to arbitration for determination, it is not for this Court to pronounce upon the
application or interpretation thereof. This argument is not without merit. While it is
so that matters relating to interpretation and application of a collective agreement
have to be referred to arbitration, the issue before me is not the application and
interpretation thereof, but a breach of that agreement. I believe that there is a
distinction between a breach of an agreement and the application or interpretation
thereof.
[11] Dealing simply with the application or interpretation of an agreement presupposes
that the parties to the agreement jointly recognise that their views in respect of the
application and/or interpretation of the agreement, differ. Either or both of them
may, therefore, refer the matter to the CCMA for arbitration. However, where both
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parties are not at a loss as to the applicability or the interpretation of the agreement
and one of the parties believes the other to be in breach, then I do not see why such a
matter cannot be referred to this Court. I do not by this imply that the CCMA does
not have jurisdiction to determine a breach. I believe that both the CCMA and this
Court has jurisdiction to entertain a dispute that has as its basis a breach of a
collective agreement.
[12] I say this because in determining a breach, the interpretation and/or the application
of the agreement is, perforce, inevitable. Since the CCMA has the power to arbitrate
an issue dealing with the application or interpretation of agreement, it must also have
the jurisdiction to arbitrate a dispute relating to a breach of the agreement. Further,
since the Act does not expressly oust the jurisdiction of this Court in respect of a
breach of a collective agreement, I am satisfied that such a dispute can be
entertained by this Court notwithstanding that in determining the breach, this Court
might, or will, be obliged to interpret the agreement. In the circumstance if for
example the applicant in this matter brought an application on the basis that its
members' dismissal on the grounds of respondent's operational requirements was
unfair, then firstly, the applicant would be obliged in terms of the Act to refer the
dispute about the unfair dismissal to this Court and not to the CCMA. Secondly, in
determining whether or not their dismissal was unfair, this Court will be obliged to
consider and interpret the collective agreement to ascertain whether there was a
breach of such an agreement. It cannot be said that the CCMA must hand down an
arbitration award on the interpretation of the agreement and then this Court must
determine the dispute about the dismissal. To argue that it is the dispute that is the
relevant factor and a dispute regarding a collective agreement has to be referred to
relevant factor and a dispute regarding a collective agreement has to be referred to
arbitration and a dispute about a dismissal for operational requirement has to be
referred to this Court is to place superficial barriers because in the example I have
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given the determination of the dispute about the dismissal would necessitate the
interpretation of the agreement.
[13] In the circumstances I am satisfied that I have jurisdiction to interpret a collective
agreement when the allegation relating to the agreement is one of breach of the said
agreement.
[14] As stated earlier, applicant's submission is that the respondent is in breach of the
agreement in that it was obliged to negotiate and conclude a procedural agreement
before it could proceed with the retrenchment exercise, but failed to do so.
[15] Having regard to clause 18 I am satisfied that applicant's submission is in fact correct.
In arriving at this decision, not only have I had regard to what I conclude to be the
import of the said clause, but also the fact that respondent itself was satisfied that
the meaning preferred by the applicant was the correct one. Respondent only
changed its view when it became apparent that its proposal with regard to the
procedure and that proposed by the applicant was so divergent that it appeared that
the two proposals were irreconcilable. The fact that the two proposals appear to be
irreconcilable did not give the respondent the right to abandon the need to conclude
such an agreement. It was required of either of the parties to then invoke the
dispute resolution procedure as provided for in the agreement to resolve the matter.
[16] In this respect applicant followed the procedure as was required. It declared a
dispute as required by the agreement and thereafter, in terms of the agreement,
referred the matter to conciliation to the CCMA. Sadly, it failed to express either the
nature of the dispute or the outcome it would like adequately and respondent latched
upon what was written in the referral to satisfy the CCMA that there was in fact no
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dispute before it. Applicant is correct when it says that respondent knew that the
real dispute was the failure to conclude rather than agree to negotiate the procedural
agreement in terms of clause 18. Respondent nonetheless took advantage of the
literal expression contained in the referral, to abort the matter.
[17] Respondent's argument, however, goes further. It is that the referral by the
applicant was in any event improper because applicant refers the dispute as one of
“refusal to bargain”. This, it argues, is untenable because section 64(2) of the Act
defines what constitutes a refusal to bargain. The dispute about failing to agree to a
procedural agreement in terms of clause 18 of the Agreement cannot, so respondent
continues, be construed as a “refusal to bargain”. I do not express an opinion
whether or not respondent is correct as it is not necessary for me to do so in respect
of the present matter. I may add, however, that section 64(2) does not provide an
exhaustive list of what constitute a “refusal to bargain” dispute. The sub-section
specifically provides that:
"A refusal to bargain includes..."
By using the word "includes" it is not limiting what constitutes a refusal to bargain
dispute, but extends it to certain instances which may not ordinarily fall under the
category of the “refusal to bargain” dispute.
[18] The fact that the CCMA failed to entertain the dispute does not, however, imply that
applicant does not have a clear right . I am satisfied that clause 18 of the Agreement
does require the parties to conclude a procedural agreement before respondent can
embark upon a retrenchment or redundancy exercise and as such the Applicant has
satisfied this court that it has a clear right .
[19] Turning then to the issue of reasonable apprehension of harm and the absence of
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adequate or alternative remedy. Dealing with the issue of adequate or alternative
remedy, applicant's contentions in this regard are based on the premise that since
the dismissals only come into effect today, this Court should interdict and restrain
such action. This is no reason to grant the relief. While it is true that the affected
employees are required to work in terms of the notice terminating the services until
today or such further period, depending on the notice being correct, the employment
has in fact terminated. It was terminated on the day they were given the notice to
that effect. The dispute is, therefore, one of dismissal. I cannot in the circumstances
interdict and restrain the respondent from terminating the contracts of employment.
The contracts of employment have been terminated.
[20] Having regard to the fact that the applicant has included in the notice of motion a
prayer for alternative relief, I am prepared to consider the granting of interim
reinstatement pending finalisation of the dispute relating to the retrenchment of the
affected employees. To do this, however, the applicants have to advance special
circumstances to persuade this Court to grant such status quo relief. The fact that
applicant is required to satisfy this Court that there are special circumstances for the
Court to grant the relief which I am prepared to consider stems from the fact that the
Act makes adequate provisions to address the issue of unfair dismissal. In terms of
the Act the applicant is entitled, if the dismissal of its affected members is found to
have been unfair, to an order of reinstatement from the date of their dismissal. The
effect of this will be that once reinstated and the respondent is still intent with
proceeding with the retrenchment exercise, it will be required to follow such
procedure, inadequacy of which results in the dismissal being found to be unfair. In
procedure, inadequacy of which results in the dismissal being found to be unfair. In
these circumstances, respondent's submission that unless relief is granted to the
applicant, the applicant will lose the opportunity to consult or negotiate substantive
aspects of the retrenchment, is of no merit.
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[21] Since the Act provides an adequate remedy and no special circumstances have been
placed before this Court as to why this Court should grant status quo relief, I am
satisfied that the relief prayed for by the applicant, or any alternatives thereto, should
be dismissed.
[22] I may add that applicant's reliance on the judgment in the matter of Num & Others
v Dumsa Dzima Manufacturing (Pty) Ltd is misguided. In that matter the Court
had not found that the individual applicants had in fact been dismissed and therefore
granted an interdict restraining the retrenchment of the individual applicants pending
the respondent complying with the collective agreement that regulated the
relationship. Had the applicant in this matter also come to this Court as early as 19
July 2000 when the CCMA refused to entertain the dispute, or immediately after 21
July 2000 when respondent refused to give it an undertaking that it would not
proceed with the retrenchment pending the conclusion of a procedural agreement,
this Court may well have granted the relief prayed for. This would have been so
because the retrenchment exercise had not been concluded by the respondent at the
time and the employment relationship continued to remain in force.
[23] Once the employment relationship has been terminated, this Court cannot come to
the assistance to grant reinstatement, albeit interim reinstatement, unless it is
satisfied that there are special circumstances to do so. If such relief is to be granted
simply because there is evidence of the process not being followed properly, then this
Court would be exceeding its powers and creating a right that has not been provided
for in the Act.
[24] The further relief sought by the applicant is that I direct the respondent to negotiate
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and agree to a retrenchment and redundancy procedure as envisaged by clause 18 of
the Agreement. I am not inclined to entertain this prayer. I refuse to do so on the
basis that since the main prayers of the applicant have been dismissed, there is
nothing urgent about the granting of this order, assuming that there is merit in
granting same.
[25] Turning then to the issue dealing with the notice to the affected employees. The
applicant's contention that the termination of the employment of the affected
employees is or will be unlawful because the respondent had failed to give the
affected employees one calendar month's notice or notice as required by section 37
of the BCEA, is of no merit. Even if I accept that notice given by the respondent
should have been given on or before 1 August to terminate the services on 31 August,
or as provided for by the BCEA, this does not mean that the notice not in compliance
with the above is invalid. If the notice is late or inadequate all it means is that the
employer is obliged to pay the employee for such period as such employee would be
entitled to. That is, if the employer is required to give notice of one calendar month,
he is obliged to hand such notice to the employee by the 1st of that month. If he
does so only after the 1st, he will be obliged to pay the employee an extra month's
salary as a notice period of one calendar month shall only expire at the end of the
following calendar month. Likewise, if the BCEA requires a notice period of a
particular period and the notice given is short, such notice is not void because of its
failure to comply with the notice period , it only entitles the employee to claim
remuneration for the period that the employer was obliged to give notice to the
employee.
[26] In the circumstances applicant has failed to establish any clear right or a right open to
some doubt in respect of the termination of the employment based on improper
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notice.
[27] Finally, with respect to costs, this matter clearly has not reached its end. I have little
doubt that the applicant will proceed against the respondent on the basis of an unfair
dismissal. Clearly where there is a matter pending between the parties, this Court
should attempt not to place any hindrance for the parties to attempt a resolution of
their disputes. Granting an order of costs against the applicant might, in the present
circumstances, lead to hardening of attitudes and place an unnecessary barrier on
the parties attempting to resolve the various matters on which they differ. I am,
therefore, not satisfied that this is a matter which the terms of law and equity
demands that a costs order be made.
[28]In the result the application is dismissed. There is no order as to costs.
Waglay ,J .
For the Applicant :Adv.M.W.Janisch instructed by
Chennels Albertyn.
For the Respondent : P.R Dreyer of Kocks & Dreyer
Attorneys
Date of Hearing & Judgment :31-08-2000
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