IN THE LABOUR COURT OF SOUTH AFRICA
CASE NO: J1152/98
In the matter between:
Applicant
and
Respondent
JUDGMENT
FRANCIS AJ
1.This is a referral for adjudication to this Court in terms of section 191(5)(b)(ii) of the Labour Relations Act 66 of
1995 (the Act). The applicant alleges that the reason for his dismissal is based on the respondent’s
operational requirements. He contends that his dismissal was unfair inter alia in that he was not consulted.
2.Both parties called one witness each.
3.There are not material disputes of facts in this matter.
4.The respondent called Antonius Jacob Vandenmunckhof as a witness. The respondent’s version is that prior to
1997 there were four separate mining companies each with their own legal personality. During June 1997
the four mining companies amalgamated and became the Evander Gold Mines Limited, the respondent in
this matter. Soon after the amalgamation of the four separate companies the applicant was given a letter of
appointment dated 7 July 1997 to confirm that he was now part of the amalgamated company. He was also
given a letter confirming that he had been appointed as a training practitioner as required to in terms of
section 7(2) of the Mines Health and Safety Act No 29 of 1996. The respondent was bought over by the
Harmony Gold Mine in August 1998. In 1997 Vandenmunckhof was the Industrial Relations Manager for
the Kinross Mine which later became part of the respondent.
5.A restructuring process started in 1997 after the amalgamation of the four different companies. The respondent
suffered financial losses and commenced embarking on negotiations and consultations with all the unions in
the three recognised bargaining chambers. One of the unions that the respondent negotiated with is the
Officials Association of South Africa (OASA) of which the applicant was a paid up member. OASA had
between 70 to 75 members. This started in September 1997 and culminated into an agreement in early
October 1997. The retrenchment agreement was signed with the relevant parties on 7 October 1997.
Vandenmunckhof was personally involved in the said negotiations.
6.During the said negotiations and consultations with the unions, certain positions were identified that would
become redundant which included the position of management, a position that was held by the applicant.
This was agreed with OASA. The parties agreed that the effective date of the retrenchment would be 8
October 1997. The negotiations went longer than anticipated. Consultation with and counselling with of
affected employees would commence immediately thereafter.
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7.In terms of the retrenchment agreement the severance pay was agreed to be two weeks for every completed year
of continuous service. It was also agreed that should any other union negotiate a package to include the last
year of service to be paid on a prorata basis, than the same would apply to this agreement. Page 3 of the
said agreement sets out the retrenchments procedures. It was also agreed that bumping would not take
place. Bumping was defined “ the placement of an employee in another class of work, thereby causing
another employee to be retrenched, where such employee would not normally have been retrenched”.
There was also a recall provision which was valid for six months after the retrenchment had been
completed.
8.LIFO was defined as Last in First Out as a selection criteria. For the purpose of this agreement, the application of
LIFO would be subject to the refinement and stipulations of the selection criteria, with due regard to
specific skills retention, meaning that if an employee fell within the selection for retrenchment, the company
could retain his services if he had specific appropriate skills. The unions signed the retrenchment agreement
in full and final settlement of the dispute. The applicant was not treated unfairly.
9.The applicant was a trainee officer and did management training. With the restructuring of the respondent,
training was also restructured. The training at Winkelhaak mine was amalgamated. The surface training
and management training became redundant and was stopped. The employees went to on job training and
surface management training stopped. The underground training continued. The applicant was not
medically fit for underground training and was not considered for it since 1985 due to the fact that he was a
diabetic. He was expected to have been boarded off but was given alternative sheltered employment.
10.Over three thousand employees were affected and were retrenched over a twomonth period. Various facilities
were set up to meet with the individual employees. On 24 October 1997 subsequent to the retrenchment
agreement being signed Vandenmunckhof, Mr d Mr Lucas Bornman who was the industrial relations and
human resources development manager met with the applicant. During the meeting the applicant was told
that the management training had ceased and that the position had become redundant. The applicant was
about the retrenchment agreement and what his entitlement in terms of the agreement would be. The
applicant requested that enquires be made about alternative employment at other mines. The enquiries were
made at the respondent’s head office and other mines to see if the applicant could be accommodated.
Letters were including a list of the positions.
11.The management training had stopped and the post has since not been filled as it was made redundant. There
was no other alternative post available. Some employees were placed underground but because the
applicant was a diabetic he could not be placed underground. During 1985 the applicant was given an
alternative sheltered employment.
12.During the meeting with the applicant, he did not request to be boarded off or to be placed on early retirement.
Such a request would be considered by the Mine Officials Pension Fund, to which the applicant belonged.
In such a case he would have been entitled to his pension benefits and the company’s contributions. If he
was retrenched, nothing prevented him to have been boarded by the Official Pension Fund which was not
administered by the respondent. If the applicant had been boarded off, he would not have received his
retrenchment benefits. It would be better to have been retrenched and than boarded off. Early retirement
had to take place in terms of the rules of the Mine Official Pension Fund which was not administered by the
respondent and he would have had to apply and would be paid out in terms of a certain formula and it was
not mutual exclusive from the retrenchment. If he was retrenched, he could still get his early retirement and
he would have benefited. He was not at early retirement age which would have been 50 years.
13.The parties met again on the 4 November 1997 where the applicant was informed that no alternative
employment could be secured at the other mines. He was given a retrenchment letter and three letters from
the other mines confirming that no employment could be secured which was requirement of the Pension
Fund. He was told to go to the pay office for his benefits. The applicant had been considered for alternative
positions but was found not to be suitable for it. The posts included that of hostel officer who was required
to work underground and economic controller which no longer existed.
14.He testified that after the respondent had gone through the restructure process it suffered further financial losses.
It faced closure and was sold to Harmony Gold Mine at a good purchase price of R72 million rands. Since
it was taken over by Harmony Gold Mine there was a further rationalisation process and retrenchments in
October/November 1998. There was a change in structure and it made a profit.
15.The applicant, Michael Christoffel Cloete himself testified. His version is that he commenced employment with
Union Corporation in 1969 until he was retrenched by the respondent on 4 November 1997. He started off
as a learner official at the Central College and than became a shift boss. Later he was appointed to be a
trainer for the whole group. He became a management trainer. In 1985 he was classified as unfit to work
underground and he was appointed as a manpower officer. He was then approached to do surface training
and the respondent did not know that he was diabetic. He was told that he would get all the benefits that the
people that do underground training got. He was promoted and became a management trainer for the
Evander, Springs and Barberton with all the gold and platinum mines he did for the Group. He later went
back to management training. He became an economic controller where he had to do vegetation on the
mine and slime dams. They had to rehabilitate the Mine and Slime dams and he became an Economic
Controller. The dams still have to be rehabilitated.
16.When the government forced the respondent to do Adult Basic Education and Training (ABET) and the
applicant was asked to start ABET at the Kinross Mine. Mariet Swarts a graduate from the Potchefstroom
University was employed and started coordinating ABET and the applicant went back to management
training. The applicant and Swarts moved to a new complex where he did management training and she
took over ABET. They reported to Johan Labuschagne who was in charge of surface training which was
completely separate from underground training. Whenever Swarts went on leave, the applicant would take
over the ABET training. When Labuschagne went on leave, the applicant acted in his place as acting
training manager until he was retrenched in November 1997.
17.During July 1997 he was asked by the unit mining technical manager to draw up his curriculum vitae ss a
decision had to be made between him and his assistant Kenneth Mbewe who had commenced working for
the respondent in 1996. He was told that decision would have to be made about retrenchments that would
have to take place at the Kinross mine where he was working but the retrenchments would not take place at
the training centre.
18.In August 1997 Labuschagne handed the applicant a letter of appointment and a letter that he had been
appointed as a training practitioner. Both letters were dated 11 July 1997. The employees were required to
sign new contracts for training practitioners. He enquired from Labuschagne about his future with the
respondent. Labuschagne who had been told to look for alternative employment told the applicant that his
job was secure and that a person with 28 years of experience would not be retrenched. He did not sign the
letters because he feared that it might affect his length of service.
19.During July to September 1997 the applicant conducted exit retrenchment interviews at other mines. The exit
interviews that he conducted were under a different category of employees and not that of officials like him.
20.The applicant admitted that he was a member of OASA. When he started working for the respondent there, was
a close shop agreement and he only heard for the first time in court that the close shop agreement was
terminated in 1995. The retrenchment agreement was only given to him on 4 November 1997. He had been
brought under the false pretences that he was not going to be retrenched and had though that his position
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was secure. He was notified about his retrenchment for the first time on 4 November 1997.
21.The applicant testified that on 24 October 1997 his assistant Mbewe told him that Bornman wanted to see him.
He went to Bornman’s office where Vandenmunckhof was invited to attend. The meeting lasted 15
minutes. Bornman told him that his position was no longer needed and that he would have to hand over his
things to Mbewe. He was told that he would have to stop working and once his documents were ready he
would be called to collect it and would be told how much is due to him. He was told that he would be paid
two week’s severance pay for every completed year of service. He would also be allowed to remain in the
respondent’s house for two months. He was told to go to the pay office to ascertain how much he would
get. He than asked whether any provisions were made for alternative employment at the other mines.
Enquiries were then only made. He went back to his office where he told Mbewe that he had been
retrenched. He worked until the Monday when he handed some other things to Swarts.
22.On 4 November 1997 he received a telephone call from Bornman’s secretary to collect his documents. He went
to Bornman’s office but does not recall whether Vandenmunckhof was present. He was given incomplete
retrenchment documents and was told to go to the time office to find out what his retrenchments benefits
would amount to. He was also given faxes received from the other mines about alternative positions. No
amounts were recorded on his retrenchment letters about what amount was due to him. He went to the time
office but found nobody there. After three attempts he finally met with the person on 6 November 1997
who told him that he had not been informed that the applicant had been retrenched.
23.The applicant was not paid on 6 November 1997 and was told that a tax directive would have to be ascertained.
He received no salary in December 1997 and in January 1998 he was given a cash advance of R20 000.00.
He received some other cash advances and finally got all his benefits amounting to R53 153.44 in May
1998. He was not told how the benefits had been calculated.
24.The applicant believes that his dismissal was unfair in that for the 28 years of service that he had he felt secure
with the respondent. He had received a merit honour for service rendered in the 1980's. He had a clean
record and also received merit colours for long service rendered. When he was given his letter of
appointment in August 1997 he was assured that he would not be retrenched yet he was retrenched three
months thereafter. There was no discussions about early retirement or that he be boarded off. Alternatives
were only considered after he had raised. He was not asked about his qualifications after alternatives were
sought. He believes that he could have gone to the rehabilitation of the mine dumps and dams or have been
employed in the place of his assistance or did ABET training in the place of Swarts. He could also have
been employed as a hostel official. Before 24 October 1997 he was not aware that his position was made
redundant and that he was going to be retrenched.
25.The dispute was referred to conciliation and after conciliation had failed it was referred to this court for
adjudication.
26.It is common cause that the applicant was a member of OASA. The applicant denied in his statement of claim
that he was a member of a trade union but admitted in the pretrial minute that he was. This fact was
disclosed to the applicant’s attorney in November 1997 that he was such a member. It is of some concern
that despite this fact, the applicant still deemed it necessary not to have disclosed this fact in his statement of
claim. During the proceedings the applicant pleaded that he had no choice to be a member because of a
close shop agreement that existed. He was unaware that the close shop agreement was terminated in 1995.
27.The applicant did not challenge the substantive fairness of the retrenchment. He admitted that there was a need
to retrench. Evidence was led that the respondent suffered financial losses and even after the retrenchment
exercise of 1997 it had to embark on further retrenchments. It was also faced with a stark choice of closing
down completely or being sold which happened in 1998. I am satisfied that sufficient evidence was led by
the respondent that proved that the retrenchment was for a fair reason based on economical factors.
28.All that remains to be determined is whether the retrenchment of the applicant was procedurally fair and in
compliance with the provisions of section 189 of the Act.
29.It is common cause that the respondent negotiated and consulted with a host of trade unions including OASA
which culminated in a retrenchment agreement being drawn and signed by the parties to it on 7 October
1997.
30.In terms of section 189(1)(c) an employer who contemplates retrenching employees is required to consult with a
registered trade union on behalf of it members. There is no obligation placed on the employer to consult
with individual employees who are members of a registered trade union.
31.The retrenchment agreement confirmed that the retrenchment had to be completed by the end of October 1997.
The severance pay that was agreed upon was two weeks for every completed year of service. The
respondent had to provide the affected employees with assistance. There was a recall provision that was in
existence for six months after the retrenchment. The effective date of the retrenchment was 8 October 1997
where after consultations and counselling with affected employees had to take place. Bumping was not
permitted.
32.During argument, Ms Hadjiconstantas conceded that there had been consultations with the applicant’s union.
She contended however that because the respondent had failed to make the list of affected employees
available to the trade unions on the 7 October 1997 and it undertook to consult with the affected, it now had
to consult with the applicant on the issue of severance pay, bumping, alternative positions and the timing of
the retrenchment. She denied that this would reinvent the process. In support of her contention she relied
on clause 11 of the retrenchment agreement which has the following:
11 TIMETABLE
on clause 11 of the retrenchment agreement which has the following:
11 TIMETABLE
It is agreed that the effective date of this retrenchment shall be 08 October 1997. The consultation with and
counselling of affected employees shall commence immediately thereafter. ”
33. Ms Hadjiconstantas admitted that the above challenge was not raised in the statement of claim and seems to
have been introduced in her closing arguments. It is to be noted that this was not raised with the
respondent’s witness. The applicant himself did not testify about what is now raised for the first time in the
applicant’s heads of arguments. It is also to be noted that no application was made to amend the applicant’s
statement of claim to cover this aspect.
34.In the statement of claim the applicant relied on eleven grounds why the retrenchment was procedurally unfair.
These were reduced to five grounds in the pretrial minute which are as follows:
34.1 No proper consultations were held with the applicant;
34.2 He was presented with a fait accompli for the termination of his employment;
34.3 LIFO was not considered for the aforesaid reasons;
34.4 The respondent failed to consider the applicant for alternative positions for which he had the skills and was
capable of performing in those positions;
34.5 The respondent failed to consider the applicant’s suggestions as alternative retrenchment.
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35.The new challenge came about when Vandenmunckhof was being cross examined about whether he had made a
list of the affected employees available after the 7 October 1997. The testimony was that the heads of
departments had compiled a list of names of employees who were going to be affected by the
retrenchments. That list was made available to the trade unions which was scrutinised. The list was made
available in September/October 1997. It was negotiated on and agreed upon. The applicant’s name was on
the list and was part of the discussions. He was the only dedicated management trainee. During the
consultation process it was agreed that the list would be kept confidential and it would be perused later. It
was not placed on the notice boards and management did not want the affected people to see their names on
it. It was agreed with the unions that the respondent would inform the employees individually. The
applicant was not told by his union and the respondent reserved the right to tell the applicant on 24 October
1997 that he had been retrenched.
36.It is to be noted that the applicant was not questioned by his representative nor by the respondent about what he
felt about the failure to notify him earlier about the list. As stated it is now raised in the heads of arguments
for the first time.
37.In the applicant’s heads of arguments the applicant submitted that the issues to be decided are the following:
37.1 What was the purpose of the agreement?
37.2 Does the agreement comply with the provisions of the Act regarding retrenchments?
37.3 If the answer to 37.2 is yes, then has the respondent complied therewith?
37.4 If the reply is in the negative, and certain aspects of the agreement are unfair and do not comply with the
provisions of the Act, then what is the effect and purpose of the agreement and what is to be made of
circumstances where the respondent has followed an agreement which does not comply with the provisions
of the Act and which is inherently unfair?
of the Act and which is inherently unfair?
38.It was argued further that by reserving the right to advise the affected employees of the position and names on
the list, the respondent failed to comply with its obligations in terms of the agreement and the Act, and
deprive the applicant of timeous notification of the possibility of retrenchment. It excluded the applicant
and deprived him of the opportunity to influence the respondent on inter alia , alternatives, selection criteria,
packages, time periods.
39.I do not believe that the applicant is allowed to adapt its case on the evidence that was led in the proceedings.
The applicant is bound to what appears in his statement of claim and what was recorded at the pretrial
conference. He cannot introduce a new cause of action in his heads of argument. This will have to be
supported by the evidence that was led by the applicant. One would either have expected the applicant to
have amended his statement of claim. This was not done.
40.There is no substance in the arguments that were raised by the applicant. The applicant initially denied that he
was a member of a trade union. The statement of claim was drafted by his attorney who already in
November 1997 knew that the applicant was a member of trade union. Why the persisted that the applicant
was not a member of a trade union is unclear to me. There were consultations in terms of section 189(1)(c)
of the Act with the applicant’s trade union.
41.It is clear from the retrenchment agreement that the parties had reached an agreement on various issues. The
parties agreed how the retrenchment exercise had to be taken forward. There were deadlines that had to be
met which was inter alia that the effective date of the retrenchment had to be 8 October 1997. The
retrenchments had to be completed by the end of October 1997. The applicant testified during cross
examination that after he was given the retrenchment agreement on 4 November 1997, he approached his
union and was advised that his position was one of the ones that was discussed during the consultations and
was agreed upon that it had to go.
42.The position for the applicant would have been different if his position was not discussed during the
consultations with his trade union. If there were by way of an example ten employees where the applicant
was employed who did the same work as the applicant and an agreement was reached with the trade union
that only five positions had to be maintained, there would than be a duty on the respondent to have
consulted with the applicant and the other affected employees. It could than have been argued that the
consultations that are referred to in clause 11 would allow for consultations to have taken place. The
position here is however different. It affected only the one person whose post had been made redundant
which was agreed with his representatives.
43.The agreement does not only cover a general retrenchment but also a specific one. It sets out what was agreed
upon. It has certain deadlines that had to be met. It how the process should be dealt with. All that the
applicant had to do in terms of the retrenchment agreement was to have met with the applicant and informed
him about the outcome of the consultation, that his position was made redundant, that there had been
consultations with his trade union, what his entitlements were, what the date of the retrenchment was going
to be, to have assisted him with looking for alternative positions, to advise him about the recall provisions of
the retrenchment agreement. There was no need to have started the consultation process afresh. In any
event in terms of section 189(1)(c) the respondent is prevented from consulting with the employee when he
is represented by a trade union. That is what clause 11 of the retrenchment agreement had in mind.
44.There is no substance in the applicant’s argument that the respondent should have been considered for the
position of his assistant Kenneth Mbewe of the ABET training officers post. The parties had agreed that
bumping was permitted. The respondent had considered the applicant for other positions like hostel official
and environmental control officer and did not deem him suitable. It was also agreed that LIFO would apply
under certain circumstances. Again this involved one position.
45.There is nothing sinister why the list of affected employees was not placed on the notice boards. The evidence
was not that the respondent prevented the unions from disclosing the list to its members. It would have
been more inhumane if the list of the affected employees was placed on the notice without personal
counselling. In terms of the retrenchment agreement the duty was on the respondent to inform the affected
employees of their retrenchment. The respondent was the employer of the applicant and not the trade union.
46.It is my finding that the applicant has complied with the provisions of section 189(1) of the Act.
47.This is a matter where costs should be awarded to the respondent. The applicant knew as long as 4 November
1997 that his union had entered into negotiations with the respondent and that his post had been raised and
discussed. Despite this knowledge the applicant proceeded with a frivolous referral.
48.In the circumstances I make the following order:
(a) The applicant’s referral is dismissed with costs.
FRANCIS AJ
JUDGE OF THE LABOUR COURT OF SOUTH AFRICA
7
: 30 NOVEMBER AND 1 DECEMBER 2000
: 6 DECEMBER 2000
: ATTORNEY P HADJICONSTANTAS
: ATTORNEY R KHUMALO