IN THE LABOUR COURT OF SOUTH AFRICA
HELD AT JOHANNESBURG ‘OF
INTEREST’
CASE NO: J 2325/99
In the matter between:
NUMSA First Applicant
TAUKUBONG, T and 31 OTHERS Second And Further
Applicants
And
ZEUNA – STARKER BOP (PTY) LTD Respondent
JUDGMENT
NGCAMU, AJ
The first applicant is the Union, which has referred this dispute to this Court, on
its behalf, and on behalf of the second to further applicants. The second to further
applicants were all employed by the respondent until their services were
terminated for the reason that the respondent termed “operational.”
The applicants challenged the dismissal on the basis that it was automatically
unfair, in that, the reason for the dismissal was to compel the individual applicants
to accept a demand in respect of a matter of mutual interest between the employer
and the employees, within the meaning of section 187(1)(c) of the Labour
Relations Act 66 of 1995 (hereinafter referred to as the “Act”).
The applicants referred a dispute to the CCMA for conciliation on 4 thMarch 1997.
The respondent raised a point in limine regarding the jurisdiction of the CCMA.
This point was upheld on 27 thMay 1999. This ruling was successfully challenged
by the applicants in a review application. This decision was confirmed by the
Labour Appeal Court.
The dispute remained unresolved. The applicants referred the dispute to this Court
on 10 thJune 2000. The Court granted condonation for the late referral on
8thDecember 2000. The reply to the applicants’ statement of case was filed on
30thJanuary 2001.
The respondent initially raised three defences to the applicants’ statement of case.
These
being:
a) The dispute had been settled by way of an offer by the second to further
applicants’ attorneys, and accepted by the respondent;
b) That this Court has no jurisdiction because the dismissals were effected on
5thNovember 1996;
c) The individual applicants were dismissed for operational reasons.
The defence in (a) above, was dismissed by this Court on 6 thMarch 2002.
Accordingly, it does not stand. The defence in (b) was abandoned by the
respondents at the commencement of the trial, as a result of the judgment of the
Labour Appeal Court in Zeuna – Starker BOP (Pty) Ltd v NUMSA 1999 (20) ILJ
108 (LAC). What remains, is the defence set out in (c).
At the commencement of the trial, it was conceded on behalf of the respondent
that there was no total compliance with the requirements of the Act, regarding
procedural fairness of the termination of employment for operational reasons.
The issues to be decided by this Court are set out in the pretrial minutes filed by
the parties. These issues are:
a) Whether the dismissal was automatically unfair;
b) Whether there was a fair substantive reason based on respondent’s operational
requirements;
c) Whether there was substantial compliance with the procedural requirement in
respect of the dismissal for operational requirements;
d) The relief sought, if any should be awarded.
I must indicate that after the respondent had made a concession regarding the
procedural aspect of the dismissal, a tender to settle the dispute was made. The
respondent offered to pay each of the individual applicants an amount equal to one
year’s pay. This offer was not accepted by the applicants.
The applicants’ case is that the dismissal was automatically unfair in terms of
section 187(1)(c) of the Act. The respondent disputed this. Section 187(1)(c)
provides that:
“ A dismissal is automatically unfair if the employer, in dismissing the employee, acts
contrary to section 5, or if the reason for the dismissal is… to compel the employee to
accept a demand in respect of any matter of mutual interest between the employer and
employee.”
The basis for contending that the dismissal was fair is operational reasons. The
defence pleaded by the respondent appears in paragraph 8 of the statement of
response. I do not need to set out the case pleaded in this judgment.
It was submitted on behalf of the respondent that the approach to be adopted by
this Court, is that which is set out in S.A Chemical Workers’ Union and Others v
Afrox Ltd ILJ 1718 (LAC). In the Afroxcase, the dismissal was in the strike
context, whereas this case deals with a dismissal in the context of a lock out. It
was submitted that in assessing the reason for the fairness of the dismissal in
February 1997, the evidence must be weighed and assessed according to the Afrox
. I was also referred to the case of NUMSA v Vetsak CoOperative Ltd and
Others(1996) 17 ILJ 455 (A) and National Union of Metal Workers v Black
Mountain Mineral Development Co. (Pty) Ltd (1997) 18 ILJ 439 (A). These cases
deal with a dismissal in the strike context and, in my view, they are not relevant to
the question of whether the dismissal was automatically unfair in respect of a lock
out.
A judgment which may be of relevance is that of Schoeman and Another v
Samsung Electronics (Pty) Ltd ( ) 20 ILJ 200 (LC). In that case, the employer
locked out the applicants to get them to agree to new terms. At page 207,
paragraph A – B, Landman J stated:
“ An employer needs to deploy, reasonably quickly and efficiently, the resources at the
employers’ disposal. Various options are open to an employer to achieve this. One of
them is the lock out route which is used to compel acceptance of a demand….”
I agree with Landman J’s sentiments on this. However, at paragraph 19, it was
stated that:
“ An employer may not dismiss employees in order to compel acceptance of a demand
but this does not prevent the employer resorting to dismissal for operational requirements
in a genuine case.”
The analogy was then made that, given the circumstances of the present case, the
dismissal was for a fair reason, being commercial reasons.
WAS THE DISMISSAL FOR A FAIR REASON?
The respondent pleaded that it employed sixty persons during 1996, and that forty
four of these were represented by the first applicant. The evidence disclosed that
the respondent employed fiftytwo wage earners and twentyeight salaried
employees. No evidence was led to prove that sixty employees were employed. It
was common cause that the first applicant represented fortynine of the fiftytwo
wage earners. The first applicant only bargained for its members during the wage
negotiations. Offers were made by the respondent which were not acceptable to
the first applicant. It is common cause, or not disputed, that some of the
employees accepted the final offer.
Prior to the acceptance of the final offer by the other employees, the individual
applicants embarked on a strike on 14 thOctober 1996 until 5 thNovember 1996.
This strike was embarked on to put pressure on the respondent. On 14 thOctober
1996, the respondent gave notice of a lock out to induce employees to accede to
the respondent’s wage proposal. The employees returned to work after the
respondent had issued an ultimatum.
On their return, the employees were informed that their services were terminated
in order to induce them to agree to the proposal. They were informed that the
dismissal would remain in force if they did not accept the proposal within seven
days. The deadline was extended to 20 thNovember 1996. The employees tendered
to return on the existing conditions. This was rejected by the respondent.
On 19 thNovember 1996, the respondent agreed to a proposal that the dispute be
referred to mediation, The company’s attorneys, in a letter appearing in bundle A
(page 194), advised that:
“ Should the mediation fail, then our client intends to proceed in terms of the
notices issued to the employees on 5 th and 11 th November 1996.”
Mediation proceeded on 14 thJanuary 1997, with the assistance of Advocate
Sutherland as a mediator. During the mediation, it appeared that the dispute was
about to be resolved. It was therefore agreed that that the agreement would be
signed. The first applicant wanted to take the agreement to its members before
signing. It was agreed that the workers could commence working pending the
signing of the agreement. The workers returned and started working as agreed.
On 21 stJanuary 1997, the company addressed correspondence, appearing in
bundle A (page 232), as follows:
“ Kindly note, however, that the return of employees to the shop floor is conditional to the
agreement being signed as already indicated. The company still reserves the right to resort
to a lock out should signature of the document as it stands not take place.”
The agreement was not signed, as the workers did not approve it.
The company pleaded that there was tension. However, no evidence was led that
there was tension between the members of the first applicant and those that
accepted the final offer. It was conceded by the respondent’s witnesses that there
was no complaint about the manner in which NUMSA members performed their
work during the period they returned to work. There is no evidence of any fight
between the employees, either between NUMSA members and nonNUMSA
members.
When the workers were locked out on 10 thFebruary 1997, they were working, and
no problems had arisen as a result of their presence in the work place. The
attorneys for the company addressed a letter (bundle A, page 245) to the Union’s
attorneys dated 10 thFebruary 1997, which recorded the following:
“ Our client’s operational requirements are not at present being met and it is with
reluctance that we inform you that the workers were informed today that they will
not be allowed to enter our client’s premises until this matter is resolved….”
The respondent is entitled to use the lock out in these circumstances, as was the
case in the Samsungcase. It is an option lawfully available to the employer. Such
option is subject to the provisions of section 187(1)(c) of the Act, which prohibits
dismissal based on a lock out.
On 10 thFebruary 1997, the respondent issued a document (bundle A, page 246) to
the effect that:
“ If you have not accepted the company’s final offer, the company has no alternative but
to commence steps to terminate your employment relationship fully. It is with regret that
we advise you of this decision which has been forced on the company due to the failure of
the company and NUMSA to reach agreement during the mediation last month.”
The employees did not accept the company’s final offer. As a result of this, a
document (bundle A, page 250) dated 13 thFebruary 1997 was addressed, stating:
As stated in our notice dated 10 th February 1997, the company is not in a position to
continue with its operations on the present basis and has no alternative but to take steps to
finally terminate the relationship. As you have not accepted the company’s final offer, the
company hereby terminates the employment relationship.”
The employment of the applicants was accordingly terminated. It is clear from the
pleadings that the termination of employment was effected because the applicants
failed to accept the offer. This is conceded in paragraph 8.10 of the respondent’s
response, which reads:
“ The employees failed timeously to accept the respondent’s offer and their
employment relationship with the respondent was accordingly terminated on 13 th
February 1997.”
The case made by the respondent in the pleadings, is that there was tension and
uncertainty in the work place. In paragraph 8.8 of the respondent’s response, the
respondent stated:
“ The tension and uncertainty regarding the determination of the wage dispute rendered it
impossible for the respondent to continue operating in this state indefinitely.”
The respondent, in the evidence, made attempts to establish a different
justification for the dismissal. The respondent’s case was that it took the decision
to dismiss the applicants because it had to prepare for new projects, which became
available. It then introduced new technology. To be able to expand it needed a
stable work force. This case was not pleaded. The respondents did not make
application to amend the pleadings in order to introduce this ground of
justification. In the circumstances, in my judgment, I am going to treat this ground
as a ground not appearing in the pleadings, which needs to be ignored. The
respondent is bound by its pleadings.
The respondent further testified that the workers were locked out to protect the
facilities. The witness, Mr. Rupp conceded that while the applicants were at work,
they did not sabotage machinery. This justification for the lock out, which was
introduced in evidence, was also not pleaded. This evidence is in direct contrast
with the notice of the !0 th 1997. It was never mentioned in that letter that the lock
out was to protect the machinery. This new case, which is being created, is
rejected.
The respondent blamed the Union for the failure of the negotiations. Mr. Rupp
conceded that the back pay remained the cause of the dispute, as well as the long
period of the agreement.
Even if the Court were to accept the new case established by the respondent, in my
view, it does not justify the dismissal. This is so because it was admitted that the
employees did not sabotage the machinery and there was no complaint about the
manner in which they performed their duties. Mr. Rupp admitted that there was no
need to effect the dismissal on 13 thFebruary 1997.
The individual applicants were prepared to accept the final offer if the period of its
duration was restricted to June 1998. In my view, this was a reasonable
compromise by the employees. The respondent rejected the proposal and felt the
period was too short. In my view, a stable working condition could have been
established. Locking out, and ultimately dismissing the employees was not a way
of maintaining peace in the work place.
Whatever the respondent’s case may be, what becomes a problem in its case is
that there had been a lock out on 5 thNovember 1996, before the 13 thFebruary
1997. The employees had been without wages for five months. When they were
told to return in January 1997, they gladly did so and performed their duties,
leaving the negotiations with the first applicant. At the time when they were
locked out on 10 thFebruary 1997, they were not on strike. They had performed
their duties without complaints. The respondent locked them out and dismissed
them for failure to accept the final offer, and this is against the spirit of the Act.
Under these circumstances, the respondent’s actions fell squarely within the ambit
of section 187(1)(c) of the Act. The action by the respondent renders the dismissal
automatically unfair because the reason for the dismissal was to compel the
employees to accept a demand that they take the final offer. I have no doubt in my
mind that, notwithstanding the right of the employer to implement a lock out to
compel acceptance of a demand, it cannot dismiss the employees for refusing to
accept the offer.
The notice to the employees dated 5 thNovember 1996 stated:
“ Take notice that your employment with this company is hereby terminated. The purpose
of this termination is in order to induce you to agree to the proposals by this company on
terms and conditions of employment put forward during the 1996 annual negotiations of
wages and conditions of employment, a copy of which proposal is appended hereto.”
This lock out persisted until January 1997. When the employees returned to work
after the mediation, the respondent confirmed that it “ reserved the right to resort
to a lock out.” This is what the respondent proceeded to do on 10 thFebruary 1997.
The employees were required to accept the offer by 16h30 on 12 thFebruary 1997
to avoid dismissal.
The submission made by Counsel for the applicants, Mr.van der Riet, that the
dismissal was to compel the applicants to accept the offer is supported by the
evidence of Mr. Rupp. Mr. Rupp testified that the 13 thFebruary 1997 was not a
cutoff point. The gates were still open for the employees to accept the final offer.
He confirmed that the respondent was prepared to take the individual applicants
back, on acceptance of the final offer. The position of the individual applicants
remained open until June 1997. This raises a question why the individual
applicants were dismissed in February 1997 if these positions were only filled in
June. In my view, there was no compelling reason to dismiss the individual
applicants on 13 thFebruary 1997, if the respondent was still prepared to take them
back. The dispute could have been referred to mediation again for a solution.
On the evidence presented, I am satisfied that there was no fair substantive reason
for the dismissal of the individual applicants.
WHETHER THERE WAS SUBSTANTIVE AND PROCEDURAL
COMPLIANCE WITH THE DISMISSAL
The respondent did not follow a fair procedure in effecting the dismissals. This
has been conceded by the respondent. It was for this reason that a tender was made
to the applicants, which tender was refused. Mr. van der Riet submitted that if the
respondent attempted to comply with section 189, it would have become obvious
that there was no need for the dismissal. I agree with this submission. I do so
because there is no evidence to suggest that a two year agreement could not have
brought peace in the work place.
WAS THE DISMISSAL AUTOMATICALLY UNFAIR?
The next question is whether the dismissal was automatically unfair, as contended
by the applicants. The reason for the lock out and termination of employment can
be traced back from the notice given to the employees on 5 thNovember 1996,
wherein they were told that their employment was being terminated to induce
them to accept the terms and conditions of employment. The lock out persisted
until the mediation in January 1997. In January 1997, when the employees
returned, they were again told that the company reserved the right to lock them
out. This threat was put into effect on 10 thFebruary 1997, and their services were
terminated on 13 thFebruary 1997.
Mr. Rupp tried to place before Court further grounds for the dismissal. What
stands out clearly, is that the lock out and the dismissal was embarked upon, to
compel the applicants to accept a proposal by the respondent. This action places
the respondent within the ambit of section 187(1)(c) of the Act. I therefore agree
with Mr. van der Riet, in that the dismissal is automatically unfair, in that it
undermined the fundamental values of the Act. An automatic dismissal deserves to
be dealt with in a manner that gives due weight to its seriousness.
See: CEPPWAWU and Another v Glass and Aluminium 2000 CC (5) BLLR 399
(LAC) at 409 FG
RELIEF
I have found that the dismissal was automatically unfair. What has to be decided is
the relief to be granted to the applicants. The purpose of the relief is to grant
redress to the employee who has been unfairly dismissed.
There were originally fortynine applicants seeking relief. The parties have agreed
that only thirtytwo individual applicants seek relief. Of the thirtytwo, only
twentytwo seek reinstatement. The remaining ten seek compensation. I have been
provided with the list containing all thirtytwo applicants. The ten applicants that
seek compensation have been indicated by a cross next to their names. The list
also contains the gross and net salary of each of the individual applicants as at the
date of dismissal.
Both Counsel have submitted argument for, and against the reinstatement. It was
common cause that as at the date of the completion of the trial, the individual
applicants had completed sixtythree months without employment. It was also
agreed that a period of twenty months had to be deducted because there had been a
delay caused by the applicants, in failing to file the statement of case in time.
Section 193(1) allows this Court to order the reinstatement of the dismissed
employee if the dismissal is substantively unfair. Mr Fabricius submitted that if
the Court finds that the dismissal was for operational reasons, reinstatement would
not be an appropriate relief. In support of his submissions, he referred to the
matter of Mzeku and Others v Volkswagen SA (Pty)Ltd and Others (2001) 22 ILJ
1576 (LAC) at 1602 C. I agree with this submission. In the present case, I have
found that the dismissal was automatically unfair. For that reason, the Court can
competently make an order for reinstatement.
The respondent has pleaded that the reinstatement is not reasonably practicable.
Mr van der Westhuizen testified that new technology had been introduced, and
that the applicants would have to be trained to operate the new machines. He
further testified that a lot of money has been invested in training the permanent
employees who replaced the individual applicants. He also testified that the
investors may lose confidence in the value of their investment. He further alluded
to the fact that the morale of the other employees may go down if the applicants
are reinstated.
Mr Fabricius submitted that the dictum in Victor v FINRO Cash and Carry (2000)
21 ILJ 2489 (LC) at 2495 I – 2496 A, should be taken into account if the Court
finds that the dismissal was automatically unfair. In that case, the Court found that
the dismissal was automatically unfair, and awarded six months pay, which the
Court found just and equitable.
It was conceded by Mr. van der Westhuizen, that if the individual applicants were
not dismissed, they would have received the training, which ended up being given
to the current permanent employees. He also confirmed that the applicants could
be trained to operate the new machines. Their reinstatement cannot be refused on
the grounds raised by Mr. van der Westhuizen. The individual applicants have
been out of employment for sixtythree months; compensation would not be a just
and equitable relief.
I accept that the reinstatement would necessitate retrenchment, which may affect
the current permanent employees. This, however, is not a ground for refusing
reinstatement. In terms of section 193(2), the Court “must” require the employer
to reinstate, or reemploy the employee. The respondent will have to comply with
section 189(7) to select those that have to be retrenched using fair criteria. The
Courts have held that the fullest redress obtainable is provided by the restoration
of the status quo ante . See National Union of Metal Workers of South Africa and
Others v Henred Fruehauf Trailers (Pty) Ltd 1995 (4) SA 456 at 462 HJ. The
Court can refuse to reinstate the employees if it is not reasonably practicable to do
so. In my view, it is reasonably practicable to reinstate those employees who wish
to be reinstated.
The Labour Appeal Court in Chevron Engineering (Pty) Ltd v Nkambule and
Others (4) BLLR 395 (LAC) dealt with the question of reinstatement for a full
period of four years and seven months, and came to the conclusion that it was not
an unreasonable determination. To refuse the reinstatement would amount to
punishing the individual applicants. I am of the view that, in the present case, the
reinstatement will be a fair order.
I am satisfied that the respondent failed to justify the dismissal of the applicants.
The applicants are entitled to the order prayed.
The order I make is the following :
1. The dismissal of the individual applicants was automatically unfair;
2. The respondent is ordered to reinstate the twentytwo applicants listed in annexure
“A” with retrospective effect, to a date fortythree months before the date of
judgment;
3. The respondent is ordered to pay compensation equal to twentyfour months, to
the ten applicants whose names have been indicated with “X” on annexure “A”
4. The respondent is ordered to pay the costs.
____________
NGCAMU, A J
Date of Hearing : 29thMay 2002
Date of Judgment :
LEGAL REPRESENTATION
For Applicants : Advocate J.G Van der Riet SC
Instructed by :
For Respondent : Advocate H.J Fabricius SC with
Advocate R.G Beaton
Instructed by :