Sneller Verbatim/JduP
IN THE LABOUR COURT OF SOUTH AFRICA
BRAAMFONTEIN CASE NO: J4955/00
2002.05.31 J5246/00
In the matter between
BOLHUIS Applicant
and
HOTEL BOULEVARD Respondent
__________________________________________________________
J U D G M E N T
__________________________________________________________
NGCAMU, A.J: The applicant was dismissed by the respondent
on the basis of operational requirement on 29 February 2000.
The applicant challenged the dismissal. The dispute was
referred to the CCMA. When the conciliation failed the
applicant referred the dispute to this court. The respondent
alleges that the dismissal was both substantively and
procedurally fair. The dismissal is not in dispute. The
respondent's business is mainly the operation of hotels. It also
caters for banqueting, conferences and weddings. The
applicant was responsible for the banqueting section of the
hotel. This section experienced difficulties as a result of other
areas opening up. The banqueting section had its own staff. As
a result of the difficulties a decision was taken to close down
the banqueting section. The hotel could still retain the
restaurant because it also provided lunch and breakfast. The
restaurant was profitable. It however became necessary to
restructure and to reduce staff.
Letters were addressed to the applicant by the managing
director setting out the problems. The first letter was written
on 14 January 2000. The applicant was offered several
alternatives. This included offering the restaurant to the
applicant to rent and operate it for her own benefit. She was
required to take over all the restaurant staff. Another
alternative was for her to take up the duties as a restaurant
and kitchen manager at a reduced monthly salary of R5 000
plus bonus. The third option was for the applicant to take the
position of general manager's secretary at plus/minus R2 500
per month. The letter stated that if she refused the options,
severance payment would be made. The applicant was
required to respond by 17 January 2000.
When the applicant was advised of the problems the
respondent was experiencing and the need to restructure she
never questioned this. The applicant initially did not refuse the
offer of taking over the restaurant. She however put forward
certain conditions to be met before accepting the offer.
Applicant made it clear that she wanted the position of the
general manager occupied by Mr Le Roux. She did not make
any proposal regarding the severance payment offered.
In a meeting of 17 January 2000 the applicant insisted
that she wanted the position of a general manager. She
addressed a letter to Mr Hamilton indicating her concern about
Mr Hamilton's refusal to bump her with Mr Le Roux. Mr
Hamilton confirmed in writing that the position of a general
manager was not available. Mr Hamilton testified that he
explained why the position of general manager was not
available. The applicant had never worked as a general
manager. Mr Hamilton testified that Mr Le Roux could not be
retrenched to make way for the applicant for the reason that
he had the same period of six years' service as the applicant.
Mr Le Roux also had two years' experience as a general
manager. The applicant did not have this experience. The
other reason given was that it was the applicant's department
that was under consideration and not that of Mr Le Roux who
was employed at another hotel, at Protea Hotel, Capital. It was
therefore impractical to retrench Mr Le Roux to accommodate
the applicant when both had the same period of service. Full
reasons were set out in a letter dated 18 January 2000
addressed to the applicant.
The applicant rejected the offers given to her. She was
asked to review her rejection of the offers. The applicant then
set out her conditions for accepting the take-over of the
restaurant. She wanted -
(a) a walk-in fridge to be installed;
(b) that respondent deal with existing staff as she wanted to
employ her own staff;
(c) that the walls and the roof be done;
(d) that all chairs be the same.
These conditions were of a cost nature and were not
accepted by the company. The company however agreed to
repair what needed to be repaired, but was not prepared to
change the chairs. The applicant did not accept the offer.
On 24 January 2000 a suggestion was made to the
applicant to take over the restaurant on a 3-month trial basis.
It was also pointed out that the respondent was not prepared
to spend about R25 000 on chairs. The respondent could not
agree that the restaurant staff be retrenched. The applicant
refused to take the restaurant on a trial basis, and insisted she
wanted the position occupied by Mr Le Roux. Mr Hamilton
pointed out that the process of consultation would be
concluded on 25 January 2000. There was a consultation on 25
January 2000. The applicant did not raise anything. On 26
January 2000 a notice of termination of service was addressed
to the applicant. The notice informed her that the last date
would be 29 February 2000.
The applicant then addressed a letter to Mr Hamilton and
stated that she did not refuse the offer of taking over the
restaurant. She mentioned that the offer of restaurant
manageress was not made in good faith. She further raised the
fact that she was not consulted on the severance package.
Mr Hamilton explained in a letter dated 28 January 2000
that a severance package was discussed with the applicant. Mr
Hamilton further testified that they did not want to retrench
the applicant. He testified that they continued to look for
alternatives. They managed to place all other employees
within the company. None of the employees disputed their
retrenchment.
On 3 February 2000 the applicant wanted the financial
statement of the Boulevard Hotel Group. Mr Hamilton
responded by letter of 7 February, and explained that the
financial statements of the group was not relevant. This was so
because it was only the banqueting section that was affected
and not the group as a whole. Other accounts required by the
applicant were furnished.
On 13 February 2000 the applicant raised the issue of
timing of the dismissal, the method of selection and severance
pay. She insisted she was available for consultation "only in
writing".
Mr Hamilton testified that the issues raised in the letter
of 13 February were never raised before. These issues were
discussed. According to Mr Hamilton the discussions with the
applicant were initially friendly but her attitude changed later.
The negotiations continued for six weeks.
Under cross-examination Mr Hamilton testified that he
became aware in mid-1999 that the banqueting section was
not making a profit. He realised that keeping the banqueting
section was not viable. There was a downturn in the market. A
decision to close the banqueting section was only taken in
January 2000. It was discussed with the employees in a
meeting. There were also discussions with the unions. Mr
Hamilton conceded that part of the banqueting section was
out-sourced to Adler Cousine. The respondent received 10% of
the profits. He however testified that the banqueting section
was running at a loss.
It was suggested to Mr Hamilton that he could have kept
the applicant in her previous position as a restaurant manager
at the same salary. He however testified that he believed that
the alternatives would be taken by the applicant.
In response to a question that Mr Hamilton brought in his
son to earn R3 000 for looking at the files. He stated that his
son was doing human resources. He asked the applicant to
come up with alternatives but she did not. He denied that he
did not consult properly. He testified that the applicant
declined the management position, which was available prior
to the dismissal. Mr Hamilton denied that the reason the
applicant was turned down was family responsibility. He
considered that the applicant could have been trained for a
couple of months to fill the position of a general manager.
Discussions were held with the applicant to apply for available
positions.
Mr Hamilton testified further that the restructuring was
merely to contain costs. The closing of the banqueting section
was a huge saving. He believed that the correct process was
followed in the retrenchment of the applicant. He denied that
the options given to the applicant were not viable. He further
mentioned that Mr Le Roux was later retrenched and his
position was not filled. There was no suitable position after the
applicant had left.
Mr Vivier testified for the respondent as well. He
confirmed the rationale for the restructuring. He testified that
the preparation of food in the banqueting section was out-
sourced to Adler Cousine to cut down costs. He believed that
the restaurant was a viable option for the applicant. He further
confirmed that the applicant did not dispute the restructuring.
The applicant was informed that her position might be
affected. He denied that the applicant got information of
redundancy only on 26 January 2000. By giving the restaurant
to her the Company was giving her an opportunity. The
respondent was going to get rent. The applicant did not make
counter proposals. She also did not accept a drop in salary. He
denied that the consultations were not in good faith. Mr Vivier
confirmed most of the evidence given by Mr Hamilton. Like Mr
Hamilton, he did not deviate from his evidence. There is not
much of importance that came under cross-examination. I find
both Mr Hamilton and Mr Vivier to be reliable witnesses.
The applicant also gave evidence. She testified that she
was employed by the respondent from August 1994 to 29
February 2000. She testified that before her dismissal there
were discussions regarding the restructuring as a result of the
downturn in business. The whole hotel had the downturn. She
was on management level. She was employed as a restaurant
manager, and took on duties of banqueting over and above
her duties. She had to concentrate on the restaurant duties,
banqueting and do secretarial work. She conceded that the
banqueting section was at risk, but it never occurred to her
that she would be retrenched because she was employed as a
restaurant manager. She discussed the restructuring, but the
letter terminating her services came as a shock. She
complained about lack of consultation and that decisions were
unilaterally taken. She did not discuss the severance pay with
the respondent. She further testified that the discussions were
in regard to the restructuring. She was never told that the
manager of the restaurant, as well as the secretary for general
manager, would be redundant.
The applicant testified further that the alternatives
discussed were for restructuring not for retrenchment. She
denied that she rejected the offer of the restaurant. She stated
that the respondent rejected her proposals. She could not
accept the position of being the secretary of the general
manager at a lower salary when she was earning R8 000 per
month. She denied that all the financial statements were made
available to her. She could only make a counterproposal on
receipt of financial statements. She further testified that if the
banqueting section was closed she still had the management
of the kitchen and the secretarial duties.
Under cross-examination the applicant denied that she
only disputed severance payment. She conceded that
severance payment was put in the letter of 14 January 2000,
but it was not discussed. She conceded that every day she was
called for a discussion, but she was never told that she would
be retrenched. She further testified that they talked about the
restructuring and retrenchment in the banqueting section.
It was put to her that throughout all the letters written
there were alternatives discussed. She conceded that she was
asked to take over the restaurant business. She questioned
the reduction in her salary. She wanted to have the general
manager's position because of her experience. She was never
told that she had lost the restaurant manager's position. She
conceded that before 14 January 2000 there were discussions
regarding the closure of the banqueting section. This was done
to save costs. She did not see this as a threat to her. She
further conceded that the position of a general manager was
senior, and that Mr Le Roux had been a general manager at
Phalaborwa and had experience. She however stated that Mr
Le Roux was afforded an opportunity, which was not given to
her. She was involved in business and marketing plans with Mr
Vivier. She did not have experience in budgeting. She agreed
that she rejected the position of being the restaurant and
kitchen manager.
Applicant further testified that she did not have
experience in dealing with equities and salary negotiations,
she however had experience in training. Mr Hamilton Jnr took
some of the duties she was doing. She however conceded that
Mr Hamilton dealt with the staff for the whole group. She did
not recall being made an offer at Hatfield. She denied that the
Commercial Workers' Union of South Africa (CUSA) ever acted
for her, as recorded in the letter from CUSA dated 3 March
2000, and addressed to the company.
This is difficult to accept for the reason that the union
would not have known that a general manager's position was
offered to the applicant at Hatfield. They would not have
known that a position in Witbank had been offered to Mr van
Heerden. The union would also not have known that the
applicant was offered the restaurant to take over. The union
also would not have known that Mr Keith Hamilton was
employed by the respondent. The union went further to
suggest a meeting for negotiations.
The applicant submitted that there was no need to
retrench her for the reason that the closure of the banqueting
section only affected part of her duties. The applicant did not
dispute that there was a rationale for the closure of the
banqueting section of the hotel. She conceded that her
retrenchment in the banqueting section was for the purposes
of saving costs. The applicant was involved in the restructuring
of the banqueting section. She did not dispute the evidence of
Vivier, in that 60% of her duties fell in the banqueting section.
Although the applicant was employed as a restaurant
manager, her duties shifted to that of the banqueting
manager. The two sections of the hotel were managed by the
applicant. This was the reason why she was affected. Her
salary accommodated the two sections she was managing. If
there was no problem with the restaurant and the banqueting
sections there would not have been a need for the respondent
to out-source a certain function.
The fact that the applicant was a restaurant manager
does not in my view assist her when it is not disputed that
60% of her time was devoted to the banqueting section.
The applicant submitted that she was dismissed in order
to accommodate Mr Keith Hamilton. The evidence, which is
undisputed, is that Keith Hamilton only dealt with human
resources for the whole group. His salary therefore came from
the group and not from the respondent.
Although it is not disputed that the applicant performed
some of the human resources duties, this cannot be compared
with those of Mr Hamilton. Mr Hamilton did not become the
restaurant manager. There is no evidence that her
retrenchment was a smoke screen done in bad faith. On the
other hand, there is evidence to show that the whole hotel had
a downturn. This was the evidence given by the respondent
and confirmed by the applicant.
The applicant submitted that it did not occur to her that
her position was going to be redundant.
The applicant was in a managerial position. The
restructuring was discussed with her. The confirmation
appears in the correspondence between the applicant and Mr
D Hamilton. The letter dated 14 January 2000, addressed to
the applicant, indicates that the applicant was aware that her
position was at risk. I quote the contents of paragraph 3 of this
letter in full:
"As a result of Adler Cousine's reluctance to take over the
entire operations, as stated, accordingly the following
proposals were tabled with you:
1. That you look closely at renting the existing restaurant and
kitchen from us, fully equipped as is, as a going concern for
your own profit. In this agreement you would be required to
take over all the relevant staff in the restaurant and kitchen.
We will help and advise you in this matter.
2. That you resume duties as our restaurant and kitchen
manager as from 1 March 2000 on a gross salary of R5 000,
with an additional performance bonus linked to the strict
control of all costs. Please note that the only other position
being envisaged is that of general manager's secretary at plus/
minus R2 500 per month.
3. As previously discussed, in the event of neither option 1 or 2
being accepted, in the absence of any further alternatives,
then severance payment will be made to you in accordance
with the Labour Relations Act. In addition a further 2-weeks'
salary will be paid to you as a gesture of goodwill from the
directors of the Hotel Boulevard in lieu of the valued service
rendered by you over the many years."
The applicant does not dispute receipt of this letter, and
correctly too. If applicant was not aware that her position was
made redundant, the first reaction would have been for her to
ask why these proposals were made. She would have
questioned why it was proposed that she could resume the
duties as a restaurant and kitchen manager as from 1 March
2000 at a salary of R5 000. This proposal should have rung a
bell on the applicant. She was also offered the position of the
manager's secretary. This sudden change of attitude should
have been questioned by the applicant. Unfortunately for the
applicant she was told in this letter that if the first two options
were not accepted, she was going to be given severance
payment. The applicant should know, as a manager, that
severance payment is only made on retrenchment. She never
raised a query about this. I fail to understand why she would
be paid severance pay if she was not affected. The applicant
never explained this in her evidence in chief.
The applicant, however, in her letter of 17 January 2000,
addressed to Mr Hamilton, dealt with the question of
retrenchment of Mr Le Roux in order for her to get the position
of general manager. She points out that she was not satisfied
with the reasons given by Mr Hamilton's refusal to give her the
position. She answered the letter by stating that:
"You are not consulting with me in good faith."
The applicant does not explain why she wanted Mr Le
Roux to be retrenched if she had no knowledge that her
position was redundant. Mr Le Roux was not working in the
banqueting section. His retrenchment could only occur if she
was bumped with him. The bumping could only be done in the
event of a retrenchment. The applicant failed to explain what
consultations she was referring to in this letter. In my view
these were consultations relating to the saving of her job.
It is clear from the correspondence emanating from the
applicant that she was interested in getting the position of the
general manager. The respondent pointed out why she could
not be appointed to that position. It is the prerogative of the
employer as to who should be appointed in a managerial
position. In doing so the skill and competency of the person to
be appointed is important. If the employer were to fail to retain
skill the business will go down. The employee has no right to
claim to be appointed to a particular position, and that the
incumbent should be retrenched. It is not unfair for the
employer to retain a person best suited for the position. In the
present case Mr Le Roux had the same period of service as the
applicant. He also had experience as a general manager,
which applicant did not have.
Further to the above, if the applicant's version is to be
believed and accepted, that she was not aware of her
retrenchment, her letter of 19 January 2000 said the opposite.
In the third paragraph of this letter the applicant stated the
following:
"Furthermore, you said this morning that you were going
ahead with the retrenchments. This was not stated in the
letter, but again refers to the two said retrenchments."
This is evidence of the fact that the applicant was aware
of her position. After the applicant was served with the letter
of her termination, dated 26 January, she never questioned the
rationale for her retrenchment. She raised the fact that she did
not refuse the alternatives of the restaurant. She further
indicated that the position of being the restaurant manageress
was not in good faith. For the first time she indicated that the
decision about the severance package was unilateral. She
wanted the respondent to give details why this decision was
made. This in my view, enough evidence of the knowledge of
the retrenchment by the applicant. It was only on 3 February
2000 that applicant took issue with the drastic downturn in
revenue and wanted the financial statement of the group.
Those documents were never requested during the period of
consultations. The respondent gave the applicant the
documents necessary for her to make up her mind.
It is common cause that other employees were
accommodated within the hotel. It is the applicant who could
not be accommodated as a result of her refusal to take one of
the options open to her. The applicant was engaged in
discussions with management and was aware of the pending
dismissals. For this reason I reject the submission that no
notice was given to the applicant that she could be dismissed.
I also reject the submission that the respondent did not
identify the affected employees.
In view of what is stated above I have come to the
conclusion that the retrenchment was discussed with the
applicant. In Visser v Sanlam (2001) 22 ILJ 666 (LAC), at 671,
para.19 the court stated that:
"Consultation as envisaged in section 189(2) is a continuous
process between the parties."
It is clear from the evidence that numerous
correspondence was exchanged between the parties in an
attempt to reach consensus on alternatives. The applicant was
not an ordinary employee. She never made her own proposals.
She could not have made any mistake about the consultations.
To plead ignorance about the retrenchment casts doubts
about her account of events. She wants the court to believe
that she was only informed on 26 January about her position
being redundant when she was afforded adequate opportunity
to discuss alternatives.
It was conceded by Mr Geldenhuys, for the applicant,
that there were lots of meetings with the applicant. It is
acceptable that it is the duty of the employer to take initiative
regarding the consultation. The employee is also obliged to
engage adequately in the consultation process. The process
involves a bilateral process which imposes an obligation on
both parties to consult in good faith.
It was submitted on behalf of the applicant that the
correspondence was window-dressing. No reasons were
suggested for this. The applicant also engaged in
correspondence.
Mr Hamilton testified that the letters correctly reflected
what was discussed. This was not disputed by the applicant. It
is common cause that the decision to close down the
banqueting section was taken. It does not follow that a
decision to retrench the applicant was taken at the time when
the decision to close down the banqueting section was taken.
The respondent engaged the applicant in consultations, where
proposals were made to avoid retrenchment. Although the
applicant indicated that she did not refuse the offer of the
restaurant, she did not accept it either. She did not give any
explanation why she wanted the chairs to be the same, and
why she wanted to employ her own staff.
It was argued that the figures requested were not given
to her. It must be noted that the request was made after the
letter of termination. These documents were handed to the
applicant. In the applicant's letter dated 8 April 2000 she
recorded the following:
"The documents handed to me today were not given to me
initially and are relevant to the restaurant."
In the light of this I reject the suggestion that the
information was not given.
It was submitted on behalf of the applicant that the
alternatives were not considered. I reject this proposition for
the reason that the applicant was given several options but
she rejected them. She however insisted that she wanted
nothing else but the position occupied by Mr Le Roux. The
applicant failed to raise any proposals.
The applicant further submitted that the figures in the
financial statement were low because of out-sourcing. That
may be correct, but it does not preclude the employer from
restructuring the business. The applicant has conceded that
there was a downturn in the business. It is highly unlikely that
the retrenchment was not discussed, as she would want the
court to believe.
I am satisfied that there was operational rationale for the
closure of the banqueting section, and that of the
retrenchment of the applicant. I am further satisfied that the
consultation took place in January. The applicant did not
question what was going on. There would not have been any
reason for her to demand the position occupied by Mr Le Roux
if this was not in the context of the consultations regarding
retrenchment. The applicant was in a managerial position and
cannot claim to be ignorant of what was going on.
In order for the employer to satisfy the provisions of
section 189 of the Labour Relations Act it does not have to
follow a check list, substantial compliance would be enough. In
the present case the applicant was given enough opportunity
to engage the employer and make her own proposals.
I am therefore satisfied that the dismissal was both
substantively and procedurally fair. I have considered the
question of costs, but came to the conclusion that it would be
fair in the circumstances of this case that I award no costs. I do
so because the applicant strongly believed that she should not
have been redundant. The conduct of her case in my view
does not warrant an order for costs. In the circumstances I
have exercised my discretion in not awarding the costs.
O R D E R
The order that I make therefore is the following:
(a) The dismissal of the applicant was fair.
(b) The applicant's application is dismissed.
(c) There is no order for costs.
ON BEHALF OF THE APPLICANT: ADV GELDENHUYS