IN THE LABOUR COURT OF SOUTH AFRICA
SITTING IN DURBAN
CASE NO
JS76/01
DATE
2003/01/31
In the matter between:
LEON SCHRÖDER (Applicant)
and
JOHN DANIEL CONTAINERS LTD (Respondent)
JUDGMENT DELIVERED BY
THE HONOURABLE MR ACTING JUSTICE NGCAMU
TRANSCRIBER
SNELLER RECORDINGS (PROPRIETARY) LTD - DURBAN
JUDGMENT
NGCAMU AJ
[1] The applicant was employed by the respondent from
August 1999 as a draughtsman. When he started
working for the respondent the workload was heavy. In
February 2000, things did not look busy. There were
talks of other contracts. The applicant realised that
there were signs of possible retrenchment. He then
went to see Mr Halls and told him that if there was
going to be retrenchment he would like to be advised
early. He was given the assurance that they would be
given sufficient time.
[2] On the 1st September 2000 he received a letter from
the respondent regarding retrenchment. The full text
of the letter reads as follows:
"Mr L Schrцder.
It was expected that the fabrication output would have
increased during the past months but unfortunately no
increase has taken place. It has therefore been
decided to close the fabrication facility, in order to
reduce operating costs to the minimum. We are
presently in negotiations to secure working capital in
order to continue with our marketing strategy and
fabrication. We therefore regret to advise you that
your services will be terminated on the 30th September
2000. We will, however, advise you immediately in the
event of a change in the present circumstances.
Yours faithfully,
L F Harris."
[3] Mr Schrцder and three employees were called to the
board room. The letter was discussed. They were then
told there were no other options. They made few
comments during those discussions.
[4] He understood the fact of the letter to be that from the
1st October 2000 they could not be employed. They
had a meeting between the four of them to decide what
to do. Mr Conradie was mandated to have a meeting
with the management. Mr Conradie undertook to speak
to Mr Hall to ascertain if the letter was final or there
would be a cancellation.
[5] Mr Conradie had a discussion with Mr Hall on the
6th September 2000 and made a report back to the
other employees who had mandated him and these
included the applicant. The report was that the letter
was not going to be withdrawn but that the letter was
not a retrenchment letter.
[6] Mr Conradie went to see a labour consultant. Conradie
informed him that they had to get legal representation.
A suggestion was made to write to Mr Harris and advise
him that the retrenchment would not be accepted. He
and Mr Conradie prepared the letter. This letter is
dated the 7th September 2000 and it reads:
"Re letters received by staff on the 1st September
2000.
We have noted the content of the above letter. After a
meeting was held between Mr L Harris and Mr P
Conradie on the 6th September 2000 at 14:30, the
following was understood.
• Considering the content of the above letter, for
which we signed receipt of, we hereby draw your
attention to the fact that we do not waive any of our
rights as permanent employees of John Daniel
Containers Ltd.
• This letter is to notify management that all staff who
receive the above letter on the 1st September 2000 do
not regard the letter as a letter of dismissal and
therefore confirm hereby that all staff are still
employed by John Daniel Containers Ltd on the
1st October 2000 onward until further notice.
• We reserve all rights regarding the above.
Yours faithfully."
[7] The letter was presented to Mr Harris but he refused to
withdraw the letter of the 1st September. The
contracts were coming in and had a hope that the letter
would be withdrawn. During the middle of the month
he started making arrangements to secure his family
outside Mossel Bay, in order to get employment.
Arrangements were made to relocate to Gauteng so
that schooling of the children would not be interrupted.
[8] I should mention that during August 2000 the applicant
had applied for leave to visit his parents in
Johannesburg. The leave was granted. He had been
granted leave from the 26th to the 29th September
2000. The 26th September was a Tuesday. His last
working day was a Friday, the 29th September.
Monday, the 25th was a public holiday. He moved his
belongings to Johannesburg on the 25th September.
[9] He was aware of other contracts which were coming in
but there were no specifics or changing of
retrenchment. On the 25th September he received a
telephone call from Mr Hall, who asked him if he would
be coming back. His response was that he would, if
required. On 27th September he was telephoned about
the leave forms. He testified that there was general
knowledge that if circumstances changed he would
return to work but he had to get security for his family.
[10] He received no other contact with respondent until the
end of September. On his arrival in Gauteng he
received legal advice, as a result of which an unfair
dispute dismissal was lodged with the CCMA on the
30th September 2000. A copy was served on the
respondent, as required by law. The respondent
replied by letter dated the 2nd October 2000. The
letter reads:
"Dear Sir,
Alleged dispute referred to MEIBC: L Schrцder
We acknowledge receipt of your referral to the MEIBC
(Johannesburg) in the alleged dispute between
L Schrцder and John Daniel Containers Ltd. As
explained to Mr Schrцder during the board room
discussion on the 1st September 2000, the
retrenchment became an option, not a fait accompli .
Mr Schrцder has, to this day, not been informed of any
retrenchment details and, as such, his status quo is
that of an employee of JDC. Irrespective of the
progress of the procedures of retrenchment at JDC at
present, it is common cause that Mr Schrцder has not
been the subject of retrenchment to date. You will
understand that with Mr Schrцder being on leave, he
could not be included in the consultative and criteria
meetings held with staff and therefore he is left out of
the process at this point in time. JDC cannot change
the time frames for procedures because of one person
being on leave.
Yours faithfully,
L F Harris."
[11] The applicant contends that the letter of the 2nd
October 2000 does not say that there has been a
change. His legal representative responded to the
letter of the 2nd October by letter of the 11th October.
Respondent responded by letter dated the 19th
October 2000, the contents of which reads:
"Dear Sir,
John Daniel Containers Ltd/Leon Schrцder
We wish to refer to your letter dated the 11th October
2000 and confirm that we have noted the contents
thereof. Your client's services were not unequivocally
terminated in a letter dated the 1st September 2000.
Your client was advised that in the event of orders not
being obtained the fabrication facility would close
down. Your client was also advised that we were in the
process of negotiations and that the possibility did
exist that we would be able to carry on with the
business of our company as usual. Your client was also
advised that he would be informed on a continuous
basis of the process and also in the event of a change
of the circumstances. Various discussions took place
between your client and Mr P C Conradie, who was
representing the workforce, and also with the Technical
Director, Mr D J Hall. The workforce was advised that if
a situation should arise for the closure of the
fabrication facility that the normal procedures would be
followed in terms of the SEIFSA main agreement and
such procedures were, in fact, implemented on the 2nd
October 2000 and thereafter terminated on the
18th October 2000 as the company was successful in
securing sufficient work. We have on record that
although your client applied for leave, it was not his
intention on his departure to return to his place of
employment and that he, in fact, relocated his family to
Gauteng without taking the trouble to discuss his
concerns or intentions with the management. It also
surprised us that your client did not furnish us with his
contact details, in order to advise him of the change of
circumstances. As far as we are concerned, your client
has absconded and did not report for duty after his
leave period. We believe that your client has
preempted a decision that has not been resolved by the
Board and we believe also that your client is fully aware
of the requirements of the retrenchment which we need
to comply with in terms of the main agreement.
Yours faithfully,
John Daniel Containers Ltd."
[12] Under cross-examination, the applicant stated that he
saw the letter of the 1st September 2000 as
termination of employment. He confirmed that the
meaning of the letter of the 6th September is that he
will still be employed on the 1st October 2000. When
asked to explain the contradiction in his evidence-in-
chief, where he said he would be retrenched on the
30th September, he replied that the letter meant that
they did not accept the fact that they could be
retrenched.
[13] It was then put to him that it was accepted that the
employment would continue. He disagreed with this
suggestion. He was then asked why he was party to a
letter if he did not abide with it. His response was that
the respondent did not notify them in writing.
[14] In answer to the question why he was the only one who
left employment, he responded by saying that others
did not have responsibilities and others had no
children. It was then put to him that he made a pro-
active decision not to return for work.
[15] Applicant conceded that the respondent did not know
that he was not going to return. It was put to the
applicant that the letter of the 1st September was for
information. It was further put to him that no services
were terminated, to which he responded by saying that
he had it in written form that he would be terminated.
He further stated that he was not informed about the
fact that his services were not terminated.
[16] This cannot be true, because the applicant received a
report of the meeting of the 6th September between
Mr Harris and Mr Conradie, in which it was reported
that the letter was not a termination letter. The
applicant stated that he felt at risk because everything
was verbal and Harris refused to reply to the letter.
[17] When he was asked to explain why he relocated his
family, he stated that it was not the first time he had
worked for a company which had problems and had to
make arrangements for his family. He disputed that
the letter of the 6th September rejected the
retrenchment. This is somehow surprising because the
letter clearly states that the retrenchment has not been
accepted by the employees.
[18] It was then put to the applicant that he repudiated his
employment by not returning on the 2nd October 2000.
He responded by saying that the last letter informed
him his services would not be required after the 30th
September 2000. However, it is not in dispute that the
applicant was on leave as at the end of September and
he was therefore required to return to his employment
at the end of his leave. He stated that he did not
return because the letter was not retracted and he had
relocated.
[19] He denied that he had jumped the ship to get
compensation. He stated that he was looking at long-
term security of employment. He denied that
Mr Conradie negotiated on his behalf and further stated
that it was his legal right to decide whether to go back
to his employment.
[20] The applicant conceded that the company did not close
and that he would have known that in October 2000 if
he had returned. When he was asked if he gave the
company any opportunity to commence the
retrenchment procedures he stated that the company
had an opportunity before he went on leave.
[21] However, in this regard I must indicate that when the
applicant went on leave it had been indicated to him
through Mr Conradie that the letter of the 1st
September was not a letter of termination and
therefore his answer to the question put to him cannot
be accepted.
[22] The applicant further denied that he distanced himself
from the procedures. Again, this is rather strange
because if the applicant was aware that there were
certain procedures taking place, he should have come
back to the respondent and be part of the procedures.
He could then make proposals if he wanted to make
any.
[23] He was asked why he did not withdraw the action that
he had instituted against the respondent. His response
was, however, strange. He stated that he had incurred
legal costs.
[24] He then testified that the termination occurred on the
1st September 2000. When it was put to him that the
company corrected the situation at a meeting with
Mr Conradie, he then stated that he did not have
anything saying he would still be employed from 1st
October 2000. This is again a ridiculous answer in my
view, because Conradie had been mandated by the
employees, which included the applicant, to negotiate
with the management and, in fact, the letter that was
written in conjunction with the applicant directed to the
company, indicates that the employees regarded
themselves as being employees as at the 1st October.
[25] Mr Harris, the CEO of the respondent, testified as well.
He testified that during the year 2000 there was a very
low inflow of work. They had to have a serious look at
the company. People in the company were consulted.
They were also negotiating a large transaction.
[26] In a meeting on the 1st September 2000 the employees
were advised that the manufacturing section will close
down. He was hopeful to get the new contract. They
were not sure when they would get the order. If they
did not get the order, they would have to close on the
30th September 2000. He testified that the letter of
the 1st September was not to terminate the contract
but a starting point to inform the employees.
[27] He had a meeting with Mr Conradie on the 6th
September, who explained that the letter of the 1st
September was not clear. The letter was explained. He
told Mr Conradie that there was no need to withdraw
the letter but if the contract was not obtained there will
be a consultation. The misunderstanding on the letter
was cleared. There was no question of closing on the
30th September but there was a risk of consultation on
retrenchment. This was agreed with Mr Conradie.
[28] The letter of the 7th confirmed what was discussed.
The contract of employment remained in place.
[29] The consultation process started on the 26th
September. He received a letter dated the 14th
September from NUMSA, stating:
"Re: Retrenchments
It was brought to my attention that the company is in
the process of retrenching workers. It is a
contravention of the LRA because, as NUMSA, we did
not receive any confirmation of your intention to
retrench workers. It is therefore very important that
we meet so that we can clear the air. The proposed
date is the 20th September 2000 at 11:00.
Yours faithfully,
National Union of Metal Workers of South Africa."
[30] He responded to this letter and stated that there was
no final decision to retrench by the 30th September
2000. The Board had to take a decision to retrench.
There was no contact with the applicant during that
period. He was surprised to receive the letter from the
applicant's attorneys because applicant was on leave.
He was made to understand that applicant was not
returning. Applicant was to return on the 2nd October
2000. He was not aware that the applicant had
relocated to Gauteng. He got to know this when he
started the process on the 26th September.
[31] He conceded that the letter of the 1st September was
not clear but that it was cleared in a meeting with
Mr Conradie. He stated that if applicant had returned,
he would have been consulted. The process would have
ended on the 18th October.
[32] Mr Hall also testified on behalf of the respondent. He
confirmed that there was a meeting with the employees
regarding the respondent's situation and that a letter
was issued by the company to the employees. He
testified that the employees were informed that the
letter of the 1st September was not appropriately
worded and that the employees would still be employed
on the 1st October 2000.
[33] The employees approached him on an informal basis
about the situation. He further testified that the
applicant had told him he would return after his leave.
He had no idea the applicant was relocating.
[34] Mr Conradie, one of the employees, testified on behalf
of the respondent. He confirmed receiving the letter of
the 1st September. He further confirmed that there
was a meeting with Mr Harris on the 6th September,
which he attended, with the mandate of the employees,
including the applicant. He obtained clarification to the
letter of the 1st. He was advised that the retrenchment
was not a fait accompli . It was accepted by all
employees that the employment had not been
terminated in terms of the letter of the 1st September.
The applicant was informed of the position.
[35] A letter was addressed to the respondent on the 7th
September with the assistance of the applicant. This
was confirming the discussion of the 6th September.
He testified that the employees were left with no doubt
as to their employment and the respondent's intention
which was to retain their services by the 1st October.
[36] He confirmed respondent's case that the employment
relationship was not terminated on the 1st October
2000. I have no doubt that the witness, Mr Conradie,
told the Court what he knew about this letter and I
have no hesitation in accepting his evidence.
[37] In the light of the evidence presented, the Court is
called upon to decide if the employment of the
applicant was terminated. In this regard, it is common
cause that a letter was issued by the respondent
advising the employees of the termination of
employment. This was not accepted by the employees
and Conradie was mandated to discuss the issue with
the respondent. The discussions revealed that the
letter was not a termination letter. This is what was
understood by Mr Conradie and related to the
employees, including the applicant.
[38] The applicant co-authored the letter to the respondent,
confirming the discussion between Mr Conradie and the
respondent. From the contents of this letter it is clear
that the contracts would still be intact as on the 1st
October.
[39] The applicant decided to relocate to Johannesburg. On
the evidence, I am satisfied that he was aware that
there was not going to be any termination at the end of
September but because of past experience he felt the
company was going to go under and decided to leave
without advising the respondent.
[40] I am satisfied that when he left for Johannesburg he
had formed an intention of not returning. The
applicant has stated that he had children and a wife to
look after and therefore had some responsibility which
the others did not have, and for that reason he had to
secure himself and his family.
[41] When the applicant had referred a dispute, it was made
clear to his attorneys that there had been no dismissal
and that the applicant was still in the employ of the
respondent. Another letter dated the 19th October
2000 confirmed that there was no termination of
employment and that the respondent was not going to
proceed with any retrenchment.
[42] I am satisfied that the applicant did not have any
intention to return to his work. He was advised that
the respondent was not proceeding with any
retrenchment. He was unemployed for a long period of
time but did not see fit to take up his employment if he
was keen to work for the respondent.
[43] I cannot accept the applicant's explanation that the
letter from the respondent dated 2nd October 2000 did
not come within the period of September 2000 and that
this was the reason he did not return. The question
that arises then is whether the applicant wanted his
employment or not. Clearly, applicant did not want his
employment.
[44] His response that he did not return because he acted
on the advice of his representative cannot also be
accepted for the reason that the evidence shows clearly
that he relocated to safe haven for his family. He did
this even before obtaining legal advice in
Johannesburg.
[45] He had been assured by Mr Conradie that there was not
going to be any dismissal. The letter of the 1st
therefore becomes irrelevant in the light of the
discussions between Mr Conradie and the management
which took place on the 6th September. It is therefore
not clear why the applicant still entertained an
impression that his services were going to be
terminated on the last day of September when this had
been confirmed by Mr Conradie, who had been
mandated by the employees to clear the air with the
management.
[46] I reject the suggestion that Mr Conradie was not acting
on behalf of the applicant. Conradie was mandated by
the employees, including the applicant. Applicant also
co-authored a letter to the management. I find it very
strange that he now dissociates himself from the letter
which he co-authored.
[47] I am satisfied that no employment was terminated,
either for the applicant or any other employee. The
employees, including applicant, rejected the
termination set out in the letter of the 1st September.
This is common cause and confirmed in a letter dated
the 7th September addressed to the respondent. Had
there been no understanding or agreement reached
with Mr Conradie which was conveyed to the applicant,
the position might have been different.
[48] The respondent's position is further strengthened by
the fact that the applicant was advised on the 2nd
October that his employment still existed. When he
was asked on the telephone whether he was going to
return, his answer was that he was going to return if he
was required. In this case I must indicate that the
applicant has indicated that he did not return because
of the letter of the 1st September. If that is the case,
then his answer to the effect that he would return if he
is required is not understood.
[49] In the light of the evidence presented, I find that the
applicant was in no way dismissed by the respondent.
In fact, he decided to jump the ship because he was of
the view that the company was going to go down and
because he felt that his future was uncertain in the
company. He did not want to be involved in a
retrenchment as a result of his past experience but the
evidence presented does show that, in fact, the
respondent was trying by all means to retain the job of
the employees and, in fact, did retain the job of the
applicant. If the applicant wanted to take up his job, he
would not have stayed in Johannesburg, even after he
had been advised that there was no retrenchment
process.
[50] I am therefore of the view that the applicant instituted
this action in order to get money to settle himself in
Johannesburg.
[51] In view of the decision I have taken with regard to the
dismissal, I find that there is no need for me to deal
with other issues raised in the pleadings. I will
therefore make no further findings on that.
[52] With regard to the question of costs, I find that the
applicant was aware his services had not been
terminated at the time when he referred the dispute.
Any uncertainties had been cleared in a meeting with
Mr Conradie. The respondent also cleared the position
in the letters addressed to the attorneys acting for the
applicant. He was clearly advised that he was not
dismissed but because he wanted to stay in
Johannesburg, where his parents were, he did not want
to return but opted to institute this action to get money
for himself.
[53] In the circumstances, I find that it would be fair that I
make an order that the applicant pays the respondent's
costs in this action.
[54] The order that I make is therefore the following:
1. The applicant was not dismissed.
2. The application is dismissed.
3. The applicant is ordered to pay the respondent's costs.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
LEGAL REPRESENTATION:
FOR APPLICANT: MR J D VERSTER
FOR RESPONDENT: MR L VAN RENSBURG
DATE OF HEARING: 15/10/2002 TO 16/10/2002
DATE OF JUDGMENT: 31/1/2003