IN THE LABOUR COURT OF SOUTH AFRICA
BRAAMFONTEIN CASE NO: JS849/02
2003-02-03
In the matter between
F MENTZ Applicant
and
JOINT MUNICIPAL PENSION FUND Respondent
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J U D G M E N T
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LANDMAN J : Mr Francois Mentz was employed by the Joint
Municipal Pension Fund, to which I shall refer as the Fund, for
some eight years prior to his dismissal on 28 February 2002.
Mr Mentz was one of two portfolio managers left after one of
their number had been transferred at a stage prior to
28 February.
The Fund was faced with a crisis when 13 000 members
and 2 500 pensioners of the Municipal Employees Pension
Fund withdrew their mandate to the Fund to administer their
investments. This resulted in a loss of earnings of about
R9 million. The property division headed by Mr Horn was also
affected. It lost some of the buildings which it administered.
The result was that there was little work to keep both portfolio
managers busy.
Several steps were taken to combat the threat to the
Fund. These included a program to commercialise the Fund
and the involvement of a private company initially known as
Biz Africa 1312 (Pty) Limited. This company was to perform
the administrative obligations of the Fund. Restructuring of
the business of the Fund was indicated. The restructuring and
its implications for the Fund and its staff were discussed from
time to time at a forum known as the Personnel Work Group.
Management and SASBO, a trade union representing the
union members employed by the Fund, assisted by a SASBO
head office official, met regularly. Policy regarding
retrenchments was in place and proposed retrenchments of
staff were discussed. Consensus was reached as regards the
need for retrenchment, the selection criteria and the
identification of the proposed retrenchees, the package and
related matters.
A first wave of retrenchments ensued during August
2001. Further retrenchments were foreshadowed. Mr Horn,
head of the property division, donned his managerial bowler
hat and recommended that Mr Mentz's post as portfolio
manager be declared redundant. This recommendation was
accepted by higher management. On 26 October 2001 the
Fund advised SASBO that further retrenchments were
contemplated and that during the coming months the
proposed retrenchees would be identified. A copy of the letter
was sent to Mrs Unteid, the chairperson of the SASBO shop
stewards at the Fund.
. A meeting between management and SASBO in the
form of the personnel work group was convened for 13
November 2001. Management attended and named five
persons, including Mr Mentz, for retrenchment. The SASBO
contingent included Mr Horn, who was now wearing the cloth
cap of an employee, as well as the deputy head of his division,
Mrs Unteid. The SASBO members allegedly agreed to the
retrenchment of the five persons including Mr Mentz. The
minutes of the decision taken at the meeting do not identify
the names of the retrenchees, but I have no doubt that their
identities were revealed at the meeting. Mrs Vanessa Botha,
who represented SASBO head office at the meeting, correctly
conceded that she could not recall that the names had been
mentioned. The other members of the meeting, including Mr
Crous, the deputy general manager, and Mrs Van Rooyen, a
SASBO shop steward, would have had more reason to know
who the proposed retrenchees were. The names would have
made sense to them.
After the meeting certain events took place, which are in
contention. Mr Horn, having now exchanged his cloth cap for
his managerial head gear, spoke to Mr Mentz. He informed him
that he would “possibly be retrenched” and invited him to
respond within two weeks. Mr Horn, although he did not tell
this to Mr Mentz, would have to make a report or
recommendation to the executive committee and the board of
trustees on 28 November.
Mr Horn's evidence regarding the events immediately
preceding Mr Mentz's dismissal is set out in an internal
memorandum of 21 January 2002. This memorandum was one
compiled after Mr Mentz had been dismissed and had
indicated that he was considering litigation. The memo reads
as follows:
"(a) Retrenchment - the following information can be recollected:
1. Informal discussions were held with Francois Mentz prior to
28 November stating that there is a possibility that he may be
retrenched. He was not overly concerned and requested two
weeks to think about it.
2. When the two weeks were up, he stated that he would be
satisfied to go (as he has other businesses) and requires the
necessary information in figures. I referred him to the correct
person to obtain the necessary figures. In addition to his
retrenchment he wanted a cleaning contract from the Fund, as
he operates a cleaning company, or a car as he had a
company car. I stated that I do not have the power to decide
on that, but will find out for him.
3. No formal discussions were held between myself and F Mentz
regarding his retrenchment until after the work group made
the decision to retrench him.
4. The trustees made the decision to retrench F Mentz on
28 November 2001.
5. At this stage Mentz was on sick leave and I requested Mrs
Louw to arrange a meeting with Mr Mentz.
6. At this meeting I told him the following:
a. I am speaking to him and informally as the department head
and that the personnel office shall also have discussions.
b. At this meeting I explained that the Joint Municipal Pension
Fund had decided to retrench him, as we are not going to
expand the portfolio by taking the 'Broll' Building in -house to
manage as was originally envisaged. It was also discussed
that in the event of the 'Broll' Property Group buildings being
managed in house, that there would probably be a place for
him at the Joint Municipal Pension Fund. But it was clearly
stated that this was not to be the position.
c. I stated that the Joint Municipal Pension Fund shall not award
him a cleaning contract, nor shall they give him a car.
d. Mr Mentz was not happy about this and he eventually
requested whether he could not purchase his company car.
e. It was agreed that he would obtain three trade in quotations.
f. At this meeting Mr Mentz stated that he would not need union
representation and that he would gladly be retrenched.
g. I stated to him that the personnel office would handle the
process from their side.
h. Mr Mentz exerted pressure on the personnel office to obtain
the necessary letter of retrenchment.
i. At no stage was he forced or intimidated in any process. He in
fact stated that he was glad that he had his own companies
and that he could now concentrate on growing his business.'"
Mr Horn, however, stated that paragraph (a)(1) is
incorrect where it states Mr Mentz requested the two weeks to
think about what he had been told. It was in fact Mr Horn who
gave him two weeks to consider the matter.
Mr Mentz says that Mr Horn did not tell him about his
impending retrenchment. He was on sick leave when Mrs
Louw of the personnel department called him after
28 November. Mr Horn told him that he should consider
voluntary retrenchment, or if he did not want this, he would
probably be retrenched anyway. Mr Horn said that he might
be able to arrange cleaning contracts for Mr Mentz and
undertook to consider Mr Mentz's proposal regarding the
motor vehicle.
I do not find Mr Horn's version credible, for the following
reasons:
(a) He has contradicted himself about what Mr Mentz is alleged to
have said at the first meeting.
(b) Mrs Louw's evidence regarding the instructions she received
from Mr Horn to contact Mr Mentz is contrary to the version of
Mr Horn.
(c) On his own version Mr Horn omitted critical information which
he should have conveyed to Mr Mentz about SASBO's decision
that he be retrenched, even though the executive committee
had still to confirm it. This aspect is particularly disquietening.
(d) Mr Horn says that Mr Mentz consented to his retrenchment,
but this is not the Fund's case on the pleadings before me.
(e) Mr Horn's inability to perceive that his position as a SASBO
representative and his managerial role vis-à-vis Mr Mentz gave
rise to a conflict of interest. This inability is an indication that
his evidence must be approached with caution.
Even if I accept Mr Horn's evidence, then it is clear that
the Fund breached Mr Mentz's terms and conditions of
employment regarding his retrenchment. The Fund might
have complied with regard to its obligations towards the union.
However, the procedure to be followed in regard to an
employee is set out in clause 6 of the policy document, which
is incorporated in the terms and conditions of employment.
The Fund breached these obligations in the following way:
(a) LIFO, in the property department, was not considered on
levels other than that of portfolio manager. See clause 6.4.2.
(b) No notice of Mr Mentz's impending retrenchment was given to
him. Notice was required in writing. See clause 6.5.1.
(c) It follows that no opportunity was thereafter afforded Mr Mentz
to deal with such a notice and to make representations within
the time limit mentioned in the terms and conditions of
employment. Indeed, Mr Crous takes Mr Mentz to task in his
letter of 9 January 2002 for not responding within the five day
period. This notwithstanding that the written notice was not
given to Mr Mentz. See clause 6.5.2.
(d) The steps which the Fund took to avoid the retrenchment of Mr
Mentz were not disclosed to him. They should have been
disclosed to him. See clause 6.5.2.
(e) The Fund failed to disclose the reason for declining Mr Mentz's
request for assistance regarding the vehicle allocated to him,
and his request that he be afforded a cleaning contract. The
Fund, of course, was not obliged to comply with this request,
but in terms of the policy (see clause 6.6) it was obliged to
take steps to mitigate the retrenchment. This would have
included considering and providing reasons for refusing to
grant Mr Mentz's request.
Although the consultation with SASBO, as I have
mentioned, would have complied with the requirements of
section 189, the policies agreed upon and incorporated in Mr
Metnz’s terms and conditions of employment require
consultation with the employee in the manner and in respect
of the subjects mentioned in clause 6. This was not done. The
breach of procedures is so gross that it may be indicative of
mala fides. I do not need to decide this last issue.
The gross disregard of procedure means that Mr Mentz's
continued employment, although not as a portfolio manager,
could have been secured. I do not know whether or not this
would have been of any longlasting value, and I do not know
whether the Fund should have bumped the centre manager
and replaced him with Mr Mentz. The reason that I do not
know this, is that the procedure is so deficient that I am unable
to come to the conclusion that the dismissal was substantively
fair. In the result I am satisfied that the dismissal was
substantively unfair. I have already found that the dismissal
was procedurally unfair.
Mr Mentz seeks reinstatement in his employment with
the Fund. This is the primary remedy. No facts have been
presented which would serve to deny him this remedy. In the
result
1. The applicant is reinstated in his employment with the
respondent on the same terms and conditions that applied to
him before his dismissal.
2. The order in paragraph 1 is made retrospective to 1 March
2002.
3. The retrenchment benefits paid to the applicant are to be
recovered from any amounts due and payable to him flowing
from this order.
4. The respondent is to pay the applicant's costs.
SIGNED AND DATED AT BRAAMFONTEIN ON 26
FEBRUARY 2003
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A A Landman
Judge of the Labour Court of South Africa
ON BEHALF OF THE APPLICANT: MR COETSEE
ON BEHALF OF THE RESPONDENT: MR DE VILLIERS- MOHR