IN THE LABOUR COURT OF SOUTH AFRICA
(HELD AT DURBAN)
CASE NO: D1419/01
In the matter between :
DHANAM MOODLEY Applicant
and
FIDELITY CLEANING SERVICES (PTY) LTD
t/a FIDELITY SUPERCARE CLEANINIG Respondent
JUDGMENT
MURPHY AJ ,
1.The applicant has referred a dispute concerning her retrenchment to this court
in terms of section 191(5)(b)(ii) of the Labour Relations Act (“the LRA’) alleging
that her dismissal was both substantively and procedurally unfair.
2. The applicant was initially employed by Prichard Cleaning Services as an on
site supervisor on 28 August 1995. Prichard Cleaning Services later merged with
the respondent and the applicant’s contract of employment was transferred to the
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respondent in terms of section 197 of the LRA.
3. During 1996 the applicant was promoted to the position of onsite manager
and then again in August 1997 was promoted to the position of area manager,
which position she held until she was retrenched for the first time on 9 April 1999.
The applicant challenged this retrenchment, and the dispute was eventually
settled on 24 April 2002. The terms of the settlement are not clear, but it is
common cause that the applicant was reemployed as an area manager on 27
September 2000 (some 18 months before the dispute was settled). The applicant
remained in this position until her services were again terminated on the 31 July
2001 (before her first dispute was settled), following the acquisition of the
Supercare group of companies by the Fidelity Services group. It is this latter
dismissal, which forms the basis of the present dispute. The matter came to trial
on 25 October 2004. No explanation has been offered for why it took almost
three and a half years to do so.
4. The respondent called two witnesses to justify the applicant’s dismissal: Mr. B
Stewart, who was previously employed by the respondent as its operations and
regional manager, and Mr. WR Berger, currently employed as the respondent’s
Director: Labour Outsourcing, Coastal. At the time of the applicant’s dismissal
Mr. Berger held the position of Director: Hospitality with some responsibility for
human resources. The applicant testified on her own behalf and also called Mr. J
Reddy to give evidence on the relationship between the respondent and another
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company, Hlanganani.
5.The testimony of both Berger and Stewart was supported by little in the way of
documentary evidence. It is common cause that the respondent failed to comply
with section 189(3) of the LRA. Section 189(3) obliges employers to issue a
written notice inviting consultation on proposed retrenchments and to disclose in
writing all relevant information pertaining to the retrenchments. The purpose of
the section is to set the agenda for a joint consensusseeking process and to
ensure that there is sufficient disclosure of information prior to any decision to
dismiss on operational requirement grounds. The failure of employers to fulfill this
obligation meaningfully, invariably leads to disputes, misconceptions, a break
down in trust and the delegitimizing of the joint consensusseeking process
mandated by the statute. The absence of contemporaneous written information
containing the agenda for the consultation process and the employer’s initial
proposal can, if not sufficiently explained, give rise to the inference that the
employer has not initiated and engaged in the process with an open mind and
the requisite seriousness. Employers that have fallen short on this obligation
often present arguments, tending to diminish the value of section 189(3), with
much reliance being placed on the dicta of Froneman DJP (as he then was) in
Johnson and Johnson (Pty) Ltd v Chemical Workers Industrial Union (1999) 20
ILJ 89 (LAC) at 9697 where he remarked in relation to section 189:
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“The important implication of this is that a mechanical “checklist” kind of approach to
determine whether section 189 has been complied with is inappropriate. The proper
approach is to ascertain whether the purpose of the section (the occurrence of a joint
consensus seeking process) has been achieved….If that purpose is achieved, there has
been proper compliance with the section. If not, the reason for not achieving that purpose
must be sought”.
There can be no quarrel with the logic and rationality of a pragmatic approach of
this kind. However, the dicta do not amount to a license to employers to negate
what is after all a statutory right to information and due process in the form of
meaningful consultation. The prescriptions of section 189 are clear, notorious,
well understood, wisely crafted and tailored to oiling the wheels of a meaningful
joint consensusseeking process. It is the wise employer who follows them to the
letter. Those employers that choose not to, do so at the peril of a finding not only
of procedural but also substantive unfairness.
6. Because Mr. Berger was directly involved in the merger and restructuring
process leading to the applicant’s retrenchment, it is best to consider his
evidence first, although Mr. Stewart testified before him. Berger testified that in
late 2000 the respondent entered into negotiations with the Supercare group of
companies resulting in a deal in which Fidelity bought Supercare some time in
the first quarter of 2001. As a result of the deal “Fidelity Cleaning” and
“Supercare Cleaning” were merged. This necessitated an analysis of the
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infrastructure of the two companies as well as their overhead structures, branch
offices, staffing, vehicles and the various operations throughout KwaZulu Natal
(“KZN”). Since no documentation about the deal was discovered or introduced
into evidence, it is not clear who was tasked with this responsibility, when it was
carried out or how it was implemented. The instruction given to Berger, and
presumably his colleagues who shared responsibility with him, was “to optimize
the efficiencies of the two companies and to put the two sets of infrastructure and
overheads together to form one costeffective structure that would be able to
service all of the contracts and all of the business that the two companies would
have had collectively”. It is difficult to determine from Berger’s testimony who
gave the instruction, when it was given, whether it was in terms of a written
strategic plan and hence whether at that time retrenchments were contemplated
by senior management in the two companies. Moreover, as no evidence was led
explaining the respondent’s corporate and regional structure, it is difficult to
determine accurately whether the restructuring process was directed and
managed from national head office or done at provincial, regional or local level.
Berger focused his testimony on what was relevant to KZN.
7. Berger described the implementation of the instruction as follows:
“we started putting together organograms we started geographically, we started by
looking at Durban Central and then some of the outlying areas, we also looked at the
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major overhead costs such as branch offices, etcetera, etcetera. Decisions were then
made as to where we going to house the regional head office and once that decision had
been made we then looked at various outlying offices, branch offices etcetera, etcetera,
and in some cases the Fidelity structure was absorbed into the Supercare structure”.
It is not immediately clear as to who constituted the “we” to whom Berger
referred, though later he indicated that he chaired a team of managers drawn
from both companies set up for the purpose of selecting employees for
retrenchment. Neither the mentioned organogram, nor any other evidence, oral
or documentary, was introduced detailing the national, regional and local
structure of either Fidelity or Supercare. Thus it is difficult to sketch a precise
picture of the restructuring process and the context in which the retrenchments
occurred or where duplication of human resources presented as a problem.
8. Be that as it may, senior management of both Fidelity and Supercare evidently
got together some time in 2001 and decided on “the umbrella structure” and
considered where there would be staff duplication. The methodology applied to
do this remains unclear, but one can safely assume that it was done
departmentally across the company at a regional level using the organograms of
both companies. Unfortunately there seem to be no minutes of the meetings of
the management team. Furthermore, as I have said, Berger failed to delineate
comprehensively or precisely the five regions into which KZN was divided, nor
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the areas falling into each region, or the administrative and operational
departments making up the company in KZN. There is also no documentary
evidence on record to elucidate this. Such evidence, to my mind, would have
assisted in determining whether the applicant’s position as an area manager was
indeed redundant and whether alternatives existed or were properly considered
in order to avoid her retrenchment. I will return to this critical issue later.
9. Once it completed a regional, local, and departmental review of the company,
the exact nature and content of which remains a mystery, the management team
spoke to the various departmental and operational heads and in Berger’s words
“asked them to have a look at the operation and come up with proposals in terms
of how they felt they could best optimize the resources at hand”. It was
understood that inevitably as a result of the merger there would be a duplication
of resources and surplus employees. However, at that stage there was no clarity
about the number of retrenchments likely to follow “until such time as we properly
analyzed the resources and properly gone through the structures of working out
what we needed to be able to run the company properly”.
10. No evidence was led about when precisely retrenchments were first
contemplated or the exact number, but it would seem that some time in June
2001 the management team established exactly which people they had under
each job category and then set about a process “where every single person that
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was to be affected by this process was given an opportunity to attend an
interview, prepare for the interview, and they had an opportunity put forward
anything that might have been of relevance for a panel of representatives both
from the Fidelity company, the Supercare company….” From the evidence
presented it is not possible to deduce how many employees were proposed for
retrenchment and ultimately dismissed, or the categories, levels, regions or areas
into which they fell. The selection interviews took place between 26 and 28 June
2001. Other than an “Interview Timetable”, no written notice explaining the
purpose of the interviews was given to the employees interviewed. With the
benefit of hindsight, it is clear enough that the interviews were for the purpose of
selecting employees for retrenchment. Whether the employees subjected to them
understood as much is another matter.
11. The interviews were conducted by a small panel chaired by Berger. The
panel posed various question to the employees aimed at eliciting information
about the interviewee’s experience, education, skills and personal qualities.
Berger initially claimed that a job specification and person specification were
circulated to the interviewees prior to the interview. Under crossexamination he
was forced to concede that he had no documentation formally notifying the
employees of the interviews or setting out its purpose. The applicant in her
testimony denied ever receiving any documentation concerning the interview,
claiming instead that she first heard of having to attend an interview
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telephonically on the day of the interview. She confirmed however that she was
indeed questioned about her skills, experience, education and personal qualities.
In the absence of documentary evidence I consider the applicant’s version the
more probable and accept that the interviews took place on short notice without
any written notice or relevant documentation about the nature, purpose and
extent of the interview having been furnished to the applicant beforehand.
12.After interrogating her ‘experience, skills, education and personal qualities,
the panel, in the case of the applicant, had regard to the number of cleaning
contracts she had under her control as an area manager and the
recommendation of her immediate superior, Mr. Stewart, about whether she
should be retained as an area manager. In order to maintain the chronology, it
makes sense to discuss the evidence of Mr. Stewart regarding the redundancy of
the applicant’s position now.
13. Stewart is currently selfemployed, but at the time of the retrenchments had
served as the respondent’s regional manager and operations manager in KZN
and had been employed for about 6 months at the time the restructuring began.
He confirmed that the merger resulted in a duplication of area managers within
the five regions of KZN. He was responsible for Natal Midlands, North Coast,
South Coast and the key contracts in and around Durban. He did not say
whether these four areas made up one region. Although he only mentioned four
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localities, his region was served by five area managers, including the applicant,
who reported to him directly.
14. After the restructuring Stewart decided that he only needed three area
managers and could justify employing no more than that. Why this suddenly
became the case, he never fully explained. He offered no breakdown of his
staffing complement or an organogram describing the effect of the merger with
Supercare at this level. He did however identify the five area managers working
under him without in each case specifying their areas. It seems no additional
area managers employed by Supercare were placed under his control.
15. Stewart went on to explain that the decision to reduce staff was not made at
regional level, but was a corporate decision made at head office. Because no
proper section 189(3) notice was ever issued by the respondent it is impossible
to determine whom at head office made that decision or when it was made.
Nevertheless it seems the regional managers were given the authority to
determine the number of posts they needed and to make recommendations
about who should fill them. In this regard Stewart stated:
“In terms of the selection staff, it was a bit difficult because you really had to sort
of look at and see which were the stronger of your staff members, look at their
personal attributes, look at their skills….”
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16. All staff were thus required to reapply for their positions, and thus the
interviews conducted by the panel chaired by Berger were set up for that
purpose.
17. Prior to the interviews for the area manager positions in his region, Stewart,
as I have explained, decided that he needed only three. As stated, he tendered
no explanation for why he preferred to reduce the number of area managers or if
there indeed was a need to do so because additional Supercare staff would take
on the functions. Without himself interviewing the five incumbents, he then made
a recommendation to the panel that the three positions be filled by Hazel
Jampies, Freddy Moodley and Zane Ismail. In effect, therefore, he recommended
to the panel that the services of the applicant and another area manager, Jenny
Coetzee, be terminated.
18. Stewart’s justification for recommending Freddy Moodley, Ismail and Jampies
was vague and unsupported by documentation identifying objective, pre
determined selection criteria and the proposed manner of their application.
19. His justification for selecting Freddy Moodley was as follows: Moodley had
been with the company for a long time (how long was never stated), he lived on
the South Coast and managed that area, where he had an established client
base. And hence it made sense to keep him there, as it would cut down on costs.
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When it was put to him in crossexamination that Moodley did not live on the
South Coast, but in fact lived in Phoenix or the North Coast, he somewhat
arrogantly and dismissively replied that he did not know where Moodley lived,
stated that he thought he lived in Umkomaas, butt then conceded that he might
have been wrong and claimed that he had recommended him on the basis of his
personal attributes and capabilities. His vacillation renders his recommendation
unreliable and possibly polluted by an element of subjectivity.
20. The basis of Stewart’s recommendation of Ismail is equally flawed and
problematic. He too had an established client base. But the primary consideration
leading to his recommendation appears to have been his sweet and gentle
nature. Stewart described his attributes thus:
“Zane is a very softspoken, very respectful person, he tends to take a lot of
abuse from people, and he was the kind of person that I could stick into a
contract where he had a particularly argumentative client and he would first, ‘Yes
Sir”, ‘No, Sir”, “Yes, Ma’am”, “No, Ma’am”, and he would – because of that ability
he would soften the client”.
21. In addition to his perceived favorable psychological disposition, Ismail was
preferred because “he was one of those guys I could send out to DTMB bus
depot in KwaMashu at 4 o’clock in the morning, he would be happy to go…..”
22. Unlike Ismail, Hazel Jampies was selected because of her rather fierce
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personal attributes. She too apparently had been with the company for a long
time (how long never being stated). She, quite the opposite of Ismail, was
described as: “absolutely regimental, she takes no bull from anybody”. In addition
to being ‘confrontational’ she had sound administrative and organizational skills,
was meticulous and handled staff better than any other manager.
23. Having thus justified his recommendations, and his implicit exclusion of the
applicant, (upon whose attributes, skills and experience, he never elaborated), he
summarized his choice as being “the three best suited characters to cover my
client base”. His interchange with his attorney on the selection is revealing. It
went as follows:
Snyman: Okay, so if I might summarize, it is not a question of the applicant and the other
person not having the ability, you just took the best of what you had.
Stewart: I took what I felt was the three strongest characters well, not the three best
suited characters to cover my client base.
Snyman: Yes. So simply put they were just better than the others.
Stewart: As far as I am concerned, yes.
Snyman: Okay. Now, what then now obviously now you have filled the three area
managers, we will call another witness about the processes and all that, now you have
filled the three area manager positions
Stewart: Mm.
Snyman: Now, what happens to the other two?
Stewart: The other two, obviously the company had approached them in terms of
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possible retrenchment.
24. Thus having proposed the applicant for retrenchment, and once the panel
confirmed his recommendation, Stewart, in cooperation with the applicant, and
in response to her initiatives, set about looking at finding her an alternative lesser
position within an associated company, which, as discussed below, ultimately
came to naught.
25. A charitable interpretation of Stewart’s methodology is that he applied the
criteria of personal attributes, skills, interpersonal relationships, performance,
length of service and experience. The fact that these criteria were never
discussed, agreed or communicated, together with their generality, vagueness
and nonmethodical application leads easily to the conclusion that he selected
his area managers on the basis of his subjective preferences. Such a conclusion
is bolstered by my observation of an occasional flash of hostility and distaste
towards the applicant during his testimony in the witness box. In particular, he
tended to dismiss the applicant’s legitimate concerns and grievance about the
prospect of losing her employment describing her application for another job in
the following terms: “I know nothing about the thing, there was no application in
place, that was her application, jump up and down and shout”.
26. Under crossexamination Stewart was unable to give a clear commercial
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rationalization for why the number of area managers in his region needed to be
reduced from five to three. He conceded that he had not taken any of the
Supercare area managers over as part of his staff complement. As mentioned,
he initially justified his decision on the basis of his subjective view that he did not
need more than three, which he fleetingly defended later on the grounds that
some of the contracts he had in Durban Central had been handed over to the
other regional managers. How many exactly were handed over and to whom, he
did not say, making it difficult to establish whether or not there was indeed a
need to reduce the number of area managers in his region from five to three.
Considering that he acquired no additional area managers as a consequence of
the merger and in the absence of any information about a reduction in workload,
one is compelled to question whether the merger itself justified any need at all for
retrenchment in Stewart’s region. Rather it seems Stewart elected to use the
opportunity presented by the merger to reduce his staff complement on the basis
of his own subjective assessment of what he needed. The merger had little to do
with his decision. He simply decided that he preferred to have three area
managers rather than the existing five and made a recommendation to that effect
with his rationale for doing so remaining largely a mystery.
27. Like Berger, Stewart drew a distinction between his recommendation to the
panel and the final selection decision. He saw himself as being entitled to decide
whom he needed and felt comfortable to make his decision on the basis of his
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subjective knowledge without the benefit of predetermined criteria or any
interview. In keeping with his tone throughout, he maintained:
“For me to sit in an interview to interview staff which are currently under my employ that I
have been working with for six months, I don’t need to interview my staff to know what my
staff’s capabilities are. So, there was in effect no need for me to sit in on the interviews”.
He therefore made a verbal recommendation that the applicant be retrenched
without the benefit of any predetermined objective selection criteria, any
interview or supporting documentation. He did so without the applicant’s
knowledge and without affording her any opportunity to address him on her
qualities, attributes, skills, experience, sweet nature, regimental approach etc. As
he saw it, he knew his staff and was sufficiently sensitive and aware of their
strengths to make a recommendation, which, as it turned out, was accepted by
Berger’s panel. He made his recommendation fully aware that at the time the
applicant was engaged in litigation with the respondent regarding her previous
unfair dismissal that was resolved some time after her second dismissal in April
2002. Additionally, he had regard to her gender, which he felt disqualified her
from work in certain dangerous areas. He never explained why such a
consideration did not operate to exclude Hazel Jampies.
28. The applicant’s explanation of events prior to the interview withstood cross
16
examination. She admitted being aware of the merger process prior to the
interviews, as there had been general discussion among staff about it.
Nevertheless, she stood her ground about the fact that prior to 2 July 2001 she
never received any written notification about the merger process, or any notice to
attend the interview or any written information about its purpose to select
employees for retrenchment in accordance with objective criteria. Her testimony
was that she received a message from other area managers to attend the
interview on the day of the interview, and that she understood the purpose of the
interview to be an assessment of her present job within the context of the merger
process. She confirmed that at no point at all, either before or after the
interviews, was she ever informed of any selection criteria applied to choose her
for retrenchment. She affirmed that during the halfhour interview questions were
posed to her regarding her skill, attributes, and experience and that she was
assessed on the basis of those questions.
29. Berger confirmed that the panel placed reliance on Stewart’s
recommendations. His claim to have taken it as “a guideline”, what ever that
might mean, is an unconvincing attempt to minimize its importance. Even as a
guideline its evident distortion by Stewart’s subjectivity made it unreliable and
positively prejudicial. Its negative influence on the final decision cannot be ruled
out, especially in the absence of any minutes of the interview. The only
documentation offered in support of the interview consisted of a cryptic rating
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schedule and a person specification containing four general questions aimed at
eliciting details of the interviewee’s experience. Berger testified that the applicant
scored lower than the other area managers. However, he failed to hand in the
score sheets and specifications of the other candidates. Thus it is not possible to
objectively verify his conclusions. Without complete documentation, it is not
unreasonable to infer that Stewart’s prejudicial and subjective recommendation
played an important role in the applicant’s selection, especially in light of the
recommendation ultimately being effected.
30. Shortly after the interview, on 2 July 2001, the applicant received a letter
dated 29 June 2001 addressed to her by G Weissbach, the respondent’s regional
manager for Natal. It read as follows:
“Due to a restructuring process as a result of the merger of the Fidelity Cleaning
Services and Supercare Cleaning operations, your position has became
redundant and it is possible that you will unfortunately be retrenched effective
end of July 2001.
Mr. R Manthe will be available to meet with you at a date and time, which will be
confirmed, to discuss the relevant issues, which will include amongst others:
1. The criteria used in selecting affected employees;
2. The obvious search for alternative to your retrenchment (sic);
3. Discussions concerning any retrenchment payment;
4. Any assistance that may be afforded by the company to you.
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In the interim it is requested that you maintain the employeeemployer
relationship and the company trusts that it can rely on your continued support
during what is undoubtedly a very trying and difficult period”.
31. This letter, most notably, was the first written notice and disclosure of
information given to the applicant in relation to her retrenchment. The letter is
somewhat ambiguous in its terms in that in one breath it declares the applicant’s
position to be redundant and then points to a consultation process of limited
purpose. The ambiguity could be interpreted to mean that the possibility still
existed for the applicant to avoid retrenchment. The lie is given to this on a
number of fronts. First of all, since the need for retrenchment was questionable,
the reason for the redundancy is not correctly stated or enlarged upon. That
aside, both Berger and Stewart were clear in their evidence that the applicant
had been recommended and selected for retrenchment by the end of the
interview process. Under crossexamination Berger affirmed that he was part of
the decision of who was to be retrenched. He was then asked when that decision
was taken and replied that it was taken shortly after the interview process had
been completed. When asked what factors he had relied on in making the
decision, he answered revealingly:
“Well, staff members that were on the panel together with me were people that were
experienced in their respective industries and together we asked people that attended the
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interviews various questions, we ascertained what their educational background was,
also what their experience was, and we also worked on certain recommendations that we
got from their various departmental heads, and we worked on a scoring system….”.
He was specifically asked if he recalled the exact date when he made the
decision as to who was to be retrenched. After some calculation he confirmed the
date to have been 29 June 2002, the same day the letter was written to the
applicant. When asked to clarify that the decision was indeed taken on 29 June,
he replied:
“Ja, that’s quite correct, the decision in terms of which people we felt were going to be
able to fill the vacant positions and also which people as a result of that needed to be
retrenched”
32. Added to that, the applicant construed the letter of 29 June 2001 as a clear
indication that she had been selected for retrenchment. She pointed to the fact
that not all the area managers had received such letters and accordingly
correctly predicted straightaway that she was one of those that was going to be
retrenched. She further testified that her retrenchment was confirmed verbally by
Carmen Meyer of the HR department on 10 July 2001. No consultation process
involving Mr. Manthe, as proposed in the letter, seems to have taken place after
29 June 2001. Or, at least, there is no evidence in that regard. Furthermore, the
applicant’s testimony that selection criteria were never discussed with her
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remains unchallenged. And as for severance pay, Mr. Snyman in argument
suggested that consultation was unnecessary because of the existence of a
bargaining council agreement laying down a minimum. I cannot accept that. The
existence of minima does not preclude a duty to consult and entertain proposals
above the statutory minimum.
Some effort was expended on seeking alternatives, though, as I discuss later,
this was at the initiative of the applicant and in any event after she had been
selected. Berger testified that his panel gave no attention to considering
alternatives at the time of the selection, explaining that such was left to the
managers at the local level. Accordingly, it is not possible to say whether
vacancies existed in other areas and regions, or whether it would have been
possible to offer the applicant a position elsewhere in the company.
33. At this point I pause to reflect upon the requirements for a fair retrenchment.
In order to determine if a genuine reason exists for an employee’s retrenchment,
the court must enquire whether the legal requirements for a proper consultation
process have been followed and whether the employer has satisfied its onus of
proving the dismissal to have been operationally and commercially justifiable on
rational grounds, having regard to what emerged from the consultation process.
SACTWU and Other v Discreto (1998) 19 ILJ 1451 (LAC). The requirements for
a proper consultation impose a duty on the employer to engage in a meaningful
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joint consensusseeking process in an attempt to reach consensus on
appropriate measures to avoid or minimize the dismissals and to mitigate their
adverse effects. Most importantly, the consultation process must be directed at
identifying and predetermining an agreed method of selecting the employees to
be dismissed. Once the method is arrived at, the employer is obliged to proceed
strictly in accordance with it. If agreement on the selection criteria eludes the
consulting parties then the employer is obliged to apply criteria, which are fair
and objective (section 189(7)). Employees, at the very least, should be notified of
these in advance to ensure that they are able to protect themselves from
inappropriate adverse selection.
34. A critical, if not the most central, ingredient of the consultation process, is the
requirement of written notice and the disclosure of information. Effective
consultation requires employees to have an opportunity to prepare for
consultation by being given sufficient advance notice, an agenda and adequate
information. Without this, the joint consensusseeking process mandated by the
legislature is hardly likely to be “meaningful”. To guide and assist the parties,
section 189(3) spells out what normally should be included in the written notice
and disclosure document. These include: a statement explaining the reasons for
the dismissal; the alternatives the employer considered before proposing the
dismissals; the reasons for rejecting the alternatives, the number of employees
likely to be affected; the job categories in which the affected employees are
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employed; the proposed selection criteria and the severance pay proposed.
35. I have risked labouring the point because in this case little of what is
supposed to happen in fact happened. Nothing approximating a joint consensus
seeking process occurred in this case. Firstly, the employer does not appear to
have invited any employee representation in the consultation process as required
by section 189(1). Secondly, at no stage prior to the selection of the employees
for retrenchment did the respondent give written notice or disclose in writing the
reasons for retrenchment, the alternatives considered and rejected, the number
affected and the categories, regions, areas or departments in which they were
employed. Added to that, no fair objective selection criteria were ever agreed,
identified, communicated or applied. And no severance pay was proposed,
discussed or disclosed.
36. In the applicant’s case, instead of a fair consensus seeking process, there
has been an arbitrary, irrational and subjective unilateral decision to terminate
her employment. With no fair and objective criteria to guide him, Stewart, himself
an employee of only 6 months standing, without discussing the matter with the
affected employees, on the basis of his subjective assessment of their attributes,
recommended his personal favourites to fill the area manager positions in his
region, which absent a clear commercial rationale, he had arbitrarily and without
consultation reduced from five to three. His recommendation was accepted
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thereafter with little or no interrogation by a panel of persons unacquainted with
the operational requirements of the region. As a consequence, the applicant was
selected on the basis of that recommendation and a questionable interview,
which rated her according to her qualities, personal attributes, skills, knowledge
and experience. She was not given any advance written notice of the purpose of
the interview, the method on which she was to be assessed and selected, or
even at that stage that her job was possibly in jeopardy. Having been selected for
retrenchment the applicant was then presented with a letter inviting her to
participate in a sham consultation process, from which tellingly the employees
not selected for retrenchment were exempted, and which in any event failed to
transpire. On no evenhanded count can such a dismissal be described as
substantively or procedurally fair. The purpose of section 189 has not been
achieved in this case. The reason for not achieving that purpose has been the
employer’s total disregard of the section’s requirements. The respondent has
simply not met its onus to show that there was a need for retrenchment, and the
procedural irregularities are of such a nature and so far reaching that a finding of
substantive unfairness is inescapable. Where the purpose and methodological
prescriptions of the process envisioned by the statute are so evidently not
understood, the distinction between process and substance becomes blurred to
the degree that the dismissal cannot be held to have been for a fair reason as
required by section 188(1)(a). In the premises the applicant is entitled to
reinstatement in terms of section 193(2) of the LRA.
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37. Much effort and time was spent during the trial and in argument on the issue
of whether an alternative position was available in a company associated with the
respondent. Apparently, after she had been selected for retrenchment, the
applicant was informed by the respondent that there was a possibility of a night
shift supervisor’s position with Hlanganani Cleaning Services, a black
empowerment company, 49% owned by the respondent and run out of its
Durban offices. The contention was made that such position depended upon the
incumbent being promoted. A dispute exists about whether the promotion took
place. As the position was with a separate company it is doubtful whether the
failure to transfer the applicant to it can found a claim of substantive unfairness.
However, in the light of the view I have taken it is unnecessary to make a finding
on this issue.
38. The applicant has incurred substantial legal costs on account of the
unreasonable approach taken by the respondent. There is accordingly no reason
in this instance why costs should not follow the result.
39. For the foregoing reasons I make the following orders:
39.1 The applicant’s dismissal is declared to have been substantively and
procedurally unfair.
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39.2 The respondent is ordered to reinstate the applicant retrospectively
to 1 August 2001 on the same terms and conditions as applied to her at
that date.
39.3 The respondent is directed to pay the applicant back pay for the
period 1 August 2001 until 1 May 2005 at the rate applicable to an area
manager or equivalent within 10 days of the date of this order.
39.4 The applicant is directed to report for duty on 2 May 2005.
39.5 The respondent is ordered to pay the applicant’s costs.
MURPHY AJ
Date of Hearing: 25 October 2004
Date of Judgment: 20 April 2005
For the Applicant: Mr. Z.E. Buthelezi
Buthelezi Inc.
For the Respondent: Mr. S. Snyman
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Snyman Van der Heever Heyns
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