IN THE LABOUR COURT OF SOUTH AFRICA
HELD IN JOHANNESBURG
NOT REPORTABLE CASE NO. J861/05
In the matter between:
NATIONAL UNION OF MINEWORKERS Applicant
And
HARMONY GOLD MINING COMPANY LTD Respondent
J U D G M E N T
TLALETSI A J:
Introduction
1. This is an urgent application filed on notice of motion in terms of
sections 189A (13) and 14 of the Labour Relations Act 66 of 1995, as
amended (“the LRA”). The applicant is seeking an order on the
following terms:
1.1 Directing the respondent to reinstate the applicant’s members
purportedly dismissed by the respondent on 19 April 2005 until it has
complied with a fair procedure.
1.2 Interdicting the respondent from giving notice to terminate the
contracts of employment of the applicant’s members until the period
mentioned in section 64(1) (a) of the LRA have elapsed in respect of the
dispute referred to the Commissioner for Conciliation, Mediation and
Arbitration (“the CCMA”) in terms of section 64(1) read with section 189A
(8) (a) of the LRA on 20 April 2005;
1.3 Interdicting the respondent from dismissing the applicant’s members
pending the resolution of the dispute referred to the CCMA in terms
of section 24 of the LRA on 20 April 2005;
1.4 Awarding the applicant’s members compensation;
1.5 Directing the respondent to pay the costs of the application.
2. The application is opposed by the respondent. I accepted the
agreement by the parties that this matter is urgent. The application
was therefore heard on 26 April 2005.
Factual background
3. On 2 April 2004 the respondent gave notice in terms of section 189(3)
of the LRA that it was considering downscaling its Free State
Operations. The notices proposed that notice of retrenchments be
given to affected employees on 2 June 2004 or any sooner date that
may be agreed upon. The notice outlined inter alia, the reasons for the
proposed downscaling and dismissals, alternatives considered,
proposed method for selecting employees to be dismissed, severance
pay and assistance to employees. The notice further advised the
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applicant that the respondent is requesting the appointment of a
facilitator in terms of section 189A (3). The compliance of this notice
with the LRA is not in dispute.
4. On 7 April 2004 applicant’s General Secretary (“Mantashe”)
suggested that the parties should agree not to embark on consultations
with CCMA facilitation. The suggestion was accepted by the
respondent. On 16 April 2004 a Joint Task team was appointed to
investigate the viability of various mines/shafts. During the beginning
of April 2004 restructuring and downscaling meetings were held
between the parties together with other affected trade unions.
5. An agreement was concluded by the parties on “The Operational
Performance Improvement and the 2004 Restructuring Process of the
Free State Operations”. The preamble of the agreement states the
purpose as being to minimise retrenchments and to focus on securing
current jobs and creating future opportunities. It addresses inter alia,
issues relating to Continuous Operations (CONOPS), termination of
contractors’ services, voluntary retrenchments and reskilling,
retraining and redeployment.
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6. On 6 July 2004 the applicant applied for facilitation to CCMA. It
further agreed with the respondent for the appointment of a private
mediator. In order to give effect to this agreement the parties
agreed to the appointment of Thandi Orleyn (“Orleyn”) to be a
facilitator/mediator. The CCMA did not appoint a facilitator. Under
the mediation of Orleyn the parties as well as Solidarity Union signed
a Memorandum of Understanding which in its preamble provided for
the implementation of the Restructuring Principles Agreed at the Joint
Forum established by the parties, to avoid compulsory retrenchments
as a result of the restructuring process with the company, and to
resolve the dispute with organised labour. The memorandum
provided inter alia, for the implementation of the CONOPS at
Randfontein, Elandsrand and Masimong. An agreement on CONOPS
was not reached at the Free State Operations.
7. On 8 September 2004 the respondent gave written notice of its
intention to implement forced retrenchments at the following Free
State Operations: Welkom 1, Marriespruit 3 shaft, Eland Mine and
Bambanani Mine. The notices referred to section 189A (8) and
provided for thirty days during which the implementation of the
decision to implement the retrenchment and the final terminations of
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employment of employees at the mine can be discussed.
8. On 10 September 2004 applicant gave notice of a primary strike at
Bambanani, Matjabeng and Welkom 1, and a secondary strike at all
the respondent’s Free State Operations due to commence on 6 October
2004. The demand by the applicant was that the respondent should
withdraw the retrenchment notices unconditionally. After a meeting
of the parties’ representatives, the applicant forwarded a draft
Memorandum of Understanding to the respondent, proposing that all
notices that have been served by ‘management’ dated 8 September
2004 including the April notices be unconditionally withdrawn with
immediate effect, and that the proposed strike action by the applicant
be withdrawn unconditionally as well.
9. On 5 October 2004 the parties entered into another agreement. The
respondent withdrew its retrenchment notices that have been served
for forced retrenchments at Welkom 1 mine, Merriespruit 3 shaft,
Eland Mine and Bambanani Mine. The notices for the consultation
processes regarding restructuring at Ernest Openheimer Hospital,
Asset Protection Services, Joel Plant, Virginia Plants and Free State 2
Plant were withdrawn with immediate effect. The notices of possible
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strike action at the Free State Operation on 6 October 2004 were
withdrawn as well. According to the Memorandum the purpose of
the agreement was to jointly identify and implement alternatives to
accommodate 5000 excess employees at the company’s Free State
Operations and to prevent forced retrenchment. The parties agreed
further that any surplus labour at any shaft will be transferred to other
shafts that have similar vacant jobs to that of the employees whose
jobs are redundant and that should placement opportunities not be
available at other operations , other avoidance measures be explored
and implemented at operational level in line with the various
retrenchment agreements as well as the agreed principles on
restructuring at national and regional level, and that placement
opportunities outside the company be pursued to accommodate
surplus employees.
10. During October and November 2004 meetings were held between the
respondent and the applicant’s branch committees in the Free State
and also at regional level for restructuring and to implement transfers,
reskilling and CONOPS. There seem to be a dispute about what if
anything, that was achieved at these meetings. The respondent
contends that the applicant in the Free State, has done nothing to
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implement the various agreements reached by the parties, and instead
has done everything to frustrate the agreed measures to minimise
retrenchments and to save jobs. On the other hand applicant denies
any move and intent on its part to frustrate the agreed measures to
minimise retrenchments and to save jobs. They argued that the
respondent has in a letter of 14 March 2005 acknowledged the
constructive role that have been played by the applicant. Termination
of the CONOPS by the applicant’s members is also denied by the
applicant. They place the blame at the door of the respondent and its
officials.
11. On 1 December 2004 the applicant delivered a list of demands.
Included in the demands listed, applicant called on the respondent to
stop all the disadvantages caused by the CONOPS. The respondent
responded to these demands made by the applicant by a letter dated 7
December 2004. On 15 December 2004 applicant referred a dispute
regarding these demands to the CCMA. On 21 December 2004 the
parties entered into a Memorandum of Understanding. The parties
recorded their agreement to enter into urgent and meaningful
discussions as from 3 January 2005 to address the CONOPS
premiums and related matters with respect to the Free State
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Operations. The parties further agreed that the applicant will
withdraw the notices of termination of the CONOPS agreement, and
the working ‘arrangement’, and that applicant’s members in the
Freegold Operations will be given a ten days break over the Christmas
period.
12. During the period from 3 to 14 January 2005 a series of meetings
were held by the parties’ representatives. Some of the matters that
were discussed related to the CONOPS, losses suffered by the
respondent and certain shafts that were to be closed by the respondent.
The parties could not reach an agreement on these matters. The
parties agreed to hold a meeting on 17 March 2005. On 14 March
2005 the respondent issued notice of intention to implement forced
retrenchments and to close Welkom 1 Mine. In this notice the
applicant was further informed that notices of termination of
employment of affected employees in terms of section 37 of the Basic
Conditions of Employment Act no : 75 of 1997 (“BCEA”) will be
issued on 15 April 2005. The applicant sent a letter on 16 March
2005 in which it rejected the contents of the notice and suggested a
meeting to be held on 23 March 2005 for the purpose of clarifying the
contents of the letter. A meeting of 17 March 2005 was held as
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planned. However nothing of significance was achieved at this
meeting. After this meeting the applicant delivered a strike notice to
the respondent as the issues that formed the basis of the strike were no
resolved. The meeting of 23 March 2005 also, did not resolve the
parties’ dispute. The applicant’s members embarked on a strike
which lasted from 23 March 2005 to 7 April 2005. On 29 March
2005, 12 April 2005 and 15 April 2005 further meetings were held.
No resolution was reached at these meetings. Of significance from
these meetings is that the respondent held the view that the issuing of
the retrenchment notices were a continuation of a process started by a
section 189(3) notice issued on 2 April 2005. The applicant’s view
however was that the process that was started by the section 189(3)
notice of April 2004 came to an end when the parties concluded the
agreement of 5 October 2004. In this agreement, they argued, the
respondent agreed to withdraw the April 2004 notice.
13. On 19 April 2005 the respondent issued retrenchment letters to
applicant’s members terminating their employment with effect from
19 April 2005. On 20 April 2005 the applicant referred two disputes
to the CCMA. The first dispute is referred in terms of section 189A
(8) (a) of the LRA and the second dispute relate to the interpretation
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and application of the agreement concluded on 5 October 2004.
The issues
14. The applicant contends that:
14.1 The notices of retrenchment issued on 19 April 2005 are
premature and unlawful in terms of section 189A(8)b read with
section 189A(2)(a) of the LRA;
14.2 the respondent failed to consult the union promptly when it
contemplated dismissing employees for reasons based on its
operational requirements;
14.3 the respondent made a final decision to dismiss without
engaging the applicant in a proper consultation process;
14.4 the respondent failed to engage in a meaningful joint consensus
seeking process with the applicant ;
14.5 the company failed to make proper disclosure of information to
enable the applicant to participate meaningfully in
consultations, and
14.6 the consultation process initiated on 2 April 2004 was finalised
when the parties reached agreement regarding alternatives to
avoid compulsory retrenchments on 5 October 2005.
15. The respondent on the other hand contends inter alia that,:
15.1 The retrenchment notices are not premature and unlawful, and
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that applicant waived its right to refer any dispute to the CCMA
by its conduct and its notices to embark upon a strike in
September 2004;
15.2 That a facilitator was appointed in terms of section 189A (4) of the
LRA after the applicant had asked that the CCMA appoint a facilitator, and
section 189A (8) therefore does not apply;
15.3 That extensive consultations were entered into assisted by the
facilitator and constructive agreements were reached as a result of the
process which made it possible for a number of compulsory retrenchments
to be avoided;
15.4 That applicant deliberately breached the agreements or
frustrated the implementation of the agreements;
15.5 That the respondent did not infringe on any of the rights of the
applicant’s members;
16. A useful summary of the provisions and objective of section 189A of
the LRA can be found in National Union of Metalworkers of SA
and others v SA Fine Engineering and others (2004) 25 ILJ 235 8
(LC) where Murphy AJ had the following to say at 2361 CH :
[6] “Section 189A was inserted into LRA by the amendments with
the aim of meeting the demands of various stakeholders for a
more efficient method for handling disputes about operational
requirement dismissals. Its structure and objective are
commendable. Therefore it comes as something of a surprise
that two years after its enactment there exists little in the way of
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judicial commentary on its purpose, scope and application. As
this case demonstrates, litigants will accordingly be well
advised to proceed with caution when embarking upon a
journey through its unchartered waters.
[7] Section 189A sets out to accomplish several objectives. First and
foremost it bestows on employees in significant operational requirement
dismissals a choice between industrial action and adjudication as the means
of attempting to resolve the dispute. To minimize avoidable strikes and
litigation, the section allows for the possibility of compulsory facilitation by
the CCMA, if either the employer or a consulting party representing the
majority of employees targeted for dismissal requests it. Otherwise the
parties are free to agree to voluntary facilitation (s 189A (3) and (4)). The
appointment of a facilitator suspends the employer’s right to dismiss for 60
days. After the period has expired the employer may give notice of
termination of employment. Once the notice of termination is given, the
employees have the choice of either embarking on lawful industrial action
or referring a dispute regarding substantive fairness to the Labour Court(s
189A(7). Once there is referral to the Labour Court the right to strike is no
longer available. Equally, if no facilitator is appointed, neither party may
refer a dispute to the relevant bargaining council or the CCMA for 30 days
from the date of a s 189A (3) notice........”
17. It is important to determine in which ‘pigeon hole’ of section 189A,
the process followed by the parties can be located. It is common
cause that in the sections 189(1) and (3) letter of 2 April 2004 the
respondent recorded its desire to have the facilitator appointed by the
CCMA, and that an application form (LRA 7.20) was attached to the
notice. The applicant adopted the attitude that there was no need for
the facilitator to be provided by the CCMA and the parties agreed to
the facilitator to be provided by the CCMA and the parties agreed to
form a Joint Task Team to investigate the viability of the mines.
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Although the applicant at a later stage applied for facilitation by the
CCMA a further agreement was reached as proposed by the
respondent, that the mediation process should be outside the auspices
of the CCMA. The reason provided by the respondent was to prevent
them from declaring a formal dispute and thus triggering the 30 days
notice period for compulsory retrenchments. It was on this
understanding that Orleyn was appointed privately by the parties and
not by the CCMA. Throughout the involvement of Orleyn, it is clear
from the correspondence and the conduct of the parties that she was
not appointed within the contemplation of section 189A. The process
adopted by the parties falls within a situation where a notice of 2 April
2004 was issued and a facilitator was not appointed by the CCMA.
Therefore the provisions of section 189A(7) in terms whereof the
employer may issue notice to terminate the contracts of employment
in accordance with section 37(1) of the BCEA, after the expiry of the
60 days from the date on which notice was given in terms of section
189(3) of the LRA, does not find application.
18. What is important is the fact that although Orleyn was not appointed
by the CCMA, she engaged the parties in a process of mediation in an
effort to avoid retrenchment. This process culminated in the
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conclusion of some agreements which includes the agreement of 5
October 2005. This agreement according to the applicant, brought to
an end a process of consultation which was triggered by the 2 nd April
2004 notice, and which notice they argue, was also withdrawn by the
respondent in terms of this agreement. Should this interpretation of
the agreement be correct it simply means that there is no notice in
terms of section 189(3) which is in existence and for the respondent to
proceed with the retrenchment a fresh notice (which may recognise
the process and progress archived up to that stage) may have to be
issued, and the parties should be free to exercise the rights available to
them in terms of section 189A, including the time periods prescribed
in section 189. On the other hand the respondent’s contention is that
the 5 October 2004 agreement did not bring to an end a process
triggered by the April 2004 section 189(3) notice and, in the event that
it is found that the facilitator was not appointed in contemplation of
section 189A, the respondent is entitled to trigger the time period
prescribed by merely giving notice of intention to issue termination
letters in terms of section 37(1) notice.
19. It is critical that the status of the 2 nd April 2004 notice as well as the
correct interpretation of the collective agreement of 5 October 2004 be
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determined in order for one to be in a position to decide which
procedure is available to the respective parties. It is common cause
that there is a dispute about the interpretation of the collective
agreement which has been referred to the CCMA by the applicant on
20 April 2005. This referral was effected a day after the letters of
termination were issued by the respondent. This court is precluded by
section 24 of the LRA from adjudicating a dispute about the
interpretation and application of a collective agreement. In the
agreement of 5 October 2004 the parties have prescribed a dispute
resolution process to be followed in case of dispute, and this process
is in line with what the applicant has done on 20 April 2005.
furthermore there are reasonable prospects that the CCMA may
uphold the applicant’s interpretation of the collective agreement
despite the respondent’s arguable contention.
20. It is abundantly clear from the correspondence between the parties
that when the termination notices were issued, already a dispute (as a
matter of fact) had already arisen. Each party stuck to its
interpretation and understanding of the collective agreement. Despite
this fact, the respondent elected to bulldoze its views by effecting
dismissal instead of referring a dispute to the CCMA in terms of
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clause 8.1 of the agreement. The fact that the dispute was only
referred after the dismissals should therefore not deny the applicant’s
members adjudication of the dispute.
21. Another aspect which has an impact on the process followed is
whether it can be said on the whole, that the process followed by the
respondent in affecting the retrenchments was fair. In the notice
served on 14 March 2005 the respondent requested inter alia, the
applicant to make suggestions and or provide ideas to minimise the
impact of restructuring at an urgent meeting to be scheduled. In the
final termination letter the following is said at paragraph 10 and 11
thereof:
“ 10. However, as was stated during the course of the meetings, we
were at all relevant times amenable to discuss with yourselves
measures to minimise the number of retrenchments, and to
ameliorate the effect of such retrenchments on members. We
repeat our offer in this regard, even though members may have
received notices of retrenchments. Were are still prepared to
discuss with yourselves the application of identified measures
to minimise the number of retrenchments. So, for instance, do
a number of vacancies exist at shafts which are not affected by
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the proposed retrenchments. A list of such positions are
annexed hereto marked Annexure “A”. Should you wish to
consult with us on this issue, we would be pleased if this could
be done as a matter of urgency, in order for affected employees
to be placed in vacancies applying the principles of relevant
skills required for the vacant position, and length of service of
employees.
11. In addition, Annexure “A” includes the total number of
contractors within Harmony. In this regard, we wish to
record that management is of the view that the issue of
contractors had been addressed on an ongoing basis with your
trade union during the consultation process. Relevant
information had also been provided on previous occasions, and
in accordance with agreements reached.”
22. I am persuaded by the argument on behalf of the applicant that the
respondent admits on their own that the process of consultation is in
itself incomplete. It is evident from the above quoted passages that on
the termination letter further information is still being supplied and the
employer is still offering to consult after the retrenchment process.
One does not know if the process suggested after the dismissals will in
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any way alter the final decision already taken before the consultation
process is finalised. On this basis alone, it is clear that a fair
retrenchment procedure had not been followed before the decision to
dismiss had been finally taken. I am not of the view that the
applicants should be blamed for the different views they held about
the process. The respondent’s decision to rush through the process is
in my view not justified. Although one may accept that should the
process be protracted indefinitely it will have financial implications
on the respondent, one cannot overlook or compromise the applicant
and its members of their constitutional and statutory rights. Had the
matter been referred for dispute resolution as prescribed by the
agreement, or had the parties applied for the appointment of the
facilitator by the CCMA despite their divergent views on the process
up to that stage, any financial loss could have been minimised and this
application avoided.
23. I am satisfied that the applicant has established a clear right and the
dismissal of its members has caused them irreparable harm. The only
satisfactory remedy available to them is to order that a fair procedure
be followed.
Costs
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24.What remains is the question of costs. Both counsel have submitted
that it is only fair that costs should follow the results. I am persuaded
by these submissions.
ORDER
In the result I make the following order:
1. The respondent is ordered to reinstate the applicant’s members
dismissed on 19 April 2005 until it has complied with a fair
procedure;
2. The respondent is interdicted from giving notice to terminate the
contracts of employment of the applicant’s members until the periods
mentioned in section 64(1)(a) of the Labour Relations Act 22 of 1995
(“ the LRA”) have elapsed in respect of the dispute referred to the
Commission for Conciliation, Mediation and Arbitration (“ the
CCMA”) in terms of section 64(1) read with section 189A(8)(a) of the
LRA on 20 April 2005; and
3. The respondent is ordered to pay the costs of this application.
_________________________
P TLALETSI
ACTING JUDGE OF THE LABOUR COURT
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APPEARANCES
FOR THE APPLICANT : ADV. J.G VAN DE RIETS SC
(Instructed by Cheadle Thompson
&
Haysom Attorneys)
FOR THE RESPONDENT : ADV. G C PRETORIUS SC
With him ADV. F G BARRIE
(Instructed by Brink Cohen Le Roux
Inc.)
DATE OF HEARING : 26 APRIL 2005
DATE OF JUDGMENT : 06 MAY 2005
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