IN THE LABOUR COURT OF SOUTH AFRICA
BRAAMFONTEIN
CASE NO : JS 1495/01
SOUTH AFRICAN COMMERCIAL CATERING
AND ALLIED WORKERS UNION (“SACCAWU”) 1ST APPLICANT
G HLANGU 2ND APPLICANT
J PHUNGULA 3RD APPLICANT
PROFESSOR MALINGA 4TH APPLICANT
PETER MAKHOMBE 5TH APPLICANT
AND
GALLO AFRICA RESPONDENT
JUDGMENT
REVELAS, J:
[1] The first applicant (a trade union) who represents four of its members, the
second to fifth applicants (“the employees”) contends that the termination of
their services by the respondent, was both procedurally and substantively
unfair. Their dismissals emanated from the respondent’s alleged operational
requirements, of which they were notified on 9 May 2001. The unfair
dismissal dispute subsequently referred by the applicants, remained
unresolved as at 23 August 2001, (despite conciliation) and a certificate to that
effect was issued by the CCMA. The applicants seek financial compensation.
[2] The respondent conducts its business in the music industry and it involves the
production and distribution of music products. The second, third and fourth
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respondents (Hlangu, Phungula and Malinga) were in the employ of the
respondent as drivers assistants. The fifth respondent (Makhombe) was
employed as a packing manager. The employees were employed at its Durban
branch.
[3] It was common between the parties on the pleadings (the pretrial minute) that
there were consultative meetings between the respondent and the first
applicant (“the union”) on ten different days in March and April 2001 and a
further meeting after the dismissal on 12 June 2001. In the same pretrial
minute it is noted that meetings were called where the respondent informed
them of its decisions. It was not disputed that during the financial year
2000/2001 the respondent reflected a financial loss in the region of eight
million rand, due to various factors which included a 40% decline in the
consumer demand for audio tapes and a general change in the business
environment of the respondent. The respondent then needed to restructure its
business operations and foresaw the retrenchment of many of its employees.
[4] Following the several meetings held between the Union and the respondent,
the second, third and fourth applicants each received a letter dated 3 May 2001
wherein they were offered alternative positions with the respondent at its new
branch in Johannesburg. They were notified to contact the respondent’s human
resources official, Mr Gift Sibeko at a given telephone number before 8 May
2001 if they were interested in taking up the positions (general assistant and
scanner), failing which, their services would be terminated. According to the
respondent, there was no response to the offer, and the services of the second,
third and fourth applicants were terminated. A similar letter containing an
offer of a position in Midrand was made to the fifth applicant. Since,
according to the respondent, he would not consult thereon, his services were
also terminated.
[5] The following events preceded these letters.
[6] In a letter dated 9 March 2001, the respondent addresses a letter to the Union,
wherein it informed the Union that there was a need to commence with
retrenchment consultations in view of the respondents financial problems. A
letter was also circulated to the respondents employers three days later,
wherein the respondents proposed retrenchment of some of its employees was
announced. The respondent undertook in these letters, to consult on the
decision to retrench and alternatives to avoid retrenchment, the selection
criteria, severance packages, and the time frame wherein the retrenchment
would take place. Disclosure of financial information pertaining to the need to
restructure and an opportunity to discuss “follow up issues” was also
promised.
[8] On 12 March 2001, the Union requested details and information
pertaining to the reason for the retrenchments, its financial status including
business plans for the next five years, details on all its employees (in particular
to determine how LIFO would be implements), various types of organographs,
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its income expenditure and recent savings. The Union also suggested times
and dates for the proposed meetings, the first of which was held on 16 March
2001. The information was provided and further meetings were held. The
Union also wanted to know at which stage the respondent became aware that
the demand in audiotapes began to diminish and that reassessment of the
Trutone Industries Plant (there these tapes were manufactured) was required.
This information was furnished.
[7] The Union, through Mr Khulekane Ngubane represented the second to fifth
applicants during the retrenchment discussions that followed. He also
represented other employees affected by the retrenchment and who were
members of the Union. Ms Freda Lowe, the respondent’s executive director,
represented the respondent in these discussions.
[8] As stated, the first meeting was held on 16 March 2001. The Union was not
present and neither was its present on 23 March 2001. The 16 March meeting
centred mainly around the respondent’s financial situation. All the information
which was requested was furnished in writing, together with other information
not requested. When a meeting was scheduled : Mr Israel Mothobeki (a union
member) was however present. At the 26 March 2001 meeting, Mr Ngubane
was present together with the relevant shopstewards and explained that his
absence was due to time constraints as he had ambitiously overbooked his
schedule. One of the main issues the respondent had to explain to the union at
this meeting was , how the costs would be reduced by relocating the
respondent’s Durban operations to Johannesburg, and how it would affect the
members. Ms Lowe advised that a feasibility study was on its way.
[9] It was conveyed to the Union at his meeting that approximately 59 positions
would be affected by the retrenchment. These included two general assistants,
would be affected by the retrenchment. These included two general assistants,
the managers, sixteen drivers, eleven van assistants, one filing clerk, one
calling counter clerk, one secretary and several other positions which were
listed that would make up the number. I mentioned just a few, and in
particular, those which included the positions of the applicants in question.
[10] The question of voluntary retrenchment packages were also discussed, as well
as the positions of temporary employees and LIFO.
[11] As at 7 April it had been agreed that overtime would be banned except in
emergency situations. And the suggestion that was debated at the insistence of
the Union was reducing the working week from 44 to 40 hours.
[12] As could be expected, there was concern about the employees from the
Durban branch that was to be closed. The second to fifth applicants would be
included in a bumping exercise and transferred to Johannesburg. This decision
led to a dispute between the parties. The respondent offered the positions in
Johannesburg but individual employees did not want to fully cover their
relocation costs as this would prove to be unaffordable given the financial
constraints which resulted in their retrenchments in the first place.
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[13] The applicant contended that the respondent who had been mala fide
throughout the consultations, had terminated the services of the individual
applicants whilst the question of relocation had not been resolved.
[14] According to the applicants, they accepted the offer of reemployment but
were dismissed notwithstanding.
[15] The second respondent testified on behalf of the applicants at the trial. His
testimony was that apart from dismissing them prematurely, the respondent
failed to offer himself and the other applicants assistance after they had been
dismissed. No employer is obliged to give post dismissal assistance to
employees who had been retrenched. That is trite. There is no merit in this
argument.
[16] In addition, he stated that the respondent should have consulted with them
directly. This was however not put to Ms Lowe when she testified. In any
event even if it is correct that the respondent did not consult directly with the
employees, it was under no obligation to do so since they were at all relevant
times represented by a trade union.
[17] The fifth respondent’s case is different, in that he says that his dismissal was
unfair in that the respondent should not have consulted with him without his
representatives being present, and further, that no alternative employment was
offered to him.
[18] On the evidence that was presented, I accept that there was a need to
restructure and to close down the respondent’s coastal plants and to retrench
some employees. It would appear from the minutes of the meetings that the
union accepted the respondent’s reasons to close down the coastal plants, in
particular the Durban branch where the four individual applicants were
employed. The Durban branch had shown a 61% decline in business. Ms
Lowe gave extensive evidence hereon which remained largely unchallenged.
Lowe gave extensive evidence hereon which remained largely unchallenged.
[19] The only two issues remaining unresolved at the end of the consultations with
the Union, were reduced salaries and the insistence by the individual
applicants on relocation assistance. Ms Lowe persisted in her stance that the
respondent could not afford it. The second applicant was present at a meeting
held on 19 April 2001, when this aspect was discussed. It was indicated by the
respondent that it would assist by virtue of loans. The respondent’s decision
not to provide relocation allowances, was based on the fact that the employees
would not be filling vacancies, but will take up positions of retrenched
employees.
[20] At the meeting of 25 April 2001, it was made clear that the respondent would
consult individually affected employees who, if they do not accept alternative
employment, will be dismissed. This was also contained in the letters of 3
May 2001, where assistance in the form of a loan was offered.
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[21] According to Ms Lowe, the fifth respondent did not participate in the meeting
scheduled for him to be consulted with, on an individual basis. This is also
borne out by the letter sent to him. He reasoned that he would not participate
without his representatives being present. It appeared from the evidence that
Mr Mothobeke of the Union had been invited to attend the meeting but failed
to attend because the convenor, Mr Moloi, was not invited. This was because
of the deadlock on the question of severance pay and the reduction in salary.
The stance of the Union was that the consultation process was not over, until
the outstanding issues (salaries and relocation costs) were addressed.
[22] The services of the fifth respondent were then terminated.
[23] The other individual applicants were advised in the letters of 3 May 2001 to
contact Mr Gift Sibeko before 8 May 2001 to indicate whether they would
accept alternative employment or not. They were advised that their failure to
accept the offer would result in their retrenchment.
[24] The first applicant corroborated Mr Gift Sibeko’s testimony that none of the
applicants contacted Mr Sibeko. Mr Ngubane testified that he phoned Mr
Sibeko about the offer of alternative employment in Johannesburg for the four
individual employees. According to him Mr Sibeko said he would revert to
him, but did not. This was disputed by Mr Sibeko who said he heard nothing
from the Union or the individual employees. Firstly, Mr Sibeko did not give
the impression of a lying witness, whereas there were several examples which
indicated that Mr Ngubane was. Secondly, making a telephone call to Mr
Sibeko would be inconsistent with the stance he held from March to May
2001, namely that members would accept transfers, provided their relocation
costs are paid by their employer. According to him it was the main dispute
costs are paid by their employer. According to him it was the main dispute
between the parties. None of the letters written by the Union after the letters of
3 May 2001 (those referring to Mr Sibeko) make reference to an acceptance of
the offer of employment. It also remains curiously unexplained why Mr
Ngubane did not phone someone else who worked for the respondent when Mr
Sibeko failed to revert to him, if he was indeed serious about accepting the
transfer offer. Mr Ngubane simply did not take the consequences of the 3 May
2004 letters seriously. He thereby jeopardised the positions of the individual
applicants who were retrenched as a consequence.
[25] Prior to 3 May 2001, when the last crucial meeting was held in an attempt to
resolve the outstanding issues, ten consultative meetings were already held
between the union and the respondent. The minutes of these meetings show
the respondent’s generally upfront and cooperative approach to the
retrenchment. Therefore the allegation of mala fides on its part, remains
unsupported by fact.
[26] During the trial, I raised my concerns about the fairness or otherwise, of
presenting the employees in question with an offer of employment in another
province and refusing to pay their relocation costs. I was persuaded that the
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respondent’s conduct was not unfair in this regard.
[27] The respondent did offer in writing, that it would assist the four employees by
means of a loan. It is also of significance that they would be taking up
positions of employees who had been retrenched in the course of a bumping
exercise, agreed upon with the union. The retrenchment exercise was effected
countrywide at several branches. To pay transfer costs for employees who
were relocated as a means of avoiding retrenchment, would be adding to
existing financial difficulties. Furthermore, the employees in question failed to
participate in the final discussions with Ms Lowe and Mr Beecham ( in the
case of the fifth applicant) and Mr Sibeko (in the case of the other applicants).
Once they had accepted the alternative positions, the question of transfer costs
and the loans offered could be revisited.
[28] In my view, the respondent complied properly with the provisions of section
189 of the Act, in so far it could. It did all it could to achieve the kind of
consultation envisaged by the Act and the law.
[29] Consultation in terms of section 189 of the Act, is a twoway process. No
meaningful consultation can take place if one party withdraws from the
process. There should also ultimately be finality in the consultation process. It
cannot be held in abeyance by a party who insists that the process is not
finalised when it is quite clear that the process had been.
[30] The applicants are not entitled to any financial compensation as they were
dismissed for a fair reason and in accordance with a fair procedure.
Accordingly, the application was dismissed with costs on 15 November 2004.
___________________________
E. REVELAS
JUDGE OF THE LABOUR
COURT OF SOUTH AFRICA
REPORTABLE
DATE OF HEARING: 8 NOVEMBER 2004
DATE OF JUDGMENT: 15 NOVEMBER 2004
REASONS: 17 OCTOBER 2005
DATE OF HEARING: 8 NOVEMBER 2004
DATE OF JUDGMENT: 15 NOVEMBER 2004
REASONS: 17 OCTOBER 2005
ON BEHALF OF THE APPLICANT: Mr MJ Molefe of SACCAWU
ON BEHALF OF THE RESPONDENT: Mr T Ngcukaitobi of Bowman Gilfillan
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Inc.
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