THE LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG
Case no: JS112/2021
In the matter between:
NEO MERAFI First Plaintiff
RUDZANI SILIGA Second Plaintiff
VELA BACELA Third Plaintiff
SIPHO MASHIGO Fourth Plaintiff
MUZI GREGORY SHABANGU Fifth Plaintiff
PRECIOUS NTOMBIZETHU MYEZA Sixth Plaintiff
and
ITHUBA HOLDINGS (RF) (PTY) LTD Defendant
Heard: 12 February 2026
Delivered: 26 May 2026
JUDGMENT
PHAKEDI, AJ
(1) Reportable: No
(2) Of interest to other Judges: No
(3) Revised
____________ ______________
Signature Date
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Introduction
[1] This opposed matter concerns an unfair dismissal claim in terms of section
191(5)(b)(ii) of the Labour Relations Act1 (the LRA) following the retrenchment
of the six Plaintiffs by the Defendant on the basis of operational requirements.
[2] The two applications under case numbers JS112/21 and JS635/21 were
consolidated on 26 May 2023 per the court order of Tlhotlhalemaje J who
directed that they be heard as one action. Subsequent to the exchange of
pleadings, the parties signed and filed the pre-trial minutes on 9 May 2024.
[3] It is the case of the six Plaintiffs that their dismissal was both procedurally and
substantively unfair due to the manner in which the retrenchment process was
undertaken. They argued that the process was a fait accompli in that there
was no meaningful consultation on the criteria to be followed during
retrenchments. Furthermore, they submitted that the Defendant did not
consider nor offer them reasonable alternative measures to avoid
retrenchments. They submitted that they were forced to accept voluntary
retrenchment packages by withholding their October salaries which were
unfairly bundled into the severance package without their knowledge or
consent.
[4] The Defendant submitted that the Plaintiffs were retrenched and they
simultaneously accepted voluntary separation packages following the one
consultation session which concluded the retrenchment process. In line with
the signed voluntary separation agreements, the Defendant paid the plaintiffs
the agreed ex gratia amounts which they duly accepted. In support of its
stance, the Defendant raised a special plea that the matter was settled
between the parties and the Labour Court may not adjudicate a dispute about
the procedural fairness of the Plaintiffs’ dismissal.
Defendant’s first special plea: the dispute was settled on 28 October 2020
1 Act 66 of 1995.
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[5] The Defendant argued that the dispute was settled when the Plaintiffs signed
and accepted voluntary termination notices which included the severance
packages on 28 October 2020.
[6] The Defendant relies on clause 4 of the retrenchment notices signed by the
parties which reads as follows:
‘Whereas the Company gives notice as follows:
1. That the employee’s services are terminated as a result of the
operational requirements (retrenchment) of the company.
2. …
3. …
4. That the employee specifically agrees with his or her signature on this
document that his/her termination of employment is substantively fair
and that the employee agrees that he/she has no claims of any nature
against the company’.
[7] The Plaintiffs do not deny having signed the retrenchment notices and having
received voluntary severance packages. They, however, stated that they
signed the notices due to coercion by the Defendant who withheld their
October salaries in exchange for signatures. They had no choice but to sign
and accept the packages because they had bills to pay and they had worked
for that month.
[8] On the other hand, the Defendant stressed that this matter had already been
settled by the Parties in terms of clause 4 of the termination notice which is
essentially a waiver of any potential claims against the employer. What this
clause records is that the employee by his signature agrees that his or her
termination of employment is substantively fair and he or she has no claims of
any nature against the company. The question then for this Court is to
consider whether the parties settled the matter and whether the employees
waived their rights to pursue other claims against their employer?
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[9] As a starting point, it is important to highlight that the Defendant and Plaintiffs
signed a ‘retrenchment notice’ and not a settlement or mutual separation
agreement. The last clause of the said notice clearly states that:
‘9. This notice constitutes the statutory written notice of the termination of
the employment of the employee.’
[10] In Lufuno Mphaphuli and Associates v Andrews and Another 2 Kroon AJ held
as follows:
‘Waiver is first and foremost a matter of intention; the test to determine
intention to waive is objective, the alleged intention being judged by its
outward manifestations adjudicated from the perspective of the other party, as
a reasonable person. Our courts take cognisance of the fact that persons do
not as a rule lightly abandon their rights. Waiver is not presumed; it must be
alleged and proved; not only must the acts allegedly constituting the wavier
be shown to have occurred, but it must also appear clearly and unequivocally
from those facts or otherwise that there was an intention to waive. The onus
is strictly on the party asserting waiver; it must be shown that the other party
with full knowledge of the right decided to abandon it, whether expressly or by
conduct plainly inconsistent with the intention to enforce it. Waiver is a
question of fact and is difficult to establish.’
[11] In this matter, this Court is not satisfied that there was a mutual separation
agreement signed by employees. The document presented to the Plaintiffs
was a retrenchment notice which according to both parties constituted the
required statutory written notice of the termination of employment. The
Defendant’s first special defence is therefore not upheld.
Defendant’s second special plea: no jurisdiction to adjudicate the procedural aspects
[12] The second preliminary point raised by the Defendant is that in terms of
section 189A(18) of the LRA the Labour Court may not adjudicate a dispute
concerning the procedural fairness of the dismissal based on operational
concerning the procedural fairness of the dismissal based on operational
requirements. This section provides that:
2 2009 (4) SA 529 (CC) at para 81.
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‘The Labour Court may not adjudicate a dispute about the procedural fairness
of a dismissal based on the employer’s operational requirements in any
dispute referred to it in terms of section 191(5)(b)(ii).’
[13] The Plaintiffs’ Counsel submitted that the Defendant’s interpretation of the
above-mentioned section is wrong and that the correct legal position was
clarified by the Constitutional Court in Regenesys Management (Pty) Ltd t/a
Regenesys v Ilunga and Others3 where it held as follows:
‘[146] In my view, the following points must be emphasised about subsection
(18), read with section 191(5)(b)(ii) and subsection (13):
(a) The Labour Court has jurisdiction to adjudicate disputes about
the procedural fairness of dismissals for operational
requirements to which section 189A applies and which are
brought to the Labour Court by way of applications in terms of
subsection (13).
(b) By virtue of subsection (18), the Labour Court has no
jurisdiction to adjudicate in terms of section 191(5)(b)(ii) a
dispute about the procedural fairness of a dismissal for
operational requirements to which section 189A applies
because the LRA provides a special procedure and special
remedies in subsection (13) for such disputes. In other words,
such disputes cannot competently be referred to the Labour
Court in terms of section 191(5)(b)(ii) for adjudication because
the LRA has a special procedure and special remedies for
such disputes in subsection (13) in terms of which they can be
adjudicated by the Labour Court.
(c) The Labour Court’s jurisdiction to adjudicate disputes about
the procedural fairness of dismissals for operational
requirements to which section 189A does not apply and which
are referred to it for adjudication in terms of section
191(5)(b)(ii) is not ousted by subsection (18). That jurisdiction
remains intact and the Labour Court has jurisdiction to
adjudicate such disputes.
3 (2024) 45 ILJ 1723 (CC).
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[147] If subsection (18) was a subsection of section 191, it, indeed, would
have ousted the Labour Court’s jurisdiction to adjudicate disputes
about the procedural fairness of dismissals for operational
requirements to which section 189A does not apply and which are
referred to the Labour Court in terms of section 191(5)(b)(ii) for
adjudication. However, subsection (18) is not located as a subsection
to section 191. It is located as a subsection of section 189A. That is
not a coincidence. The reason for that is that, like all the subsections
to section 189A, subsection (18) relates to dismissals for operational
requirements to which section 189A applies. If it was meant to relate
to dismissals for operational requirements to which section 189A does
not apply, it would have been located as a subsection to section 191.
[148] The interpretation that subsection 189A(18) has ousted the jurisdiction
of the Labour Court to adjudicate disputes about the procedural
fairness of dismissals for operational requirements referred to it in
terms of section 191(5)(b)(ii) is not accurate….
[206] The interpretation of subsection (18) to the effect that the latter
provision hasousted the jurisdiction of the Labour Court to adjudicate
disputes about the procedural fairness in dismissals for operational
requirements brought before it in terms of section 191(5)(b)(ii) or in
terms of subsection (13) or both is inconsistent with the right of access
to courts in terms of section 34 of the Constitution and section 38 of
the Constitution.’
[14] Based on the above authority, the special plea that this Court lacks jurisdiction
to determine the procedural fairness of the Plaintiffs’ dismissal is not upheld.
Background facts
[15] The Plaintiffs were employed by the Defendant on different days and
occupying different positions. On or during June 2020, the Defendant invited
all its +/- 180 employees to a meeting and they were addressed by the Group
all its +/- 180 employees to a meeting and they were addressed by the Group
Chief Executive Officer , Ms Charmaine Mabuza. During the meeting she
indicated that the business was doing well despite the Covid- 19 pandemic.
She indicated that the pandemic had required that the business introduces a
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new shift system and at no stage did she mention that the company was
intending to retrench employees.
[16] On or about 02 October 2020, twenty four employees including some of the
Plaintiffs received an email from the Defendant’s legal representative, Mr
Arend Posthuma (Mr Posthuma) inviting them to attend a virtual meeting to
discuss the Defendant’s workforce model on Monday, 5 October 2020. The
consultation meetings were divided into separate groups and employees were
consulted on different dates in October 2020.
[17] On 5 October 2020, the Defendant’s Anneke Roodman (Ms Roodman) sent
an email to remind the Plaintiffs about the meeting and attached a notice in
terms of section 189 addressed to each of the invited employees. The notice
informed the employees that the Defendant was embarking on a restructuring
process and their positions were impacted by the structural changes . The
reason for restructuring was the Covid-19 pandemic and the need to sustain
the longevity of the contract to operate the National Lottery.
[18] In respect of alternatives to retrenchment, the notices indicated that
employees would be expected to apply for alternative positions within the new
structure if such a vacancy exists and depending on their skill sets and/or
qualifications. In respect of the selection criteria, it was recorded that
employees will be retrenched based on skills and qualifications. In respect of
the timing of the retrenchment, the process was envisaged to take a period of
sixty days ending on 05 December 2020.
[19] During the meeting, Mr Postuhuma was introduced as the Facilitator of the
retrenchment process and the employees were informed that the purpose of
the meeting was to discuss their possible retrenchment. One of the affected
employees requested a recording of the meeting and he was told that the
recording would be made available. Another employee enquired about the
selection criteria followed, and the Defendant stated that this was a first
selection criteria followed, and the Defendant stated that this was a first
consultation and that everything would be discussed during follow up
consultations because the process was envisaged to be completed on 05
December 2020.
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[20] The Defendant then requested the employees to sign and acknowledge
receipt of the retrenchment notices and submit same on 06 October 2020.
[21] The second group of employees including the fourth Plaintiff were consulted
on 08 October 2020. Mr Posthuma was still the Facilitator of the retrenchment
process. Employees suggested sport -betting department as an alternative to
retrenchment but t his suggestion was not taken into account. It was in that
meeting that the employees were informed that the Defendant had resolved to
abolish the positions they were occupying in terms of its new structure.
[22] The Defendant then unilaterally made available the revised voluntary
retrenchment package with a lump- sum amounts varying according to date of
employment and the package of each of the employees. No further
consultations took place after the first meeting with affected employees and
they started engaging on the contents of the revised offers made to them.
[23] On 27 October 2020, Ms Roodm an sent an email to the employees informing
them that they must sign the retrenchment notices drafted by Mr Posthuma
and send them back before close of business on 28 October 2020 and further
that their last working day would be 30 October 2020 and further that the
severance payment will be made after 14 days of obtaining the tax directive.
[24] On the morning of 28 October 2020, all employees had not received their
salaries despite having worked for the month of October. Ms Roodman then
informed them that their October salaries were included in the lump sum
voluntary retrenchment packages in order to create a saving on the normal
Pay As You Earn (PAYE) deduction. It was then made clear that payments
could not be made to the employees until they handed in signed agreements.
[25] The First Plaintiff signed the retrenchment notice on 28 October 2020.
[26] The Second Plaintiff signed the retrenchment notice on 28 October 2020 and
[26] The Second Plaintiff signed the retrenchment notice on 28 October 2020 and
next to his signature he recorded the words ‘signed under protest in relation to
termination of employment clause number 4’.
[27] The Third Plaintiff signed the retrenchment notice on 28 October 2020.
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[28] The Fourth Plaintiff signed the retrenchment notice on 28 October 2020.
[29] The Fifth Plaintiff signed the retrenchment notice on 28 October 2020.
[30] The Sixth Plaintiff signed the retrenchment notice on 28 October 2020.
[31] On 30 October 2020 all employees received their exit documents and
returned the property of the Defendant and that is how their employment was
terminated. They are now challenging their dismissal and are seeking an
order in the following terms:
‘a. The dismissal of the Plaintiffs was procedurally and substantively
unfair;
b. Cancellation and setting aside of the voluntary retrenchment
packages;
c. Reinstatement with full retrospective effect;
d. Maximum compensation;
e. Costs of suit.’
The dispute between the parties and the evidence
[32] The Defendant relied on the evidence of a single witness, Ms Anneke
Wagerle (formerly Roodman). She testified that she occupied the position of
Head of Human Resources at the time of retrenchments. She stated that the
Defendant, Ithuba Holdings, was the operator of National Lottery and it was
not permitted to have any other operations. Recently, the license to operate
the National Lottery was awarded to Sizakhaya Holdings which started
operating from 01 June 2025 and the Defendant will be applying for voluntary
liquidation.
[33] She stated that Plaintiffs received their notices in terms of section 189 (3)
between 05 and 13 October 2020. Various consultation meetings took place
between the parties and no minutes were taken during such discussions.
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[34] The company presented voluntary severance packages as an alternative to
retrenchments and all other various elements were considered and
employees’ queries were all answered as and when they arose. Additionally,
the affected employees were informed that they are allowed to apply for
vacant positions in the company if they meet the requierements of the
advertised positions. She testified that 31 employees were dismissed and 24
including the six plaintiffs accepted voluntary severance packages. The
remaining seven employees who did not accept the voluntary severance
packages were absorbed into some vacant positions within the company.
[35] She disputed that the Second Plaintiff, Mr Rudzani Siliga signed the
retrenchment notice under duress as indicated on his notice. She testified
further that none of the employees who accepted and signed retrenchment
notices tendered the payments they received to the Defendant as
confirmation that they were resiling from the arrangement.
[36] Under cross examination, she confirmed that she regarded herself as a
Human Resources expert based on her qualifications. When asked about the
criteria used to select employees who were going to be retrenched, she could
not give a clear answer save to state that everyone who was affected was told
to apply for vacant positions. She stated that there were about seven
vacancies offered as an alternative to retrenchment but employees accepted
voluntary severance packages as an alternative. When asked why were
employees asked to apply for vacant positions if they were offered as an
alternative to dismissals, she stated that they wanted to give everyone an
opportunity to apply.
[37] When asked about the reason why the Plaintiffs only signed the termination
agreements on 28 October 2020, which was the day on which they ought to
have received their salaries, she responded by saying that she did not know.
She, however, emphasised that she did inform the affected employees that
She, however, emphasised that she did inform the affected employees that
their October salary was included in the voluntary severance package and
they did not receive their salaries on that day because they had missed the
deadline for submission of the signed retrenchment notices.
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[38] She also confirmed that all employees of the Defendant received their salaries
on the 28 th of every month. She further stated that the reason why she
included their October salary in the voluntary severance package was to
ensure that the employees get a saving on PAYE from SARS because their
October salary would have attracted additional tax deductions.
[39] She was referred to a WhatsApp text from the Third Plaintiff, Vela Bacela
which indicated that she was informed on 27 October 2020 that she will not be
receiving her salary for the month of October. Bacela had pleaded with
management to pay her salary as she had bills to pay and she was also in
hospital at the time. However, the witness indicated that she was not obliged
to enquire about the health of the employees and her role was to ensure that
the policies of the employer are complied with.
[40] She was further referred to an email from Mr Mashigo who complained about
non-payment of his salary and her response thereto. She further indicated
that she received the Tax directive for all employees on the same day hence
the Finance department was able to process payments on the 28
th shortly
after receiving signed notices . When asked about the protest by the Second
Plaintiff who declared the process unfair, she indicated that she accepted his
signed document and that his unhappiness did not mean that the process was
not fair. She went ahead and paid his package because he had satified the
requirement set by the Employer.
[41] She was referred to her email dated 20 October 2020 with the subject line
‘extension of voluntary package’ addressed to affected employees which
reads as follows:
‘Good day all,
With the close of all the first round of consultations, a large amount of
alternatives were brought forward for consideration and discussion with the
Executive Committee. In conjunction, a voluntary package was made
available to al for consideration after which it was requested that feedback be
available to al for consideration after which it was requested that feedback be
given on the proposed alternatives prior to the acceptance of the packages in
order to make informed decisions.
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As you know, the deadline for the acceptance of the voluntary package was
yesterday. In saying this, we were also only able to arrange an appropriate
time with the Executive Committee yesterday to discuss the alternatives and
in such it was decided to once again extend the deadline for the acceptance
of the voluntary package in order to accommodate the request for feedback.
Please note that the final deadline for acceptance is, Friday, the 23 rd of
October 2020. Arend, the facilitator who has been assisting us, will finalise
the minutes to the meeting held yesterday and will circulate the decisions
made regards the proposed alternatives tomorrow for all to consider. Please
note that the decision regarding the alternative will be applicable to all,
regardless of acceptance of the package.
We hope you find this in good faith.
Kind regaros,
Anneke Roodman | Head of Human Resources’
[42] She was also referred to another email as confirmation that employees were
expecting to receive their salaries in the morning of 28 October 2020. She
further conceded that her email did not indicate that the October salary was
going to be included in the package. She also testified that all Plaintiffs
received their salaries and packages on 28 October subsequent to submitting
the signed agreements.
[43] She also stated that the position occupied by Mr Siliga, Production Manager,
became redundant due to the pandemic. Then it was put to her that the same
position was given to Serisha Naidoo in 2022. She then responded by saying
there was a lapse of time in respect of re-employment terms and the notice in
terms of section 189(3) was not binding. She also indicated that she could not
have given the Plaintiffs any of the available positions as this could have
prejudiced everyone and she wanted to give everyone a fair chance.
[44] During re-examination she emphasised that she included the October salary
in the package in order to save on Tax costs. She was then asked what would
in the package in order to save on Tax costs. She was then asked what would
have happened had Mr Siliga not signed the agreement, she then indicated
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that his salary would have been paid and the retrenchment process would
have started afresh. The Defendant then closed its case.
[45] Mr Rudzani Siliga (Siliga) testified as the only witness on behalf of the
Plaintiffs. He testified that he was employed as a Product Manager since June
2016 and the company was performing well and met all its delivarables and
target goals. He was surprised when he got the retrenchment notice because
as a Product Manager he had set new objectives for the duration of the
contract with National Lottery.
[46] He testified that employees received a letter titled ‘ intention to retrench’ and
they were not consulted on the appointment of Mr Posthuma as the
Facilitator. He informed them that the process will entail many consultation s
as it was going to take a period of sixty days concluding on 05 December
2020. There was no trade union in the workplace as such they relied on the
expertise of Mr Posthuma who was supposed to discuss alternatives and be
impartial throughout the process. However, he did not ensure that t he
procedure adopted was fair and catered for the interests of the workers as
well. Siliga complained about the fairness of the process because their views
and inputs were not taken into account. The fact that Mr Posthuma is now
before court representing the Defendant is confirmation that he was not an
independent facilitator.
[47] He further testified that his October salary ought not to have been included in
the voluntary severance package as he had worked for the month of October.
He then referred to an email dated 20 October 2020 which he wrote to Ms
Roodman and it read as follows:
‘Good morning Anneke
Thanks for the update. Any feedback on the issues raised in my previous
mail?
Note
This morning during our Marketing Team Meeting our HOD announced that
there was a board meeting yesterday and everyone was happy that we are
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currently ahead in terms of the NLC and Business financial targets. Why is
the company continuing with retrenchments if the aftermath of Covid-19 is not
the reason?
About the mental health challenge
Don't you think more focus should be on helping those employees that are
faced with retrenchment deal with the challenge? The mental challenge is
great under normal circumstances but these are hard times for all
retrenchment candidates and their families. The mental health of all
employees is important but there's a greater need and urgency to help the
employees whose services the company no longer requires.
Thanks’
[48] While he was still expecting meaningful engagement with the Defendant, he
received a revised offer which was done unilaterally without his inputs. There
were also few advertised positions on the intranet which were not within his
qualifications as such he did not apply. None of the affected employees were
offered any position in order to avoid dismissals. On 22 October he received
the following email from Ms Roodman:
‘Good day Rudzani,
As per the email sent on Tuesday, the 20 th of October, please note that the
following revised voluntary package has been suggested after the Executive
Committee has taken into consideration the alternatives proposed by all
possibly affected. Please note that despite perhaps having accepted the prior
offer, this new offer will still be available to you for consideration:
1. The voluntary retrenchment package available to you is a lump-sum of
R348 831,26 and includes the following:
a. 3 Months' Salary - October, November and January additionally
b. 1 Months' Notice Pay
c. Severance pay to the value of 4 weeks which totals to R59 208,12.
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d. Leave pay to the value of 7,92 days which totals to R23 015,14.
Any negative leave balances will be absorbed by the company.
e. Remaining Data relief pay -out of 10 months (on the proviso that
you complied with the requirement)
f. The Laptop that you have been issued with by the company to the
value of R6 164.00. Please note that the awarding of the laptop
will necessitate the company to deduct Fringe Benefit Tax as
prescribed by legislation. Note that Fringe Benefit Tax is calculated
on the value of the benefit (as stipulated above) at the tax bracket
that you currently subscribe to. It will therefore be your choice as
to whether you would like to accept the laptop and the associated
Fringe Benefit tax or not. In considering the pac kage, please
indicate this so that we can take this into account when projecting
a settlement.
2. Kindly note that the date of acceptance of such voluntary package is
the 23rd of October. Thereafter the package will no longer be
available as an alternative to retrenchment.
3. Kindly note that Mr. Arend Posthuma, the retrenchment facilitator, will
be sharing comments on other alternatives raised with you.
If you have any further questions in this regard, please do not hesitate to
contact me. All additional questions will be addressed in the following
consultation.
Kind regards
Anneke Roodman | Head of Human Resources’
[49] He did not accept the revised offer as he was still of the view that the process
will run until 05 December 2020 and the Employer was still considering other
alternatives seeing that the business was in a good financial position.
[50] On 28 October 2020, all employees were expecting to receive their salaries
but this did not happen. He was never informed that his October salary was
bundled into the package and he was not prepared to accept the
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retrenchment notice and waive his claims against the company as he did not
agree that his position had become dormant and the process followed was
fair. He then wrote the following email to Ms Roodman, Finance, EXCO, and
Mr Posthuma:
‘Hi Anneke
Thank you for the kind words. My salary for October was not paid, why? I did
render my services for October and duly deserve to get paid. Tell me how is
this fair.
Please explain what constitutes a ‘substantively fair’ retrenchment process. I
did not particularly experience the fairness you are referring to so I cannot
vouch for what I did not feel.
The reason I am accepting the offer is the understanding that my services are
no longer needed by the company. If you are sure that everything was done
by the book then you do not require this clause, your process should speak
for itself.
You promised to send minutes of a meeting that was held on Monday, 19
October but I am yet to receive the minutes. I couldn’t access the recording of
the first group consultation, Arend please assist.
Please remove this clause so I can sign
TERMINATION OF EMPLOYMENT
‘1. That the employee’s services are terminated as a result of the
operationa; requirements (retrenchment) of the company.
2. That the position of Product Manager has become redundant in the
structure of the company and that the position therefore ceases to
exist.
3. That the employee’s employment in the capacity of Product Manager
terminates with immediate effect and that his/her last working day will
be 30/10/2020.
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4. That the employee specifically agrees with his or her signature on this
document that his/her termination of employment is substantively fair
and that the employee agrees that he/she has no claims of any nature
against the company’.
[51] In response to his email , Mr Posthuma indicated that they will consider
withdrawing the voluntary severance package offered to him in light of the fact
that he did not wish to sign the notice presented by employer but no clause
shall be removed. He stressed that the Employer would not be paying
severance package and still be faced with legal action by aggrieved
employees. He further offered to restart the consultation sessions to ensure
that the process is both procedurally and substantively fair.
[52] He indicated that the package was never withdrawn as suggested by Mr
Posthuma. The Defendant refused to engage meaningfully and disclose the
selection criteria followed and information any alternative measures to avoid
dismissals. Mr Posthuma and Ms Roodman had informed him that he could
only be paid once he has signed the notice. He inserted the words ‘signed
under protest in relation to termination of employment clause number 4’ on his
retrenchment notice and he received his package on the same day.
[53] Under cross examination he confirmed that he knew who Mr Posthuma was
and he understood the retrenchment process since he had been retrenched
before. He was also asked if he knew that the Labour Court did not have
jurisdiction to determine the procedural fairness of a section 189A process
and he answered in the negative. He further stated that he was only consulted
once and thereafter he was offered a severance package. He was referred to
an email on page 27 dated 14 October 2020 which reads as follows:
‘Good morning Arend
Thanks for the feedback. I’ll accept the voluntary retrenchment offer.
Do I really have to leave with immediate effect? I took three days leave from
19 to 21 October 2020 – system approved but not taken yet. What happenes
19 to 21 October 2020 – system approved but not taken yet. What happenes
to those three leave days if I leave the company with immediate effect?
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Please advise
Kind regards’
[54] He, however, stated that he did not have sufficient time to consider the offer.
he further denied that the revised offer included an additional month as it
included his salary for the month of October 2020. He further confirmed that
he did receive an amount of R348 831.26 but reiterated that he signed under
duress and he recorded his protest on the signed retrenchment notice. It was
further put to him that he was consulted and the process needed not to
continue for a full period of 60 days due to the parties reaching an agreement.
[55] He, however, stressed that it was made clear that if they do not sign the
retrenchment agreements they will not be paid since their October salaries
which were bundled into the voluntary severance packages. He referred to the
following email exchange on 28 October 2020 between herself and Ms
Roodman:
‘Hi Rudzani
Unfortunately policy is written for the many and not for the few and it is for
those reasons that we have to have some regulations within our organisation.
At this point, Finance is happy to make payments today, with the condition
that a signed agreement by both parties are in hand…
…’
A few minutes later he responded as follows:
‘Hi Anneke
I do understand. I am asking questions so I walk away knowing that the
process was fully transparent. So if I sign the retrenchment notice today, my
October salary will be paid today?
Thanks
He then signed the agreement but omitted the attachment in his email . Ms
Roodman then responded by stating:
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‘Hi Rudzani
I would love to release the payments. Can you please resend soonest.’
[56] He also referred to an email correspondence which confirmed that the
Defendant was not prepared to pay their October salaries unless they signed
and submitted retrenchment notices. This was supported by an email from
Nimee Dhuloo at 13: 37 with the subject line ‘ Processing of Voluntary
Retrenchment packages’ which read as follows:
‘Dear All
I trust that everyone is doing well
Kindly be advised that HR is awaiting some of the signed agreements in order
to release your respective payments. In the absence of a signed agreement,
we will unfortunately not be able to make your payments.
Please prioritize this so that you do not compromise your payment which is
scheduled as per the normal pay date the 28' October.
Thank you Best Regards
Nimee’
At 01h47 she sent a follow up email which read:
‘Dear All
Finance has just alerted me to the fact that the agreements need to be in by
the latest 3 pm in order to meet the payments date of the 28th.
Thank you
Regards
Nimee’
[57] The Plaintiffs then closed their case without calling other witnesses. The
Parties were directed to file closing submissions and I am indebted to both of
them for their compliance with the directive.
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Evaluation
[58] Section 189 (3) of the LRA deals with dismissals based on operational
requirements and provides that:
‘the employer must issue a written notice inviting the other consulting party to
consult with it and disclose in writing all relevant information, including, but
not limited to:
(a) the reasons for the proposed dismissals;
(b) the alternatives that the employer considered before proposing the
dismissals, and the reasons for rejecting each of those alternatives;
(c) the number of employees likely to be affected and the job categories
in which they are employed;
(d) the proposed method for selecting which employees to dismiss;
(e) the time when, or the period during which, the dismissals are likely to
take effect;
(f) the severance pay proposed;
(g) any assistance that the employer proposes to offer to the employees
likely to be dismissed;
(h) the possibility of the future re-employment of the employees who are
dismissed;
(i) the number of employees employed by the employer; and
(j) the number of employees that the employer has dismissed for reasons
based on its operational requirements in the preceding 12 months.’
[59] Section 213 of the LRA provides that ‘ operational requirements ’ means
requirements based on the economic, technological, structural or similar
needs of an employer. The retrenchment notices issued by the Defendant and
signed by the Plaintiffs clearly records that ‘ the employee’s services are
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terminated as a result of the operational requirements (retrenchment) of the
company.’
[60] Based on the case presented before Court, the central issues for
determination are whether the Defendant established a fair and rational basis
for the retrenchments, whether it complied with its obligations to meaningfully
consult on alternatives to dismissal, and whether it applied the fair selection
criteria when selecting employees for dismissal.
The consultation and rationale for dismissal
[61] Section 189(2)(a)(i) of the LRA requires the employer and affected employees
to engage in a meaningful, joint consensus-seeking process and to attempt to
reach agreement on measures to avoid dismissal. Central to this obligation is
a genuine consideration of alternatives to retrenchment, including the
placement of affected employees into suitable existing positions where such
positions are available.
[62] In Super Group Supply Chain Partners v Dlamini and Another
4 (Super Group),
the LAC reiterated that section 189 imposes a positive duty on employers not
merely to consult, but also to take appropriate measures on their own initiative
to avoid dismissals or to mitigate their effects. Consultation is therefore not a
passive exercise, but one that requires an employer to actively engage with
and, where reasonably possible, implement alternatives to retrenchment.
[63] In Kotze v Rebel Discount Liquor Group (Pty) Ltd5, the LAC held that:
‘The failure to consult the appellant on known alternatives does not affect or
detract from the existence of a valid or genuine commercial rationale for
retrenchment. It only affects his selection. The selection of an employee for
retrenchment does not only impact on the procedural purpose of consultation
but also on its substantive purpose. This is so because failure to consult on
known alternatives leaves open a possibility that the affected employee might,
contrary to the employer's belief, have accepted the undisclosed alternative to
contrary to the employer's belief, have accepted the undisclosed alternative to
his or her retrenchment. If he or she would have, then it follows that he or she
4 [2012] ZALAC 25; (2013) 34 ILJ 108 (LAC) at para 24.
5 [1999] ZALAC 25; (2000) 21 ILJ 129 (LAC) at para 37.
22
would not have been retrenched and the decision to retrench him or her
would therefore be both procedurally and substantively unfair notwithstanding
the existence of a genuine business rationale therefor.’
[64] In this case, the only alternative given to Plaintiffs according to the evidence
of the Defendant was the voluntary severance package. Plaintiffs complained
about not being consulted and the Defendant’s defence is that there was no
need to engage in further consultations since the voluntary severance
packages were already accepted. This is contrary to the evidence of the
Plaintiffs supported by email correspondence that they were coerced into
signing retrenchment notices since their October salaries were not paid and
there was no intention to release such salaries unless the agreements had
been signed and submitted before 15h00 on 28 October 2020 which was the
day they ought to have received their salaries.
Alternatives and selection criteria
[65] It was not disputed that none of the dismissed employees were offered
alternative positions. Instead, the Defendant availed seven positions and
advertised them at higher qualifications to exclude the Plaintiffs. This
requirement that affected employees ought to have reapplied for positions
which were in essence introduced to phase out their positions does not
amount to an alternative to dismissal. It was an attempt by Defendant to
initiate a fresh recruitment process with a clear target to get rid of t he majority
of the affected employees.
[66] In the event that dismissals cannot be avoided, section 189(2)(b) of the LRA
requires the parties to engage meaningfully and, where possible, reach
agreement on the criteria to be applied in selecting employees for
retrenchment. In the absence of agreement, the employer must apply a fair
and objective selection criteria. In this matter, the Defendant refused to
disclose the selection criteria followed in retrenching the Plaintiffs. The section
189(3) notice clearly states that:
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‘The selection criteria that the company proposes to implement to determine
who are candidates for possible retrenchments will be skills and
qualifications.’
[67] In Chemical Workers Industrial Union and others v Latex Surgical Products
(Pty) Ltd6, the LAC said that:
‘Section 189(7) makes provision for what happens at the end of the
process of consultation. Where attempts at finding measures that
would avoid the dismissal of employees have failed, the end of the
consultation process is the selection of the employees to be dismissed
and then, finally, the dismissal. With regard to what selection criteria an
employer must use when selecting employees to be dismissed,
counsel for the appellants submitted that, where the employer and the
union have not agreed upon the selection criteria, the employer is
obliged in terms of s 189(7) (b) to use fair and objective selection
criteria. I agree. Section 189(7) of the Act contemplates two types of
selection criteria that may be used in the selection of employees to be
dismissed. The one type is provided for in s 189(7)(a) and the other in
s 189(7)(b)…’
[68] In Umicore Catalyst SA (Pty) Ltd v National Union of Metalworkers of SA on
behalf of Members
7, the LAC reaffirmed that the onus rests on the employer
to establish that the selection of employees for dismissal was fair. While
criteria such as length of service, skills and qualifications are generally
accepted as fair, deviations from commonly-accepted standards such as LIFO
must be justified and supported by evidence demonstrating their necessity for
the effective operation of the business.
[69] The evidence presented before this Court supports the case of the Plaintiffs
that they were pushed out of work and there was no meaningful consensus -
seeking engagement between them and their employer. The Defendant’s
reliance on signed notices of termination is misplaced as the notices were
merely signed to cater for the termination arrangements. All that the
merely signed to cater for the termination arrangements. All that the
6 (2006) 27 ILJ 292 (LAC) at para 84.
7 (2024) 45 ILJ 2545 (LAC) at para 19.
24
Defendant sought to achieve with the signed notices of termination was to try
to undermine the Plaintiffs’ rights to fair labour practices. The notice itself
records that it is meant as a statutory notice of termination of employment and
not a settlement or mutual separation agreement.
[70] The other issue of concern is that the Plaintiffs had worked for the month of
October 2020 but they were not paid their salaries at the end of the month.
various correspondence has been quoted above demonstrating that the
Defendant pushed the Plaintiffs out of work by withholding their salaries and
bundling them into the severance payments. All employees had raised the
same issues of non- payment of their salaries and it was clear that the only
way they could be paid their salaries was if they signed and submitted the
retrenchment notices and there were no other alternatives.
Conclusion and remedy
[71] The Defendant failed to establish a fair and rational basis for the
retrenchments in that it did not demonstrate that the Covid- 19 pandemic had
affected its operations and there was a need to retrench employees and re-
advertise some of the positions on higher qualifications. The witness testified
that the seven employees who rejected the voluntary severance packages
were absorbed into the vacant positions which were never offered to the
Plaintiffs.
[72] Furthermore, t he section 189(3) notice issued by the Defendant failed to
disclose the alternatives considered prior to the decision to retrench and the
criteria to be followed. The process was also not allowed to run for a period of
sixty days but it was cut short in order to force the Plaintiffs to sign
retrenchment notices. The effect of the failures to establish a valid rationale
and/or meaningful consideration of alternatives and/or application of fair
selection criteria inevitably leads to the conclusion that the Pl aintiffs’
dismissals were substantively unfair.
dismissals were substantively unfair.
[73] The Plaintiffs sought maximum compensation in the event that the Court finds
in their favour. Section 194 of the LRA governs the award of compensation for
substantively unfair dismissals and requires that such compensation be just
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and equitable, subject to the statutory maximum of twelve months’
remuneration. The Defendant has indicated that the license to operate the
National Lottery was awarded to another company and this creates doubt as
to whether it will be in a position to satisfy an award of maximum
compensation. However, I have taken into account the fact that they did not
pay the employees their salaries for the month of October although they had
rendered their services and the manner in which dismissals were effected was
harsh and unfair.
[74] Having regard to the nature of the dispute, including the gruesome and unfair
manner in which the retrenchment process was conducted and the impact on
the plaintiffs, I am of the view that an award of compensation equivalent to
eight months’ remuneration for each plaintiff is just and equitable.
Costs
[75] Costs in the Labour Court are regulated in terms of section 162(1) of the LRA ,
which provides that the Labour Court may make an order for the payment of
costs, according to the requirements of the law and fairness. Although the
Plaintiff was greatly failed by the poor legal strategy employed by her counsel,
this did not demonstrate any conduct warranting chastity from this Court. As a
general proposition and considering the dictates of fairness, the Court sees no
legitimate reason to depart from the general principle that costs do not follow
the result in employment disputes.
[76] Accordingly, the following order is made:
Order
1. The dismissal of the Plaintiffs is declared to be procedurally and
substantively unfair.
2. The defendant is ordered to pay each of the six plaintiffs compensation
equal to eight (8) months’ remuneration, calculated at the rate
applicable at the time of their dismissal.
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3. The compensation referred to above must be paid within 15 court days
of receipt of this judgment and order.
4. There is no order as to costs.
_______________________
G. C. Phakedi
Acting Judge of the Labour Court of South Africa
27
Appearances:
For the Plaintiff: Adv N Tshisevhe
Instructed by: Thabethe FF Attorneys
For the Defendant: A Posthuma of Snyman Attorneys