About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Cape Town Labour Court, Cape Town
You are here:
SAFLII
>>
Databases
>>
South Africa: Cape Town Labour Court, Cape Town
>>
2026
>>
[2026] ZALCCT 95
|
Noteup
|
LawCite
Ndengane and Others v Unitrans Supply Chain Solutions (Pty) Ltd (C586/2022; C10/2023; C09/2023) [2026] ZALCCT 95 (19 June 2026)
Download original files
PDF format
RTF format
THE
LABOUR COURT OF SOUTH AFRICA,
HELD
AT CAPE TOWN
Case
No’s: C586/2022, C10/2023 & C09/2023
Not
reportable
In
the matter between:
MTWU
obo NDENGANE & OTHERS
Plaintiff
and
UNITRANS
SUPPLY CHAIN
SOLUTIONS
(PTY) LTD
Defendant
Date
of Hearing:
10-11 February 2025, 25-26 November 2025 &
27 January 2026
(Written
closing argument submitted by 6 February 2026).
Date
of Judgment:
22 June 2026
This judgment was handed
down electronically by circulation to the parties’ legal
representatives by email, publication on
the Labour Court website and
release to SAFLII. The date and time for handing down judgment is
deemed to be 10h00 on 19 June 2026.
Summary:
(Dismissals for operational
requirements – rationale based on renewal of a contract on
reduced terms – employees refusing
to accept reduced
remuneration – retrenchments substantively fair –
Procedure – employer’s failure to provide
requested
information about the company’s overall financial position not
unfair – requested information not relevant
to the operational
reasons relied on).
JUDGMENT
LESLIE
AJ
Introduction
[1]
In this matter, three cases were consolidated for hearing. They
concern the fairness of the dismissals, for operational
reasons, of
the plaintiff’s members.
[2]
The plaintiff is the Motor Transport Workers Union (“MTWU”
or “the union”).
[3]
Under case
number C586/2022, thirteen employees are cited, namely:
[1]
Mafanga MS, Fortuin C, Makuleni X, Jacobs H, Hendricks MC, Ross EA,
Johnson J, Pietersen D, Cloete J, Louw J, Smit R, Welkom CM
and
Ntengane KO.
[4]
Under case number C10/2023, two employees are cited, namely Messrs
Erasmus and Mark. Under case number C09/2023, Mr Jaxa
is the employee
party cited.
Special
pleas
[5]
The defendant raised special pleas disputing jurisdiction in respect
of certain employees.
[6]
As regards Mr Pietersen, the defendant disputed the existence of a
dismissal. Mr Chonco, the defendant’s Head
of Human
Capital, testified that Mr Pietersen was not dismissed. On 29
June 2022, he was informed, in writing, that with
effect from 1
August 2022 his Health & Safety (HSE) allowance would be reduced
from R400 to R150 per shift. He was offered
a “settlement
package” in recognition of this change, which Mr Pietersen
accepted. He thereafter resigned on
22 August 2022. He
signed a document confirming that the reason for the termination of
his employment was “Resignation”.
The plaintiff,
which bore the onus of establishing that Mr Pietersen was dismissed,
led no evidence to gainsay the defendant’s
version.
[7]
Since the plaintiff failed to establish that Mr Pietersen was
dismissed, the defendant’s special plea falls to be
upheld, for
want of jurisdiction.
[8]
As regards
Messrs Mafanga and Ndengane, the defendant similarly reduced their
HSE allowances with effect from 1 August 2022 and
they were paid a
“settlement package”. The union, acting on behalf
of a group of employees including Messrs Mafanga
and Ndengane,
referred a dispute to the applicable bargaining council
[2]
regarding an alleged unilateral change to their terms and conditions
of employment. A written settlement agreement resolved
that
dispute on 5 September 2022. In terms of the settlement
agreement, the defendant agreed to restore the HSE allowances.
However, the defendant then proceeded with a retrenchment process in
respect of that group of employees.
[9]
For present purposes, it is clear that Messrs Mafanga and Ndengane
were not dismissed by 26 July 2022 – the date
on which the
unfair dismissal dispute was referred to conciliation before the
NBCRFI. This court accordingly does not have jurisdiction
over the
unfair dismissal disputes in respect of Messrs Mafanga and Ndengane.
[10]
The defendant raised a separate special plea in respect of the
following employees: Messrs Fortuin, Makuleni, Jacobs,
Ross, Johnson,
Welkom, Erasmus, Mark and Jaxa. It is common cause that these
employees were retrenched with effect from 31
July 2022 and that they
received severance packages. With effect from 1 August 2022,
they were re-employed, albeit on changed
terms and conditions of
employment. The defendant submits that the employees’
conduct, in accepting re-employment,
meant that the unfair dismissal
dispute was settled.
[11]
Waiver of rights is not lightly presumed. Aside from the fact that
the employees accepted re-employment, there is no
evidence that they
waived their right to pursue an unfair dismissal dispute. The
defendant did not make it a condition of
re-employment that the
employees waive their rights to pursue an unfair dismissal claim.
Any such condition was certainly
not recorded in writing, and there
was no evidence that it was otherwise agreed between the parties.
The defendant
has not discharged its onus in this regard.
[12]
Accordingly, there remains a live unfair dismissal dispute in respect
of Messrs Fortuin, Makuleni, Jacobs, Ross, Johnson,
Welkom, Erasmus,
Mark, Jaxa, Hendricks, Cloete, Louw and Smit (13 in total)
(hereinafter referred to as “the employees”).
The
merits
Background
[13]
The defendant carries on business in the road freight industry. This
case concerns the transportation of petroleum
under contract with
Shell, rendered by the defendant. The employees were employed
as truck drivers based at the Shell Burgan
terminal, reporting to the
Unitrans Killarney Depot in Cape Town.
[14]
Mr Louis
Steyl, a General Manager in the defendant’s employ, testified
that the defendant had several existing contracts,
at depots around
the country, to transport petroleum for Shell, including the Burgan
contract. This was a five-year contract, expiring
at the end of
August 2021.
[3]
[15]
In or around May 2021, Shell put the contract out to tender. The
defendant was invited to bid in a “reverse auction”
process. This was essentially a live online auction in which a
bidder can see what prices have been submitted by competitors,
and
adjust its bid price accordingly. The auction takes place
within a matter of minutes.
[16]
In respect of the Burgan contract, the defendant’s opening bid
was R3,821 million and its final bid was R3,392
million. The latter
bid was the defendant’s “walk-away” price, that is,
the lowest it was prepared to go before
abandoning its interest in
the contract.
[17]
In order to arrive at its mid-price, the defendant had cut its
internal rate of return, maintenance costs and tyre cost
per
kilometre to a minimum. These cuts were, however, not sufficient and
the defendant had to resort to its minimum auction bid.
This
was based on labour costs at the bargaining council’s minimum
rates for all drivers. Mr Steyl was subsequently
required to
confirm, in response to enquiries from Shell, that the labour costs
were based on the NBCRFI’s minimum wage rates.
[18]
The defendant was not successful in retaining any of its existing
contracts with Shell, except for the Burgan contract.
The
defendant retained the Burgan contract despite having only the
fifth-lowest bid.
[19]
The defendant employed around 39 drivers and 5 or 6 administrative
staff in connection with the Burgan contract. Mr
Chonco was
tasked with determining how best to align labour costs with the new
contract terms.
[20]
Mr Chonco testified that there were two main categories of affected
drivers: (a) the group of drivers who were on a higher
rate of pay
than the bargaining council minimum; and (b) the group of drivers who
were on the bargaining council’s minimum
basic wage but who
received a higher HSE allowance (than the bargaining council
prescribed). As set out above, following
the determination of
the special pleas, this dispute primarily concerns the former group –
who were ultimately retrenched
with effect from 31 July 2022.
The
procedure followed
[21]
The defendant commenced discussions directly with the affected
employees in August 2021, explaining that the terms of
the Shell
contract had changed and proposing revised remuneration rates.
At a later follow-up session the affected employees
advised that they
were in the process of joining the union. Discussions were put
on hold so that the defendant could meet
formally with the union.
[22]
The first
meeting with the union was held on 7 October 2021. Management
explained the background and made a proposal that
would result in all
employees being placed on the bargaining council’s minimum
wage
[4]
and receiving a standard
HSE allowance of R200. The employees’ employment would continue
uninterrupted and they would retain
their length of service. To
cushion the blow, employees would receive a once-off payment of R1000
per completed year of service.
It was made clear, from the
defendant’s perspective, that this was not a section 189
consultation process as it did not envisage
retrenching any employees
at that stage.
[23]
The union requested further information in support of the need to
reduce salaries and requested time to consider the
proposal.
[24]
The next meeting was held on 11 January 2022. By that stage,
the union had advised management that their proposal
was not
acceptable to their members. No counter-proposal was tabled.
It was minuted that the anticipated request for
information had not
yet been received by management. Management indicated that a
section 189 consultation process would ensue.
[25]
On 25 January 2022, the defendant issued a notice in terms of section
189(3) of the Labour Relations Act 66 of 1995 (“the
LRA”),
spelling out the reasons for the envisaged retrenchments and
reiterating the offer of continued employment on the
bargaining
council’s minimum wage (together with a once-off payment as
described above).
[26]
The first section 189 consultation meeting was scheduled for 31
January 2022 but ultimately took place on 18 February
2022. Mr
Chonco read the section 189(3) letter and then called for any
questions with regards to the rationale, selection
criteria,
alternatives to avoid retrenchment and the date of implementation.
Mr Vukela, the union official present, stated
that the defendant
needed to prove its economic non-viability. To this end, the
union undertook to present a request for
specific financial
information, which would be reviewed by the union’s finance
experts before reverting. The union also raised,
in tentative terms,
LIFO as a potential selection criterion.
[27]
The union appointed a firm of accountants, Lamula & Lamola, to
engage with the defendant on the financial rationale
underpinning the
retrenchments. The accountants submitted a request for
information and subsequently met with members of
the defendant’s
management (Chonco, Steyl and Leneste Lubbe, Business Development
Manager) on 1 April 2022.
[28]
Mr Steyl
testified as to what took place at this meeting, which took the whole
day. The union did not call any witness who
was present at the
meeting.
[5]
Mr Steyl
identified the documentary information that was made available to the
accountants. The documents illustrated
the financial impact of
the revised terms of the Shell Burgan contract. For example, in
June 2021, the total monthly value
of the contract was R4.121
million. Following the implementation of the new contract
terms, it fell to R3.665 million (effective
from 1 September 2021).
In short, the accountants were placed in a position to assess
for themselves the adverse financial
impact of the new Shell contract
terms.
[29]
Mr Steyl confirmed that he explained to the accountants how the
bidding process had worked (i.e. the reverse auction)
and how the
defendant had ultimately arrived at its final “walk-away”
price – which included a reduction in maintenance
costs, the
internal rate of return and labour costs for operational staff and
drivers.
[30]
Following this meeting, the accountants produced a written report to
the union dated 11 April 2022. In that report,
it is noted that
certain information was requested from the defendant but had not been
provided. This included the company’s
latest management
accounts, its audited annual financial statements for the past two
years, and the company’s budget for
the current financial year
and reforecast.
[31]
Mr Steyl testified that he explained to the accountants that the
annual financial statements were at company level and
were available
to the public online. As regards the information relevant to
the Burgan contract, the accountants were provided
with the general
ledger up to February 2022. As regards the request for
management accounts, in respect of the Burgan contract
the available
general ledger and income statement were provided. Mr Steyl explained
that he did not have the latest management
accounts at company
level. Similarly, he did not have the overall company budget
and reforecast and so this could not be
provided.
[32]
Mr Steyl testified that the accountant appeared satisfied with the
information that had been provided, coupled with the
explanations as
to why certain information was not available, and did not raise any
objection during the meeting.
[33]
This is corroborated by a portion of the accountant’s report
which records that: “
Upon manual inspection of an Income
Statement, General Ledger printouts and Shell’s revised rate
cards which Louis Steyl shared
with us, together with management
selected bid documents that Leneste Lubbe projected on the day, we
are comfortable that management
responded to our questions which were
based on the documents tabled before us.”
[34]
Despite this, the report records that the defendant’s failure
to provide the requested documents (largely pertaining
to the
company’s overall financial state) “
adversely impacted
on our ability to make a conclusive analysis of the company’s
financial position.”
The report concluded that “
There
is not enough financial information which justify
(sic)
the
S.189 plans.”
Under the heading “Recommendation”,
it was stated that “
Retrenchments in terms of section 189
appear to be unjustified based on non-existent financial information
presented to MTWU auditors.”
[35]
A follow-up consultation meeting took place on 21 April 2022.
The accountants’ report was presented at this
meeting. On
the grounds that the requested information had not been provided to
the accountants, the union adopted the view
that: (a) the parties
were deadlocked; (b) it was unable to advance any alternatives to
retrenchment; and (c) that if the defendant
proceeded with the
retrenchments the union would take the dispute to court. The
defendant indicated that, effective 1 June
2022, the contracts would
be “restructured” – every driver would be employed
on the bargaining council’s
minimum rate, with an HSE of R150.
[36]
The defendant thereafter attempted to refer the matter to the CCMA
for facilitation. However, the CCMA required
the consent of the
union – which was not forthcoming. In an email dated 1 June
2022, the union confirmed with the CCMA that
it believed that “
this
process does not require facilitation”
.
[37]
The union also did not pursue any dispute concerning the defendant’s
alleged failure to disclose relevant information
under section 16 of
the LRA.
[38]
On 14 June 2022, the defendant addressed correspondence to the union,
indicating that in order to allow for further engagement,
it was
extending the proposed implementation date to 1 August 2022.
The defendant reiterated that it did not wish to retrench
any drivers
as their posts remained available – albeit on the reduced
salaries.
[39]
A final consultation meeting took place on 1 July 2022. The
defendant’s position was that, since no alternatives
had been
proposed by the union, the defendant’s proposal would be
implemented. The affected drivers would receive retrenchment
notices
with effect from 31 July 2022, as well as offers of employment on the
revised terms with effect from 1 August 2022.
The union
responded that it had not proposed any alternatives because the
defendant had not been transparent in providing the requested
financial information. It rejected the defendant’s decision to
restructure and retrench and indicated that it would be taking
legal
action.
[40]
The affected employees were thereafter issued with retrenchment
notices (dated 30 June 2022) with termination dates of
31 July 2022.
They received severance packages based on one week’s pay per
year of completed service. They were
simultaneously offered,
and accepted, new contracts of employment, with effect from 1 August
2022, on the revised terms and conditions.
Procedural
fairness
[41]
The union argues that the dismissals were procedurally unfair on the
basis that the consultation process was a sham –
the dismissals
were a fait accompli and the defendant presented no alternative to
the employees other than to accept the revised
terms. Related
to this, the union argues that it was unable to consult or propose
alternatives because its accountants’
request for financial
information had been denied.
[42]
It is clear that the union viewed the defendant’s failure to
provide the requested financial information to its
accountants as a
sticking point. The conclusions reached by the accountants in
their report informed the union’s subsequent
conduct in the
consultations. Without the requested documents, it adopted the
stance that it could not meaningfully engage
in the consultations or
propose any alternatives.
[43]
In this sense, the union put all its eggs in one basket. Whether
this was justified turns on whether it was provided
with sufficient
information to consult.
[44]
Section 189(3) of the LRA imposes a duty on an employer to disclose,
in writing, all relevant information (including
but not limited to
the information listed in subsections (a) to (j)). The question
in the present matter is whether the defendant
provided sufficient
relevant
information to enable the union to meaningfully
consult.
[45]
Relevance is determined with reference to the operational rationale
underpinning the restructuring exercise.
[46]
Applied here, the stated reason for the retrenchments was that the
defendant could not operate the Shell Burgan contract
profitably
without reducing the remuneration of the affected employees.
[47]
In my view, the defendant provided more than sufficient information
to justify this rationale. The union’s
accountants were
placed in a position where they could assess: (a) that the defendant
had resorted to tendering at reduced remuneration
costs as a last
resort, only after cutting other operational costs; and (b) the
impact of the revised contract terms, namely, the
reduced income
received by the defendant under the Shell Burgan contract.
[48]
The
accountants’ report stated that three items had been requested
but had not been received. Mr Steyl’s uncontested
evidence
[6]
in this regard was
that:
48.1 The defendant’s
annual financial statements were at company level and were available
to the public online, and this had
been explained to the accountants;
48.2 As regards the
request for company-level management accounts, these were not
available, but in respect of the Burgan contract
the available
general ledger and income statement had been provided;
48.3 Mr Steyl also did
not have the overall company budget and “reforecast”
which had been requested.
[49]
In short, the existing information regarding company-level finances
had been made available, in addition to all relevant
information
pertaining to the stated reason for the retrenchments, i.e. the
reduced economic terms of the Shell Burgan contract.
[50]
In any event, given that the defendant did not rely on its overall
financial state as a reason for retrenching the affected
employees,
the requested information pertaining to the company’s finances
was not required for the union to meaningfully
engage on the question
at hand.
[51]
When pressed in cross-examination why he regarded the information
that had been provided as insufficient, Mr Vukela was
unable to
answer. He merely stated that the union was guided by the
accountants (who were not called to give evidence).
[52]
Consultation is a two-way street. If the union felt hamstrung
in its ability to meaningfully consult, it had remedies
available to
it. It could have pursued a section 16 application before the
CCMA. Alternatively, it could have taken
up the defendant’s
invitation to engage in a facilitated process under the auspices of
the CCMA. It did neither.
[53]
Ultimately,
the union had more than sufficient information to consult on the
stated rationale for the retrenchments. In these
circumstances,
the union’s failure to engage or advance any alternatives
[7]
belies its argument that the defendant conducted a sham process.
[54]
The defendant was entitled to take a view on the impact of the
reduced terms of the Shell contract and the need for retrenchments.
The only option it could envisage to save jobs was the one it tabled,
namely, the continuation of the drivers’ employment
on reduced
remuneration rates. In the absence of any alternatives proposed
by the union, the defendant was not obliged to
propose additional
alternatives from its side. Its failure to do so does not mean
that the consultation process was a sham
or that the dismissals were
a fait accompli.
[55]
I accordingly conclude that there is no merit to the union’s
complaint of procedural unfairness. The dismissals
were
procedurally fair.
Substantive
fairness
[56]
The crux of the union’s argument on substantive fairness is
that the reduced terms of the Shell Burgan contract
was not a fair
reason to retrench the affected employees, in the absence of proof of
the defendant’s overall financial position.
In other
words, the union’s position is that the defendant was only
permitted to retrench if it could show, at company level,
that it was
in financial difficulty.
[57]
The defendant, on the other hand, did not rely on the company’s
overall financial state to justify the retrenchments.
Its case
was that it could not profitably operate the Shell Burgan contract if
the affected employees remained on their existing
salaries.
[58]
The defendant presented evidence showing that, in order to succeed in
retaining the Shell Burgan contract through the
reverse auction
process, it had been required to reduce all operating costs
associated with the contract. As a last resort,
its “walk-away”
price had required it to reduce drivers’ salaries and HSE
allowances. Mr Steyl testified
that, due to the substantial
drop in the contract price, it was not viable for the business to
continue operating the Shell Burgan
contract on the terms that had
previously pertained. He stated that, if the defendant had
continued on the old terms, the
contract would have been shut down
because it would have been unprofitable – in which case all of
the employees engaged on
the Shell Burgan contract would have lost
their jobs. The union was not in a position to refute this evidence,
which must accordingly
be accepted.
[59]
Substantive fairness therefore turns on this crisp issue – was
it competent for the defendant to rely on the viability
or
profitability of the Shell Burgan contract alone, as opposed to the
overall financial health of the company, to justify the
retrenchments?
[60]
It is
well-established that employers are entitled to reduce staff for a
variety of reasons, including pursuing what they consider
to be a
better cost structure.
[8]
Retrenchments are not only justified when they are necessary to
ensure the survival of a business. A profit-making business may
retrench in order to make greater profits.
[61]
Applied here, the evidence established that, following the renewal of
the Shell Burgan contract on lesser terms, it was
no longer viable or
profitable for the defendant to operate that contract on the same
basis as before. The defendant had
been constrained to bid
allowing for labour costs at the bargaining council’s minimum
rates. It had lost several other
Shell contracts and had not
succeeded in its bids for additional Shell contracts at new sites.
[62]
Having shown this, it was not necessary for the defendant to go
further and also establish that the company as a whole
was in
financial difficulty. An employer is not required to operate a
specific contract at a loss, even if it is otherwise
solvent, in
order to retain jobs. The employees selected for retrenchment
were those earning salaries above the bargaining
council minimum
rates of pay. In my view this was a rational and fair approach
that was tailored to the specific operational
reasons relied on by
the defendant.
[63]
I accordingly find that the dismissals were substantively fair.
[64]
As regards
costs, I am mindful that costs do not necessarily follow the result
in this court and that a fair balance must be struck
between not
unduly discouraging litigants from approaching this court, on the one
hand, and preventing vexatious and frivolous
litigation, on the
other.
[9]
The litigation
brought by the union, although unsuccessful, was not frivolous or
vexatious. There is an ongoing relationship
between the union and the
defendant. I therefore decline to award costs against the
union.
[65]
In the premises, the following order is made:
Order
[1] The defendant’s
special plea in respect of Messrs Pietersen, Mafanga and Ndengane is
upheld. The court does
not have jurisdiction in respect of
their alleged unfair dismissal claims;
[2] The defendant’s
special plea in respect Messrs Fortuin, Makuleni, Jacobs, Ross,
Johnson, Welkom, Erasmus, Mark and
Jaxa is dismissed. The court
does have jurisdiction in respect of their unfair dismissal claims;
[3] The unfair
dismissal claims under the above case numbers are dismissed;
[4] The dismissals
of Messrs Fortuin, Makuleni, Jacobs, Ross, Johnson, Welkom, Erasmus,
Mark, Jaxa, Hendricks, Cloete, Louw
and Smit were substantively and
procedurally fair;
[5] There is no
order as to costs.
Leslie
AJ
Acting
Judge of the Labour Court of South Africa
Representatives
–
For
the plaintiff
:
L Mosala,
instructed by Matlatle Attorneys
For
the defendant:
G M Viljoen,
instructed by Thomson Wilks
[1]
There were 14 employees cited but the name of J Johnson was
duplicated.
[2]
The National Bargaining Council for the Road Freight Industry
(“NBCRFI” or “the bargaining council”).
[3]
The contract had been due to end in June 2021, but had been extended
on a month-to-month basis until the end of August 2021.
[4]
R66.2973.
[5]
No union official attended the meeting.
[6]
Bearing
in mind that no union official attended the meeting on 1 April 2022
and that the accountants were not called to testify
at the trial.
[7]
There is a reference to LIFO being touted by the union as an
alternative selection criteria in the minutes of the consultation
meeting held on 18 February 2022. However, read in context it
is clear that this was not seriously persisted with by the
union.
The union’s position was that it was unable to propose any
alternatives until such time as it had been furnished
with the
requested financial information. In the same meeting, Mr Chonco
stated that if the union regarded the selection criteria
as unfair,
they needed to propose alternatives. This invitation was not
taken up in any subsequent meeting or item of correspondence.
[8]
See
General
Food Industries Ltd v FAWU
[2004] 7 BLLR 667
(LAC) paras 52 and 62, citing
NUMSA
v Fry’s Metals
[2003] 2 BLLR 140 (LAC).
[9]
Zungu v
Premier of the Province of KwaZulu-Natal
(2018)
39 ILJ 523 (CC) para 24.