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[2018] ZACC 44
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South African Commercial, Catering and Allied Workers Union and Others v Woolworths (Pty) Limited (CCT275/17) [2018] ZACC 44; (2019) 40 ILJ 87 (CC) ; 2019 (3) BCLR 412 (CC); [2019] 4 BLLR 323 (CC); 2019 (3) SA 362 (CC) (6 November 2018)
Links to summary
Heads of arguments
CONSTITUTIONAL
COURT OF SOUTH AFRICA
Case CCT
275/17
In the matter
between:
SOUTH AFRICAN
COMMERCIAL, CATERING
AND ALLIED
WORKERS
UNION
First
Applicant
C MOENG AND
OTHERS
Second
and Further Applicants
and
WOOLWORTHS (PTY)
LIMITED
Respondent
Neutral citation:
South African Commercial, Catering and Allied Workers Union and
Others
v Woolworths (Pty) Limited
[2018] ZACC 44
Coram:
Zondo
DCJ, Cachalia AJ, Dlodlo AJ, Froneman J, Goliath AJ, Jafta J,
Khampepe J, Madlanga J, Petse AJ and Theron J.
Judgment:
Khampepe J (unanimous)
Heard on:
29
May 2018
Decided on:
6
November 2018
Summary:
Labour
Relations Act — section 189A(19) — retrenchment —
dismissal for operational requirements
Substantive
unfairness — operationally justifiable — consideration of
alternatives — reinstatement remedy
ORDER
On appeal from the
Labour Appeal Court:
1. Condonation is granted for the late filing of the application for
leave to appeal.
2. Leave to appeal is granted.
3. The applicants’ appeal is upheld.
4. Paragraph 2 of the order of the Labour Appeal Court is set aside
and replaced with the following:
“4.1
The appeal is dismissed.
4.2
There is no order as to costs.”
5. The respondent’s conditional cross-appeal is dismissed.
6. No order as to costs is made in relation to the proceedings in
this Court.
JUDGMENT
KHAMPEPE J
(Zondo DCJ, Cachalia AJ, Dlodlo AJ, Froneman J, Goliath AJ, Jafta J,
Madlanga J, Petse AJ and Theron J concurring):
Introduction
[1]
The right to fair
labour practices, whilst incapable of a precise definition,
encompasses the right to security of employment and
specifically the
right not to be dismissed unfairly.
[1]
[2]
The concept of unfair
dismissals is regulated by Chapter VIII of the
the
Labour Relations Act
[2]
(LRA)
, which gives effect to
the recognition by our law that an employer has a right to dismiss an
employee based on, inter alia, misconduct,
incapacity or operational
requirements. However, over and above the circumstances in
terms of which an employer may dismiss
an employee for substantively
fair reasons, an employer is nevertheless required to prove that the
dismissal was procedurally fair.
It is thus imperative that not
only should an employer be able to prove that the dismissal was for a
fair reason, but that the
procedure adopted was fair.
[3]
This is an application for leave to appeal against the
judgment and order handed down by the Labour Appeal Court on 19
September
2017. The Labour Appeal Court upheld the appeal
from the Labour Court in part and dismissed it in part. The
Labour
Appeal Court dismissed the claim in respect of alleged unfair
procedure but upheld the claim that the dismissal was substantively
unfair. The Labour Appeal Court also ordered that an amount
equal to 12 months’ remuneration should be paid rather
than
reinstatement (as was ordered by the Labour Court).
[4]
The applicants seek to challenge the Labour Appeal Court’s
substitution of the 12 months’ remuneration compensation
award for reinstatement, and the Labour Appeal Court’s
dismissal of the claim for relief based on procedural unfairness.
They further seek an order confirming the Labour Court and
Labour Appeal Court’s finding that the dismissals were
substantively
unfair, as well as the Labour Court’s finding
that the dismissals were procedurally unfair.
[5]
The respondent has brought a conditional counter-application
for leave to appeal. Only if the applicants were to succeed in
their application for leave to appeal, the respondent seeks leave to
cross-appeal those parts of the Labour Appeal Court’s
decision
and orders which went against it.
Parties
[6]
The first applicant is the South African Commercial, Catering
and Allied Workers Union (SACCAWU), a trade union registered in terms
of section 96 of the LRA. SACCAWU brings this application in
its own name and in its representative capacity as the trade
union to
which the second to further applicants belong.
[7]
The second to further applicants are all members of SACCAWU,
who until about 4 November 2012, were employees of the respondent.
[8]
The respondent is Woolworths (Pty) Limited (Woolworths), a
company with limited liability registered in terms of the company
laws
of the Republic of South Africa. Woolworths is a
well-known South African retail store.
Factual
Background
[9]
Until 2002, Woolworths employed its
employees on a full-time basis. These employees (full-timers)
worked fixed hours totalling
45 hours per week. In 2002,
Woolworths decided that in future it would only employ workers on a
flexible working hour basis.
These workers (flexi-timers) would
work 40 hours per week.
[10]
By 2012, Woolworths’ workforce consisted of 16 400
flexi-timers and 590 full timers. Full-timers earned
superior
wage rates and enjoyed better benefits. The
remuneration package of some full-timers exceeded the wages and
benefits applicable
to flexi-timers by 50%. Full-timers and
flexi-timers did the same work.
[11]
Woolworths decided that, in keeping with current market
trends, it needed to operate with an entire workforce consisting of
flexi-timers.
It decided to convert the full-timers to
flexi-timers on the terms and conditions of employment applicable to
flexi-timers.
In order to do this, Woolworths first invited
full-timers to voluntarily become flexi-timers during a period from 4
August 2012
to 4 September 2012.
[3]
It did not invite the union to participate in this phase.
Certain inducements were offered to the full-timers for the
conversion. All of the full-timers save for 177 employees opted
for early retirement, voluntary severance or agreed to become
flexi-timers. Woolworths then progressed to the second phase in
accordance with section 189A of the LRA,
[4]
during which 85 out of the 177 full-timers accepted one of the
voluntary options. Eventually, only 92 of them were retrenched,
44 of whom are the second and further applicants.
[5]
[12]
As Woolworths employed more employees than the threshold
specified in section 189A(1) of the LRA,
[6]
it was obliged to follow the process specified by the section to
effect the retrenchments. Woolworths gave the prescribed
notice
of termination of employment in terms of section 189(3)
[7]
as regards the remaining 177 full-timers. It also engaged
in a consultation process including one facilitated by the
Commission
for Conciliation, Mediation and Arbitration (CCMA) in terms of
section 189A(3) of the LRA. SACCAWU represented
some of
its members who were full-timers. SACCAWU was entitled in terms
of section 189A(2)(b)
[8]
to strike on the issue, but did not.
[13]
During the course of consultation, two things happened.
Firstly, 85 of the full timers accepted the voluntary option;
leaving 92 full-timers who opposed conversion and did not accept any
of the voluntary options. Secondly, SACCAWU and 44 of
its
members appreciated the need to work flexi-time and accepted that
full-timers should be converted to flexi-timers. SACCAWU
initially suggested that the full-timers retain their existing wages
and benefits and proposed that although these employees would
work 40
hours per week they would be paid for working 45 hours at their
full-time wage rates. Towards the end of the consultation
process, SACCAWU varied its stance. It proposed that the
workers would work flexi-time for 40 hours and be paid only for
those
hours but at their full-time wage rates (which meant an 11% reduction
in wages for full-timers who became flexi-timers).
Woolworths
did not understand this to be a different proposal and rejected it.
[14]
Woolworths gave notice to terminate the contracts of
employment. It retrenched 92 full-timers. On 3 December
2012, SACCAWU,
on behalf of 44 of these full-timers, launched an
application in terms of section 189A(13)
[9]
of the LRA in the Labour Court. On 18 December 2012, in terms
of section 191(11)
[10]
of the LRA, it referred a dispute concerning whether there was a fair
reason for the dismissal to the Labour Court for adjudication.
[15]
SACCAWU applied for the consolidation of its unfair dismissal
claim and its application seeking redress for the procedural
unfairness
of the dismissal. This application was granted.
Litigation
history
Labour Court
[16]
The Labour Court upheld SACCAWU’s challenges that the
dismissals were both substantively and procedurally unfair.
Woolworths
was ordered to reinstate the 44 dismissed workers
retrospectively from the date of their dismissal. The Labour
Court also
ordered Woolworths to pay the applicants’ costs.
Application for leave to appeal in the Labour Court and Labour
Appeal Court
[17]
The Labour Court granted Woolworths
leave to appeal to the Labour Appeal Court. The
Labour Appeal Court upheld only
part of the Labour Court’s
conclusions and orders. The Labour Appeal Court confirmed the
Labour Court’s
conclusion that the dismissals were
substantively unfair, but changed the remedy from reinstatement to an
award of compensation
equal to 12 months’ remuneration. In
addition, the Labour Appeal Court set aside the Labour Court’s
relief
in relation to the claim based on procedural unfairness. No
order as to the costs of the appeal was made.
This Court
[18]
In this Court, the applicants seek
leave to appeal parts of the Labour Appeal Court’s
decision. Specifically, the
Labour Appeal Court’s
substitution of the 12 months remuneration compensation award
for reinstatement, and the Labour
Appeal Court’s dismissal of
the claim for relief based on procedural unfairness. The
applicants also seek an order
confirming the Labour Court and Labour
Appeal Court’s conclusion that the dismissals were
substantively unfair.
[19]
In respect of substantive unfairness, the applicants submit
that Woolworths failed to prove that the dismissal was for a fair
reason,
based on the employer’s operational requirements as
required by section 188(1)(a)(ii) of the LRA. In respect of
procedural
unfairness, the applicants argue that Woolworths has
failed to prove that the dismissal was effected in accordance with a
fair
procedure as required by section 188(1)(b) of the LRA. It
was further pleaded by the applicants, in the alternative,
that the
dismissals were automatically unfair in contravention of section 187
of the LRA. However, this challenge was
not pursued in the
Labour Court, the Labour Appeal Court or this Court.
[11]
Jurisdiction and leave to appeal
[20]
This matter engages this Court’s jurisdiction as it
raises important issues of interpretation and application of sections
of the LRA, which give content to the right to fair labour practices
as guaranteed by section 23(1) of the Constitution. There
are
also reasonable prospects of success and it is therefore in the
interests of justice that leave to appeal be granted.
Condonation
[21]
The delay in filing the application for leave to appeal was
only a few days and condonation was not opposed. There was also
no prejudice suffered as a result of the late filing of the
application.
It is therefore in the
interests of justice to grant condonation.
Issues for
determination
[22]
The following issues arise for consideration:
(a) The substantive unfairness of the dismissals;
(b) if the dismissals were not substantively unfair, the procedural
unfairness of the dismissals; and
(c) the appropriate remedy in the case that the dismissals are found
to be unfair.
Substantive unfairness
[23]
The retrenchment occurred in November 2012, at a time when
section 189A(19) applied.
[12]
The section provided that, in a dispute about the
substantive fairness of large-scale retrenchments, the Labour Court
must find that the employee was dismissed for a fair reason if—
“(a) the dismissal was to give effect to a requirement based on
the employer’s economic, technological, structural
or similar
needs;
(b) the dismissal is operationally justifiable on rational grounds;
(c) there was a proper consideration of alternatives; and
(d) selection criteria were fair and objective.”
[13]
[24]
It is trite that the onus of proving that the retrenchments
were substantively fair rests upon the employer, Woolworths.
[14]
[25]
The origins of the wording of section 189A(19) are found in
the Labour Appeal Court’s judgment in
Discreto
where Froneman DJP held:
“As far as retrenchment is concerned, fairness to the employer
is expressed by the recognition of the employer’s ultimate
competence to make a final decision on whether to retrench or not. .
. . For the employee fairness is found in the requirement
of
consultation prior to a final decision on retrenchment. This
requirement is essentially a formal or procedural one, but,
as is the
case in most requirements of this nature, it has a substantive
purpose. That purpose is to ensure that the ultimate
decision
on retrenchment is properly and genuinely justifiable by operational
requirements or, put another way, by a commercial
or business
rationale. The function of a court in scrutinising the
consultation process is not to second-guess the commercial
or
business efficacy of the employer’s ultimate decision (an issue
on which it is, generally, not qualified to pronounce
upon), but to
pass judgment on whether the ultimate decision arrived at was genuine
and not merely a sham (the kind of issue which
courts are called upon
to do in different settings, every day). The manner in which
the court adjudges the latter issue is
to enquire whether the legal
requirements for a proper consultation process has been followed and,
if so, whether the ultimate
decision arrived at by the employer is
operationally and commercially justifiable on rational grounds,
having regard to what emerged
from the consultation process. It
is important to note that when determining the rationality of the
employer’s ultimate
decision on retrenchment, it is not the
court’s function to decide whether it was the best decision
under the circumstances,
but only whether it was a rational
commercial or operational decision, properly taking into account what
emerged during the consultation
process.”
[15]
(Footnotes omitted.)
[26]
Section 189A(19) is considered to be a deeming clause
directing the Labour Court, in the case of large-scale
retrenchments,
to equate fairness with rationality.
[27]
However, in
Black Mountain Mining
the Labour Appeal
Court held, with regards to a dismissal in terms of section 189A(19)
that:
“It does not follow that just because an employer dismisses an
employee due to its ‘economical, technological, structural
or
similar need’ that the [section 189A(19)] precondition has
been met. An employer must first establish on a
balance of
probabilities that the dismissal of the employee contributed in a
meaningful way to the realisation of that need. In
my view,
dismissals for operational requirements must be a measure of last
resort, or at least fair under all of the circumstances.
A
dismissal can only be operationally justifiable on rational grounds
if the dismissal is suitably linked to the achievement
of the end
goal for rational reasons. The selection of an employee for
retrenchment can only be fair if regard is had to
the employee’s
personal circumstances and the effect that the dismissal will have on
him or her compared to the benefit to
the employer. This takes
into account the principles that dismissal for an employee
constitutes the proverbial ‘death
sentence’.”
[16]
[28]
Woolworths has argued that the test in
Black Mountain
Mining
should not be followed as that test is based on case law
that does not deal with large-scale retrenchments in terms of section
189A(19)(b) and does not accord with the plain language of section
189A(19)(b).
[29]
The Labour Appeal Court held that it was unnecessary for
purposes of the appeal to revisit the decision in
Black Mountain
Mining
.
[17]
I agree. If the elements listed in section 189A(19)(a) to
(d) have not been satisfied, the dismissals were substantively
unfair. I consider each of these elements below.
Purpose of the dismissals
[30]
Section 189A(19)(a) of the LRA requires the dismissal to give
effect to a requirement based on the employer’s economic,
technological,
structural or similar needs. In the notice
issued in terms of section 189(3) of the LRA, Woolworths gave only
one reason
for the retrenchments, being that “the company needs
to be in a position to employ employees who are able to be used on a
flexible basis”.
[31]
SACCAWU accepted that the reason for restructuring the
workforce and doing away with the class of full-timers was to give
effect
to a requirement based on the employer’s economic,
technological, structural or similar needs but that this element no
longer
applied as the full-timers had indicated that they were
prepared to convert to the flexi-time model (albeit not on all the
same
terms).
Operationally justifiable
[32]
Section 189A(19)(b) of the LRA requires the dismissals to be
operationally justifiable on rational grounds. The Labour Court
found that this requirement was not met. As I have already
stated, for the purposes of this judgment it is not necessary
for
this Court to revisit the decision in
Black Mountain Mining
.
That is because, even on the lower standard of rationality set
out in
Discreto
, Woolworths has failed to show the
retrenchments were operationally justifiable on rational grounds.
The sole reason advanced
by Woolworths for the dismissal is as
contained in the section 189(3) notice, namely that “the
company needs to be in a position
to employ employees who are able to
be used on a flexible basis”. This stated purpose was
achieved when the individual
applicants, represented by SACCAWU,
agreed to work the flexible hours and days required. It
therefore follows that there
was no longer a need for the
retrenchments.
[33]
Woolworths has argued that a holistic reading of the section
189(3) notice reveals that there were additional reasons for the
retrenchments,
namely considerations of equity and cost efficiency.
This argument is, with respect, farcical. The section
189(3) notice
emphasises the “need to employ people who are
able to work according to flexible working arrangements. This
would improve
both the costs and the operational efficiencies of the
business”. I agree with both the Labour Court and the
Labour
Appeal Court that a fair reading of this notice reveals that
the sole reason for the retrenchments was the need for flexibility,
with the benefits of that flexibility being greater cost and
operational efficiency and not that these were intended to serve as
self-standing reasons. Woolworths’ transparent attempt to
add these reasons as an afterthought must therefore be rejected.
Proper consideration of alternatives
[34]
During the consultation process SACCAWU proposed, as an
alternative to retrenchments, that the employees would convert to the
flexi-time
model but maintain their same remuneration and benefits.
In a letter of 30 October 2012, SACCAWU amended this proposal
to
the effect that the full-time workers would accept an 11% decrease
in their remuneration. Woolworths has argued that it did
not
understand SACCAWU’s proposal in its letter of 30 October 2012
to be any different from the other proposals which it
had made and
therefore did not consider same. This alleged misunderstanding
does not save Woolworths from its failure to
have properly considered
this as an alternative to the retrenchments, but instead it evidences
that this alternative was not properly
explored.
[35]
The applicants also allege that Woolworths did not properly
consider the offered alternatives to retrenchment such as natural
attrition
and / or wage freezes for the full-time employees.
Additionally, the Labour Appeal Court found that Woolworths did
not consider
the possibility of ring-fencing as an alternative.
[36]
Given that Woolworths had been phasing out the full-timers for
more than a decade, since 2002, it is
inconceivable
why this same model could not have continued, particularly as the
number of full-timers since 2002 had significantly
decreased. A
wage freeze would also have sped up the rate of natural attrition.
[37]
None of the above alternatives were considered or attempted by
Woolworths. Woolworths has also offered no tenable reasons for
this failure, when it bears the onus to show that it had considered
all possible alternatives in this regard. On the evidence
before us,
Woolworths has not shown that it
properly considered these alternatives. This constitutes a
breach of section 189A(19)(c)
of the LRA.
[38]
It therefore follows that the dismissal of the individual
applicants was substantively unfair because Woolworths has failed to
prove
that it complied with section 189A(19)(b) or (c). In
other words, Woolworths failed to prove that the retrenchments were
operationally justifiable on rational grounds or that it properly
considered alternatives to retrenchments.
Procedural unfairness
[39]
Section 189(2) of the LRA requires the employer and other
consulting parties (the trade union and its members) to “engage
in a meaningful joint consensus-seeking process and attempt to reach
consensus” on the topics specified in section 189(2)(a) to (c).
These topics include appropriate measures to avoid dismissals,
to change the timing of dismissals and to mitigate the adverse
effects of the dismissals. The employer is also required to
disclose relevant information and provide meaningful reasons
for
rejecting SACCAWU’s representations or proposals.
[40]
The applicants argue that the dismissals were procedurally
unfair as Woolworths failed to consult meaningfully with SACCAWU when
retrenchments were first contemplated, failed to disclose relevant
information and failed to provide meaningful reasons for its
rejection of the SACCAWU’s representations.
During
the voluntary phase, there was no form of negotiation or consultation
with the respective workers but what had in fact occurred
was that
the workers were merely given options as determined by management.
After a substantial number of workers refused to accept the
voluntary options, Woolworths moved to the consultation phase
under
section 189 of the LRA. The applicants argue that when
Woolworths entered the consultation phase, management was not
genuinely open to meaningful consensus seeking, as all that was
up for discussion was the choice of voluntary retrenchments
or loss
of jobs. The content of the voluntary options and their
benefits were not up for negotiation nor was the issue of
avoiding
the retrenchments.
[41]
During oral argument the question also arose whether, if
Woolworths had in fact contemplated the possibility of dismissals at
the
voluntary stage, its failure to issue a notice of dismissal at
that stage would have had the result of infringing on the employees’
right to strike. If that is true, it would have considerably
diminished the negotiating strength of the workers in this case.
[42]
Although there is merit in the above argument, the issue of
procedural unfairness only arises in the event that this Court finds
that the dismissals were not substantively fair.
[18]
As this Court has determined that the dismissals were in fact
substantively unfair, there is no need for this Court to engage
on
the issue of procedural unfairness.
Remedy
[43]
It is by now
axiomatic that reinstatement is the primary remedy that the LRA
affords employees whose dismissals are found to be
substantively
unfair. In
Equity
Aviation
this
Court held that the ordinary meaning of the word “reinstate”
is:
“
to
put the employee back into the same job or position [that] he or she
occupied before the dismissal, on the same terms and conditions.”
[19]
[44]
Accordingly, an employee that is reinstated will consequently
resume their employment on the same terms and conditions which
prevailed
at the time of the dismissal.
[45]
Reinstatement is thus aimed at placing the employee in the
position that they would have been in or that they would have
occupied,
but for the unfair dismissal. Furthermore,
reinstatement is intended to safeguard employment by restoring the
employment
contract.
[46]
Reinstatement must be ordered when a dismissal is found to be
substantively unfair unless one of the exceptions set out in section
193(2) applies, namely that the affected employees do not wish to
continue working for the employer; the employment relationship
has
deteriorated to such a degree that continued employment is rendered
intolerable; it is no longer reasonably practicable for
the employees
to return to the position that they previously filled; or the
dismissal is found to be procedurally unfair only.
[47]
As affirmed by this Court previously, the fact that a significant
period might have lapsed from the date of dismissal to the
date of
the judgment is not a bar to reinstatement. An employee whose
dismissal is substantially unfair should not be disadvantaged
by the
delays of litigation where she or he has not unduly delayed in
pursuing the litigation.
[20]
[48]
At this stage, I deem it appropriate to focus particularly on the
exception provided for in section 193(2)(c), namely instances
wherein
reinstatement is not “reasonably practicable”.
[49]
The LRA does not define the term “reasonably practicable”.
However, guidance can be sought from various authoritative
court
decisions. The Labour Appeal Court in
Xstrata
held:
“
The
object of [section] 193(2)(c) of the LRA is to exceptionally permit
the employer relief when it is not practically feasible
to reinstate;
for instance, where the job no longer exists, or the employer is
facing liquidation or relocation or the like.
The term ‘not
reasonably practicable’ in [section] 193(2)(c) does not equate
with term ‘practical’, as
the arbitrator assumed. It
refers to the concept of feasibility. Something is not feasible
if it is beyond possibility.
The employer must show that the
possibilities of its situation make reinstatement inappropriate.
Reinstatement must be shown
not to be reasonably possible in the
sense that it may be potentially futile.”
[21]
It
is thus evident that the term “not reasonably practicable”
means more than mere inconvenience and requires evidence
of a
compelling operational burden.
[50]
An employer must lead evidence as to why reinstatement is not
reasonably practicable and the onus is on that employer to
demonstrate
to the court that reinstatement is not reasonably
practicable. In this case the dismissal was not for
misconduct. The
respondent dismissed the applicants for the
reason that it believed that they were not prepared to work the
so-called “flexi-time”
that the respondent wanted them to
work and were insisting on working and being paid on a full-time
basis. It is accepted
by all concerned that the respondent was
mistaken in understanding this to be the applicants’ position
after they had made
the last proposal before they were dismissed.
It is also accepted by all concerned now that in fact the last
proposal that
the applicants made to the respondent entailed that
they would work flexi-time. The applicants’ proposal
entailed that
they would accept an 11% reduction in their salaries.
[51]
The effect of this proposal was that, whereas all along the
applicants’ employment was on a “full-time” basis,
the basis upon which they were going to continue to be employed was
going to change. In fact their hours of work were going
to
change from those applicable to the so-called “full-time”
employment to those applicable to working “flexi-time”.
Full-time employment in this sense meant fixed hours and on fixed
days in a week. “Flexi-time” employment meant
employment on the basis of flexible hours and flexible days.
The respondent was no longer prepared to employ the applicants
and
others doing the same job on a full-time basis and wanted all of them
to work on a flexi-time basis. The overwhelming
majority of
cashiers had accepted the respondent’s proposal to work on a
flexi-time basis by the time the applicants made
their last proposal
before they were dismissed.
[52]
Counsel for Woolworths contended that the positions in this
instance were no longer available and had ceased to exist upon the
dismissal
of the employees. He therefore submitted that the
applicants’ employment contracts could not be revived as
full-time
employment contracts. I do not agree that the
positions in which the applicants were employed no longer exist.
They
were employed as cashiers and there has been no suggestion
that the number of cashiers has decreased. It is the conditions
of employment that have changed and not the positions themselves.
Cashier positions do still exist within various Woolworths
stores,
and have not become redundant nor have they ceased to exist. If
this was the position, Woolworths would not be able
to be fully
functional and operational as it is. As this Court said in
Equity Aviation
, reinstating an employee means restoring the
employee to the position in which he or she was employed immediately
before dismissal.
[22]
This means reviving the employee’s contract of employment that
had been terminated previously.
[53]
What raises the question whether reinstatement would be
competent or appropriate in this case is not only the fact that the
respondent
had decided that all its cashiers should work flexi-time
and the overwhelming majority of the cashiers had accepted this
position
but also the fact that, before the applicants were
dismissed, they had put forward to the respondent a proposal which
entailed
that they were prepared to work flexi-time. It is
necessary to consider what the effect is of that proposal to the
question
whether reinstatement is competent or appropriate.
[54]
One view would be that, since the applicants had already
accepted the notion of working flexi-time when they were dismissed,
if
they are to go back and work for respondent, they have to go back
on the basis that they will work flexi-time and not on the basis
that
they will work on a full-time basis. Another view would be that
a reinstatement order cannot require the applicants
to work
flexi-time because the contracts that governed their employment when
they were dismissed were based on them working on
a full-time basis.
In other words, you cannot restore a flexi-time contract of
employment which did not exist between each
applicant and the
respondent. If you are going to reinstate, you can only
reinstate the full-time contract of employment
that governed the
employment relationship between the applicants and respondent at the
time of dismissal.
[55]
The applicants’ counsel submitted that the applicants
remained bound by their last proposal to the respondent. He
submitted
that consequently any order as may be made should take
account of that last proposal. That counsel for the applicants
took
this attitude is understandable. However, I do not think
that it is correct that in law the applicants remain bound by their
last proposal to the respondent.
[23]
I say this because the respondent rejected their proposal. They
cannot be bound by a proposal that was rejected.
Their
dismissal followed upon the respondent’s rejection of their
proposal. In any event, that proposal was made a
number of
years ago.
[56]
Although the respondent knows now that it had misunderstood
the applicants’ last proposal, there is nothing on record that
suggests that it has, in the meantime, accepted that proposal as it
was. They may have wanted to discuss it further with
the
applicants. Accordingly, we do not know what agreement the two
sides could have ultimately agreed upon. That means
that we do
not know the terms and conditions under which the applicants would
have continued to work for the respondent if they
had never been
dismissed. In these circumstances it seems to me that we should
revive the contracts of employment which existed
between the
applicants and the respondent at the time of dismissal on the basis
that as soon as possible after this judgment has
been handed down the
parties may resume the consultation process which ended when the
dismissal took place and the applicants may
then revive their
proposal or make another proposal aimed at the parties reaching an
agreement on the issue of them working flexi-time.
Accordingly,
Woolworths has not shown that reinstatement is not reasonably
practicable.
Retrospectivity of reinstatement
[57]
Section 193(1)(a) of the LRA confers a discretion on an arbitrator or
the Labour Court to order reinstatement with retrospective
effect.
Thus, a court may order reinstatement effective from any previous
date provided that this a date is not earlier than
the actual date of
dismissal.
[24]
The dismissal was substantively unfair. That means that there
was no fair reason for the dismissal of the applicants.
Additionally, this was a dismissal for operational requirements
and not a dismissal for misconduct. It is a so called
no-fault
dismissal. There was no fault on the part of the applicants
which brought about their dismissal. On the contrary,
it was
the employer who was at fault in dismissing them. It made an
error and misunderstood the applicants’ last proposal.
There is no suggestion that the applicants have in any way been
dilatory in taking steps to pursue the litigation to vindicate
their
rights. Therefore, the Labour Court was correct in ordering
reinstatement with retrospective effect to the date of
dismissal.
[58]
Once the order of the Labour Appeal Court has been set aside
and has been replaced with an order dismissing Woolworths’
appeal
against the order of the Labour Court, the order of the Labour
Court will automatically be restored. What we emphasise is
that, after this judgment, the parties will be free to resume their
discussions aimed at reaching agreement on the working of flexi-time
by the applicants.
Conditional
cross-appeal
[59]
For the same reasons that the applicants’ appeal must
succeed, so must Woolworths’ cross-appeal fail.
Costs
[60]
The rule of practice that costs follow the result does not
apply in Labour Court matters. In
Dorkin
, Zondo JP
explained the reason for the departure as follows:
“The rule of practice that costs follow the result does not
govern the making of orders of costs in this court. The
relevant statutory provision is to the effect that orders of costs in
this court are to be made in accordance with the requirements
of the
law and fairness. And the norm ought to be that costs orders
are not made unless those requirements are met. In
making
decisions on costs orders this court should seek to strike a fair
balance between, on the one hand, not unduly discouraging
workers,
employers, unions and employers’ organisations from approaching
the Labour Court and this court to have their disputes
dealt with,
and, on the other, allowing those parties to bring to the Labour
Court and this court frivolous cases that should not
be brought to
court.”
[25]
[61]
In accordance with the requirement
of law and fairness, no costs order is warranted in this matter.
Order
[62]
The following order is made:
1.
Condonation is granted for the late
filing of the application for leave to appeal.
2.
Leave to appeal is granted.
3.
The applicants’ appeal is
upheld.
4.
Paragraph 2 of the order of the
Labour Appeal Court is set aside and replaced with the following:
“4.1
The appeal is dismissed.
4.2
There is no order as to costs.”
5.
The respondent’s conditional
cross-appeal is dismissed.
6.
No order as to costs is made in
relation to the proceedings in this Court.
For the Applicants:
P Kennedy SC instructed by Haffegee Roskam Savage Attorneys
For the Respondent:
A Myburgh SC instructed by Mervyn Taback Incorporated
[1]
National Education, Health and Allied Workers Union v University
of Cape Town
[2002] ZACC 27; 2003 (3) SA 1 (CC); 2003 (2) BCLR
154 (CC).
[2]
66 of 1995.
[3]
SACCAWU v Woolworths (Pty) Ltd
[2016] ZALCJHB 126 (
Labour
Court judgment) at paras 8 and 11.
[4]
Id at para 11.
[5]
Id at para 12.
[6]
Section 189A(1) provides:
“This section applies to employers employing more than 50
employees if—
(a) the employer contemplates dismissing by reason of the employer's
operational requirements, at least—
(i) 10 employees, if the employer employs up to 200 employees;
(ii) 20 employees, if the employer employs more than 200, but not
more than 300, employees;
(iii) 30 employees, if the employer employs more than 300, but not
more than 400, employees;
(iv) 40 employees, if the employer employs more than 400, but not
more than 500, employees; or
(v) 50 employees, if the employer employs more than 500 employees;
or
(b) the number of employees that the employer contemplates
dismissing together with the number of employees that have been
dismissed by reason of the
employer's operational
requirements in the 12 months prior to the employer issuing a notice
in terms of section 189(3), is equal
to or exceeds the relevant
number specified in paragraph (a).”
[7]
Section 189(3) provides:
“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.”
[8]
Section 189A(2)(b) provides:
“In respect of any dismissal covered by this section—
(b) despite section 65(1)(c), an employee may participate in a
strike and an employer may lock out in accordance with the
provisions
of this section.”
[9]
Section 189A
(13)
provides:
“
If an employer does not comply with a fair
procedure, a consulting party may approach the Labour Court by way
of an application
for an order
—
(a)
compelling the
employer to comply with a fair procedure;
(b) interdicting or restraining the employer from dismissing
an employee prior to complying with a fair procedure;
(c) directing the employer to reinstate an employee until
it has complied with a fair procedure;
(d) make an award of compensation, if an order in terms of
paragraphs (a) to (c) is not appropriate.”
[10]
Section 191(11) provides:
“
(a) The referral, in terms of subsection
(5)(b), of a dispute to the Labour Court for adjudication, must be
made within 90 days
after the council or (as the case may be) the
commissioner has certified that the dispute remains unresolved.
(b) However, the Labour Court may condone non-observance of that
timeframe on good cause shown.”
[11]
This was due to the decisions of the Supreme Court of Appeal in
National Union of Metalworkers of South Africa v Fry’s
Metals (Pty) Ltd
[2005] ZASCA 39
; (2005) 26 ILJ 689 (SCA) and
the Labour Appeal Court in
Fry’s Metals (Pty) Ltd v
National Union of Metal Workers of South Africa
[2002] ZALAC 25
;
(2003) 24 ILJ 133 (LAC).
[12]
It was introduced into the LRA in 2002 in terms of the
Labour
Relations Amendment Act 12 of 2002
and was deleted by
section
33 of the Labour Relations Amendment Act 6 of 2014
with
effect from 1 January 2015.
[13]
Section 45
of the
Labour Relations Amendment
Act 12 of 2002
.
[14]
See
section 192(2)
of the LRA.
[15]
SA Clothing and Textile Workers Union v Discreto – A
Division of Trump & Springbok Holdings
[1998] ZALAC 9
;
(1998) 19 ILJ 1451 (LAC) (
Discreto
) at para 8.
[16]
National Union of Mineworkers v Black Mountain Mining (Pty) Ltd
[2014] ZALAC 78
;
[2015] JOL 33457
(LAC) (
Black Mountain
Mining
) at para 37.
[17]
Woolworths (Pty) Ltd v SACCAWU
[2017] ZALAC 54
; (2018) 39 ILJ
222 (LAC) (Labour Appeal Court judgment) at para 36.
[18]
This is because, upon finding that a dismissal is substantively
unfair, the consequential relief of either retrospective
reinstatement
or compensation preclude any additional relief being
granted for procedural unfairness.
[19]
Equity Aviation Services (Pty) Ltd v Commission for
Conciliation,Mediation & Arbitration
[2008] ZACC 16
;
2009
(1) SA 390
(CC);
2009 (2) BCLR 111
(CC) (
Equity Aviation
) at
para 36.
[20]
Id at para 51-2.
[21]
Xstrata South Africa (Pty) Ltd
(Lydenburg
Alloy Works)
v National Union of
Mineworkers obo Masha
[2016] ZALAC 25
; [2017]
4
BLLR 384
(LAC);
(2016) 37 ILJ 2313 (LAC)
(
Xstrata
)
at
para 11.
[22]
Equity Aviation
above n 19 at para 36.
[23]
During oral argument counsel for the applicants conceded that there
was no agreement between the respondent and the union based
on the
applicants’ last proposal as that proposal was never accepted
by the respondent.
[24]
Section 193(1)(a)
of the LRA. See also
South
African Commercial Catering & Allied Workers Union v Primserv
ABC Recruitment
(Pty) Ltd t/a
Primserv Out Sourcing Incorporated
(2006)
27 ILJ 2162 (LC).
[25]
Member of the Executive Council for Finance, KwaZulu-Natal v
Dorkin N.O.
[2007] ZALAC 41
; (2008) 29 ILJ 1707 (LAC) (
Dorkin
)
at para 19, as approved by this Court in
Sibongile Zungu v
Premier of the Province of KwaZulu-Natal
[2018] ZACC 1
;
2018 (6)
BCLR 686
(CC); (2018) 39 ILJ at para 24.