Khanya Cleaning Group (Pty) Ltd v South African Transport & Allied Workers Union and Others (PR32/2023) [2024] ZALCPE 39; (2025) 46 ILJ 363 (LC) (2 October 2024)

FLYNOTES: LABOUR – Dismissal – Operational requirements – Severance pay – Entitlement – Given in excess of 4-weeks’ notice of intended retrenchment – Applicant assisted acquiring employer who offered their retrenched employees’ alternative employment – No basis upon which employee could obtain both alternative employment and severance pay – Commissioner either misconceived nature of enquiry or arrived at an unreasonable result – Award reviewed and set aside – Basic Conditions of Employment Act 75 of 1997, s 41.

THE LABOUR COURT OF SOUTH AFRICA, GQEBERHA

Reportable

Case No: PR32 / 2023

In the matter between:

KHANYA CLEANING GROUP (PTY) LTD Applicant and SOUTH AFRICAN TRANSPORT & ALLIED WORKERS UNION (“SATAWU”) First Respondent NATIONAL UNION OF METALWORKERS OF SOUTH AFRICA (“NUMSA”) Second Respondent COMMISSION FOR CONCILIATION, MEDIATION AND ARBITRATION (“CCMA”) Third Respondent COMMISSIONER VUYO YOYO NOMBEWU N.O. Fourth Respondent

Heard: 4 July 2024

Delivered: This judgment was handed down electronically by circulation to the parties' legal representatives by email, publication on the Labour Court’s website. The date for hand-down is deemed to be 02 October 2024.

Summary: Statutory review of CCMA’s arbitral award – Whether the Commissioner committed an irregularity in terms of s 145(2)(a)(ii) to the LRA so such an extent that the Commissioner either misconceived the true nature of the inquiry or arrived at a result

which cannot be justified as being reasonable.

Dismissal for operational requirements – Upon dismissal, employees becoming entitled to severance pay in terms of s 41(1) of the BCEA. Employer’s failure to make payment. Dispute referred to the CCMA for conciliation and then arbitration.

Severence pay – in terms of s 41(1) of the BCEA – Employer raises a defence during arbitration proceedings that it is exempted from such payment in terms of s 41(4).

Severence pay – Unions seeking to resist the application of s 41(4) of the BCEA because the Employer didn’t “arrange” suitable alternative employment for its members who were the employees retrenched by the Employer.

Severence pay – Discussion and comparison of Irvin & Johnson Ltd v Commission for Conciliation, Mediation & Arbitration & Others (2006) 27 ILJ 935 (LAC) and Fidelity Supercare Cleaning (Pty) Ltd v Busakwe N.O. & others [2010] 3 BLLR 260 (LC).

Notice pay – Not in dispute that the Employer advised its employees in terms of s 189(3) to the LRA of the proposed retrenchment date.

Notice pay – Unions assert that in addition to the above notification, the Employer was required to notify its members of the proposed termination of their employment contracts in terms of s 37(1)(c) to the BCEA.

JUDGMENT

SMITH, AJ

[1] This matter was enrolled and heard by me on 4 July 2024 in this Court’s opposed motion court. Thereafter, judgment was reserved.

[2] The Applicant prosecutes this review application, in terms of section 145(1)(a) of the Labour Relations Act[1] (LRA), to review and set-aside an Award made by the Fourth Respondent (the Commissioner) under the auspices of the Third Respondent (the CCMA).

[3] As its relief, the Applicant seeks an order that I make a substituted finding, or that I remit the dispute back to the CCMA for

re-consideration afresh before a different Commissioner to arbitrate. The Applicant also sought a costs order; only in the event of opposition.

[4] Only the Second Respondent has delivered a Notice of Intention to Oppose and an answering affidavit. It also filed Heads of Argument

and its representative appeared to deliver argument. I am satisfied with the service on the First Respondent.

[5] The issue in dispute – which was referred by the First and Second Respondents, on behalf of their individual members (the employees), who were employed by the Applicant – was whether these employees were entitled to severance and notice pay in terms of section 41 and 37(1)(c) respectively to the Basic Conditions of Employment Act[2], as amended (BCEA).

[6] The Applicant placed in dispute the employees’ entitlement to receive such severance pay, on the basis that the employees who had found alternative employment with a different employer, had done so through the intervention of it. Similarly, it placed in dispute the individual members’ entitlement to receive notice pay as it had given in excess of 4-weeks’ notice of their intended retrenchment.

[7] The Commissioner found in his Award that the affected employees were entitled to severance pay because they had secured for themselves the alternative employment through no assistance of the Applicant. He also found that the affected employees were entitled to notice pay in lieu of a termination notice in terms of section 38 to the BCEA.

[8] It is this outcome which is the subject of challenge by the Applicant. The Applicant alleges that the outcome reached by the Commissioner – in light of the issues raised by the dispute under arbitration – was not one that could reasonably be reached on the evidence which was placed before him.

Statutory six-week period

[9] After the delivery of argument, and during my preparation of this judgment, I noted that the Applicant’s prosecution of this

application may have been outside the period set by the legislature in section 145(1)(a) to the LRA. I thought it best to deal with this issue by means of a Directive issued to the parties through the Registrar’s office. I waited for a response from each of the parties in the form of written submissions. It is this process which has delayed the preparation of this judgment slightly.

[10] The Applicant came to learn of the arbitral award on 13 February 2023. The review application was served on the First and Second

Respondents by e-mail. Hard copies were delivered to them the next day.

[11] On 28 March 2023, the review application was filed at the Registrar’s general office by e-mail. The Applicant complied with the learned Judge President’s Directive dated 5 January 2022. The next day, a hard copy was delivered at the Registrar’s general office.

[12] The Second Respondent took no issue with the averments made by the Applicant in its founding affidavit on both the jurisdiction of this Court and the timeous service of the review application. In the absence of express challenge, such is deemed to be admitted.[3]

[13] In its submissions to my Directive, a different approach emerged. The Second Respondent now alleged that the review application was delivered late. It failed to raise any prejudice.

[14] On my calculation[4], the Applicant delivered its application in time. Even if I am wrong in that regard, there is no evidence that the CCMA served the arbitral award on the parties in terms of section 138(7)(b) to the LRA and therefore the period hasn’t begun to run against the Applicant.[5]

Factual background

[15] The Applicant is a contract cleaning services company, which rendered services to a tyre fabrication factory in Kariega. Its contract’s

validity period with its client came to its natural end; was extended on a month-to-month basis to allow its client’s tender

application process to be completed.

[16] The likely effect of the above would be, and which proved to be the instance, that the Applicant would be unable to employ its employees who rendered cleaning services to the Kariega factory on the Applicant’s behalf.

[17] This was communicated to the Applicant’s employees who were likely to be affected by the eventual termination when the Applicant

embarked on a section 189 to the LRA retrenchment process. The Applicant sent notice of retrenchment circulars: the first of which

was dated 5 May 2022 and the second of which was 23 May 2022. The reason for the two circulars was because the proposed retrenchment

date was changed from 31 May 2022 to 30 June 2022. The reason for this change of stance was because the tyre factory kept its engagement of the Applicant’s contract cleaning whilst due diligence was underway in the formal appointment of its new service

provider.

[18] Ultimately, the Applicant efforts to be awarded the bid for the new cleaning contract came to naught and a new contract was awarded to its competitor, Supercare.

Applicant’s contested version of events

[19] The Applicant’s supervisor, Mr Ngqoboka, liaised between its affected employees and Supercare, with the purpose of Supercare to offer alternative employment to the affected employees.

[20] In furtherance of this objective, the Applicant’s managing director, Mr Olivier, met with the regional manager of Supercare, Mr du Pleez, in order to discuss the possibility of Supercare’s offer of alternative employment to the affected employees. In order to achieve this, the Applicant shared all the affected employees’ contact details with Supercare.

[21] The Applicant arranged for a venue for interviews to be conducted by Supercare; gave each of the affected employees paid time-off in order to attend these interviews and circularised application forms for employment with Supercare, as well as correlated their responses on those forms.

[22] There were 30-employees who were offered, and took up, alternative employment with Supercare. These employees started their new

employment with it on 1 July 2022. There was no gap between these employees’ employment with the Applicant and then Supercare.

[23] The Applicant was able to absorb a further 130 of its employees in different positions and locations within its own group. Of those

employees who were affected by the termination of the Kariega factory’s contract, 11 of whom were dismissed for operational

requirements. These 11 employees were paid severance pay in terms of the BCEA. The Applicant accepts this and there is no further dispute on this topic.

[24] The First and Second Respondents referred, on behalf of their members who were retrenched (i.e. the 30-employees referred to above), a dispute to the CCMA.

[25] This is to say that these 30-affected employees, who have accepted offers of alternative employment with Supercare, and who were

employed by it at the time of the referral of the dispute, also demand payment of severance pay in terms of the BCEA.

Applicant’s argument

[26] The Applicant contends that it gave the affected employees more than 4-weeks’ notice of termination and that their employment with Supercare was affected though its efforts. It also asserts that it isn’t obliged to make payment of severance pay to the individual members as they were all offered alternative employment by Supercare through the Applicant’s intervention.

The Second Respondent’s version of events

[27] The Second Respondent admits that Mr Ngqoboka met with Supercare, but places in issue that this was for the purpose to assist Supercare’s

offer of alternative employment to the affected employees.

[28] It records in its answering affidavit that Mr Ngoboka shrugged off any suggestion that he was instrumental in Supercare’s offer of alternative employment to the affected employees.

[29] It also records that it was Mr du Preez, from Supercare, who wished to meet with the Applicant’s Mr Olivier, and not the other way around.

The Second Respondent’s argument

[30] It was argued that the Applicant played no more than a minor administrative role in Supercare’s offer of alternative employment to the 30 affected employees.

The Commissioner’s reasoning in his award

[31] I have provided a precis of the material facts above. The Applicant delivered no replying affidavit in which it joins issue with the Second Respondent’s version of events.

[32] The Commissioner bases his decision that the material facts in this referral are distinguishable from the facts before the Labour Appeal Court in often quoted Irvin & Johnson Ltd v Commission for Conciliation, Mediation & Arbitration & others[6] (Irvin & Johnson) decision. He finds authority in a similarly often referred to judgment in the Labour Court by Bhoola J in Fidelity Supercare Cleaning (Pty) ltd v Busakwe NO & others (Fidelity Supercare).[7]

[33] Using the authority of Fidelity Supercare, he finds that the mere fact that the interviews were conducted during the Applicant’s affected employees’ working time cannot be equated with an offer for alternative employment.

Analysis of the law

[34] As a general rule, an employee dismissed for operational requirements is entitled to severance pay. This is codified in section 41(2) of the BCEA[8]. Its method of calculation is to be found in subsection (3). An exception to this general rule is to be found in subsection (4).

[35] The raison d'etre of section 41(4) is to compensate an employee who has been dismissed for operational requirements, through no fault of her own, to be paid compensation for her loss of employment. However, the legislature considered that an employee who unreasonably refuses an offer of alternative employment is not without blame. She should therefore shoulder the loss of employment without any compensation.[9]

[36] Previously, in this country during the 1980s and 1990s, two schools of thought presented themselves on the purpose of severance pay. The first school was heavily influenced by Lord Denning MR in Lloyd v Brassey.[10] The Court of Appeal in England and Wales held that as a director would be entitled to a golden handshake on the loss of her office, so too would an employee be entitled to a severance or redundancy payment from her employer on the loss of her employment. It was considered that severance pay was used to compensate an employee for the loss of her accrued rights to her job, irrespective of whether, after her dismissal, she spent any period of time unemployed. This reasoning, amongst others, influenced the old Industrial Court in at least two of its previous decisions.[11]

[37] The opposing school of thought was of the view that the purpose of severance pay was to tide the employee over, after her dismissal, in her efforts to search for another job.[12]

[38] Both schools of thought therefore considered the payment of severance pay to a dismissed employee to be a form of compensation. Where they differed was what the palliative sought to cure.

[39] It is not for nothing that Zondo JP (then known) underscored in Irvin & Johnson that the legislature didn’t intend, in its enactment of sectiom 41(4), that a dismissed employee for operational requirements would be able to secure for herself severance pay and her salary for the alternative employment.[13]

[40] Zondo JP, on behalf of the Full Court above, justified his reasoning with reference to section 203(3) of the LRA, and to the Code of Good Practice on Dismissals Based on Operational Requirements[14], which stated, at clause 11, in its then current form, that if an employee either accepted or unreasonably refused to accept an offer of alternative employment, the employee’s right to severance pay is forfeited. It was held, at 949B – C, by Zondo JP that where an employee accepts alternative employment, arranged by the employer, she forfeits her right to receive severance pay.

[41] The Second Respondent argued that section 41(4) does not find application in the facts of this referral as the Applicant did not

assist in the affected employees securing for themselves alternative employment with Supercare. It is necessary shortly to examine the evidential material which was placed before the Commissioner which was used by him in the preparation of his award, through the lenses provided to this Court by the case authority.

[42] I was referred to a decision by Lagrange J in Servest Landscaping Turf Maintenance (Pty) Ltd v SA Commercial Catering & Allied workers Union & others [15] (Servest) by the Applicant in its Heads of Argument. This case was also a review of a Commissioner’s award in the CCMA. The Commissioner, like the one in casu, also sought to distinguish Irvin & Johnson on the facts. It will be recalled, from reading that earlier decision, that I&J entered into an agreement with a food services

management company, KKS, to manage its staff canteen. I&J’s entire workforce of the canteen would be employed by KKS, at the same rate of remuneration.[16]

[43] It was argued before Lagrange J that the Commissioner’s conclusion that Irvin & Johnson is distinguishable was reasonable.[17] There, the Commissioner found in her award that as Servest never concluded a term in an agreement between it and Bidvest that Bidvest must employ all the Servest employees who were retrenched by it. This motivated her decision on outcome that the authority of Irvin & Johnson could not assist the retrenching employer and was distinguishable. She awarded that the employer was to pay severance pay to the applicant.

[44] A similar line of reasoning was adopted by a CCMA Commissioner in South African transport and allied workers union and another v Khanya Cleaning Group[18] (Khanya Cleaning Group) also an application to review and set-aside an award. There,[19] the Commissioner also sought to distinguish Irvin & Johnson on that basis that the respondent in the referral hadn’t concluded an express provision in an agreement for the new employer who offered alternative employment to employ the employees affected by the retrenchment.

[45] Lagrange J in Servest was guided by an unreported decision in the Labour Appeal Court.[20]

[46] I find, from my understanding of Irvin & Johnson, that, in order for a retrenching employer to escape the statutory obligation to pay severance pay to employees dismissed for operational requirements, it is not incumbent on it to insist on the inclusion of a special term in an agreement with a prospective employer, who is to offer employment to their retrenched employees, that it will employ these employees at the same rate of remuneration.

To the extent that the Commissioners referred to above tend to base the outcomes of their awards on this singular distinction, they have committed an error of reasoning so egregious that it might render their respective outcomes as being unreasonable.[21]

[47] I find, as I do, that there are a range of facts to consider. These facts were considered by Lagrange J in Servest, in paragraphs 13 – 17 of his judgment.

[48] I was also referred to two unreported arbitration awards in the bible of documentary exhibits which was placed before the Commissioner, which both relate to contract cleaning services, the first of which is Ntuli[22] and the second is DETAWU.[23] In the first award, Ms Ntuli, the applicant, sought payment of severance pay after her fixed-term contract was terminated with her employer (Empact). The reason for this was because Empact’s cleaning contract was not renewed by its employer, a bank. The new contract cleaning company (FIDEM) was approached by Empact to consider employing all of Empact’s affected employees, including the applicant. She was interviewed and eventually offered employment with FIDEM. Her job interview was conducted at Empact’s office and was attended during company time for which her wages were not docked. All of this was common ground.

[49] Commissioner Dlamini there found that as Empact had facilitated and recommended the application for alterative employment with FIDEM, that it was not required to pay her severance pay.

[50] In DETAWU, the individual applicants were employed as fixed-term contract cleaners, for a period longer than 24-months, by the respondent, Supercare. They rendered cleaning services at Supercare’s employer’s premises, a pharmaceutical manufacturer, (Aspen) in Gqeberha. Supercare’s cleaning contract was not renewed and another service provider was appointed.

[51] In response, Supercare terminated its contracts with the individual applicants. The new service provider, SSG, employed some of the retrenched employees. The individual applicants then referred a dispute to the CCMA on the unpaid severance pay.

[52] Supercare’s Mr du Preez contacted SSG. It indicated to him that it couldn’t employ all of Supercare’s affected employees, but that it would interview them. The applications for employment submitted to SSG took place whilst Supercare was still rendering cleaning services to Aspen. Some of the interviews took place over the employees’ lunch breaks and during company time at Aspen. Supercare’s employees submitted their CVs to SSG, through Supercare. SSG’s job advertisements were affixed to Supercare’s noticeboard, and Supercare facilitated job interviews with SSG.

[53] Commissioner van der Walt determined that the actions of Supercare amounted to it having arranged alternative employment with its

affected employees by SSG. He also determined, that even if his reason for his outcome was wrong, then the individual applicants

would still not be entitled to severance pay. This was because they did not deserve compensation as they had never been unemployed and therefore never needed any income to tide them over whilst they were job-seekers.

Evidence led before the Commissioner

[54] In casu, the evidence led before the Commissioner must be read against the backdrop of both the Irvin & Johnson and Fidelity Supercare Cleaning decisions. The former case is the upper-end of the scale of what a retrenching employer would need to do in order to stave off its obligation to pay severance pay to retrenched employees for operational requirements. At the lower-end of the scale is the latter case, where all the employer did was to introduce the retrenched employees[24] to an alternative employer, and to provide a reference to that other employer which employed its retrenched employees. The Labour Court, per Bhoola J, held that the Applicant did not “arrange”[25] alternative employment and merely provided a reference. This amounted only to a “facilitation”.[26] Somewhere in the mid-range lies Lagrange J’s judgment in Servest.

[55] As mentioned, Mr Ngqoboka was the site manager for the cleaning contract at the Kariega tyre factory. He was employed as the Applicant’s Operations Manager. He gave evidence that he gave to Supercare a list of its employees who were likely to be affected by the proposed retrenchment. Additionally, he put Supercare into contact with his managing director, Mr Marius Olivier, for the purposes of Supercare meeting the affected employees. After this meeting, Mr Ngqoboka booked a boardroom for Supercare’s Mr Martin to meet the affected employees.

[56] At this meeting, the affected employees were given employment application forms by Supercare. This meeting was scheduled during the Applicant’s employees’ working-time, for which their pay wasn’t docked by it. Some or all of these employees arrived in their cleaning uniforms. These forms, once completed, were given back to Mr Ngqoboka, who placed them into a box. He then says that he gave this box to security. All of this occurred before the retrenchment of the affected employees.

[57] The Second Respondent’s representative disputed Mr Ngqoboka’s live evidence in the following features: that the affected employees met Supercare’s Mr Martin on their own time and not during company time; and that it was Supercare which booked the boardroom for the interviews. It appears to have been common ground between the parties that Supercare met with the affected employees and that their application for employment forms were placed inside a box which Mr Ngqoboka took care of and eventually gave it to security. It was furthermore common ground that at no stage were these employees unemployed.

[58] Despite these bare denials, Mr Zengetwa, the Second Respondent’s union official, who had given live evidence earlier on in the day before Mr Ngqoboka, couldn’t take these denials any further. In argument, it was raised by the Applicant that Mr Zengetwa was not in attendance at the interview in the boardroom with Supercare’s Mr Martin. Therefore, so it was argued that, he had no personal knowledge of these events and that his evidence was hearsay.

[59] In the Second Respondent’s answering affidavit, much moment was made of a point of Mr Ngqoboka’s re-examination in which a clearly leading question was asked of him by his representative whether he regarded himself as playing an instrumental role in ensuring that the affected employees were offered alternative employment with Supercare. Mr Ngqoboka’s answer was

non-committal: He said that it depended on whoever sees it that way.

[60] As I understand the gravamen of the Second Respondent’s argument, this amounts to a concession that the Applicant doesn’t

see itself as being instrumental to the employment of the affected employees with Supercare.

[61] The Commissioner, in his award, places great purchase on the fact that Mr Ngqoboka did not negotiate with Supercare that it employ all of its affected employees, which is what had occurred in Irvin & Johnson. The mere fact that the interviews were held during company time was found by him to be insufficient and couldn’t be equated with the Applicant having arranged alternative employment.

[62] There was also a bible of documentary exhibits placed before the Commissioner. These documents were admitted as what they purported to be.

Incidence of the onus of proof

[63] The Commissioner also determined that it was the Applicant (respondent in the referral before him) that bore the overall onus of

proof on the payment of the severance and notice pay. And because of this, it failed to adduce sufficient evidence which is why the referral was decided against it.

Reasonableness of the award on the evidential material placed before the Commissioner

[64] It is not my function to determine the correctness of the Commissioner’s reasoning in his award. I must determine whether the outcome reached by the Commissioner was not one that could reasonably be reached on the evidence and the other evidential material properly before him.[27] Ultimately, an emphasis is placed on the result of the referral, rather than the reasons for arriving at that result.[28]

[65] The Applicant has pleaded, as its grounds for review, that the Commissioner’s outcome was motivated by a material mistake in law; constituted a gross irregularity in the proceedings; that he deprived it of a fair hearing and arrived at an unreasonable result.

[66] I find, as I do, that the Commissioner has committed a material error of law. It was the First and Second Respondents (as applicants in the referral on behalf of their individual members) who bore the overall onus of proof to prove that their members were entitled to compensation in the form of severance and notice pay. The Applicant (as respondent) bore an evidential burden to lead its defence in rebuttal of the allegations made against it. Even if I am wrong in that regard, as the dismissals were admitted, the First and Second Respondents opened their respective cases and led evidence first. Section 73A(1) to the BCEA refers to an employee’s monetary claim for the payment of any amount in either the BCEA, LRA, collective agreement or contract of employment. The individual

members were the claimants and were required to prove their claims using evidence.

[67] Leaving this aside, its necessary to examine the nature of the evidence led before the Commissioner. I have discussed in some detail

the evidence of Mr Nqgoboka. Admittedly, this evidence was subject to challenge by the Second Respondent. Despite minor skirmishes as to which party organised a boardroom for Supercare to meet the affected workers, and who had ultimate custody of a box of application forms, the inescapable conclusion from the admitted fact remains that the Applicant met with Supercare. I must find whether the Applicant assisted Supercare with the presentation of further information when requested to do so by it.

[68] Whether it was the Applicant who reached out to Supercare first or vice versa, in my view places far too granular an interpretation of Bhoola J’s use of the word “arrange” at paragraph 27 of her judgment. The emphasis, in my view, should be on whether there has not only been collaboration[29] between retrenching and acquiring employers; but also that the retrenching employer has been moved as a matter of some urgency into action to assist the acquiring employer with whatever information is required by it in order for it to offer alternative employment to employees retrenched for operational requirements.

[69] Instead of using Mr Nqgoboka’s evidence in the determination of his outcome, as he ought to have done, the Commissioner lasers-in on the fact that the Applicant hasn’t concluded a special term in an agreement between it and Supercare; in order for Supercare to employ all of its employees who were likely to be retrenched for operational requirements. The Commissioner explains this in his Award that there has been no negotiation between the Applicant and Supercare.

[70] The Commissioner has misconstrued the true nature of section 41(4) and the Irvin & Johnson and Fidelity Supercare decisions. The LAC in Irvin & Johnson never elevated, to a point of principle, that in order for an employer not to pay severance pay, that it had to negotiate a special term with another employer to offer alternative employment to its retrenched employees. Bhoola J, in Fidelity Supercare, held that the employer there had not done enough in its efforts to ensure that its retrenched employees would secure alternative employment. Each of those decisions were decided within their own factual matrix. Each referral to the CCMA or bargaining councils with jurisdiction on this point is to be determined on its own merits.

[71] In casu, the Applicant, much like the applicant in Servest, and the respondent employers in Ntuli and DETAWU, did not just sit on their hands and impassively watch the world go by: They assisted the acquiring employer who offered their retrenched

employees’ alternative employment.

[72] Next is a concession apparently made by Mr Nqgoboka that he didn’t regard himself as being instrumental in the alternative employment of the retrenched employees. In my view, this doesn’t take the referral very far. A concession made by a witness is not one that goes to a fact or facts, but is rather what this witness makes of his treatment of the disputed facts[30] – which is not the witness’s ultimate function, but that of the finder-of-fact, the Commissioner. Even still, the question asked of Mr Nqgoboka was inappropriate in that he was neither qualified as an expert witness, nor would his answer be relevant and admissible[31] because it was clearly an opinion which was expressed about the Applicant’s role in Supercare’s appointment of the retrenched employees. This disputed issue, in any event, was the ultimate issue before the Commissioner for determination and not that of Mr Ngqoboka.

[73] The legislature has recognised the need to compensate employees who are retrenched through no fault of their own. The legislature

recognises the primary of keeping employees in the labour market rather than out of it. Whether the purpose of this compensation is to tide the employee over while she seeks alterative work; or whether it is in reignition of accrued rights to her job, irrespective of whether, after her dismissal, she spent any period of time being unemployed, is a debate that can rage on another day.

[74] From these two opposing schools of thought, it is accepted that the purpose of severance pay is to cushion an employee from the loss of her employment. It is also accepted that the purpose of section 41(4) is to incentivise employers to ensure that their employees secure alternative employment.

[75] In light of this, and in light of the clear recognition of the LAC in Astrapak,[32] that there was no basis upon which an employee could obtain for herself both alternative employment and severance pay. I preface here when I ask rhetorically that this question is obiter, but what is the purpose to compensate an employee with severance pay for the loss of her employment when she has already found alternative

employment (assume on the same or better terms as her previous job) and not spent a moment unemployed? This is done all done through her own efforts and without the aid of her retrenching employer. Quite clearly then, this employee needs no soft cushion of severance pay to land on. Surely if an employee were to prosecute a referral for that type of compensation, she would need to clearly quantify the basis of her claim as she would do for a contractual breach in the civil courts.

[76] This is what focused commissioner van der Walt’s mind in DETAWU as his alternative reason to dismiss the applicant’s referral for severance pay. The question was also raised by Professor Grogan in his academic handbook, Dismissal.[33]

[77] Returning now to the outcome of the award, what is to be made of the Commissioner’s material errors? Errors, on their own, would not be sufficient to render violable an arbitral award. Something more is needed. These errors must have as their consequence their ability to render the award as being one which no reasonable decision-maker could have made in the same circumstances.[34]

[78] These errors notwithstanding, can the Commissioner’s award be justified as being reasonable on the basis of the evidential material placed before him?

[79] It is clear to me that the Commissioner’s misunderstanding of the principle in Irvin & Johnson, in which he regarded that anything less than a special term between the Applicant and Supercare that Supercare would employ all of its retrenched employees could only relieve the Applicant from its statutory obligation to pay severance pay to the individual members, was the wrong approach. This approach has caused the Commissioner to commit irregularities in terms of section 145(2)(a)(ii) to the LRA. He either misconceived the nature of the enquiry or arrived at an unreasonable result.

[80] In this review, I find that this threshold has been met and the award is liable to be set-aside as a result. Briefly, I turn to the notice pay.

Notice pay

[81] The Commissioner deals with this in a single paragraph of his Award. He reasons that as the Applicant, with the overall onus being cast upon it, led absolutely no evidence on the section 189 consultative process; the First and Second Respondent’s assertion that no notice of termination was given to their members; and that notice pay was paid to their members in lieu of that notice.

[82] In reading the transcribed record as I have done, this is not the established position. Both Messers Zengetwa and Ngqoboka referred to the minutes of the meetings between the unions and the employer on the proposed retrenchments.

[83] The Applicant was at pains to point out that the termination of its cleaning services contract at the tyre factory, was extended by an additional month. This was because of the extension afforded to it by the tyre factory whilst it completed its due diligence with its new service provider. Therefore, the initial notice of retrenchment referred to a date being 31 May 2022, and that the period between 5 May – 6 June 2022 would be the “paid notice month”.

[84] When the termination date of the cleaning services contract was changed by the tyre factory, the Applicant informed its employees on 23 and 31 May 2022 that the proposed retrenchment date would be extended from 31 May to 30 June 2022. Thereafter, the retrenched

employees who referred the non-payment of the severance pay dispute to the CCMA commenced work at Supercare on 1 July 2022.

[85] The Applicant submits that it has given in excess of four weeks’ notice to all of its employees affected by the retrenchment. It also makes the point that no additional notice was possible for the retrenched employees to work out.

[86] Despite it not being the subject of challenge by the Second Respondent, it argues that the proposed retrenchment date is applicable only to the section 189 process to the LRA and doesn’t constitute notice in terms of section 37(1)(c) to the BCEA. Therefore, as I understand the argument, an employer is to notify an employee in its circular provided to her in terms of section 189(3) to the LRA, of the proposed retrenchment date; and then also to notify that same employee of the proposed termination of her employment contract with it in terms of section 37(1)(c) to the BCEA. This constitutes, in my view, a double notice of termination. The Second Respondent argues that the Applicant has incorrectly conflated both section 189(3) in the LRA and section 37(1)(c) of the BCEA.

[87] In advancing this proposition in the manner in which it did in its Heads of Argument, the Second Respondent did not point me in the direction of any reported authority on this topic. I have been unable to locate any such authority from my own research which would bind me. I find the argument unconvincing by the Second Respondent.

[88] Despite the retrenchment notices and the minutes of the consultative meetings between the two unions and the Applicant being referred to in evidence, the Commissioner makes no mention of this in his Award. In this sense, this is a disjunction between the evidential material before him and the outcome.

[89] Although I have already set-aside the Award for the reasons advanced by me on the topic of severance pay, for the same reasons I would do the same for the Award on the topic of notice pay. The Commissioner has misconstrued the incidence of the onus and thereby committed an irregularity; he has failed to take into account material and relevant evidence, and thereby committed an irregularity. Viewed in the round, his reasoning for his award on notice pay cannot be justified as being reasonable in view of the evidential material which was placed before him. (I have already mentioned that there was no dispute on the contents of the documentary exhibits in the bible which was handed to him by consent).

Substitution or remittal?

[90] In its prayer for relief, the Applicant has sought an order that I issue a substituted order in which I declare that the individual

respondents are not entitled to: (i) notice pay and (ii) severance pay. This is the order which I intend to make.

[91] The Constitutional Court has indicated the importance of the expeditious resolution of employment disputes.[35] The individual respondents were retrenched on or about 31 May 2022.

[92] The evidence has been led by both parties before the Commissioner. There was no argument before me that a differently constituted CCMA Commissioner would be better placed than me to deliver an award – especially with particular reference to the credibility and demeanour of the individual witnesses. There is also no indication to me that the outcome of a remitted referral to the Commission would turn favourably on a credibility and demeanour assessment of the individual witnesses.

[93] To remit this matter back to the Commission would only heap further cost on both parties and may unnecessarily cause further delay and prejudice to each of the parties.[36]

[94] I therefore make an order in terms of prayers 1 – 3 of the Notice of Motion. I intend on making no costs order[37] the reason for which will be to ensure fairness.

[95] The following order is issued:

Order

1. The arbitral award under the auspices of the Third Respondent, case number ECPE4307-22, dated 13 February 2023, is reviewed and set aside.

2. It is ordered that the individual respondents, who are members of the First and Second Respondent, are not entitled to both (i) notice pay and (ii) severance pay.

3. No order on costs is made.

David. A. Smith

Acting Judge of the Labour Court of South Africa

Appearances:

For the Applicant: Ms L. Kok of Van Zyl’s Incorporated, Gqeberha For the 2nd Respondent: Mr K. Mdladlamba (Union official) NUMSA, Johannesburg, c/o NUMSA, Gqeberha.

[1] Act 66 of 1995, as amended.

[2] Act 75 of 1997.

[3] Absa Bank Ltd v IW Blumberg and Wilkinson 1997 (3) SA 669 (SCA); [1997] ZASCA 15 at 673–674; Daewoo Heavy Industries (SA) Pty Ltd v Banks and others [2004] 2 All SA 530 (C) at para 25.

[4] Zululand Anthracite Colliery v Commission for Conciliation, Mediation & Arbitration & another (2001) 22 ILJ 1213 (LC); [2001] ZALC 6; Mbatha v Lyster & Others [2001] 4 BLLR 409 (LAC); (2001) 22 ILJ 405 (LAC).

[5] Madlala v Nampak Sacks (Pty) Ltd & others [2008] 3 BLLR 267 (LC) at paras 11 – 12.

[6] (2006) 27 ILJ 935 (LAC); [2006] 7 BLLR 613 (LAC) per Zondo JA, Willis AJA et Jafta AJA concurring. This case was again referred to with approval by the LAC in Astrapak Manufacturing Holdings (Pty) Ltd t/a East Rand Plastics v Chemical, Energy, Paper, Printing, Wood and Allied Workers Union (Astrapak) [2013] 12 BLLR 1194 (LAC); [2013] ZALAC 19; per Davis JA, with Tlaletsi ADJP et Molemela AJA concurring.

[7] Fidelity Supercare Cleaning (Pty) Ltd v Busakwe NO & others [2010] 3 BLLR 260 (LC); [2009] ZALC 165.

[8] Irvin & Johnson at para 39.

[9] See Freshmark (Pty) Ltd v Commission for Conciliation, Mediation & Arbitration & others (2003) 24 ILJ 373 (LAC); [2003] 6 BLLR 521 (LAC) per Zondo JP, with Nicholson JA et Van Dijkhorst AJA concurring, at para 24. The LAC in Irvin & Johnson at para 26, also referred to with approval the speech of Lord Slynn of Hadley in Barry v Midland Bank PLC [1999] UKHL 38; [1999] IRLR 581 [HL], for the purpose for which severance pay is paid to an employee dismissed for operational requirements.

[10] [1969] 1 All ER 382 at 383.

[11] Jacob v Prebuilt Products (Pty) Ltd (1988) 9 ILJ 1100 (IC) at 1104D – F; Cele & others v Bester Homes (Pty) Ltd (1990) 11 ILJ 516 (IC) at 527G- J;

[12] Young & another v Lifegro Assurance (1990) 11 ILJ 1127 (IC) at 1137B – E.

[13] Irvin & Johnson at paras 44 - 45.

[14] Now no longer exists.

[15] (2023) 44 ILJ 380 (LC); [2022] ZALCCT 54.

[16] Irvin & Johnson at paras 3 – 4.

[17] Ibid at para 8.

[18] [2023] 5 BALR 579 (CCMA).

[19] Ibid at para 26.

[20] Vergenoeg vir Seniors v Stone and Others [2010] ZALAC 35 per Tlaletsi JA, with Patel JA et Hendricks AJA concurring.

[21] Herholdt v Nedbank Ltd (Congress of SA Trade Unions as Amicus Curiae) (Herholdt) (2013) 34 ILJ 2795 (SCA); [2013] 11 BLLR 1074 (SCA) at para 25.

[22] Nikelwa Ntuli v Empact Group (Ntuli) GAJB6968-20, CCMA, Johannesburg, 21 July 2021, Commissioner Dlamini.

[23] DETAWU obo Tanya Du Piesanie & 95 others v Supercare Cleaning Services (DETAWU) ECPE2602-21, CCMA Gqeberha, Commissioner van der Walt.

[24] See paras 8(a) and 14 of Fidelity Supercare Cleaning.

[25] Ibid at para 27.

[26] Supra.

[27] Herholdt at para 12.

[28] Fidelity Cash Management Service v Commission for Comciliation, Mediation & Arbitration & others (2008) 29 ILJ 964 (LAC); [2008] 3 BLLR 197 (LAC) at paras 97 and 100.

[29] See para 19 of Servest.

[30] Harlech-Jones Treasure Architects CC and others v University of Fort Hare [2001] JOL 8151 (E) at para 104 – 108, per Kroon J, with Leach et Jansen JJ concurring.

[31] S v H 1981 (2) SA 586 (SWA). See also Holtzhauzen v Roodt 1997 (4) SA 766 (W) at 772B – 773D.

[32] Astrapak ibid at fn 4.

[33] Grogan, J., Dismissal Juta & Co., Cape Town, (2010) p 408.

[34] Herholdt at para 25. See also van Niekerk J in Southern Sun Hotel Interests (Pty) Ltd v Commission for Conciliation, Mediation & Arbitration & others (2010) 31 ILJ 452 (LC); [2009] 11 BLLR 1128 (LC) at para 17.

[35] Commercial Workers Union of SA v Tao Ying Metal Industries & others (2008) 29 ILJ 2461 (CC); [2009] 1 BLLR 1 (CC) at para 63.

[36] See Wagley J (then known) in Consol Ltd t/a Consol Glass v Ker NO & others [2002] 4 BLLR 367 (LC); 2005 (6) SA 23 (C) at 369 – 371.

[37] Zungu v Premier of the Province of KwaZulu-Natal & others (2018) 39 ILJ 523 (CC); [2018] 4 BLLR 323 (CC) at para 24.