Khawusele and Others v Fidelity Cash Management (C826/2006) [2011] ZALCCT 53 (15 June 2011)

not reportable / of interest to judges

IN THE LABOUR COURT OF SOUTH AFRICA

(HELD AT CAPE TOWN)

CASE NUMBER: C826/2006

In the matter between:

B. KHAWUSELE ...................................................................................First Applicant

K. MAHO

..........................................................................................Second Applicant

A.S. MADIKIZELA ...............................................................................Third Applicant

M. BENYA ..........................................................................................Fourth Applicant

A. MAKETA ...........................................................................................Fifth Applicant

S. HALU

...............................................................................................Sixth Applicant

L. MAJALAZA .................................................................................Seventh Applicant

Z. MKHUMBUZI .................................................................................Eighth Applicant

and

FIDELITY CASH MANAGEMENT ............................................................Respondent

JUDGMENT

Rabkin-Naicker A.J.INTRODUCTION[1] The Applicants were dismissed on the 23rd October 2006 for participating in an ‘illegal work stoppage/ unprotected industrial action’. Before this court, the Applicants contended that they had not been involved in an unprotected strike but instead, after being given a lawful instruction by the senior manager of the branch to go to the Bargaining Council regarding their grievance, they left the premises on 19 October 2006 in the early morning. [2] The court is required to decide whether the action taken by the Applicants amounted to unlawful industrial action, and whether their subsequent dismissal by the company was procedurally and substantively fair.[3] In making this decision regard must be had to section 68(5) of the LRA which states :“Participation in a strike that does not comply with the provisions of this Chapter, or conduct in contemplation or in furtherance of that strike, may constitute a fair reason for dismissal.”[4] In determining whether or not the dismissal is fair, the Code of Good Practice : Dismissal in Schedule 8 of the LRA must be taken into account. Item 6 of the Code of Good Practice : Dismissal provides as follows :“6 Dismissals and industrial action(1) Participation in a strike that does not comply with the provisions of Chapter IV is misconduct. However, like any other act of misconduct, it does not always deserve dismissal. The substantive fairness of dismissal in these circumstances must be determined in the light of the facts of the case, including- (a) the seriousness of the contravention of this Act; (b) attempts made to comply with this Act; and (c) whether or not the strike was in response to unjustified conduct by the employer.(2) Prior to dismissal the employer should, at the earliest opportunity, contact a trade union official to discuss the course of action it intends to adopt. The employer should issue an ultimatum in clear and unambiguous terms that should state what is required of the employees and what sanction will be imposed if they do not comply with the ultimatum. The employees should be allowed sufficient time to reflect on the ultimatum and respond to it, either by complying with it or rejecting it. If the employer cannot reasonably be expected to extend these steps to the employees in question, the employer may dispense with them.”[5] First Applicant was not present at trial, nor had he deposed to an affidavit setting out his earnings with the company having been requested to do so by the Applicants’ legal representative, and his colleagues. Thus for the purposes of the order emanating from this judgment I am unable to regard him as a party in the dispute. The Second to Eighth Applicants seek reinstatement into their previous positions with the company. BACKGROUND TO THE DISPUTE[6] The Respondent operates a cash in transit business and falls under the

scope of the National Bargaining Council for the Road Freight Industry. It is common cause that at the time of the dispute and

referral to this court, the company was called Fidelity Cash Management Services, which has subsequently been changed to G4S Cash

Solutions.[7] In 2006 the Applicants were employed by the company with the job title of ‘vehicle security guards’ (VSGs).

They commenced employment with effect from 1 July 2006 after completing a month’s training on a fixed term contract. Their

contracts set out that their remuneration would be an amount of R2170 per month with an additional fire arm allowance of R330 per month.[8] It was common cause that subsequent to their appointment as VSGs, there were at least three meetings held between the Applicants and their union on the one hand, and the company on the other, in relation to the Applicants’ grievance that they were being underpaid. The President of the Motor Transport Workers Union (“the union”) and a senior manager from the company’s head office travelled to Cape Town to discuss the issue.[9] The grievance arose from the fact that applicants were being paid substantially less than the other employees (with whom the applicants travelled in cash in transit vans), who drove vehicles or who actually handled the cash. The industry standard at that time for the drivers and crew was at least R4500 per month. The applicants alleged that although they were doing very dangerous work in the cash in transit industry their salary was equivalent to an ordinary security guard.[10] It was common cause that the company informed the Applicants and other employees in their position, that they would be “promoted” to crew when vacancies arose. It was the company’s case that the Applicants did not drive or actually deliver the cash as did other crew members and that they were therefore not employed at the same level of seniority.[11] The Applicants were informed by the company that in March 2007, there would be a possibility of a rise in wages in terms of negotiations under the Main Collective Agreement of the Road Freight Industry under which the parties fell. No progress was made in resolving their grievance before the alleged illegal work stoppage took place in October 2006.Was there an illegal work stoppage?[12] This question was hotly contested at trial. The company was without its principal witness to the events of the morning of the 19th October 2006, and in particular to the meeting that had taken place with the VSGs on the morning of the alleged work stoppage. This witness, Mr Nico de Jager (“de Jager”), the branch manager of the company, had emigrated to Australia by the time the trial was enrolled.[13] The applicants insisted in testimony that de Jager had instructed them to go to the bargaining council on the day in question and they were therefore only obeying a lawful instruction when they left the premises before the morning shift. It is necessary to evaluate whether the applicants have discharged the onus of proving that the work stoppage was legal,

see Modise & Others v Steve’s Spar Blackheath (2000) 21 ILJ 519 (LAC) at paragraph 10.[14] The third applicant (Madikezela) testified as to what had happened on the 19th October 2006. He stated that the VSGs were sitting chatting in the recce room and that when de Jager came there: “he was very upset and he told us that he hear we are claiming we are going to be promoted……And he’s not going to do so because we are not productive. So if we think maybe there is any place that can change what he told us, we can, we can go to the Bargaining Council”.[15] According to the Eighth Applicant (“Mkhumbuzi”), de Jager just said: “I hear that you want promotion. You want more money. You will never get that. You can go whenever you like. You can even go to the Bargaining Council and find out there.”[16] Mkhumbuzi’s evidence regarding what happened when the applicants went to the bargaining Council is particularly revealing.

He testified that: “…the day we were there by the Bargaining Council, we also told that guy who was there that day, we don’t even know that we are still having jobs, because we have to go back base. He say no, they can’t do to you that because you are here and then we have marked here on our visitation register that you were here”.[17] A further piece of evidence of significance to the version that applicants were simply following a lawful instruction when they left the premises, was that given by the seventh applicant (“Majalaza”) in chief, when he stated that on the 19th October 2006, de Jager had told them: “…if we think that what they are doing is unfair to us we must leave and go and report to the Bargaining Council and see if we are going to win. So we accepted his instructions, we left the premises”.[18] In view of the applicants own testimony referred to above, and taking into account that the ‘lawful instruction defence’ was raised for the first time at trial, I find that the probabilities do not favour the applicants on the issue of the legality of the work stoppage. I find instead that the applicants walked out in frustration after de Jager had basically told them that they would never get more money, and that as Mkuhumbuzi testified, they did not know if their jobs would be safe when they returned to base. They were in fact suspended pending their disciplinary hearing on the 19th October 2006,the day of the work stoppage.

[19] I now turn to consider whether the company has discharged the onus of establishing that their dismissal was procedurally and

substantively fair.

Procedural Fairness of the Dismissal

[20] It was submitted on behalf of the company that there had been substantial compliance with the audi rule in respect of the dismissals. Mr Samuel Raubenheimer (‘Raubenheimer’) of Danshall Consulting chaired the disciplinary hearing and gave evidence in respect of this process. He explained to the court that he had great trouble recalling the factual nature of the evidence at the hearing, and that unfortunately his notes taken there had been mislaid. He knew the form the disciplinary hearing took because it would have been the format he always used. He conceded under cross-examination that it might be a fair assumption that certain of his evidence in chief may not be a correct version of what occurred.

[21] It was the applicants’ case that two of their number were not present at the hearing and had informed the company of their inability to attend. It was further their evidence that they were not given a chance as individuals to give evidence or to challenge the evidence at the hearing. They were however represented by a shop steward, a Mr Coordon (“Coordon”). Coordon (who had since 2006 joined the ranks of management and gave evidence for it) was unable to dispute that the applicants were not given an opportunity to state their case at the disciplinary hearing.[22] Given the above, the applicant’s version of the disciplinary hearing is to be preferred, I do not deem it necessary to deal with the appeal process. What is of importance to consider in respect of overall procedural fairness in the context of this case, is the issue of whether the Schedule 8: item 6 guidelines were followed.[23] The company was unable to provide evidence that an ultimatum as contemplated in Item 6 of Schedule 8 was given to the applicants. Mr Dean Bryte (‘Bryte’) the operations manager of the branch at the time confirmed that there had been illegal work stoppages before, and was asked under cross-examination what the company had done previously. He stated that ‘you give them ultimatum and then you give them second ultimatum and then you just suspend’. He testified that in this instance there was no time to give the applicants an ultimatum as they just walked off. He was unable to answer as to whether an ultimatum was issued to the union as this was de Jager’s department.[24] The purpose of an ultimatum is to afford striking employees an opportunity to consider their position before action which may have dire consequences is taken against them. Sufficient time must be given to them in this regard i.e. to entice them back to work. See Professional Transport workers Union & Others v Fidelity Security Services (2009) 30 ILJ 1129 (LC) at paragraphs 41 and 44 and the authorities there incited.[25] In this matter, it is undisputed that no ultimatum was issued by the company and that further, there was no consultation with the applicants union

as to the course to adopt. On the company’s own evidence, this practice had been observed in the past. I am therefore of the view that it is reasonable to expect that it should have been observed in this case.[26] Even if the court accepts that the applicants were warned they would face dismissal if they walked out, such a warning would not meet with the standard of fairness required in these circumstances. I am in respectful agreement with Molahlehi J in the Professional Transport Workers Union v Fidelity Case Management case (supra) that to comply with principles of fairness an ultimatum must:(i) be communicated to the striking employees;(ii) the communication must be in a language easily understood by the employees - preferably it should be their home language;(iii) the terms of the ultimatum must clearly indicate what is expected of the employees, including the time frame within which they are expected to comply and where compliance must be carried out;(iv) more importantly indicate the possible consequences of their failure to comply with the terms of the ultimatum, and (v) the employees must be given sufficient time within which to consider their position in relation to compliance or otherwise with the terms of the ultimatum. [27] In all the circumstances therefore, I am of the view that the company has failed to prove that the dismissal of the applicants was procedurally fair.Substantive Fairness of the Dismissals[28] Having concluded that the applicants were involved in an illegal work stoppage which constitutes misconduct, the enquiry into substantive fairness will focus on the seriousness of the contravention of the LRA; attempts made to comply with the Act; and whether or not the illegal work stoppage was in response to unjustified conduct by the company. (Item 6(1) of Schedule 8.)[29] The applicants made

relatively prolonged attempts to find a solution to their grievance and their demand for the same pay as other members of the crew. It was common cause that the union did not take steps to refer the matter to the bargaining council althought it was applicant’s

evidence that the national leadership of the union had undertaken to do.[30] Although the evidence does point to attempts to comply with the LRA by Applicants in attempting to get their union to refer the dispute, this cannot excuse the applicants conduct. This court, in upholding the overarching principles of our employment legislation, must express its disapproval at unprotected industrial action, whatever its duration.[31] The next question to consider is whether the strike was in response to unjustified conduct on behalf of the employer. During the trial the company gave evidence on the binding nature of the main agreement of the Road Freight Industry. It was the company’s case, through the testimony of one of its consultants Mr Manthey (“Manthey”), that prior to 2007, persons such as the applicants were in a recognised category of ‘security guard’ in terms of the Main Agreement and that after that date the title changed to ‘vehicle security guard’. During 2006, the company could not pay wages outside of the negotiated category of security guard.[32] The main agreement that applied at the time of the dispute was not discovered by the company who relied instead on references to an unsigned later agreement. Subsequent to the filing of written submissions by the parties, I requested them to supplement these, in respect to the relevance of the main agreement that actually governed the parties at the material time. I am indebted to the legal representatives for filing same.[33] Mr Makapane for the applicants, argued that since the company had failed to discover the relevant agreement even when it was raised in court,

that I should not have regard to it. I must disagree given that a published collective agreement has the status of subordinate

legislation. See Platinum Mile Investments (Pty) Ltd t/a Transition Transport & Allied Workers Union & Others (2010) 31 ILJ 2037 (LAC). The court may therefore take judicial notice of its contents.[34] In as far as the Road Freight Collective Agreement and amendments for the period of May 2004 and July 2006 are concerned, its contents are of relevance to this case in that they assist in the determination of whether the applicants had a valid grievance. The definition section of the agreement reveals that a ‘security guard’ means an “employee, other than a security officer, who is engaged in one or more of the following duties: Guarding, protecting or patrolling premises, buildings, structures or other fixed or moveable property, whether or not he handles or controls dogs in the performance of any or all of the said duties”. [35] There are three categories of ‘security officers” defined in the said Agreement. Ms Potgieter for the company submitted that the applicants fulfilled the function of security guards, and not that of security officers, in that they did not drive the vehicles or handle cash. Majalaza confirmed the role he and his colleagues played in evidence when he testified as follows:“…as the vehicle security guard you will work there as the third man, that means you must be the first person that must go out of the vehicle, and then when you go out, after you go out then you must take cover, and see if there is any suspicious surroundings around the vehicle or around the vicinity in which you are working at, and then if the situation is fine then you will make a sign to your colleagues in the vehicle……..and then you will escort him (the crewman) into the client’s premises.”[36] In her submissions, Ms Potgieter quoted the relevant definitions of the security officers in the Main Agreement, who drive and handle the cash, but failed to include that part of the stated definition of the three types of ‘security officers’,

which includes the words “and who may have to carry firearms”. It was common cause that the applicants were required to handle firearms. The description of the applicants precise function set out above makes it abundantly clear why.[37] This court does not have jurisdiction to interpret the collective agreement and make findings as to its meaning. I have considered the agreement’s terms to assist me to ascertain the issue of substantive fairness and whether it can be said that the conduct of the company was in anyway blameworthy. It was not disputed by the company that at other branches of its operations, employees working as crew on the cash and transit operations were not paid the security guard rate. [38] Taking judicial notice of the 2007 collective agreement (Regulation Gazette No. 30041), I record that in fact the definition of a VSG was included in 2007 for the first time, and is defined as: “an employee who is engaged to provide a protective, armed service to the security officer 11, in securing an area, guarding of cash and valuables, securities and negotiable documents in transit.” I note that in this Agreement while the Paterson grade of a VSG is category B2, the security guards grade is category A. Security officers are at category B3 and B4.[39] There is no doubt that it is arguable that the rate of pay being earned by the applicants (ie. as security guards) was not commensurate with the dangers of the work they undertook. Whether they should have been paid according to the ‘security guard’ category at the time, given the need for them to carry firearms, was a matter than should have been resolved through interpretation of the collective agreement at the Bargaining Council. I can only infer that the union at national level, and the company were not overly concerned to ensure a determination take place.[40] The question of whether the

employer was involved in unfair conduct could only be answered if there had been a definitive ruling on whether the applicants should have been categorised as ‘security officers’ or ‘security guards’ under the applicable collective agreement. In the same vein, whether the applicants in fact were making a lawful demand for more pay would have been settled had the matter been referred to the Council in terms of section 24(1) of the LRA.[41] This court must decide on the fairness of the dismissals. Taking into consideration all the circumstances of this case, including the short duration of the work stoppage and the legitimate grievance of the Applicants in respect of their remuneration as tied to the category ‘security guard’, I find that dismissal was too harsh a penalty.Remedy [42] Having found that the dismissals were both procedurally and substantively unfair, I must consider whether the primary remedy of reinstatement is apposite. Generally, a court is loath to grant reinstatement in the circumstances of an unprotected strike in order to show its disapproval of the contravention of the provisions of the LRA. [43] I do not consider that the company’s conduct contributed negatively to the circumstances leading to the work stoppage in distinction to the factual matrix in Professional Transport workers Union & Others v Fidelity Security Services (2009) 30 ILJ 1129 (LC), where there had been no engagement with the union over the implementation of a new roster. The company did engage with the applicants and their union representatives on their grievances and demands on at least three occasions between July and October 2006. I have stated above that I am unable to find the company’s categorisation of the employees in terms of the collective agreement as unfair. This arguable case should have been taken to the bargaining council for determination. I therefore do not consider reinstatement to be appropriate. The applicants are however entitled to compensation in view of the company’s scant regard for procedural fairness and imposition of too harsh a penalty in the circumstances.[44] In as far as costs are concerned, I note that the attorneys for the applicants, who have represented them on a pro bono basis have not made submissions in this regard. I do not consider that fairness dictates that costs are awarded in this matter save for the wasted costs which were tendered by the company in respect of a postponement of the matter on the 14th February 2011.[45] In conclusion, I make the following order:45.1 The dismissals of the Second to Eighth Applicants were procedurally and substantively unfair;45.2 The respondent is hereby ordered to pay Second to Eighth applicants an amount equivalent to 12 months remuneration calculated at their salary as of the date of their dismissals;45.3 There is no order as to costs. Rabkin-Naicker A.J.Date of Hearing: 14/2/2011; 22-23/2/2011; 3-4/5/2011Date of Judgment: 15 June 2011Appearances: For the Applicants: Mr K. Makapane Edward Nathan Sonnenberg Attorneys For the Respondent: Ms C. Potgieter Blake Bester Incorporated