National Union of Metalworkers of South Africa and Others v Beta Engineering (1969) (JS1117/10) [2016] ZALCJHB 144 (31 March 2016)

THE LABOUR COURT OF SOUTH AFRICA

JOHANNESBURG

Reportable

Case No: JS1117/10

In the matter between:

NATIONAL UNION OF METALWORKERS OF

SOUTH AFRICA

First Applicant

CARL RAKWENA

Second Applicant

JAMES MOLELE

Third Applicant

and

BETA ENGINEERING (1969)

Respondent

Heard: 9 and 10 March 2015

Judgment: 31 March 2016

Summary: Claim for unfair dismissal following a retrenchment exercise; Applicants challenging the selection process; LIFO principle applied as a selection criterion; Impact of break in service on LIFO considered; Selection of employees with long service found to be unfair; Dismissal declared substantively unfair; Reinstatement not reasonably practicable due to the Applicants’ delay in pursuing the matter; Compensation awarded instead.

JUDGMENT

VOYI AJ.

Introduction

[1] This is a claim for unfair dismissal following a retrenchment exercise embarked upon by the Respondent, being Beta Engineering (1969) (hereinafter “Beta Engineering” or “the Respondent”). The claim was initiated by the National Union of Metalworkers of South Africa (“NUMSA”), acting on behalf of two former employees of the Respondent.

[2] The two former employees are Mr Carl Rakwena (“Rakwena”) and Mr James Molele (“Molele”), and are also cited in these proceedings as the Second and Third Applicants, respectively.

Background Facts

[3] The background facts to this matter are largely common cause. Due to unfavourable financial conditions, Beta Engineering embarked on a retrenchment process as envisaged by section 189 of the Labour Relations Act.[1] The Respondent operates in the metal industry and is a supplier of smaller machine components/parts.

[4] The catalyst to Beta Engineering’s financial woes was the loss of one of its major sources of income stream.

[5] In or about June 2005, a major client (being Supreme Spring, a division of Metindustrial (Proprietary) Limited) decided to source certain specific products supplied by Beta Engineering from other suppliers. The reasons behind this decision are irrelevant to this case.

[6] Before commencing with the retrenchment process, Beta Engineering unsuccessfully implemented ‘short-time’ as well as ‘lay-off’ in an attempt to alleviate its precarious financial situation. When these attempts failed to yield the desired results, the notice contemplated by section 189(3) of the LRA was issued.

[7] It was initially on 8 March 2010 that Beta Engineering formally mooted the possibility of retrenchments. In a letter of the said date, which was issued to all employees, the following was recorded:

‘NOTICE TO ALL EMPLOYEES RE COMPANY’S POSITION

Management hereby wish to inform all Employees that management had considered the Company’s performance over the last 12 months ending 28 February 2010.

Management regrets to state that it will needs to re address the Company’s position in regard to the following:

1. Loss of income due to a decline in orders and loss in production;

2. The high cost of the Company wage bill in comparison with other expenditures; and

3. Restructuring of its operations and downsizing of its production..

Management envisages that this may have an impact on certain positions within the company that may adversely affect some Employees.

As soon as a final decision is taken you will be informed accordingly.’

[8] Beta Engineering did not immediately act on the contemplated action as mentioned in its letter of 8 March 2010. Employees were invited to consider being voluntarily retrenched and some employees accepted this option.

[9] The strategy of laying-off some employees, as mentioned hereinbefore, was actually implemented at this juncture.

[10] On 15 June 2010, Beta Engineering issued a formal notice of intention to declare certain positions redundant to the local organiser of NUMSA, being one Mr Sam Khumalo (“Khumalo”). This notice recorded the following:

‘Dear Sir

NOTICE OF INTENTION TO DECLARE CERTAIN POSITION REDUNDANT

As you are fully aware Management in April 2010 has decided to abolish some positions and to retrench the occupants of such positions. However after consultations with you and the Shopstewards it was agreed to implement lay-offs as an interim measure to see if the business does not improve.

Management regret to inform you that due to the effect that this section does not generate any new business and of its operational needs management is consider abolishing the positions of Engineer, Machine Operator and General Assistant with effect from 1st July 2010.

You are accordingly informed that as soon as a final decision has been reach a meeting will be scheduled to discuss the following:

(a) To discuss a timetable of the potential measures which may be taken.

(b) If retrenchment is unavoidable to discuss what benefits and severance pay can be provided by the company.

(c) The last date of work;

(d) Possible re-employment in the future.

You will be duly informed when this meeting will take place.

Yours faithfully,’

[11] As envisaged by section 189(1), (2) and (3) of the LRA, there were consultations between the employer and the trade union representing employees of Beta Engineering, it being NUMSA.

[12] The consultations were held on 28 June 2010 as well as on 16 July 2010. The minutes of the two consultations form part of the documentary evidence presented by the parties.

[13] The minutes reveal that there was not much input from the union representative, being Khumalo or the shopsteward who was in attendance on the critical issues the parties were seeking to reach consensus on. By way of demonstration, The following is recorded in the minutes of 28 June 2010 on the ‘proposed selection criteria to be followed’:

‘Facts presented by Company Representative:

Management said that:

(i) In respect of the Engineer and General Assistant the current incumbents are the only one.

(ii) In respect of the Machine Operator the Last-in-First out principal will be applied.

Respondent and Alternative proposals by Employee/Representative:

No response from the Union Official.’

[14] Respecting the consultation of 16 July 2010, the union representatives (being Khumalo, together with one Mr Cosmos Mathabula) and the shopsteward staged a walk-out after no consensus could be reached on which employees should be retrenched. Despite this, Beta Engineering proceeded with the meeting as motivated by the desire to conclude the retrenchment process by the end of July 2010.

[15] Indeed the process was concluded, on 31 July 2010, by the issuing of letters of termination of employment contract due to retrenchment to both Rakwena and Molele.

[16] In August 2010, NUMSA lodged an unfair dismissal dispute with the Metal and Engineering Industries Bargaining Council (“MIBCO”) on behalf of both Rakwena and Molele.

[17] The dispute was unsuccessfully conciliated by Commissioner Sipho Dlamini on 2 September 2010. As a result of the unsuccessful conciliation, a certificate of non-resolution was issued.

[18] A statement of claim initiating the proceedings before this Court was delivered on 14 December 2010. A day later, being on 15 December 2010, Beta Engineering’s response to the statement of claim was delivered. Thereafter, years elapsed with no advance on the case.

[19] The pre-trial conference that is supposed to be convened within 10 (ten) days of the date of delivery of the response to a statement of claim, as per Rule 6(4)(a) of the Rules of the Labour Court, was only held in or around June 2014.

[20] The minutes of the pre-trial conference, which was conducted by way of correspondence, were signed on 10 June 2014. They were filed on the same day.

The Trial

[21] At trial, Beta Engineering was represented by Mr D J Coetsee, an attorney practising under the name Dirk Coetsee Attorneys. The Applicants were represented by Mr Tumiso Manasoe of NUMSA. The trial lasted only for two days.

[22] Beta Engineering called only one witness, being Mr Craig de Freitas (“de Freitas”) who is the son of the owner of the business, being Mr Dudley de Freitas (“de Freitas senior”). The evidence of de Freitas was brief and straight to the point. The key aspects of his evidence can be contextualised as follows.

[23] He is the production and administration supervisor for Beta Engineering and he was involved in the retrenchment process. Prior to the retrenchment exercise, there were 18 (eighteen) employees working for the company. He was the only one dealing with administration.

[24] Evidence was led on the nature of Beta Engineering’s business. The witness also gave background facts leading to the ultimate retrenchments of Rakwena and Molele.

[25] After the implementation of shot-time and lay-off did not yield the expected results, the Respondent consulted NUMSA through Khumalo. The notice issued on 15 June 2010 was referred to. Initially there were 6 (six) positions that were to be affected by the retrenchment process.

[26] Of importance in this matter, de Freitas mentioned that all of the affected positions were linked to or involved with the particular client that decided to source the products elsewhere.

[27] Out of the 6 (six) positions that were to be affected, 3 (three) of its incumbents opted for voluntary retrenchments. This left only 3 (three) remaining positions that were to be affected. These positions were those of an Engineer, one Machine Operator and a General Assistant.

[28] The Engineer that was to be retrenched ended up leaving out of his own accord. That left only 2 (two) positions to be affected, they being that of a Machine Operator and a General Assistant. Molele occupied the Machine Operator position and Rakwena was the General Assistant.

[29] The selection yardstick that was decided upon by the employer was LIFO for the Machine Operator and Rakwena was the only one to be retrenched as he was the only General Assistant. There were 14 (fourteen) Machine Operators employed by Beta Engineering at the time.

[30] It was testified that the machines used at the Respondent’s business were more than the appointed operators and that these were different types of machines. He stated that Molele operated 2 (two) of the semi-automatic machines and he was also able to operate other machines.

[31] Although Molele could have been used for other machines, the machines operated by him were linked to the lost business. The LIFO principle was used for Molele and there was no response to this selection criterion from NUMSA.

[32] As for Rakwena, it was testified that he was not skilled enough. This was elaborated on with a statement that the majority of the Machine Operators could set the machines on their own, something Rakwena could not do. By way of example, it was mentioned that one Mr Samela, who was a Machine Operator, could operate and set his machine without any assistance, which was not the case with Rakwena.

[33] It was also testified that Molele left Beta Engineering’s employ in January 2008. The evidence was that Molele abandoned Beta Engineering for almost 4 (four) months and later came back to re-join the company.

[34] As to why Molele was specifically retrenched, it was stated that this was due to the loss of a greater chunk of the employer’s business. It was stressed that no consensus could be reached with the trade union representative on (a) the number and category of positions to be abolished and (b) the selection criteria that were to be followed in identifying the affected employees.

[35] Under cross-examination, de Freitas reiterated that the Engineer was not ultimately retrenched but he left out of his own accord. It was put to him that Rakwena was a driver and he agreed that it was so initially.

[36] Mr Manasoe, representing the Applicants, referred de Freitas to a certain settlement agreement that was reached at MIBCO on 25 February 2010, in which it was inter alia recorded that:

‘2. Mr Rakwena will serve as an assistant to the machine operator in the interim but shall retain the title of a driver.’

[37] The aforementioned settlement agreement was reached after NUMSA had lodged a dispute concerning employees being placed on ‘short-time’ by the employer. The witness confirmed his awareness of the settlement agreement.

[38] It was put to de Freitas that Rakwena was not an assistant and that, as at the year 2003, he could perform other functions. This was so put with specific reference to a certain document, dated 23 June 2003 and appearing at page 11 of the Applicants’ bundle of documents which were used at trial, wherein certain functions next to Rakwena’s name are recorded. These functions were recorded as delivering and collecting goods, preparation and packing of goods, packing of stock, as well as drilling and chamfering. The witness conceded that Rakwena could do more than one task in that he could be rotated.

[39] The fact that Rakwena was employed in 1996 and that he was a driver until February 2010 was also conceded. When it was pointed out that the General Assistant position that was to be affected by the retrenchment was not occupied by Rakwena but by one Mr Petrus Molela, the witness quickly pointed to a typographical error in the minutes of the consultations to the extent that they refer to a General Assistant. According to him, the correct description of the position that was to be affected was that of a machine assistant operator.

[40] It was also put to the witness that Molele commenced his employment with Beta Engineering in the year 1997. In response, de Freitas pointed out that Molele resigned in January 2008 and later re-joined the company 2 (two) months later. I pause herein to point out that earlier, de Freitas stated that Molele was out of Beta Engineering’s employ for almost 4 (four) months.

[41] In relation to the date of commencement of employment for Molele, reference was made to a form that was completed by de Freitas as part of the Department of Labour’s process of withdrawing unemployment insurance benefits, it being the UI-19 form.

[42] It was pointed out to the witness that the alleged initial period of employment for Molele until 2008 was completed after the Department of Labour intervened by way of a telephone call. This was, however, denied.

[43] Reference was also made to copies of payslips issued by Beta Engineering for the period 28 February 2009 and 5 March 2008 as well as 4 February 2010 to 10 February 2010. The significance of the payslip for the former period was that same was issued during the period Molele was supposedly no longer with the Respondent.

[44] As for the payslip for the latter period, they reflect the engagement date as being 4 June 1997. This particular payslip was issued after Molele had allegedly re-joined the Respondent in or around April 2008, yet the engagement date is recorded as being 4 June 1997.

[45] Of significance, the witness was unable to refute the contents of these payslips. He retorted by conceding that, purely by virtue of the payslips, it is correct that Molele was at work in March 2008 and had not resigned.

[46] It was put to the witness that Machine Operators do not need qualifications to perform their functions. He conceded that none of the Machine Operators had qualifications. The witness, however, pointed out that Rakwena could not read a ‘winijard gauge’.

[47] Of significance once more, it was conceded that Rakwena could have performed the functions of a Machine Operator if he could have been trained. When the witness was confronted with a claim that Rakwena was never given the opportunity of training, he retorted by stating that informally he was trained.

[48] It was also put to the witness that between February 2010 and July 2010, there were deliveries for the employer and that Rakwena could still perform the functions of a driver. These propositions were easily conceded to.

[49] When asked if the Respondent had offered Rakwena the General Assistant’s position, de Freitas said “no”. He elaborated on his answer by stating that it would have resulted in half the cut on his salary.

[50] Under re-examination, the witness stated that the union representative had no comments during the consultations on the alternative employees that could have been retrenched.

[51] Regarding the truck that was being used by Rakwena while he functioned as a driver, the witness stated that same was sold and deliveries were, thereafter, being made with a half-ton Corsa bakkie.

[52] It was the witness’ evidence that the driving functions were being performed by one Mr Isaac Nene after Rakwena was no longer functioning as a driver. He emphasised that Mr Isaac Nene was driving the Corsa bakkie even before the truck was disposed of. As for Mr Isaac Nene’s position, the witness testified that he was a qualified ‘storeman’.

[53] At the end of his testimony, the witness reiterated that Molele left stating he was resigning but later approached the Respondent for re-employment. After a few questions of clarity from my side, the Respondent closed its case without calling any further witnesses.

[54] The Applicants opened their case by calling Molele. The second witness for the Applicants was Rakwena and the third (and last) witness was Mr John Ramahama (“Ramahama”), who was the shopsteward that partook in the consultations held between NUMSA and the Respondent.

[55] What follows is only the material aspects of the evidence tendered by these 3 (three) witnesses.

[56] In essence, Molele disputed that he resigned in January 2008 as testified to by de Freitas. He stated that he was at Beta Engineering working during the period he had allegedly left the services of the Respondent, and that he was receiving his salary.

[57] Molele testified that he was operating a couple of the Respondent’s machines and that he had trained some of the Machine Operators. He mentioned that 2 (two) of the 4 (four) Machine Operators who could set and operate their own machines joined the Respondent after him. He further testified that there was no machine he could not operate except for a certain ‘CNC Machine’ which had to be set up by the manager.

[58] Under cross-examination, it was put to Molele (and he did not dispute) that he was operating machines that manufactured spring bolts for Supreme Spring. When it was, further, put to him that the business with Supreme Spring was lost by the Respondent, he retorted that the work he was performing was for many other clients and that the bolts were not only for Supreme Spring.

[59] It was also put to Molele that he resigned in 2008 to cash in his provident fund savings. He responded by stating that he had asked the Respondent to get him his provident fund savings so that he could settle his debts. He was, however, adamant that he did not leave the Respondent’s employ.

[60] It was furthermore put to him that he could only have withdrawn his provident fund savings if he had resigned from the Respondent as an employee. He admitted to having received his provident fund savings but maintained that he continued to work for the Respondent notwithstanding having received such savings.

[61] As for Rakwena, he testified that he joined the Respondent on 1 August 1996 and that his position was that of a driver and forklift operator. As part of his driving duties, he was driving the Respondent’s truck as well as a van.

[62] He testified that as an assistant to the Machine Operator, he was merely assisting the operator to operate the machines. According to him, the General Assistant position was occupied by one Mr Petrus Molela.

[63] Rakwena testified that the functions of a driver were given to another employee from the stores after he became an assistant to the Machine Operator. He further testified on the reason he was moved from being a driver. He stated that the van belonged to de Freitas and the latter did not want him to use it.

[64] It was the witness’ evidence that he was never given any training to operate the Respondent’s machines. He did not know how to set up the machines and this would be done for him by other machine operators.

[65] After a machine would be set up for him, he would be instructed on how to operate it and he did. The witness was adamant that he could do the work performed by machine operators.

[66] Under cross-examination, it was put to Rakwena that he started as a driver and he drove the Respondent’s truck. When it was, however, put to him that Mr Isaac Nene was driving the bakkie and he drove the truck, he strongly disagreed and stated that he was driving both the truck and the bakkie alone. He mentioned that all depended on the load and deliveries to be made.

[67] According to him, Mr Isaac Nene only assisted by driving the bakkie if he had already left with deliveries using the truck and something additional needed to be delivered as a matter of urgency. Rakwena was adamant that Mr Isaac Nene was not frequently driving for the Respondent.

[68] It was also the witness’ evidence that he was not moved to the position of assistant to the Machine Operator immediately after the truck broke down. His evidence was that he continued as a driver using the bakkie for years after the truck had been disposed of.

[69] When it was put to Rakwena that there was only one General Assistant, he retorted by stating that there were two, namely Mr Eddie Simelane and Mr Moses Malaza. It was pointed to him that the 2 (two) employees were Machine Operators and his response was that they may have been promoted after he was dismissed.

[70] The witness was also cross-examined on his engagements with the trade union representative regarding the retrenchment process. He was also cross-examined on the training he was offered to become a Crane Operator. There was no re-examination.

[71] The last witness for the Applicants, being Ramahama, testified that he joined the Respondent in 2003 and became a shopsteward in 2008. He testified that there was never a period where he left the Respondent’s employ, either through resignation or retrenchment.

[72] Ramahama’s evidence was that Molele never left the services of the Respondent, as alleged, in the year 2008. He maintained that, as a shopsteward, he would have known if an employee was ‘quitting’ work.

[73] The remainder of Ramahama’s evidence dealt with generic issues and nothing much turns on such evidence for the purposes of this judgment. To the extent that certain aspects of his evidence may be relevant to my evaluation below, I will make specifically reference thereto.

Evaluation

[74] The Applicants were unable to gainsay the Respondent’s case that there was a justifiable rationale for the retrenchments. It appears to me that the Applicants’ case is focused on the selection of Rakwena and Molele for retrenchment as opposed to other employees that were retained by the Respondent.

[75] In essence therefore, the case turns on the selection criteria that were employed by the Respondent.

[76] In support of Molele’s case, in particular, there was strong reliance by his representative on section 84(1) of the Basic

Conditions of Employment Act.[2]

[77] The provisions of section 84(1) of the BCEA state thus:

‘For the purposes of determining the length of an employee’s employment with an employer for any provision of this Act, previous employment with the same employer must be taken into account if the break between the periods of employment is less than one year.’ [own emphasis]

[78] In argument, Mr Coetsee easily conceded that if section 84(1) of the BCEA is taken into account, Molele should not have been retrenched as he would have had longer years of service than other Machine Operators. According to Mr Coetsee, this could be remedied by an increase in severance pay.

[79] It is my considered opinion that the concession regarding the impact of section 84(1) of the BCEA on the retrenchment of Molele was made without fully appreciating what the provisions of that section exactly say.

[80] It is specifically stated in section 84(1) that the determination of the length of an employee’s employment is for any provisions of the BCEA itself. It is, therefore, clear that the said section 84(1) speaks to the provisions of the BCEA and in particular to section 41 of that Act.[3]

[81] In the present matter, we are not determining the length of an employee’s employment for any provisions of the BCEA but for purposes of the LIFO principle.

[82] I, accordingly, have no hesitation in holding that the provisions of section 84(1) of the BCEA find no application to the present matter in so far as the LIFO principle is concerned.

[83] The provisions of section 84(1) of the BCEA are only relevant in respect to Molele’s entitlement to severance pay for the period 4 June 1997 to 31 March 2008. He was not paid his severance pay for the said period. In argument, it was conceded that his dismissal, if it is found to have been unfair, can be remedied by granting him the severance pay which was not paid out to him.

[84] Aside the findings I arrive at below with regard to the fairness of Molele’s dismissal, I intend to hold the Respondent to its preparedness to afford Molele the unpaid severance pay. If the Respondent had taken into account the provisions of section 84(1) of the BCEA in its belief that Molele had broken service, it ought to have nevertheless paid him severance pay for the period 4 June 1997 to 31 March 2008.

[85] If indeed Molele had resigned in January 2008, as contended by the Respondent, his length of service at the time of his retrenchment would only be the period from 1 April 2008 to 31 July 2010.

[86] It is my view that the LIFO principle mandates the employer to take into account the length of continuous employment and not intermittent or cumulative periods of service. In support of this view, I refer to the English case of International Paint Co. v Cameron,[4] where the following was held:

‘It was submitted that on the facts in this case the employers had not contravened any customary arrangement or agreed procedure. They had applied the recognised procedure of first in, last out and in view of their agreement with Mr. Boyle that meant in his case that his service fell to be regarded as continuous. In our opinion the first in, last out principle in this context means literally what it says. What counts is length of continuous

employment rather than cumulative periods of service. This is well recognised in industry and, subject to exceptions in particular

cases, an employee who leaves his employment and returns to the same employment at a Iater date is regarded as having started his

appointment anew in any question of selection for redundancy between him and other employees. This appears from the industrial tribunal case of Dorrell v. Engineering Developments (Farnborough) Ltd. [1975] I.R.L.R. 234. The other tribunal case of Sudders v. Prestige Group Ltd. 20 [1975] I.R.L.R. 367 which was also cited to us we consider to be rather special.’ [own emphasis]

[87] After all, an adoption of the LIFO principle in a retrenchment exercise is aimed at rewarding long serving employees for, inter alia, their loyalty. The underlying objective of the LIFO principle was stated by the Labour Appeal Court in Porter Motor Group v Karachi[5] as follows:

‘Longer serving employees have devoted a considerable part of their working lives to the company and their experience and expertise are an invaluable asset. Their long service is an objective tribute to their skills and industry and their avoidance of misconduct. In the absence of other factors, to be enumerated hereinafter, their service alone is sufficient reason for them to remain and others to be retrenched. Fairness requires that their loyalty be rewarded.’

[88] In an instance where an employee decides to resign, the devotion and loyalty to be in continuous service of the employer comes to an end. Of importance, the employment relationship terminates. When the employee returns, a new employment relationship resumes; unless the parties agree otherwise. In this context, the following was held in International Paint Co. v Cameron (supra):

‘It is of course always open to an employer to re-engage an employee who has left him for a period and returned on the basis that he will be regarded as having continuous service for such matters as the calculation of redundancy payments, etc. So long as this is confined to matters concerning only the employer and the employee it cannot be criticised. If however, the terms of the reengagement are intended to modify well established and understood industrial procedures such as the first in, last out principle in selection for redundancy, that should be clearly spelt out. In our view it should be made known to the other members of staff who are likely to be involved.’

[89] If indeed Molele had resigned in January 2008, as alleged by the Respondent, there would be no merit to his claim that he should not to have been retrenched on the basis that he had longer years of service than other Machine Operators. If he had resigned, he would have had a shorter period of service than other Machine Operators.

[90] On the evidence presented before me, I am unable to find that Molele had resigned in January 2008 as claimed by the Respondent. When de Freitas was confronted with the payslips issued to Molele, he basically conceded that Molele was at work during the period he had allegedly resigned.

[91] The payslip for the period 28 February 2008 to 5 March 2008, in particular, reflects that Molele was paid a weekly salary of R1648.42. This, on a balance of probabilities, proves that he was at work as there would have been no basis for the Respondent to remunerate an employee that had resigned.

[92] According to the UI-19 form which was completed by de Freitas on 13 August 2010, it was recorded that Molele had resigned on 20 February 2008 and was re-appointed on 1 April 2008. The period between 20 February 2008 and 1 April 2009 is just over one (1) month.

[93] In his evidence, however, de Freitas stated that Molele had left for a period of almost four (4) months. Under cross-examination, he reduced this period to two (2) months.

[94] I am unable to accept de Freitas’ version regarding the alleged resignation. Not only was it refuted by Molele and Ramahama, it was further contradicted by documents issued by the Respondent itself.

[95] This issue is laid to rest by the payslips issued to Molele on 27 July 2009 and 10 February 2010, wherein the engagement date is clearly stated as being 4 June 1997.

[96] I, therefore, find the Applicants’ version to be more probable in relation to whether or not Molele had resigned from the Respondent’s employ, thereby breaking his continuous service from 4 June 1997. With this finding, it therefore follows that, on the application of the LIFO principle, Molele should not have been retrenched as he had longer years of service than other Machine Operators of the Respondent. Accordingly, his dismissal was not fair.

[97] As for Rakwena, it was admitted by de Freitas that no formal training was offered to him. Considering that no qualifications were necessary for one to become a Machine Operator, it is my view that Rakwena’s retrenchment could have been avoided. After all, he had much longer years of service than most of the other employees of the Respondent, including Molele. He was employed in August 1996.

[98] It was boldly admitted by de Freitas, under cross-examination, that Rakwena was never offered the position of General Assistant, ostensibly on the basis that it would have resulted in him foregoing half of his salary.

[99] Considering the fact that the General Assistant had lesser years of service than Rakwena, nothing prevented the Respondent from offering him the General Assistant’s position.

[100] The claim that such an offer, if it was made, would have resulted in about half a cut on Rakwena’s salary is not supported by the documentary evidence serving before me at trial.

[101] The General Assistant was being paid a salary of R962.00 per week whereas Rakwena was earning R1,164.40 per week. In my mind, there is not a huge difference in the two salaries.

[102] It was contended by the Applicants in their statement of claim that “…the Respondent did not bump employees across the company so that employees with longer service are retain (sic) and those with less

years of service are retrenched”. Had this been done, I am of the view Rakwena would not have been retrenched as he had much longer years of service than most employees of the Respondent.

[103] Another curious factor concerning Rakwena is the fact that his position was that of a driver. He was employed as such and was paid as such even up to the date of his retrenchment. He was moved to be an assistant to a Machine Operator following the settlement agreement reached at MIBCO on 25 February 2010.

[104] In terms of the settlement agreement, Rakwena was to serve as an assistant to the Machine Operator. There was no such position prior and his move to be an assistant was specially orchestrated so as to accommodate him in the Respondent’s workplace. If he was to be retrenched, he ought to have been so retrenched in his position of a driver. I, therefore, equally find that the retrenchment of Rakwena by the Respondent was not fair.

[105] The Applicants also challenged the procedural fairness of their dismissal. Their sole complaint is that the Respondent failed, during consultations, to disclose information as required by the LRA in retrenchment proceedings. I mention that the evidence of Ramahama did not speak to this complaint despite the fact that he took part in the consultations held with the Respondent.

[106] In reaction to this specific challenge, the Respondent contends that the trade union representative was furnished with copies of the documents that were requested. I find support for this in the minutes of the consultation of 28 June 2010, where the following is recorded:

‘Response and Alternative proposals by Employee/representative:

The Union Representative also requested the Sales figures from March 2010 to the end of May 2010.

(This was provided by management to the Union.)’

[107] The minutes of the consultation of 28 June 2010 were never placed in dispute by the Applicants. The union representative who took part in the consultations held, being Khumalo, was not called as a witness to support the compliant of procedural unfairness. In my considered view, the allegation that the dismissal was effected without a fair procedure is without merit.

[108] It was the trade union representatives that opted to walk out of the second consultation meeting held on 16 July 2010; apparently on the basis that they were going to pursue the ‘dispute route’. The Applicants cannot now complain about procedure when they were the ones that elected to forsake the retrenchment process before it was even concluded.

[109] As for relief, I hold a firm view that reinstatement would not be a reasonably practicable remedy. The Applicants instituted these proceedings in December 2010. The pre-trial conference was only held after same was set down before a Judge as contemplated by Rule 6(5)(b) of the Rules of the Labour Court.

[110] The matter only came before this Court for trial in March 2015, over four (4) years later. The Applicants could not explain this inordinate delay when it was pertinently raised by the Respondent’s legal representative at trial.

[111] The delay in prosecuting the claim can only be attributed to the Applicants. In Republican Press (Pty) Ltd v Chemical Energy Paper Printing Wood and Allied Workers Union and Others,[6] the Supreme Court of Appeal took the following apposite view concerning the impact of delay to reinstatement or re-employment as a remedy:

‘In the present case the passage of six years from the time the workers were dismissed, all of which followed consequentially upon the failure of the union to pursue the claim expeditiously, was sufficient in itself to find that it was not reasonably practicable

to reinstate or re-employ the workers.’

[112] In this matter, I equally find that the failure by the Applicants to expeditiously pursue the dispute for almost four (4) years renders reinstatement to be reasonably impracticable. The appropriate relief would, therefore, be compensation instead.

[113] In view of my finding that both Molele and Rakwena should not have been retrenched considering inter alia their longer years of service, maximum compensation is warranted.

[114] The two employees lost their jobs in circumstances where that should not have been the case. They had served the Respondent for years yet employees with much shorter years of service were retained at their expense.

[115] After all, the Respondent itself had opted for the LIFO principle in selecting employees to be retrenched. LIFO was not applied in relation to Rakwena as the Respondent held the view that he was the only one occupying the assistant to a Machine Operator position. If there was another employee occupying such position as well, I am inclined to conclude that the Respondent would, in all probabilities, have applied the LIFO principle in selecting the employee to be retrenched.

[116] Had LIFO been correctly applied, taking into account the import and spirit of that principle, both Molele and Rakwena would have retained their employment with the Respondent.

[117] With regard to costs, there is, in my view, no need to grant a cost order in favour of the Applicants as they were represented by a trade union representative throughout these proceedings.

[118] The proceedings themselves were initiated by NUMSA internally. In the exercise of my discretion, I am inclined not to make an order as to costs. My view on costs certainly does not mean that costs can never be awarded in favour of a litigant represented by a trade union official.

Order

[119] In the circumstances, I make the following Order:

118.1 The dismissal of the Second and Third Applicants by the Respondent was procedurally fair but substantively unfair.

118.2 The Respondent is ordered to pay to the Second and Third Applicants compensation equivalent to twelve (12) months’ remuneration each, calculated as follows:

(i) for the Second Applicant, the sum of R55,891.20 this being a monthly salary of R4,657.60 multiplied by 12; and

(ii) for the Third Applicant, the sum of R114,508.80; this being a monthly R9,542.40 multiplied by 12).

118.3 The Respondent is also ordered to pay to the Third Applicant his severance pay for the period 4 June 1997 to 31 March 2008.

118.4 There is no order as to costs.

NP Voyi

Acting Judge of the Labour Court of South Africa

Appearances:

For the Applicants: Mr Tumiso Manasoe, Union Official NUMSA

For the Respondent: Mr D J Coetsee (Attorney) of Dirk Coetsee Attorneys

[1] No. 66 of 1995 as amended (“the LRA”).

[2] Act No. 75 of 1997 as amended (“the BCEA”).

[3] See: Solomons and Usabco (Pty) Ltd (2002) 23 ILJ 786 (CCMA) at p 790I-J, an award endorsed by this Court in Rogers v Exactocraft (Pty) Ltd (2015) 36 ILJ 277 (LC) at para 22.

[4] [1979] ICR 429; (1979) IRLR 62.

[5] (2002) 23 ILJ 348 (LAC) at 354A-C.

[6] (2007) 28 ILJ 2503 (SCA) at 2515A-B.