South African Transport and Allied workers Union obo Mlotsa and Others v Grindrod (Intermodal) (JS988/13) [2016] ZALCJHB 429 (26 October 2016)

THE LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG

JUDGMENT

Not Reportable

Case no: JS 988 / 13

In the matter between:

SOUTH AFRICAN TRANSPORT AND ALLIED

WORKERS UNION obo MLOTSA AND 16 OTHERS

Applicants

and

GRINDROD (INTERMODAL)

Respondent

Heard: 17 and 18 October 2016

Delivered: 26 October 2016

Summary: Operational requirements – redundancy of positions – division of employer closing – employees’ positions redundant

Operational requirements – alternative positions – alternative positions explored – no viable alternatives available

Operational requirements – reason for retrenchment – employees contending retrenchment based on incapacity – difference

between alternatives and incapacity considered – proper operational requirements exist

Operational requirements – procedural fairness – procedural fairness not in issue

Operational requirements – voluntary retrenchment agreement – compromises any unfair retrenchment claim

Practice and procedure – membership of union in dispute – union required to prove membership – in absence of proving this employees not party to dispute

Dismissal – operational requirements – dismissal substantively and procedurally fair – application dismissed

SNYMAN, AJ

Introduction

[1] The applicants have brought a claim of unfair dismissal based on operational requirements to the Labour Court by way of a statement of claim filed on 29 October 2013. The respondent opposed the claim and raised two further issues in terms of which it contended some of the individual applicants would not be entitled to relief under the statement of case. The matter came before me on trial on 17 and 18 October 2016.

[2] From the outset, something must be said about the manner in which the applicant union, South African Transport and Allied Workers Union (‘SATAWU’) conducted the case. The SATAWU official, Mr Mokwena, arrived at the trial without properly preparing for the matter and in fact did not even have witnesses present. None of the individual applicants even attended at the trial on the first day. I adjourned the trial early on 17 October 2016 so as to afford Mr Mokwena a chance to obtain witnesses to testify on behalf of the applicant the following day. On 18 October 2016, only one of the individual applicants attended at Court to testify together with one of the former shop stewards employed at the respondent. The testimony of these witnesses were, in general terms, entirely at odds with the case pleaded on behalf of the applicants in the statement of claim. In addition, Mr Mokwena tried to introduce several unproven and undiscovered documents into evidence, which I did not allow.

[3] At the end of the parties’ closing arguments on 18 October 2016, I made the following order:

1. The applicants’ application is dismissed.

2. The applicant union, the South African Transport and Allied Workers Union (‘SATAWU’), is ordered to pay the costs of the application.

3. Written reasons for this order will be handed down on 26 October 2016.

[4] This judgment now constitutes the written reasons referred to in clause 3 of the order, supra.

The relevant background

[5] In the end, considering the lack of proper testimony presented by the applicants, as well as the fact that the evidence of the respondent’s

witness went mostly unchallenged under cross examination, most of the pertinent evidence in this case went undisputed.

[6] The respondent is a division of Grindrod SA (Pty) Ltd (‘Grindrod SA’). Grindrod SA has a number of independent operating divisions, with each division having its own business, operating structure, management, exco, financial statements and budgets. In fact, some of the divisions do not even conduct the same kind of business. For all intents and purposes, the divisions may as well be separate business entities.

[7] The respondent business unit, Grindrod Intermodal (which I will refer to in this judgment as ‘GIM’), resorts under the Freight Services division of Grindrod SA. GIM provides a service solution for containerized cargo, which includes transport,

warehousing and logistics relating to the same. This service is provided at 11 site facilities across the country.

[8] One of the other business units resorting under the Freight Services division of Grindrod SA was Grindrod Logistics. In turn, part of the Grindrod Logistics business was a business called ‘Dry Bulk’. Dry Bulk conducted business from two sites, one in Alrode in Alberton, and the other in Nigel. As the name suggests, the business conducted transport and logistics in respect of dry bulk goods. The site in Nigel focussed primarily on flour and associated products, whilst the site in Alrode focussed on mining materials.

[9] The Grindrod Logistics business unit, and with it Dry Bulk itself, had been suffering unacceptable losses and in 2012 Grindrod SA decided to close the business unit. As a result of the closure of Grindrod Logistics, Dry Bulk was then transferred to GIM with effect from 1 September 2012. All the employees of Dry Bulk also transferred to GIM.

[10] The individual applicants were all code 14 truck drivers employed in Dry Bulk. Francis Henderson (‘Henderson’), the national HR manager of GIM at all times relevant to this matter, testified for the respondent, and indicated that the only area in GIM where GIM employed code 14 drivers was in Dry Bulk.

[11] Henderson testified that upon GIM taking over Dry Bulk, it became apparent that the business had severe difficulties. It was suffering losses in excess of R2 million per month at the time. It poorly managed, and insufficient management of costs was in place. However, and despite these challenges, GIM approached the Dry Bulk business with the view to turn it around and make it profitable.

[12] GIM immediately embarked on cost reduction and efficiency measures. It endeavoured to more effectively manage fuel and overtime, and sought co-operation with the drivers in this regard. It sought to insource repairs and maintenance of trucks and management of tyres. The method of operation was also sought to be changed, by focussing on lesser expensive short haul operations instead of more expensive long hauls. A more efficient operating system was also sought to be implemented.

[13] All the above measures had some effect, but was unfortunately far from sufficient to turn around the losses in Dry Bulk. The biggest difficulty was that the majority of costs in Dry Bulk lay in employee expenses and vehicle running costs, which had to be reduced.

[14] On 20 November 2012, a consultation was held between GIM management and driver representatives about the high costs in Dry Bulk and the need to reduce the same. At this time, there were 58 permanent drivers employed in Dry Bulk, and a further 17 drivers were supplied by a labour broker. Employees were fully appraised of the financial situation in Dry Bulk.

[15] As touched on above, part of the costs challenge was the vehicle running costs. Dry Bulk had too many of its own vehicles, which was simply costing too much to operate. An owner driver scheme was investigated which would entail trucks being transferred to individual drivers who then be guaranteed subcontract work, but nothing was finalized in this respect at the time, or ultimately in the end. Because there were too many trucks in Dry Bulk, GIM sold 10 trucks to another Grindrod SA division, Fuelogic, at the end of 2012. This sale fortunately did not impact on the continued employment of Dry Bulk employees, as GIM firstly terminated its contract with the labour broker, and those drivers were no longer used.

[16] Where it came to long haul activities, it was apparent that it was far less costly to make use of transport subcontractors as far as possible. In this regard, Dry Bulk had an existing subcontractor it used called Ventrans. This subcontractor was continued to be used.

[17] Unfortunately, all the aforesaid measures adopted in Dry Bulk still did not turn matters around. Losses continued and by May 2013, losses had accrued to more than R8 million for the period until then, which included a R2.2 million loss for May 2013 itself. Henderson testified that Dry Bulk also lost key customers. Further restructuring was needed.

[18] On 24 June 2013, GIM issued all the trade unions, including SATAWU, and employees, with a Section 189(3) notice of intention to restructure. It was recorded in the notice that all code 14 drivers were possibly affected and that the proposed selection criteria would be LIFO. It was proposed that consultations be conducted in July 2013. At the same time Henderson also sent out a bulletin to other divisions in Freight Services to enquire whether these divisions had any driver vacancies.

[19] A consultation was held with the union and drivers’ representatives at Alrode on 26 June 2013. The financial position of Dry Bulk was explained, as well as the need to further reduce the fleet of trucks by an envisaged further 10 to 15 at the time. This envisaged further reduction of the truck fleet would affect up to 20 drivers’ positions. It was explained that

there were still 8 drivers left that came from the labour brokers, and these drivers would first be let go. But this still left a possible 12 of Dry Bulk’s permanent drivers affected by possible retrenchment. It was proposed that the selection

criteria of LIFO be used to select drivers for retrenchment.

[20] None of the employee representatives took issue with the rationale for the restructuring in the consultation referred to. Also, there was no issue raised with regard to the use of LIFO as selection criteria. The drivers’ representatives proposed that possible alternative positions in other divisions be explored, such Fuelogic or Automotive Transport, and the respondent undertook to look into that. It was also conveyed to the drivers that the subcontractor Ventrans was willing to purchase some of the vehicles and take over drivers with it, but this would be a completely separate employer with new and separate conditions of employment.

[21] A minute was prepared of the consultation on 26 June 2013, and circulated to all employees.

[22] What followed was a process of consultation and communication throughout July 2013. I do not intend to set out all the details of what happened in this period in this judgment, and will only record that which is pertinent to deciding the case in this matter.

[23] GIM in July 2013 explored possible alternative positions for affected drivers in Fuelogic. The difficulty however was that Fuelogic’s

primary business required it to employ drivers from Botswana, as a result of contract stipulations, and it thus had no vacancies for the Dry Bulk drivers.

[24] The affected drivers were also invited to indicate if they would accept lesser positions as code 10 or 11 drivers. However, and because this would be associated with some drop in remuneration, none of the drivers expressed interest in this.

[25] Ventrans in the end acquired some of the Dry Bulk vehicles in this period. The drivers were invited to apply for positions at Ventrans. Some of these drivers were indeed successful in obtaining positions at Ventrans, which will be discussed further below.

[26] GIM also explored the possibility of alternative positions at Grindrod Automotive (‘Automotive’). Automotive was an entirely separate division which conducted the business of a vehicle carrier. As such, the trailers used in this business were different, and different skills were required. Nonetheless, there were 9 possible vacancies in Automotive, and GIM arranged for all the affected drivers to attend at Automotive for assessment. Only 4 drivers arrived at Automotive for assessment. But in the end, none of the drivers were employed at Automotive.

[27] GIM also provided affected drivers with the option of voluntary retrenchment, and two drivers accepted this option.

[28] Ultimately, and despite initially envisaging that only 12 drivers would have to be retrenched, the total grew to 18 drivers in the course of the process because more of the Dry Bulk trucks were sold. This issue was dealt with in a consultation held on 18 July 2013, and it was confirmed that all the drivers from the labour broker had already been let go. Based on the undisputed selection criteria of LIFO, it was conveyed by GIM to the driver representatives that there was a group of drivers that started employment with Dry Bulk on 1 March 2012, and because these were the drivers with the shortest service, the drivers selected for retrenchment would come from this group. No issue was taken with this suggestion.

[29] The final consultation happened on 29 July 2013. It was confirmed that GIM had sold 20 trucks from Dry Bulk which affected a total of 18 drivers employed by GIM. These drivers were selected for retrenchment based on LIFO as set out above. There was however still a possible 13 alternative positions in other divisions / contractors being explored at the time, but all 18 drivers would be retrenched and then possibly be placed in alternative positions elsewhere if these positions materialized.

[30] On 31 July 2013, all the drivers selected for retrenchment were then issued with notices of retrenchment, with their notice month commencing 1 August 2013.

[31] This was however not the end of the woes at Dry Bulk. The business, even despite this round of interventions, did not turn around. Ultimately by the end of 2013, the entire Dry Bulk business was closed and all the drivers were retrenched.

Preliminary issues

[32] As touched on above, the respondent has raised preliminary issues in its answering statement, and the pre-trial minute, which I will now deal with.

[33] The first issue raised is that two of the individual applicants, being Themba Mndebele (applicant number 4) and Douglas Nsibanyoni

(applicant number 8) had accepted voluntary retrenchment and signed voluntary retrenchment agreements, which agreements were concluded in full and final settlement of all employment claims. The respondent contended that because of this, the claims of these two individual applicants had been compromised.

[34] The agreements signed by these two individual applicants were placed before me. Henderson testified as to how the agreements came about, and stated it was as a result of the voluntary retrenchment offered to employees, which they accepted. There was no evidence produced by the applicants to indicate a contrary scenario, and these two applicants did not testify. I have no reason to doubt that these two individual applicants indeed concluded these agreements in accepting voluntary retrenchment from GIM.

[35] The agreements themselves record that the employee signing it has accepted retrenchment and that the agreement is concluded in full and final settlement of all claims arising out of the employment relationship. This being the case, any claims arising out of the employment relationship, including a claim for unfair dismissal, has been compromised and simply cannot be later raised in proceedings such as the matter now before me. In Wilson Bayly Homes (Pty) Ltd v Maeyane and Others[1] the Court held:

‘The contract in the present case was one of compromise. The nature of such a contract is that it is concluded because the rights of the parties are uncertain, and they choose not to resolve that uncertainty. By the very nature of such a contract, there can be little room for finding that the parties must have intended their contract to depend upon the existence of one or other of the factors relevant to their respective rights. It is precisely to avoid testing them that they compromise.’

[36] In Makiwane v International Healthcare Distributors[2] the Court dealt with a signed agreement concluded in the context of retrenchment, and the Court accepted that where a party accepts the benefits under any settlement agreement in full and final settlement and had abided by such acceptance of those benefits, he places himself beyond the jurisdiction of the Labour Court. The Court said:[3]

‘… in the present case I am of the view that when the applicant signed the agreement, thereby signifying his acceptance of its terms, and later accepted the benefits paid to him in terms thereof, the dispute between him and the respondent was finally settled. From that time onwards there was no live dispute between the parties (see also Spillhaus & Co (WP) Ltd v CCMA & others [1997] BLLR 116 (LC)). There being no live dispute for this court to determine, it follows that this court has no jurisdiction to deal with this matter.’

The same situation clearly applied to the two individual applicants in this instance. They signed the agreement, accepted

retrenchment, accepted the payments in terms of the agreements, and thus compromised their claim for unfair retrenchment.

[37] Therefore and for the above reasons alone, the application in respect of Themba Mndebele (applicant number 4) and Douglas Nsibanyoni (applicant number 8), falls to be dismissed.

[38] The second point in limine related to the issue of membership of some of the individual applicants, of SATAWU. In particular, the respondent has contended that Winston Mathibela (applicant number 2), Charly Mkhumbuzi (applicant number 5), (Hezekia Mdlalose (applicant number 6) and Jerome Mavuso (applicant number 17) are not and never were members of SATAWU. It is clear from the documentary evidence that SATAWU only had about 6.3% membership in GIM.

[39] The point the respondent makes is that SATAWU brings the application to Court in its own name and with itself as a party, on behalf of its members. This is apparent from the statement of claim. None of the individual applicants have brought the claim in their own name, and as a party in their own right. There is of course nothing wrong with SATAWU bringing the claim in its own name on behalf of its members, as this is precisely what Section 200(1) of the LRA contemplates.[4] The issue however remains that Section 200(1) can only apply, and can only be utilized by a trade union, in respect of its members. In National Union of Mineworkers v Hernic Exploration (Pty) Ltd[5] the court held that because the trade union was an actual party to the proceedings, and acting on behalf of its members, the individual

members need not be cited in the pleadings.

[40] But this does not mean that the trade union is exempt from still having to prove its authority to bring the proceedings, which would include an issue as to whether or not certain individuals to the dispute are its members, where that is specifically placed in contention. This is precisely the case now before me. The respondent is in effect saying that some of the individual applicants SATAWU purported to bring the claim on behalf of, are not SATAWU members and thus SATAWU had no authority to bring the claim on behalf of such individuals. In simple terms, the existence of union membership is the sine qua non for SATAWU having authority under Section 200(1) to bring a case on behalf of individual employees. The respondent is entitled to place this authority in dispute and call for proof of membership. In Chemical Energy Paper Printing Wood and Allied Workers Union and Others v Express Payroll CC[6] the Court said:

‘… This is what distinguishes the Hernic case from the instant one. The respondent in casu wants proof of membership. As has been stated earlier in this judgment, the applicants' attorneys may represent the members who have signed the powers of attorney but should not extend their mandate to the

dismissed employees who have not given such mandate. In the Hernic case the objection was that the appellant had no right refer the dispute to the CCMA but in the present application the applicant is asked to prove that all the employees are its members and it has a right to represent them. …’

[41] In effect, proof of membership would be proof of authority to bring these proceedings. In Candy and Others v Coca Cola Fortune (Pty) Ltd[7] the Court held as follows as to when such proof was required and what proof must be provided in this regard, and said:

‘… The point is simple. If an attorney brings process to court and signs pleadings, it is accepted that the attorney has the necessary

authority to do so. It however remains open for this authority to be challenged by way of simple notice. Once challenged, all the attorney needs to do is provide proof of authority by way of a power of attorney (or other acceptable form of proof) and that is the end of the issue without further evidence being required …’

In casu, and applying the above ratio, the respondent raised a challenge in the answering statement, which is proper notice of such challenge. All SATAWU then had to do was to discover the membership forms signed by the four individual applicants the challenge related to. Once these membership forms were then so discovered, authority would be considered to be proven, and that would have been the end of the issue.

[42] Unfortunately, SATAWU did not prove such membership. Despite the challenge being repeated in the pre-trial minute, SATAWU still remained supine. Even when given the opportunity to prove membership of these individual applicants at trial, SATAWU could not produce membership forms. The consequence of this failure is as follows, as said in Candy:[8]

‘In the absence of powers of attorney or any alternative form of proof of authority as contemplated by rule 7(1), the end result has to be that Advocate Phale has failed to establish the authority to act. That being the case, he has been unable to show that either he or B W Mtsweni Attorneys had the right to bring the current proceedings on behalf of the individual applicants to the Labour Court and therefore, by necessary

consequence, to serve and file the statement of claim …’

[43] In the circumstances, SATAWU had no right to bring the proceedings and file a statement of claim on behalf of Winston Mathibela (applicant number 2), Charly Mkhumbuzi (applicant number 5), (Hezekia Mdlalose (applicant number 6) and Jerome Mavuso (applicant number 17), as it could not be proven that these individual applicants were its members. These individual applicants are thus not party to these proceedings, and the application falls to be dismissed in respect of these cited individuals on this basis alone.

[44] For all the above reasons, the respondent’s objections in limine are upheld, and the application falls to be dismissed in respect of the following 6 (six) individual applicants as listed in the statement of claim: (a) Winston Mathibela (applicant number 2); (b) Themba Mndebele (applicant number 4); (c) Charly Mkhumbuzi (applicant number 5); (d) Hezekia Mdlalose (applicant number 6); (e) Douglas Nsibanyoni (applicant number 8); and (f) Jerome Mavuso (applicant number 17).

Was the dismissal substantively unfair?

[45] Turning then to the remaining individual applicants as listed in the statement of claim, the first issue to decide is whether their

dismissal was substantively fair. The applicants’ case in this regard is informed by the statement of claim, and the pre-trial minute, to which the applicants are bound.[9] In this regard, the case to be decided is the following:

45.1 Whether the respondent failed to follow the selection criteria of LIFO;

45.2 Whether there were other employees that could have been terminated instead of the individual applicants, which includes labour broker employees, more recently employed employees and fixed term contract employees;

45.3 Whether the individual applicants were retrenched for failing to operate different equipment, without reasonable assessment; and

45.4 Whether the individual applicants were retrenched for incapacity as opposed to a financial rationale.

[46] Before I deal with the case of the applicants, I must mention that Henderson presented testimony to the effect that some of the individual applicants were in fact elsewhere accommodated due to the efforts of the respondent, as part and parcel of the retrenchment exercise. As referred to above, and following the final consultation on 29 July 2013, there was still a situation of 13 other possible alternative positions elsewhere, for retrenched drivers, being explored. So therefore, and even though such individual applicants were retrenched by the respondent, they were nonetheless alternatively accommodated in employment due to the efforts of the respondent and as part of the retrenchment exercise. In such circumstances, it can hardly be said that their retrenchment was unfair. These individual applicants are Frans Mehale (applicant number 15) and Jacob Metsing (applicant number 16), who took up employment at Ventrans.

[47] I will first deal with the contention that LIFO was not applied. This part of the applicants’ case can be swiftly disposed of. I was presented in the course of evidence by the respondent with a list of all the employees in Dry Bulk and their respective starting dates. Henderson specifically testified about the list, and explained there was a group of drivers that had recently started employment in Dry Bulk on 1 March 2012 and they had the shortest service. Henderson stated that all the affected drivers were selected from this recently employed group of drivers and the list confirms this. The applicants presented no evidence that LIFO was not properly applied in this case. I am satisfied that this part of the case of the applicants has no merit at all, and that the respondent indeed properly applied LIFO in selecting drivers for retrenchment.

[48] Turning next to the contention that other employees should have been retrenched instead of the individual applicants, this case is equally entirely without substance. Firstly, the applicants did not even indicate exactly who these other employees were supposed to be that should have been retrenched in their stead. The individual applicants were the ones with the shortest service, so it could not have been other shorter serving employees. As to the reference to fixed term contract employees, Dry Bulk had no drivers employed on fixed term contracts. Further, and where it came to the labour broker employees, these were the first to have been let go, and when the individual applicants came up for retrenchment, there were no labour broker employees left. There can be little doubt that the individual applicants were properly and fairly selected for retrenchment.

[49] This now brings me to the crux of the case of the applicants. This case was that the individual applicants were retrenched not because of financial reasons, but because of their incapacity. This is the case pertinently pleaded in statement of claim, which was drawn up by attorneys representing the applicants at the time. In the statement of case, it is stated that the individual applicants were ‘referred’ to Grindrod Logistics[10] where they had to drive trucks with different trailers than they were used to operating. According to the pleaded case, these

individual applicants were subjected to pre-employment tests to see if they could operate these trailers, and then when according to the respondent the individual applicant could not operate these trailers, they were retrenched. The applicants went further and pleaded that the respondent did not train the individual applicants to operate these new trailers and this training, if done, would have taken “a day if not less’ to render the individual applicants competent to perform those duties. Based on these pleaded facts, the applicants then contend that the individual applicants were actually retrenched for incapacity.

[50] I have a number of difficulties with this case of the applicants. First and foremost, it was not supported by the evidence. The applicants called two witnesses to testify, the first being one of the individual applicants, Bongani Mlotsa (applicant number 12) (‘Mlotsa’), and the second being one of the former shop stewards, Bongani Nkala (‘Nkala’). None of these two witnesses presented testimony what is in any way reconcilable with the above pleaded case. In fact, the testimony presented by these witnesses differed so much from what was pleaded, that one has to ask what possible credibility can any case advanced by the applicants then have? In Knox D’Arcy AG and another v Land and Agricultural Development Bank of South Africa[11] the Court said:

‘It is trite that litigants must plead material facts relied upon as a basis for the relief sought and define the issues in their pleadings to enable the parties to the action to know what case they have to meet. And a party may not plead one issue and then at the trial, and in this case on appeal, attempt to canvass another which was not put in issue and fully investigated. …’

[51] Mlotsa in fact testified that he was one of the employees that went to Automotive for assessment, was successfully assessed and was then selected for training. According to Mlotsa, and after one weeks’ training, he was found suitable to be placed with Automotive and was actually told by the trainer that this was the case. But Mlotsa was not appointed, and he explained that the reason for this was that there had been a ‘misunderstanding’ between the management at Automotive and the drivers from Dry Bulk to be appointed, about pay rates and conditions of employment, as these differed at Automotive from that which existed at Dry Bulk. Mlotsa said that because of this “misunderstanding” they were sent back to Dry Bulk and retrenched. It is not rocket science to appreciate the canyon like discrepancy between this testimony and the pleaded case referred to. And worse still, the testimony by Mlotsa was never put to Henderson under cross examination.[12]

[52] Considering then the testimony of Nkala, he in fact said that it was clearly understood that the drivers would be retrenched from Dry Bulk, and that any positions at Automotive would be new positions as an alternative following those retrenchments. This testimony is entirely irreconcilable with the first part of the pleaded case of the applicants. Nkala then admitted that he did not know why drivers did not get positions at Automotive, and said that he believed it was due to Automotive having lost a Labour Court case resulting in a number of drivers having to be reinstated, and it is this that caused all vacancies to evaporate. As Nkala said – Automotive had its ‘own problems’. Nkala conceded under cross examination that he was never informed by anyone in management that the drivers did not get positions because they failed an assessment. He also said that he was told by the manager in Dry Bulk (Mr Fouche) that he (Fouche) had no control over what happens at Automotive. Yet again, this testimony is wholly unsupportive of the pleaded case of the applicants.

[53] Evidence that deviates from the pleadings to such an extent, should be rejected. This was the case in Ekhamanzi Springs (Pty) Ltd v Mnomiya[13] where the Court said:

‘At the hearing, Mr Bosman opportunistically claimed that the respondent was not denied access on 14 April 2008 simply because she was not at the workplace on that day and was therefore not dismissed. He clearly deviated from the pleaded case. This defence seems to have been an afterthought, as it was not canvassed in the pleadings. The court a quo correctly rejected the evidence that was inconsistent with the pleadings. …’

[54] Henderson, for the respondent, testified that where it came to the possible positions at Automotive, these arose as a result of her exploring alternative positions that may be available in other divisions where drivers retrenched from Dry Bulk could be placed. As touched on above, she explained that these other divisions were entirely separate and had their own employment requirements and terms and conditions, and all she could do was to facilitate possible employment of drivers by making them available for consideration. She testified that due to these efforts, she was informed of 9 possible positions at Automotive, and she submitted lists of drivers to Automotive, and it was then arranged which drivers would attend there for assessment. The undisputed e-mail correspondence in the bundle of documents supports this evidence. According to Henderson, most of the drivers did not even attend at Automotive for assessment. Henderson conceded that she did not know why Automotive turned the drivers away and also conceded that none of the Dry Bulk drivers were employed at Automotive.

[55] I have no reason to doubt the evidence of Henderson. Most of her evidence was unchallenged under cross examination. As I have said, her evidence was fully supported by the documentary evidence. In fact, the evidence of Nkala also supports the testimony of Henderson to the effect that the drivers would be retrenched from Dry Bulk and that the positions as Automotive were possible alternative new positions following that retrenchment. In short, the positions at Automotive simply could not be seen as a measure to avoid the retrenchment of the individual applicants from Dry Bulk. There were no available alternative positions in Dry Bulk. It does not matter that Automotive may resort as a division under Grindrod SA and is not a separate legal entity. The testimony of Henderson that it was completely independent from the respondent and may as well be a separate entity was undisputed. In fact, Automotive did not even conduct the same business as the respondent.

[56] A further problem is that it is not apparent which of the individual applicants even pursued a possible position at Automotive. It certainly could not have been all the individual applicants as listed in the statement of case, for the reasons already elaborated on above. There was in any event only 9 such possible positions available, which does not even cover all the individual applicants.

The evidence by Henderson, as supported by e-mails sent at the time, was that only four individual applicants sought to pursue positions at Automotive. This has to mean that as a matter of logic and common sense, all the individual applicants simply could not have been retrenched for the reason that they could not fulfil the requirements of positions at Automotive (with minimal training required), as pleaded. The applicants have the sequence all wrong. The possibility of positions at Automotive came about because of their retrenchment at Dry Bulk in the first place, and not vice versa.

[57] In the end, the incapacity or not of the individual applicants had nothing to do with their retrenchment. The pleaded case in this

regard has no substance, and falls to be rejected.

[58] This then only leaves one consideration, namely whether the retrenchment of the individual applicants was founded on a proper financial

rationale. In my view, there is little doubt that it was. Henderson testified as to the profit and loss statements of Dry Bulk, which also formed part of the documentary evidence. This evidence remained undisputed. It was clear that losses over the period relating to the retrenchment exercise were more than R8 million, and more than R2 million for May 2013 alone, when it was decided to proceed with the retrenchment exercise. As the evidence also showed, Dry Bulk in fact finally closed at the end of 2013. I may add that Mlotsa conceded under cross examination that the drivers were informed to ‘apply’ at Automotive due to the poor financial performance of Dry Bulk. Finally, and considering the undisputed contents of the consultations in June and July 2013 where no issue was ever taken by the driver representatives with regard to the rationale for the restructuring, I am satisfied that the retrenchment of the individual applicants was founded on a sound financial rationale.

[59] In the end, the issue of whether a dismissal for operational requirements is substantively fair is decided by way of answering what is called a general question and a specific question. As said in Chemical Workers Industrial Union and Others v Latex Surgical Products (Pty) Ltd[14]:

‘Whether or not there was a fair reason for the dismissal of the individual appellants relates to a general question and a specific question. The general question is whether or not there was a fair reason for the dismissal of any employees. The specific one is whether there was a fair reason for the dismissal of the specific employees who were dismissed, which in this case, happened to be the individual appellants. The question of a fair reason to dismiss the specific employees who were dismissed goes to the question of the basis upon which they were selected for dismissal whereas the other question relates to whether or not there was a reason to dismiss any employees in the first place.’

[60] Considering what I have set out above, it is my view that both these questions can comfortably be answered in favour of the respondent.

Operationally speaking, the decision to retrench was founded on sound financial considerations, made commercial sense and had nothing to do with the incapacity or not of any of the individual applicants. Dry Bulk was simply not a profitable and viable business. As was said Kotze v Rebel Discount Liquor Group (Pty) Ltd[15]:

‘…What we have to do is to decide whether the respondent's decision to retrench was informed and is justified by a proper and valid

commercial or business rationale. If it is, then that is the end of the enquiry …’

[61] Moving on to the specific question, the undisputed evidence was that some 20 trucks were sold to try and alleviate the respondent’s

financial difficulties, resulting in the loss of 18 drivers’ positions after all the labour broker drivers were let go. It was only Dry Bulk that employed code 14 drivers and the individual applicants were all code 14 drivers. The drivers selected for retrenchment were the 18 shortest serving employees in Dry Bulk. There was no suggestion, nor evidence, of anyone else who could have been retrenched instead of the individual applicants. The selection of the individual applicants for retrenchment is unassailable.

[62] For all the reasons as set out above, I thus conclude that the dismissal of the remaining individual applicants by the respondent was substantively fair.

Was the dismissal procedurally unfair?

[63] At trial in this matter, Mr Mokwena for SATAWU sought to argue that the dismissal of the individual applicants was procedurally unfair as well. Despite the fact that there was no proper evidence in support of such a case presented by the applicants, there is a much bigger obstacle in way of the applicants where it comes to such a case. This obstacle is that the applicants did not challenge procedural fairness in the statement of case. In addition, the pre-trial minute not only also records that the procedural fairness is not challenged, but it is specifically said that the “Applicants do not dispute the consultation process’.

[64] The simple fact is that the applicants are bound by the case as advanced in their statement of claim, and to that which has been specifically agreed to in the pre-trial minute. In dealing with a pre-trial minute, the Court in National Union of Metalworkers of SA and Others v Driveline Technologies (Pty) Ltd and Another[16] said:

‘It is true, of course, that a pretrial agreement is a consensual document which binds the parties thereto and obliges the court (in the same way as the parties' pleadings do) to decide only the issue set out therein.’

In the same judgment, it was further held:[17]

‘I think it is necessary immediately to accept as a point of departure that, where a litigant is a party to a pre-trial minute reflecting

agreement on certain issues, our courts will generally hold the parties to that agreement or to those issues. (Price NO v Allied JBS Building Society 1986 (3) SA 874 (A) at 882D E; Filta Matix (Pty) Ltd v Freudenberg and Others [1997] ZASCA 110; 1998 (1) SA 606 (SCA) at 613E 614D.)’

[65] In GE Security (Africa) v Airey and Others,[18] the Court was again confronted with a situation where a litigating party sought to rely on issues outside the ambit of the pre-trial

minute and the Court said the following:

‘The key issue before this court had therefore been settled in the pretrial minute and the respondents were bound by the admission they made therein. See in this respect Filta-Matix (Pty) Ltd v Freudenberg and Others [1997] ZASCA 110; 1998 (1) SA 606 (SCA) at 614B-D and Shoredits Construction (Pty) Ltd v Pienaar NO and Others (1995) 16 ILJ 390 (LAC); [1995] 4 BLLR 32 (LAC) at 34C-F. …’

[66] As to the issue of the applicants’ case as pleaded in the statement of claim being different from what the applicants now seek to argue in Court, I refer to Imprefed (Pty) Ltd v National Transport Commission[19] where it was held:

‘At the outset it need hardly be stressed that:

“The whole purpose of pleadings is to bring clearly to the notice of the Court and the parties to an action the issues upon which reliance is to be placed.”

(Durbach v Fairway Hotel Ltd 1949 (3) SA 1081 (SR) 1082.)

This fundamental principle is similarly stressed in Odgers’ “Principles of Pleading and Practice in Civil Actions in the High Court of Justice” (22nd ed) 113:

“The object of pleading is to ascertain definitely what is the question at issue between the parties; and this object can only be attained when each party states his case with precision.’

The Court further held:[20]

‘…. Particularly in this context, it goes without saying that a pleading ought not to be positively misleading by referring explicitly to certain clauses of the contract as identifying the cause of action when another is intended or will at some later stage-in this case at the last possible moment-be relied upon. As it was put by Milne J in Kali v Incorporated General Insurances Ltd 1976 (2) SA 179 (D) at 182A:

“. . .a pleader cannot be allowed to direct the attention of the other party to one issue and then, at the trial, attempt to canvass another.”’

[67] In the end, and in respect of any case of procedural unfairness, one can do little better than to refer to what was said in Chester Wholesale Meats (Pty) Ltd v National Industrial Workers Union of SA and Others[21]:

‘…. That should be the end of the matter because an applicant is confined to the case pleaded in his statement of claim (unless amended) as particularized, clarified or limited by the pretrial minutes. ….’

[68] I thus conclude that it is not competent to consider any case of procedural unfairness in this matter. I will have no regard to any such case and will make no finding as to procedural unfairness.

Conclusion

[69] Therefore, the dismissal of the remaining individual applicants by the respondent, for operational requirements, is both substantively and procedurally fair. The applicants’ unfair dismissal claim thus falls to be dismissed.

[70] As to costs, it must be considered that the applicants were legally assisted in bringing the claim to the Labour Court and filing a statement of claim. In this context, SATAWU pleaded a case that it should have known was not sustainable. The manner in which the case was presented in Court was also far from satisfactory. I find it concerning that none of the individual applicants even attended at court (save for Mlotsa that testified) to indicate interest in the case, which would certainly have been expected. I do not believe SATAWU was bona fide in persisting with this case. The respondent has been caused to spend time, effort and costs in defending a matter which should have been clear from the outset, had little substance. It is my view that a costs order against SATAWU is certainly appropriate, for these reasons given. In any event, applying the broad discretion I have with regard to the issue of costs in terms of Section 162 of the LRA, I consider it fair and appropriate that the respondent not be left completely exposed where it comes to the payment of legal fees, and should be entitled to party and party costs in opposed trial proceedings.

[71] It is for all the aforementioned reasons that I made the order that I did as reflected in paragraph 3 of this judgment.

_____________________

S Snyman

Acting Judge of the Labour Court

Appearances:

For the Applicants:

Mr B Mokwena – Union Official

For the Respondent:

Mr G M Kirby-Hirst of MacGregor Erasmus Attorneys

[1] 1995 (4) SA 340 (T) at 345E. See also Van As v African Bank Ltd (2005) 26 ILJ 227 (W) at 231 C – G.

[2] (2003) 24 ILJ 2150 (LC) at para 19.

[3] Id at para 20.

[4] Reads 'A registered trade union or registered employers' organisation may act in any one or more of the following capacities in any dispute to which any of its members is a party — (a) in its own interest; (b) on behalf of any of its members; (c) in the interest of any of its members.'

[5] (2003) 24 ILJ 787 (LAC) at paras 39 and 42.

[6] (2011) 32 ILJ 2959 (LC) at para 36.

[7] (2015) 36 ILJ 677 (LC) at para 15.

[8] (supra) at para 20.

[9] There is a discussion later in this judgment concerning the legal basis as to why parties are bound to the case advanced in their pleadings and the pre-trial minute, which considerations are equally applicable to what is now being considered.

[10] It was established at trial that this was referring to Automotive.

[11] [2013] 3 All SA 404 (SCA) at para 35.

[12] This would equally entail the rejection of such evidence – see ABSA Brokers (Pty) Ltd v Moshoana N.O. and Others (2005) 26 ILJ 1652 (LAC) at para 39; Southern Sun Hotel Interests (Pty) Ltd v Commission for Conciliation, Mediation and Arbitration and Others (2010) 31 ILJ 452 (LC) footnote 13; Trio Glass t/a The Glass Group v Molapo NO and Others (2013) 34 ILJ 2662 (LC) at para 41.

[13] (2014) 35 ILJ 2388 (LAC) at para 19. See also Lowies v University of Johannesburg (2013) 34 ILJ 3232 (LC) at para 29; Chemical Energy Paper Printing Wood and Allied Workers Union and Others v CTP Ltd and Another (2013) 34 ILJ 1966 (LC) at para 105.

[14] (2006) 27 ILJ 292 (LAC) at para 55.

[15] (2000) 21 ILJ 129 (LAC) at para 36.

[16] (2000) 21 ILJ 142 (LAC) at para 16.

[17] Id at para 83.

[18] (2011) 32 ILJ 2078 (LAC) at para 20.

[19] [1993] 2 All SA 179 (A) at 188.

[20] Id at 189.

[21] (2006) 27 ILJ 915 (LAC) at para 19.