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Malapo Technology (Pty) Limited v Schreuder and Others (CA5/01) [2002] ZALAC 17 (8 August 2002)

.RTF of original document

IN THE LABOUR APPEAL COURT OF SOUTH AFRICA
HELD AT CAPE TOWN
Case No: CA5/01

In the matter between

MOLAPO TECHNOLOGY (PTY) LIMITED  Appellant
and
CHARNE NICOLE SCHREUDER                   First Respondent
LANORE ROUX                                          Second Respondent
SHARON JANE BOSHOFF                        Third Respondent
JACQUELINE ELIZABETH WOOLLEY     Fourth Respondent
_______________________________________________________________
JUDGEMENT
_______________________________________________________________

ZONDO JP

Introduction

[1]      This is an appeal from a decision of the Labour Court in terms of which that Court granted an application brought by the present respondents for certain declaratory orders against the present appellant. In order to deal with the appeal properly, it is necessary to first set out the facts. As no request was made in the Court a quo for any issues to be referred to oral evidence, such disputes of fact as there may be in the papers are to be dealt with on the basis of the approach to be found in Plascon Evans Paints v Van Riebeeck Paints 1984 (3) SA 623 (A) at 634 E - 635 C.

The facts
[2]      With effect from the 1st April 2000 the appellant acquired a business known as IUVATEK Electronic Services and its assets from Telkom SA Limited as a going concern. The parties’ understanding of the effect in law of that transaction on the contracts of employment of the employees who were employed by Telkom in that business unit is in line with the understanding which appears in the minority judgement in Nehawu & others v University of Cape Town (2002)23 ILJ 306 (LAC) at 317-348, namely, that the contracts of employment of the employees employed in a business that is being transferred from one person or company to another are automatically transferred to the purchaser or transferee upon the transfer of the business.

[3]      Prior to this transaction , Telkom had offered voluntary retirement packages to employees over the age of 50 who were employed in the IUVATEK business unit. Not enough employees volunteered to be retrenched. After the transaction, the appellant also offered voluntary retrenchment packages to employees who wished to apply for voluntary retrenchment. It did this in consultation with trade unions whose members could be affected. Again not enough employees took this offer up.

The events of the 28th April 2000

[4]      On the 28th April 2000 the second respondent was away from work on leave. The first, third and fourth respondents were at work. At some stage on that day the first, third and fourth respondents were called by the appellant’s management and told that they were being retrenched with effect from the 30th April 2000. They were informed that they were going to be given letters to this effect later and that, once they had received the letters, they could leave immediately.

[5]      The first, third and fourth respondents were subsequently called in individually and given letters of dismissal, their unemployment cards and their certificates of employment. They were informed that they could leave early. The first respondent duly took the appellant up on this offer and left the appellant’s premisses soon after receiving her letter of dismissal. The letters of dismissal were to the effect that the addressees were dismissed with effect from the 30th April 2000. In part each dismissal letter read thus: “Your position has been identified as being redundant and as such your service with the [appellant] will be terminated on 30th April 2000". As the second respondent was away on leave, she was not given any letter of dismissal on this day. However, her father received a telephone call from the appellant’s sectional manager who told him that the second respondent had been retrenched and that she should come in on the 2nd May and collect her documentation.

[6]      After the third and fourth respondents had received their dismissal letters and other documentation, they remained on the appellant’s premises while waiting for their transport to take them home. Before the third and fourth respondents’ transport could arrive, the appellant decided that it was no longer going to pursue their dismissal and decided effectively to withdraw its decision to dismiss them. This was still in the course of the 28th April.

[7]      Pursuant to that decision, there was interaction between the appellant and the third and fourth respondents. There are certain disputes of fact in regard to what happened at this stage of the interaction. On the third and fourth respondents’ version, while they were waiting for their transport, they were approached by Mr Van Rooyen at about 15h00 who told them that they were being reinstated and “instructed” them to return their dismissal documents. The third and fourth respondents apparently stated that this was “not funny”. The appellant admits that a remark to this effect was made by the fourth respondent. On the third and fourth respondents’ version they were “on the verge of tears” but were taken by Mr Van Rooyen into a certain room from which he telephoned the human resources manager, Mr Donald Peddie, and told the third respondent to speak to him herself.

[8]      The appellant denies that the third and fourth respondents were in tears. It also states that the third and fourth respondents indicated that they wished to speak to Mr Peddie to confirm what the true position was. In my view nothing turns on whether it was Mr Van Rooyen or the two respondents who initiated the idea of speaking to Mr Peddie. As to the allegation that the two respondents were in tears, the matter must be dealt with on the basis of the appellant’s version. The third respondent then spoke to Mr Peddie. She states that Mr Peddie told her that he did not have time to speak because he had to go to a meeting. She says that she, nevertheless, asked him what was happening as they had been dismissed but had now been told to hand back the dismissal letters.

[9]      According to the respondents Mr Peddie told the third respondent that the respondents’ “papers” were being “pulled back” and they should hand them back. Mr Peddie recalls the third respondent speaking to him and that she asked what was going on. He states that he told the third respondent that their retrenchment was no longer being proceeded with and they should hand the documentation back. The third and fourth respondents then state that they remained adamant that they had been dismissed but that Mr Van Rooyen told them that they were now being instructed to hand the papers back or else they would “face discipline”. The respondents’ founding affidavit then reads: “Third and fourth [respondents] handed documents back under protest”. It does not say that, in handing the letters back, they told Mr Van Rooyen that they were doing so under protest.

[10]     Mr Van Rooyen denies that he told the third and fourth respondents that they would “face discipline” if they did not return the documentation. His version is that the third and fourth respondents handed the documentation back voluntarily. Mr Van Rooyen further states that the third and fourth respondents did not inform him that they were handing the documents back under protest.

[11]     In the replying affidavit the respondents only say that, even on the appellants’ version, the respondents were instructed to hand the documentation back. They state that the appellant approached the matter on the basis of an employer giving employees an instruction. They give a general bare denial of the rest of the allegations in the relevant paragraph of the appellants’ answering affidavit. This aspect of the matter must be decided on the appellant’s version, namely that the third and fourth respondents handed their documentation back voluntarily and that they did not state that they were doing so under protest. This must be the approach because, to the extent that there is any dispute of fact on this aspect, the version of the party which was the respondent in the Court below must prevail. That party is the appellant.

The events of the 2nd May 2000

[12]     The first working day after the 28th April 2000 was Tuesday the 2nd May 2000. On that day the first respondent received a message from a neighbour to contact the appellant. She did so and spoke to the switchboard operator who told her that she needed to come to work or else she would “lose money”. Mr Van Rooyen had instructed the switchboard operator to contact the first respondent and ask her to contact work. According to Mr Van Rooyen he did not want the first respondent to be staying at home when she could be working and earning money since the appellant was no longer pursuing her retrenchment.

[13]     The first respondent went to work and was told to go and see Mr Van Rooyen. Her version and that of the appellant about the content of the discussion that took place between herself and Mr Van Rooyen are substantially similar. She enquired what the position was. Mr Van Rooyen told her that her dismissal was not being proceeded with, that she was still employed by the appellant and that she should return the dismissal documentation. According to the appellant, the first respondent told Mr Van Rooyen that she intended to “dispute the situation”. This must obviously include instituting legal proceedings about the situation. She maintained that she had been dismissed and had, as a result, become entitled to certain benefits. The first respondent refused to hand back the dismissal documentation and has never returned it. Mr Van Rooyen stated that she was not entitled to any benefits because she remained in the appellant’s employment. Mr Van Rooyen told her that she could do whatever she liked but had to return the documents. She refused to do so.

[14]     Thereafter the first respondent telephoned Mr Peddie. She states that he was abrupt and could not explain to her how the appellant could treat the respondents the way it had. She states that he did, however, say to her that she should return the dismissal documents and that this was an instruction. She states that she refused to return the documents and said that she would not be returning to work but would be going home. Mr Peddie does not deny the first respondent’s version in this regard. He recalls receiving the first respondent’s telephone call. He states that he told her that her retrenchment was not being proceeded with and that, as she was in the appellant’s continuous employment, she should return the letter of retrenchment. He recalls the first respondent mentioning that she would be going home. In the light of the fact that the appellant does not deny the first respondent’s version of the content of the conversation between herself and Mr Peddie, the matter must be decided on the basis that the first respondent’s version is true. That version includes the allegation that Mr Peddie told the first respondent that the requirement that she hand back the retrenchment letter was an instruction.

[15]     The first respondent then had a further verbal exchange with Mr Van Rooyen. Her version and that of the appellant on this aspect converge in all material respects. The first respondent continued with her attitude that she would not return the dismissal documents and maintained that she had been dismissed and that she believed that, as a result of the dismissal, she had become entitled to the payment of certain benefits and that she would go home.

[16]     Mr Van Rooyen told her that, if she went home when she was required to be at work, she would be disciplined. The first respondent then states the following in par 34 of the founding affidavit:

“I really did not know what to do. Like the other [respondents] I am not in a position to have no income. I was also extremely concerned about the threat of discipline as it was clear to me that what was being conveyed was that I would be dismissed for misconduct and would not receive any severance pay”.

[17]     A further interaction occurred involving the first respondent, Mr Van Rooyen and a shopsteward. The first respondent states that, faced with this difficult situation, she spoke to her shopstward who, after speaking to Mr Van Rooyen, advised her that she could reserve her rights and return to work. She then states that she returned to work under protest. The appellant does not deny any of these allegations. It admits that Mr Van Rooyen told her that, if she left her work without permission, she would face disciplinary action. The appellant states that the first respondent told Mr Van Rooyen that she intended taking the matter further. The appellant states that the first respondent then returned to work and continued to work.

[18]     On the respondents’ version the second respondent attended at the appellants premises at about 09h45 on the 2nd May. She was called in by Mr Van Rooyen who told her that her retrenchment had been “pulled back” and she was going to continue working. The respondents’ founding affidavit then states: “ [Second respondent] adopted the same position as we had.” As the position which the first respondent had adopted was not entirely the same as the position which the third and fourth respondents had adopted, one does not know precisely what the position is that the second respondent must be taken to have adopted when it is stated in the founding affidavit that she adopted the same position as the first, third and fourth respondents.

[19]     The appellant’s version with regard to the second respondent is that the second respondent together with her father attended at the appellant’s premises on Tuesday the 2nd May 2000. Mr Van Rooyen informed both of them that the appellant was no longer proceeding with the retrenchment of the second respondent. Mr Van Rooyen said to them that the second respondent remained in the appellant’s employment. The appellant states that Mr Van Rooyen gained the impression that both the second respondent and her father were happy with the fact that her employment had not been terminated and that she continued in the appellant’s employment. The appellant states that thereafter the second respondent resumed her duties and has remained in the appellant’s employment since then.

[20]     On or about 15 May 2000 there was a work-related braai. At this braai the respondents indicated to Mr Hart, who is chairman of the appellant, that they were unhappy about the appellant’s purported withdrawal of their dismissal. Mr Hart apparently maintained that the dismissal had been withdrawn and the respondents continued to be in the appellant’s employment. However, he also stated that, if the respondents wanted to leave the appellant’s employ on their own, they could do so but, in that event, they would not be entitled to severance pay or any other benefits. The respondents also pointed out to Mr Hart that there was no work for them to do in the appellant’s workplace and that all they were doing was sitting around and doing odd jobs like moving tables and chairs. The respondents believed that the appellant was treating them in this manner in order to drive them into resigning from its employment so that their departure would not entail any liability on the appellant’s part in respect of any benefits. The appellant denies that the respondents have no work to do. It states that they are all gainfully employed by it and are performing duties which are consistent with and are required in the positions in which they are employed. It goes on to detail the duties which they perform. This part of the matter must be decided on the basis of the appellant’s version.

Proceedings in the Labour Court

[21]     The respondents were aggrieved by the appellant’s conduct. Accordingly, they brought an application to the Labour Court for an order declaring that their contracts of employment had been terminated by the appellant on the 28th April 2000 due to the redundancy of their positions and/or the reorganisation undertaken by the appellant and that they were entitled to payment of severance pay and costs in the event of opposition. The appellant opposed the application. The Labour Court found in favour of the respondents and granted the declaratory orders sought plus costs against the appellant. With the leave of the Court a quo, the appellant now appeals to this Court against that judgement and order.

The appeal

The Jurisdictional points

[22]     It appears that in the Court a quo the Court raised the question whether or not it had jurisdiction in respect of this matter. The appellant had not in its answering affidavit taken the point that the Court a quo did not have jurisdiction in the matter. However, it appears from the judgement of the Court a quo that in response to the question raised by the Court a quo , it was argued on behalf of the appellant that the Court a quo lacked jurisdiction to deal with this matter on the basis that what the respondents wanted was severance pay and that, in the light of sec 41(6) of the Basic Conditions of Employment Act, 1997 (“the BCEA”) the Commission for Conciliation, Mediation and Arbitration (“CCMA”) had jurisdiction to arbitrate it and the Labour Court had no jurisdiction in respect thereof. Sec 41(6) reads:-
“If there is a dispute only about the entitlement to severance pay in terms of this section the employee may refer the dispute in writing to -
(a)      a council if the parties to the dispute fall within the scope of that council or
(b)      the CCMA if no council has jurisdiction”.


[23]     The Court a quo held that it had jurisdiction to deal with this matter. In support of this finding it relied on s41(10) and s77(3) of the BCEA. Sec 41(10) reads:-
“If the Labour Court is adjudicating a dispute about a dismissal based on the employer’s operational requirements, the Court may inquire into and determine the amount of any severance pay to which the dismissed employee may be entitled and the Court may make an order directing the employer to pay that amount.”

Sec 77(3) reads:
“(31) The Labour Court has concurrent jurisdiction with the civil courts to hear and determine any matter concerning a contract of employment, irrespective of whether any basic condition of employment constitutes a term of that contract.”

[24]     The Court a quo rejected the appellant’s reliance on sec 41(6) for the contention that it did not have jurisdiction in respect of the matter. It effectively held that sec 41(6) refers to a situation where the dispute is only about the entitlement to severance pay. It found that this matter was not only about entitlement to severance pay. It said that the dispute related to a dismissal based on the employer’s operational requirements as well.

[25]     On appeal it was argued on behalf of the appellant that the Court a quo had erred in finding that it had jurisdiction in regard to this matter. The one basis advanced in support of this contention was that there had been no referral to conciliation of any dispute about an alleged unfair dismissal. This argument is based on the provisions of s191(1) which are to the effect that, if there is a dispute about the fairness of a dismissal, the dismissed employee may refer the dispute for conciliation to a council, if the parties to the dispute fall within the registered scope of the council, or, to the CCMA if there is no such council. I think the answer to this argument is that the dispute that sec 191(1) requires to be referred to conciliation is a dispute about the fairness of a dismissal. In this matter there is no dispute about the fairness of a dismissal. Accordingly the appellant’s contention in this regard falls to be rejected.

[26]     Another basis advanced in support of the contention that the Labour Court did not have jurisdiction was that the second declaratory order sought by the respondents concerned an entitlement to severance pay which dispute, so continued the argument, ought to have been referred to the CCMA for arbitration. The appellant did not specify any statutory provision in support of this contention. The only statutory provision that I can think of which it could seek to rely upon is that of sec 41(6) of the BCEA which has been quoted above. That section refers to a case where the dispute is only about “the entitlement to severance pay in terms of this section...”

[27]     Unlike the Court a quo I am not certain that it can be said that the dispute between the parties in this matter is not a dispute only about the entitlement to severance pay. However, I do not consider it necessary to express a definitive view on this aspect of the matter. There is another basis on which the argument can be disposed of. In my view, if the appellant seeks to rely on sec 41(6) to contend that the Labour Court had no jurisdiction in respect of this matter, the appellant should satisfy the Court not only that this dispute is only about the entitlement to severance pay but also that the entitlement to severance pay is “in terms of this section” as prescribed in s41. I say this because the severance pay that sec 41(6) refers to is said to be one “in terms of this section.” It seems to me that where the severance pay that is claimed is not in terms of s41 but is in terms of a contract or the Rules of a Pension Fund, it cannot be said that the claim is for the payment of severance pay “in terms of” sec 41.

[28]     In this matter not only did the respondents not rely on sec 41 for their claim for severance pay but, in fact, they categorically stated in their founding affidavit that they sought severance pay and benefits in terms of the Rules of the Telkom Pension Fund which was the second respondent in the Court a quo. They even attached to the founding affidavit copies of certain pages of the Rules of the Pension Fund which they said contained provisions which applied to them as retrenches. Furthermore, in the appellant’s own letter of the 8th June 2000 addressed to the respondents’ attorney there is an indication that the appellant’s understanding was also that the respondents were seeking to claim “termination of service benefits” from the Telkom Pension Fund. In the second paragraph of that letter the appellant wrote: “We have also notified the Telkom Pension Fund administrators that only on official notification from ourselves of the termination of any of our employee’s services should they conduct any termination of service benefits calculations and not on the request of any of our employees or their representatives.” Dealing with its understanding of the purpose of the respondents’ application in the Court a quo the appellant had this to say in par 4.7 of its answering affidavit:-
“The purpose of the application appears to be an attempt by the [respondents] to obtain the payment of a severance pay from the [appellant] notwithstanding their continued on- going employment with the [appellant]. It is further apparent that the application is motivated by an attempt by the [respondents] to obtain certain payments from the Telekom Pension Fund of which they are members, which payments would arise if their services were terminated by the employer as defined in the rules of the Telkom Pension Fund ‘as a result of the abolition of his post or a reorganisation of the employer’s activities.’ This may result in a liability by the [appellant] to the Telkom Pension Fund which it could ill afford at a time when it is attempting to transform the business it acquired into a viable entity.”
In the light of all of this I am of the opinion that the appellant has failed to show that the respondents’ claim falls within the ambit of sec 41(6) of the BCEA. In my view that section cannot apply when it cannot be said that the dispute is about the entitlement to severance pay in terms of that section and that it is only about severance pay.

[29]     One of the sections on which the Court a quo relied in support of its finding that it had jurisdiction was s41(10) of the BCEA. Sec 41(10) provides that “(i)f the Labour Court is adjudicating a dispute about a dismissal based on the employer’s operational requirements, the Court may inquire into and determine the amount of any severance pay to which the dismissed employee may be entitled and the Court may make an order directing the employer to pay that amount.” It is noteworthy that s41(10) refers to a situation where the Labour Court is “adjudicating a dispute about a dismissal” and not to case where it is adjudicating a dispute “about the fairness of a dismissal” which is the phrase used in s191(1) of the Act. It appears to me that there is significance to be attached to the fact that in sec 41(10) the phrase used to describe the dispute is “dispute about a dismissal” and not the phrase “dispute about the fairness of a dismissal” as used in sec 191(1) of the Act. The significance is the recognition that dismissal cases which the Labour Court may adjudicate are not confined to those where the dispute is about the fairness of a dismissal and that there are other dismissal cases which the Labour Court may adjudicate where the fairness of the dismissal is simply not in issue. Dismissal disputes that fall under the former category would be those contemplated in sec 191(5)(b)(ii) of the Act whereas dismissal cases that fall under the latter category would include those dismissals where the issue is whether the dismissal complies with the requirements for the termination of a contract of employment prescribed by s37 of the BCEA.

[30]     With regard to the latter category of dismissal disputes, the Labour Court has exclusive jurisdiction in terms of s77(1). Sec 77(1) reads: “Subject to the C