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National Education Health and Allied Workers' Union and Others v University of Pretoria (JA39/03) [2005] ZALAC 7 (26 October 2005)

.RTF of original document


IN THE LABOUR APPEAL COURT OF SOUTH AFRICA
HELD AT JOHANNESBURG

                                                                        CASE NO: JA 39/03

In the matter between:

NATIONAL EDUCATION, HEALTH       1st and further Appellants
AND ALLIED WORKERS’ UNION
AND OTHERS

and

UNIVERSITY OF PRETORIA                              Respondent

JUDGMENT

Zondo JP

Introduction

[1]      The first appellant is a registered trade union of which the second and further appellants are members. In this judgment I shall refer to the first appellant as “the union”. The second and further appellants are former employees of the respondent. The respondent is the University of Pretoria. The second and further appellants are among a large group of employees whom the respondent dismissed from its employ for operational requirements on the 30th June and 31st July 1998.

[2]      The appellants disputed the fairness of the dismissals. They contended that the dismissals were unfair both substantively and procedurally. The respondent maintained that the dismissals were fair both procedurally and substantively. In due course the dispute was referred to the Labour Court for adjudication. It was heard by Revelas J. The Labour Court found that the dismissals were fair both procedurally and substantively. It, accordingly, dismissed the appellants’ claim with costs but subsequently granted them leave to appeal to this Court. This, then, is an appeal from the decision of the Labour Court dismissing the appellants’ claim with costs.

[3]      Before the appeal can be considered, it is necessary to set out the factual background to the dismissal of the second and further appellants. I propose to do so below. However, before I do so, let me say this. For purposes of this judgment, it is not necessary to set out all the facts or events relating to the second and further appellants’ dismissal, particularly those relevant to the substantive fairness of the dismissal. This is because in this appeal the appellants do not challenge the substantive fairness of the dismissal. The appellants only challenge the procedural fairness thereof. Even that challenge to the procedure is a very narrow one. It is that, when the respondent initiated the consultation process required by sec 189(1) of the Labour Relations Act, 1995 (Act 66 of 1995)(“the Act”), the union was faced with a fait accompli. In the light of the fact that the appellants’ challenge to the fairness of the dismissal is a very narrow one, I propose to confine the factual background to this matter to the facts and events that are relevant to the determination of whether or not the appellants were faced with a fait accompli.

         The facts       
[4]      In his speech at the opening of the 1997 academic year on the 28th January 1997 Prof Van Zyl, who was the new Rector and Vice-Chancellor of the respondent at the time, set out, among other things, his vision for the respondent and its role in South Africa and, indeed, internationally. Prof Van Zyl stated, among other things, that the respondent had to meet certain challenges facing it. He enumerated certain matters which he said required particular attention. The first of the matters he mentioned was that there would have to be a thorough reconsideration of the university’s core functions and the performance or execution thereof. He also stated that partnerships with the private sector would have to be investigated urgently, particularly through the outsourcing of support services.

[5]      By way of a letter dated the 7th February 1997 the respondent appointed management consultants called Strategic Partners to investigate the cost-effectiveness and efficiency of certain support services within the respondent. This project was to be known as the Support Services Development Project. In the letter of appointment the respondent stated that the consultants’ brief was to undertake a support services development project at the respondent. The respondent also set out in the letter the “parameters” of the consultants’ appointment. The letter stated that the main objective of the support services development project would be “to optimize the cost efficiency and effectiveness of support services of the university.” The letter also identified the service areas that had been prioritized for detailed review during 1997. These were given as:
                  -        Building and Terrain Services
                  -        Campus Security
                  -        Marketing Services
-        Student Services (including the Bureau for Culture and the Bureau for Sports)
-        Technical services.
Under the third paragraph of the letter of appointment the respondent informed Strategic Partners that the support service development project would be carried out according to the following phases in the case of each support service area mentioned above. The phases were:
-        The establishment and acceptance of the project’s mandate among all stakeholders in the University’s support services.
-       
A factual analysis into the current levels of cost efficiency and effectiveness.
-       
A participative process giving stakeholders an opportunity to jointly evaluate the current costs efficiency and effectiveness of the services concerned, the opportunities for performance improvement as well as the options and guiding criteria towards change.
-       
The preparation of a project plan towards implementing the preferred change option(s)
-       
Assistance towards successful implementation.” (Emphasis added)

[6]      In the fourth paragraph of the letter the respondent went on to make it clear to the consultants that “(t)he evaluation of future options regarding the functioning of each support service will be carried out with proper consideration of:
-        the interests and rights of employees, students and other service users.
-        financial affordability and cost competitiveness of options.
-        Sustainability of the options considered.”

[7]      In the fifth paragraph the respondent pointed out that “(t)he project for each service area will be overseen by a project steering committee comprising representatives from, inter alia, staff and unions, line management and students. The chairperson of the project steering committee will be selected by these representatives.”

[8]      It would seem that already on the 6th May 1997 the consultants held a meeting with the union in which they briefed the union on their mandate. The minutes of that meeting reflect that, among other things, Mr Marais, who was the leader o the consultants, informed the union that his team had requested the meeting “in order to brief Nehawu on the envisaged Support Services Development Project and to request their comment and advice on the structuring of the project.” The minutes also reflect that, among the things, Mr Marais told the union that the consultants had no pre-conceived ideas on the type of changes that the support services would be required to undergo in order to improve their cost-effectiveness. He also informed it that the consultants had not been asked to merely justify any stakeholder’s foregone conclusion on the direction that support services would go in the future.

[9]      The minutes of the meeting of the 6th May also reflect that Mr Sehone of the union asked whether the inevitable outcome of restructuring would not be a reduction of personnel through retrenchments. Mr Marais’ answer was an explanation that it was too early to think in terms of what kinds of changes would be necessary to improve the cost-effectiveness and efficiency of support services. He said that the extent of the problem and the alternatives for change had to be identified first. He likened the situation rather to that of a doctor and said that, before a doctor examined a patient, he would not be able to tell the nature of the patient’s illness nor would he know what medicine to suggest. He said that the Support Services Development Project had to first investigate the current problems before deciding whether restructuring would be the right solution. He pointed out that in certain organisations better management processes or even an increase in staff had been implemented in support services.

[10]     In that meeting Mr Marais also outlined the process that the consultants intended to follow in going about executing their mandate. The minutes reflect that he said:
-        The first stage of the project (of which this meeting forms a part) involves discussion with the various stakeholders involved in support services in order to explain the envisaged objectives and process and to obtain input from the stakeholders. This stage is to result in the formation of a steering committee in each of the service areas concerned.
-       
These steering committees should represent all stakeholders such as workers – labour unions, line management and students. The role of the steering committees would be to consider the work of the consultancy and to participate in project workshops.
-       
The second stage of the project is envisaged to consist of an independent review of the current cost-effectiveness and efficiency of the services concerned by the consultancy. In the course of this review they will consider aspects such as service user satisfaction, the future need for the service concerned, the current cost of service delivery as well as management practices. The review will also consider how the nature and costs of the services at the University compare with that of other universities and other public and private sector organisations. The consultancy will present the results of their review to a workshop. The workshop will develop conclusions on the opportunity for improving the cost effectiveness and/or efficiency of the service concerned and will list potential improvement alternatives. During the next stage the consultancy will provisionally evaluate the improvement options according to criteria developed during the first workshop. The results of this evaluation will be presented to a second workshop where the stakeholders will consider the best improvement option and its implementation implications.
-       
Once an implementation decision has been made, the consultancy will assist with implementation planning and with project management during implementation. Naturally, no implementation could proceed without proper consultation with all role players concerned.”

[11]     Mr Marais emphasised that the best interests of the respondent and, therefore, of all stakeholders, would be served by the participation of all stakeholders concerned including the union in the project. He then asked what the union’s suggestions were regarding participation of workers and union representatives in the process of the project. At the meeting the union representatives indicated that they would need to consult their shopsteward colleagues before they could react to the invitation to participate in the project.

[12]     On the 28th May 1997 another meeting was held between the consultancy and the union. The aim of the meeting was for the consultancy to brief the union further on the Support Services Development Project and to give the union an opportunity to ask whatever questions or raise whatever concerns they may have had about participation in the project. The minutes of the meeting reveal that the union delegation asked numerous questions. Indeed, there were even debates on certain issues. Ultimately the union delegation indicated that the union would participate in the project. It is important to highlight that in that meeting the union was informed that the aim of the meeting was to give it the opportunity to:

-        comment on the proposed process and suggest possible alternatives
-       
raise any preliminary concerns and or issues regarding the project
-       
comment on the consultative approach and indicate possible alternatives and [to] know each other and develop a working relationship.”

[13]     The union confirmed its agreement to participate in the project by way of a letter from a Mr Robinson Mosebi. The letter appears to have been approved by Mrs Molefe who was the chief shopsteward of the union at the respondent. In addition to advising in that letter of its agreement to participate in the project, the union also made a proposal as to the composition of “the structure of the Steering Committee.” The union suggested that each steering committee should be composed of:
                  (a)      one representative from the consultancy;
                  (b)      two representatives from supervisors/managers
(c)      three representatives of unions or employee organisations.
         Mr Marais subsequently wrote to the union to welcome its decision to participate in the process or the project. He also informed the union that he was accepting its proposal of how the steering committees should be composed. He said that in fact the union’s proposal on the composition of such committees was the same as his own earlier proposal. The union then participated in the project and in the steering committees. In participating in the project and being part of the steering committees, the union was free to raise whatever concerns it had, was free to make any proposals it wished to make and was free to express any views it had. It was not hampered in any way.

[14]     In a letter dated 21 August 1997 the union, through Mr Robinson Mosebi, advised Mr Marais that the union was withdrawing from further participation in the project because the minutes of the various meetings that its representatives had attended did not reflect the contributions made by the union representatives’ in such meetings. However, later on the union rejoined the process and continued to participate until the end of the process.

[15]     In the September 1997 issue of the University’s bulletin it was explained that, after the establishment of a steering committee in each one of the support services that had been prioritised, the project team (i.e. the consultants) had undertaken an independent investigation into each of the various services. It was said that such investigation had focused on the effectiveness, client satisfaction, cost, efficiency, the opinions of staff, management practices as well as comparisons with the practices at other organisations.

[16]     It was also stated in the bulletin that at that time the consultancy was presenting two workshops in respect of each service. At such workshops, continued the bulletin, the consultancy’s analysis of the service, the need for change as well as the possible alternatives for the future were considered in consultation with the steering committee concerned. It was stated that, once those workshops had been concluded, the consultancy would make a recommendation to the Executive of the respondent. It was then written: “These recommendations may coincide with or differ from those of the steering committee.” It was stated that that was where the work of the steering committee would end.

[17]     There was a section in the September 1997 UP Bulletin which dealt with the “road ahead.” In this section it was stated that in October 1997 the consultancy aimed to complete the report-back to the steering committees. The following also appeared in the bulletin:
The analyses of the project team will by then have been open to inspection by all interest groups and these groups will have been able to participate in the process for the consideration of alternatives for the future. After the steering committee process in respect of each department has been concluded, the project team will make their recommendations, together with views expressed by the steering committee concerned to the Executive of UP. This means that the Executive may start to take principle decisions regarding the future of the various services during September and October 1997. Where personnel implications arise, management will have to consult with the parties concerned before a final decision can be made.”
During October 1997 the consultants submitted their reports in respect of some of the support services to the Executive of the respondent. In such reports the consultants inter alia identified the problems in the relevant support service areas and made recommendations on what should be done to address them. The recommendations included that the support services affected in this matter be outsourced.

[18]     The Executive of the respondent furnished copies of the consultants’ reports to all stakeholders including the union and asked them to give their reactions thereto. In a letter dated 29 October 1997 Mrs Molefe undertook to Prof Pottas of the respondent that the union would submit its response to the reports of the consultants on the 5th November 1997. This was agreed to by the respondent. In the UP Bulletin of the 7th November 1997 it was announced that on the 1st November a support centre had been installed in the Marketing Services Building “to answer questions from staff about the renewal process at UP.” The investigation undertaken by the consultants was part of the renewal process at the respondent. It was further stated that the centre would also be “part of general employees’ aid programme managed by the Labour Relations Division.” It was stated that a team of professionals including ministers of religion, social workers, psychologists and staff of the Labour Relations Division would be available to assist staff. It was also written:
The centre will assist staff who may be affected by rationalisation to compile a CV, find other work and will also give advice on financial matters etc. Staff members will still be able to use this one stop service for a limited time after they have left the university’s service.”

[19]     The union failed to submit its response to the reports by the 5th November 1997. By a letter dated 10 November 1997 the union asked that it be given an opportunity to give a verbal reaction to the consultancy’s reports and that this be done on either 12 or 13 November 1997. By a letter of the same date Prof de Beer, who was a vice-principal of the respondent and who was the respondent’s main contact person or representative both in the Support Services Development Project and in the subsequent sec 189 consultation process that started in November or December 1997, agreed to the union’s suggestion.

[20]     On the 13th November 1997 a meeting was held between the respondent and the union. Although the union had requested the meeting for the purpose of giving a verbal reaction to the consultants’ reports, once at the meeting, the union’s Mr Jaftha indicated that there were a number of questions on which the union sought to have clarification. One such question was whether the process that had taken place was a substitute for the consultation process required by the Act in the case of a contemplation of a dismissal of employees for operational requirements. Prof de Beer explained that, once the Executive of the respondent had received all comments on the reports and all parties had had a chance to discuss them with a view to trying to reach a consensus, the Executive would “take a position in terms of which the provisions of section 189 of the Labour Relations Act might come into play and will be followed to the letter.”

[21]     After asking another question which was answered, the union’s Mr Jaftha submitted a proposal for redeployment to Prof de Beer. The document containing the proposal was marked: “NEHAWU’s Redeployment Proposal”. Mr Jaftha commented that such proposal had been used as a model for restructuring at other institutions focusing on a training strategy for staff with the use of government funding earmarked for such purpose. Mr Jaftha stated that the proposal did not constitute the union’s reaction to the reports and reserved the “right” to comment later. Prof de Beer undertook to submit the proposal to the Executive for consideration after which a follow-up meeting would be held to discuss the merits of the submission as part of the comment on the reports. The meeting ended with the union not having given the verbal reaction to the consultants’ reports as it had undertaken to. It also did not ask for an extension of time to do so.

[22]     On the 18th November 1997 the respondent gave notice of consultation in terms of sec 189 of the Act and invited various unions including the union to a meeting scheduled for the 24th November 1997. There was an annexure to the notice. The annexure to the notice stated, among other things, that “the crux of the [consultants’] recommendations, comments and proposals” revealed that “the respondent will have to provide for the discontinuation of service in various ways of some of its employees on the basis of the University’s operational requirements, should attempts to avoid such staff reduction by the consultation as set out in Section 189 of the Labour Relations Act not succeed.”

[23]     In the second last paragraph of the annexure to the notice it was stated that as a point of departure the management of the respondent would attempt to enter into discussions with all parties involved regarding, among others, measures to try and avoid dismissals, to minimise the number of persons who might be considered for dismissal and to mitigate the adverse effects arising from dismissal as well as information that may be required.

[24]     On the 24th November 1997 the respondent held a meeting with various unions and employee organisations as well as staff who were not members of any unions. The union had observers at that meeting but arranged to have a separate official meeting with the respondent on the 25th November 1997. The respondent and the union did, indeed, hold a meeting on the 25th November 1997. The management stated at the meeting that since receiving responses to the consultants’ reports from a number of stakeholders, it had become evident to it that it would have to face realities and contemplate the dismissal of members of staff on account of operational requirements. The management stated that at that stage there was no indication of the number of employees, departments or units that could be affected by such a process. It was stated that the purpose of the meeting was to inform the union of the situation. The management set out certain measures that it thought could help to avoid dismissals or minimise the number of dismissals.

[25]     The union’s Mr Jaftha expressed the hope that the management would bear the interests of the staff at heart and not treat the consultation in terms of sec 189 of the Act as a mere formality. According to the minutes he further stated that there were indications that “this was a mere formality or so-called smoke screen for decisions that had already been made.” The minutes of the meeting reflect that Mr Jaftha “referred to a UP Bulletin of the 7th November 1997 in which it was indicated that a support centre was established prior to the commencement of the process.” Mr Jaftha said that from this it appeared that the decision to dismiss staff had already been made by the management. He also queried why, if the first phase of the Support Services Development Project had not yet been completed and all comments received, notice was given of staff reduction in terms of section 189. The minutes indicate that Mr Jaftha pointed out the distinction between restructuring and a decision to retrench and that the parties involved had agreed to a process of restructuring.

[26]     Mr Jaftha also stated that the union doubted “the sincerity, honesty and commitment of Management” and was not confident that the ideas and proposals it would make would be meaningfully addressed. He said that for this reason the union’s intention was to “tie the matter up by all possible means in terms of the relevant legislation.” The union said that it had been caught off-guard as it had thought that the meeting was still to deal with the first phase of the project. Mr Jaftha stated that the union had thought that the notice of consultation in terms of sec 189 of the Act would only be given after the completion of the first phase. Mr Jaftha proposed on behalf of the union the addition of another item on the agenda of the meeting. The item is reflected in the minutes as “mitigating the timing of dismissals.” Mr Jaftha said that the union would argue that that was not the time to dismiss employees in the light of the approaching festive season.

[27]     Mr Jaftha also requested that “section 197 of the Labour Relations Act, regarding the transfer of contracts, also be included in the legal framework.” The management said it was agreeable to this as it considered section 197 as part of the law of the country to which the respondent was subject. The union reserved its comment regarding vacancies and fixed-term contracts of employment as potential mea